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Table of Contents:
Introduction…………………………………………….…….……..P 3
Task 1 – Validity of contract…………………………….…………P 3
Task 2 – Legal rights and remedies……………………………......P 5
Conclusion………………………………………………..…………P 8
References………………………………………………………..….P 9

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Introduction:
Alan works as an accountant in charge for the Melbourne based company ‘Natural
Therapies Practice’. By considering his quality of service a natural health product
supplying company named ‘Wellness Pty Ltd’ had offered a part time job to Alan as the
company’s naturopath. While taking into consideration their offer Alan decided to
purchase some new computer software to facilitate the growth and speed of his business
for which he went to a local shop named Health Solution Software Pty Ltd.
There he met the sales assistant Betty, who convinced Alan to purchase XY Software
Package at $ 10,000 after giving discount of $ 500 despite of knowing the fact that the
software had received complaints from customers earlier, for she had to meet the sales
target for that month. When Alan started to use the software in his day to day business
after few days it began to receive complaints from the customers as it would take more
time to deliver the required medicines. Due to this reason subsequently Wellness Pty Ltd
also decided to offer the job of naturopath to someone else.
Now, furious Alan decided to sue Health Solution Software Pty Ltd for his loss in
business, future opportunity of employment and for the amount he spent on buying the
software.
Task 1 – Validity of contract:
When the XY Software Package began to receive negative feedback from the customers
of Natural Therapies Practice and owing to which Alan had to lose his opportunity of
employment with Wellness Pty Ltd, he decided to demand for compensations from

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Health Solution Software Pty Ltd in the court of law. But to establish his demand in legal
ground at the first place Alan has to verify that he holds a valid contract with Health
Solution Pty Ltd in absence of which he can’t claim his compensations. To determine
whether Alan had a legitimate contract with the Health Solution Software or not we shall
discuss the structure of the business the software company follows and reach to a
convincing conclusion (Donnelly, 2011).
As per the Australian Contract Law after evaluating various court cases of the genre it
has been cleared that the shops that run on self help arrangement which means customers
browse through the products to select the desired item and bring that to the cash counter
to purchase, runs on ‘invitation to treat’ structure (Anson, 2001). Under this formation the
customer browse through the displayed items and makes his purchase decision and carry
the product to the cashier to pay the bill himself.
What happened in this particular case was that Health Solution Software runs on an
invitation to treat structure as customers can visit the shop to make their selection by
themselves and purchase the product. However, like any other shop of this kind it also
had sales assistants to help customers to make their choices.
When Alan arrived in the shop he had no idea about what software should be purchase
that would be appropriate for his business. Thus, he took help of Betty, the sales assistant
and explained that he needed computer software that would help him to keep hold of the
drug prescription records of the customers from country’s health department so that he
would be able to prescribe the correct natural remedy for them. Betty offered him XY

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Software Package and Alan purchased the product by signing a purchase contract where
the amount of money he had paid was mentioned (Broom, 2007).
Thus following the ‘invitation to treat’ structure of business Alan certainly holds a valid
contract which makes him liable to bring a case of compensation against Health Solution
Software Pty Ltd.
Task 2 – Legal rights and remedies:
When the validity of contract has been established now the areas of disputes related to the
contract should be analyzed at the first place to decide the remedies and legal rights
available for Alan.
When Alan reached the shop to buy the software he made clear at the very first place
what his requirements were based on which Betty recommended him the XY Software
Package and stated that “I highly recommend the ‘XY Software package’, priced at
$10,500, because I believe that it will do the job well” in spite of the fact that she knew
very well that the software had already received negative feedbacks from the customers.
The software package had complaints of breaking down during operations and didn’t
offer timely access to patients’ files.
Under section 18 of Part 2 of Contract Law the statements of Betty made her guilty of
misleading or deceptive conduct as she made a falsified representation with respect to the
future matter of doing of operation by the software. Also, under section 4 of the law this
act of Betty made her accountable for this legally shaky contract as she had no reasonable

