Jinny’s Furniture Ltd Case Study

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Jinny’s Furniture Ltd Case Study

Issue

The issue is whether all the elements of a contract were met in the case between Mary
and Larry for the purchase of leather three-seater as advertised by the company.

Law

According to common law of contracts, a legally binding contract is only formed when
the basic elements of a contract are met. These elements include offer and acceptance, intention
to be bound by the contractual terms, and consideration (Enright, 2007).
First, the parties entering into a contract must meet legal capacity to enter into a contract.
They must be of the right mental capacity, although there are exceptions as provided in statutes
like Goods Act 1958 (Vic) s 7(1)), which means this provision is not absolute. A contract will
also be voided if one of the parties fails to understand the nature of the contract due to
intoxication, if the other party knew of the party’s incapacitation due to intoxication (Enright,
2007).

Category:

Description

BUSINESS LAW 101
ASSIGNMENT
INSTRUCTIONS:
 This is an INDIVIDUAL assignment!
 If you DO NOT hand in your typed copy during this class, you will get 0 for your
assignment. Jinny’s Furniture Ltd Case Study.
 Word Count: 900 minimum and 1500 maximum (excluding references and
bibliography).
 Marks: Will count out of 30 marks. Jinny’s Furniture Ltd Case Study.
 Ensure the following is taken into account when you type your assignment:
– Font: Times New Roman, 12pt
– Headings: Bold
– Line Spacing: 1.5 cm
– Insert references as stated on pages 12-16 of your Unit Outline. If you do not
provide references and a bibliography, you will be given 0.
– Insert page numbers
– At the top of your assignment, type the Unit Name and Number, Assignment,
Student Name, Student Number and Date
– DO NOT PLAGIARISE!!! I will know if you have plagiarised and the consequences will
not be good!!!

ASSIGNMENT:
Read the practical scenario below and answer the question. When you answer the question
you need to answer it in paragraph form and structure it with appropriate headings.
Here it goes…

This is taken from a hypothetical question in Questions and Answers.
Jinny’s Furniture Ltd is a retailer of household furniture. The company announced its winter sale on 1
August 2016 by placing the following advertisement in several national daily newspapers in the Perth.

JINNY’S FURNITURE WINTER MEGASALE!
Prices cut by up to 60%!
Special offer! Anyone purchasing an Italia leather three-seater sofa by cash or credit card at the
reduced price of $500 will receive an Italia leather two-seater sofa priced at $250 in the sale
absolutely free of charge!
This offer is available at all our stores until 20 September 2016.

(The advertisement concluded by listing in small print all the company’s stores throughout the
country.) Jinny’s Furniture Ltd Case Study.

On 15 August 2016, Mary took a copy of the advertisement with her and called her local Jinny’s
Furniture store to inspect the Italia sofas. She spoke to Larry, the Sales Manager, and told him that she
had decided to purchase the sofas subject to first talking this over with her husband. However, Mary
had a few too many alcoholic drinks and she couldn’t hear very well and on the day, she had this
discussion with Larry, she didn’t realise her hearing was this bad. Mary told Larry that she had a couple
of drinks, but she understood. Larry then, knowing of Mary’s state, told Mary that the company only
had a limited number of two-seaters so it was agreed that she would leave $100 in return for this
agreement to hold the sofas for 48 hours. Larry told her that he would deduct the $100 from the
purchase price if Mary went ahead with the purchase within that time period. Jinny’s Furniture Ltd Case Study.

On 17 August 2016, Mary called the store to purchase the sofas and spoke to Larry who was very
apologetic but explained that his staff had forgotten to reserve the sofas for her. He explained that in
any event the two-seaters were ‘subject to availability’ (as stated in various notices around the store),
and the company had now run out of them. Larry also said that ‘…obviously the two-seaters were a free
gift and were subject to availability’. He pointed out that the Italia three-seater sofa was still available
but the price had now gone back up to $1200.

Advise Mary on this scenario and whether there is a contract. Jinny’s Furniture Ltd Case Study.

==========================================================================================

Jinny’s Furniture Ltd Case Study

Issue

The issue is whether all the elements of a contract were met in the case between Mary
and Larry for the purchase of leather three-seater as advertised by the company. Jinny’s Furniture Ltd Case Study.

Law

According to common law of contracts, a legally binding contract is only formed when
the basic elements of a contract are met. These elements include offer and acceptance, intention
to be bound by the contractual terms, and consideration (Enright, 2007). Jinny’s Furniture Ltd Case Study.
First, the parties entering into a contract must meet legal capacity to enter into a contract.
They must be of the right mental capacity, although there are exceptions as provided in statutes
like Goods Act 1958 (Vic) s 7(1)), which means this provision is not absolute. A contract will
also be voided if one of the parties fails to understand the nature of the contract due to
intoxication, if the other party knew of the party’s incapacitation due to intoxication (Enright,
2007). Jinny’s Furniture Ltd Case Study…….

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