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Contract Law Question about Misunderstandings!

Discussion in 'Australian Law Students Forum' started by Bhavna Gidj, 22 April 2017.

  1. Bhavna Gidj

    Bhavna Gidj Member

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    Hello all

    Need a bit of help with a homework question!

    So, Jill called a carpet laying company and stated to the carpet lady, Sally, on the phone, "
    “Our plan is to remove the old carpet and install new floorboard instead"
    and the carpet lady, Sally, stated: "We can do this for you at a great price"

    Okay, so it turns out that Sally only meant the installation of the floorboards - this misunderstanding only came to light a few letters after the phone call where Jill stated that the quoted 1,000K for both removal and installation were indeed good prices, to which Sally replied... "I am sorry, I think you've misunderstood ... we only install floorboards, not remove carpets."

    The contract that was sent from Sally to Jill stated (before the revelation that removal wasn't included"
    "Floorboards & Co agree to supply and install floorboards at the location of the customer for a total price of $1,000." In the conditions, it states that a 50% payment prior to the work being undertaken must occur - does this matter?

    The actual question is basically whether Floorboard's and Co have to remove the carpet now, because of the misunderstanding?

    MY THOUGHTS
    It appears that Jill is in the wrong here for not being clear enough.

    The misunderstanding, 'good faith' so to speak will most likely hold in court?

    No work had actually happened yet so it appears there's no financial (or otherwise) loss to Jill who may as well just find another contractor - UNLESS she is entitled regardless because of Sally's statement "We can do this for you at a great price."

    Any help would be great with regard to this!
     
  2. Rod

    Rod Well-Known Member

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    477
    In IRAC your issue identification is half way there. The rule you used is wrong.

    Misunderstanding here likely = mistake

    What kind of mistake?

    Then look at what remedies exist for the applicable mistake.
     
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  3. Bhavna Gidj

    Bhavna Gidj Member

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    Thank you for your response Rod!

    Okay so the term 'misunderstanding' is best described in the legal term 'mistake'. Thanks for letting me know, I am completely new to contract law.

    The kind of mistake appears to be... a mistake of fact. Is it possible that because the mistake is so fundamental the contract could be void?? I feel that it could be. I don't think undue influence is the issue here, just innocent mistake?
     
  4. Rod

    Rod Well-Known Member

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    unlikely

    In the land of contracts - yes. Note misunderstanding can mean different things depending on context, but here it is easy to work out - you are answering a contract question.

    'Consensus ad idem'. You need to now apply the rule to the facts and provide reasoning and cases to back you up.

    Now work out why it is not a unilateral mistake. Knowledge and intent come into play and likely getting close to misunderstanding as defined in the ACL.
     
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