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ground for making the representation (Cohen and Mc Kendrick, 2009). However, her
obligation to meet the sales target of the month doesn’t qualify as a reasonable basis for
selling the disputed product to Alan.
Also, under section 29 of chapter 3 division 1, Betty is liable of making a misleading
representation of the software package in respect of its standard, quality and previous use
and also under section 33 for she made a false representation about the characteristics and
suitability of purpose for the software package to Alan as when he installed the computer
software at his store it didn’t give him access to the records of the Health Department at
all, which was his sole requirement for the purchase as he had stated at the very first stage
to Betty (Elliott, 2001).
Now, in this situation as per the Australian Contract Law certain legal rights are available
to Alan based on section 54 as the software package sold by Health Solution Software
failed to live up to the quality as described by the sales assistant. The software could not
serve the purpose of his requirement and was not free from defects which made the
product to breach consumer’s guarantee as codified in the Contract Law (Astley v
Austrust Limited, 2000). As per the law any product made for sale should be cleared to
the customer before he makes his purchase decision to determine whether the product is
of acceptable quality or not. In this particular case Health Solution Software didn’t
maintain this principle and thus Alan is allowed to lodge a legal case against them as per
the law (Laborde, 2011).
Also, under section 56 the Health Solution Software is found to be guilty as it failed to
supply a quality product as per the description. When Alan stated to Betty that he

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categorically needs a computer software package that provides him access to the drug
prescription records of the customers from the Health Department he made it very clear
what his requirements were (Stein, 1993, pp. 439-452). Despite of that Betty
recommended him a product which failed to perform the task.
Therefore, in view of the above mentioned discussion it is now clear that Health Solution
Software is certainly guilty of the charges of misleading representation of the product and
for that reason certain remedies are available at the disposal of Alan by the court of law
to get the compensation for his damages.
According to the nature of the contract made between Alan and the software company no
liquidated damages can be applicable in this situation as the contract of purchase doesn’t
hold any clause that describes a particular sum of money to be submitted by the involving
parties upon breach of contract (Broom, 2007). Thus, Alan can get damage compensation
for the breach of contract which is also commonly viewed by the court as substitute for
performance.
However, as per the legal provisions the claims for damages must not be too remote from
the actual breach. That means, not the three areas of compensations can be granted to
Alan based on the nature of the breach (Elliott, 2001). The $ 10,000 paid by him to
purchase the software and $ 150,000 amount of business he had to lose due to the lack of
performance of the software could be claimed but $ 100,000 he expected to earn after
joining Wellness Pty Ltd as naturopath could not be legally approved to claim from
Health Solution Software as this aspect of damage is too remote from the actual damage
made by them.

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Conclusion:
Thus, Alan had a valid contract with the Health Solution Software at the time of his
purchase which makes him permissible to ask for compensation when the software
package couldn’t perform the desired task as guaranteed by the sales assistant. The
Contract Law provides him the legal rights to claim his damage compensations from the
breaching company and get return of the amount he had to lose while purchasing the
product for $ 10,000 and loss in business he had to face as the customers became irritated
with the delay in their service and switched on to other companies. It is due to the
misleading representation of the product by the Health Solution Software that Alan had to
face the negative consequences. But as described in the above section, through applying
his legal rights under Australian Contract Law Alan could retain a significant amount of
the losses he had to face.

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BIBLIOGRAPHY
Books
Anson, W., ‘Principle of the English Law of Contract and of agency’, 3rd
Edn, 2001, Blake
Publishing
Broom, H., ‘Commentaries on the Common Law’, 4th
Edn, 2007, Black Publishing
Cohen, N and Mc Kendrick, E., ‘Comparative remedies for breach of contract’, 7th
Edn, 2009,
Prentice Hall
Elliott, W., ‘Commentaries on the law of contracts’, 2nd
Edn, 2001, Collin Barrow
Laborde, C., ‘Electronic Signature in International Contracts’, 9th
Edn, 2011, Applewood Books
Journals
Stein, Peter, (1993), “Donellus and the Origins of the Modern Civil Law,” in Mélanges Felix
Wubbe (J. A. Ankum, F. Feenstra, J. E. Spruit, C. A. Cannata, Y. Le Roy & P. Weimar, eds.,
Friboug, Switzerland: University Press Fribourg), pp. 439-452.
Internet Sites
Donnelly, J., http://rightsandremedies.blogspot.com, Downloaded on 11th
October 2011
Cases
Astley v Austrust Limited (2000) 197 CLR 1; [1999] HCA 6 (4 March 1999)