Case Assessment Using The IRAC Method

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Question 1 : Avinash is a regular visitor to a local café that provides a self-service facility where customers have the option of selecting a drink or food item from a menu displayed on a touch screen located near the counter. To select a product, a customer only has to touch an image or icon showing the desired product, and then touch a virtual ‘OK’ button to submit an order. The order is relayed to the café’s front counter where the cashiers can view it on their own screens.

Customers using the touch screen are immediately issued with a printed ticket containing an order number and the price payable at the front counter.

Customers present these tickets to the cashiers who confirm the relayed order appearing on their screens. At this point, the customers pay for their purchases and await delivery.

This system is designed to save time during peak periods and is very popular. Some customers place their orders as takeaways, while others, like Avinash, prefer to be seated and consume them on the premises. These preferences are preselected by the customers when they use the touch screen.

When Avinash reached the cashier, he paid $4 for the coffee he had ordered and then took a seat waiting for it to be served at his table.

The next morning, Avinash returned and ordered his usual coffee- and for the first time, a Danish pastry- using the self- service facility. The total cost was $7.50 which he duly paid. As he sat in the café consuming his drink, he bit into the pastry and struck something hard, breaking a tooth. He examined the chewed remains and found a piece of metal that had somehow been lodged in the pastry.

The next morning, Avinash returned and ordered his usual coffee- and for the first time, a Danish pastry- using the self- service facility. The total cost was $7.50 which he duly paid. As he sat in the café consuming his drink, he bit into the pastry and struck something hard, breaking a tooth. He examined the chewed remains and found a piece of metal that had somehow been lodged in the pastry.

This café accepts no responsibility or liability for any injury caused to customers by consumption of food or drink sold.

In response, Avinash exclaimed, ‘I’m a consumer and I have rights!’

Required: Explain how the contracts Avinash made with the café were formed.

  1. You will need to address all the essential elements of a contract (including consideration) as well as analyse the legal status of each step or event that led to the café supplying Avinash with its products. Refer to relevant case law. In this part, do not discuss the impact, if any, of consumer protection laws.
  2. You may, but are not obliged to use the IRAC format for this part, given that each step or event must be analysed separately.

Explain whether the café is legally entitled to rely on the clause printed on the ticket to avoid liability in relation to Avinash’s mishap.

  • For the purposes of this part you should consider both common law as well as consumer protection legislation (confirming whether Avinash qualifies as a ‘consumer’).
  • Please use IRAC format for this part.

Question 2 : ‘In contrast to express terms found in a contract, implied terms can arise in a variety of ways and are beneficial to at least one of the parties to the contract. Some contracts may contain both express and implied terms, but the ways these two types of terms operate are significantly different from one another’.

Required: Discuss this statement by reference to cases and legislation, providing examples of each.

  • You need to justify your view as to whether these two types of terms are ‘significantly different from one another’
  • You need to justify your view as to whether these two types of terms are ‘significantly different from one another’


Part A

a. The establishment of contracts between the café and Avinash at each stage of their interactions. an assessment of whether all contract requirements are present.

b. The feature of taking these into account and identifying them in light of recent transactions.

Rules: Contracts are said to exist when agreements result in legally enforceable obligations. Therefore, an agreement that cannot be enforced in court is not a contract. According to the common law system, the fundamental components of a contract are obtained from judicial interpretations of the same that are issued as judgments. The common law system is incorporated into the Australian Commonwealth, and it is subject to judicial decisions and interpretations of that system. The initial requirement of a contract, according to the common law system covered in this common law assignment, is an offer. An offer is a clear declaration of intent to enter into a contract. On the other hand, an invitation to treat is only a forerunner to an offer and is not a legitimate offer. The acceptance is the second requirement. A contract cannot be created until the offer is accepted and communicated. The original offer, however, is revoked and the opportunity to accept it is lost if the terms are altered or a counteroffer is made. This was taken into account in the judicial interpretation of the same that was established in the Hyde v. Wrench1 decision. The second requirement for a contract to be enforceable derives from the parties' purpose to establish a binding legal relationship. According to the ruling in the case Balfour v. Balfour2, agreements signed between family members would be assumed to lack such an aim. Consideration, which will also be covered below, is the last factor to evaluate when determining whether a contract is legitimate.

A. (a) The consideration for a contract is the benefit received by a party from entering into it. This indicates that the consideration for a contract is what motivates the parties to enter into it and will be crucial to its performance. This is due to the fact that the parties engaged into such a contract as a result. Consideration might be executed or not. According to the ruling in the case of Dunlop v. Selfridge Ltd.3, consideration that is executory is contingent on its performance in the future, while consideration that is executed has already been carried out.


In the current case covered in this common law assignment, the café's menu and available selections would be seen as an invitation to treat. When a customer places an order, that order is considered to be an offer, and the machine's issuance of a ticket implies a lawful acceptance of that offer. This is so that the offer would still be legal in light of the Hyde v. Wrench ruling as there was no alteration of terms when it was accepted. 4 . Because placing an order in a café would be considered a commercial transaction, it would infer the presence of an intention to establish a legally binding agreement5. Thus, as far as these prerequisites were concerned, a contract's requirements were met.

b. In this instance, the notion of consideration addressed in this common law assignment would refer to the values desired by the parties in such contracts.

6. The café's requested consideration is the price it will charge for the goods it sells, and Avinash's requested consideration is the product. As a result, the consideration owed from Avinash's end was fulfilled when he ordered the product and paid for it. Since the café had to deliver the food to him when it was his turn, the consideration owed was executory in nature, as can be inferred from the ruling in Dunlop v. Selfridge Ltd.7.


In this part of the common law assignment, it can be said that Avinash and the café had an enforceable contract in place. This is because it can be used to deduce the fundamentals of a contract.

a. Both sides showed that thoughtfulness was an important factor.

Part B

Issues a. Whether the printed clause on the ticket is legitimate and whether the café can depend on it to escape liability.

b. Avinash's legal rights in relation to the contract he had with the café under the Australian Commonwealth's current consumer laws.


A contract contains a number of duties that the parties who are agreeing to it must uphold and carry out. These commitments are implied by contract clauses that are also written down. A contract's term would therefore be the best way to determine the agreement's actual intent. Therefore, these clauses can also be written to limit parties' responsibility in the event that a particular circumstance or condition is acknowledged by all contracting parties. When a given condition is met or is implied from the same, such a term, which is known as an exclusionary term, would release a certain party from obligation. Thus, it is possible to define an exclusion clause as one that, in some circumstances, can also limit responsibility or liability. However, because such a clause can result in unfairness in the balance, these clauses must be written in a way that strictly follows the common law's established standards. First, according to Chapelton v. Barry Urban District Council8, such a phrase is implied by prior transactions or dealings between the parties and can be considered incorporated. In the second, which deals with its interpretation, it is stated that the phrase must be understood in accordance with George Mitchell (Chesterhall) Ltd v Finney Lock Seeds9. Exclusion clauses, however, shouldn't violate consumers' rights or be unjust terms that could tip the scales of justice. Another component of the same is this. However, if it can be proven that an exclusion clause is ambiguous in terms of the scope of its applicability, the court will view it as being inapplicable, as was decided in the case of Houghton v. Trafalgar Insurance Co. Ltd.11 This is because, under the contra proferentum12 principle, a language like that would be read against the party attempting to rely on it. As a result, the word would not be valid.

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