Elsa enjoys horse riding.

Elsa enjoys horse riding. She has had a few lessons and has been for short trail rides numerous times whilst on holidays. She is excited that a new horse-riding facility called ‘Hills Happy Horses Riding’ (HHHR) has opened in the Adelaide Hills where customers are able to enjoy indoor horse-riding lessons or outdoor trail rides (half-day and whole day options) on the large property. Elsa makes a booking to trail ride for a whole day. Upon arrival, she pays the $200.00 entry fee at the front door booth. She walks through the entrance room and enters an impressive large indoor horse-riding arena. To one side there is a cloak room where she hands in her jacket and hires specialised horse-riding boots and a riding hat. She is given a docket which she is told she must return to claim her jacket. On the back of the docket the following is printed:

Hills Happy Horses Riding bears no responsibility for any injuries sustained whilst on these premises howsoever the injury may be caused”.

Elsa is given a horse and one of the staff members fits and secures the saddle and helps Elsa onto her horse. She exists the indoor arena and has a wonderful time trotting through the native bush trails on the property until an eagle unexpectedly swoops Elsa on her horse. Her horse is very frighted by the sudden squawk and swooping of the bird and rears up on its back legs. Elsa is thrown off her horse. The saddle also comes off the horse and lands on Elsa’s head. It is later discovered that the saddle had a broken buckle which the staff member claims she did not notice when she fitted the saddle on the horse.

Elsa’s medical bills are substantial. She sustained a broken ankle, leg, arm, severely strained neck and a severe concussion. She wants HHHR to pay her medical costs. She keeps being told that the HHHR will not pay because they incorporated a term into the contract by way of notice which protects HHHR from liability for these sorts of claims. Elsa is told that the exclusion clause was included on the back of the docket she was handed at the cloak room and that it is clearly printed in large, bold font on a large sign hung at the back of the indoor horse-riding arena. Elsa is very frustrated and seeks your advice on whether HHHR is likely going to have to pay for her medical bills.

Issue: Is the exclusion clause likely to protect HHHR from liability?

Note: Answer this problem question thinking carefully about the rules relating to incorporation of terms by way of notice. Use the IRAC method taught in class to set out your answer.

Part B (40 marks)

Legal Problem

‘SF’ Pty Ltd is a large company which produces a range of sweet snack foods for children. The company has observed high growth in a related area of the market, namely, the healthy snack food segment of the snack food industry for children. Businesses with products falling into this expanding category pride themselves on formulating food items of nutritional value containing low percentages of sugar, sodium, and no artificial additives. Intending to capitalise on the expanding market for healthy snack foods, SF introduce a new range of food items called ‘Natural Yummies’. The range quickly becomes incredibly popular. A Natural Yummies product which is doing particularly well are Natural Yummies snack bars.

Edward is the owner of a small company called ‘Delicious and Nutritious’ Pty Ltd (DN) which prides itself on producing a range of healthy snack bars formulated for children. The snack bars are low in sugar and sodium, contain no artificial additives and are high in protein.

Given the success of the Natural Yummies snack bars, SF is now a very strong competitor in the healthy snack food segment of the snack food industry for children. Edward has become concerned about how SF is marketing its Natural Yummies snack bars. The packaging makes numerous assertions on the box:

“No nasties in Natural Yummies snack bars!”
The yummiest snack bars your kids will ever eat!”
Formulated in partnership with our nutritionists to give your child the healthy snack they deserve.”

The packaging has an animated drawing of a laughing child juggling different fruits.

Edward thinks that the combination of imagery and statements SF is using on the Natural Yummies snack bar range leads consumers to believe that the snack food is beneficial for consumption by young children because they are represented as being healthy when they are not. A close look at the Nutrition Information indicates that Natural Yummies snack bars contain three types of artificial preservatives to lengthen shelf life and, whilst the snack bars do contain comparable high amounts of protein, they also contain a high percentage of sugar. In comparison, DN’s snack bars contains no artificial additives and are low in sugar and sodium. Edward of DN lodges a complaint alleging that SF is in breach of s 18 of the Australian Consumer Law.

Does Edward of DN have a legitimate claim against SF under section 18 of the Australian Consumer Law?

Answer this problem question using the IRAC method taught in class.

Part C (30 marks)

Short Research Essay

You have the option to choose essay i) OR ii).

Do NOT attempt both.

Consider the following statement and write a short essay-style response.

It is best practice to avoid reliance on the prior dealings rule. Do you agree?

There is no set way (‘model’ way) to respond to the statement. However, it must be written in essay format. Please include an Introduction, Main Body and Conclusion. As well as referring to the text book (Fitzpatrick, J., Symes, C., Veljanovski A. & Parker, D. Business and Corporations Law (any edition) you are required to reference at least two other academic sources to support your arguments. You must use Harvard Style referencing (in text) (See University Writing Centre Harvard Style Guide) and provide a Reference List at the end of your essay (Reference List is NOT included in word count).

A few things you may like to consider as you research and write you essay include explaining what the prior dealings rule is, why it may have relevance to parties where a term of the contract has been incorporated by way of notice, whether the law is clear and certain in this area. We considered the prior dealings rule in both Lecture 3 and Seminar 3.

Remember to present your essay in accordance with the rules relating to Academic Integrity. I have included writing resources for you on the MyUni page (see Modules Tab). Included here are slides written by an expert from the University Writing Centre. Please make sure you quote, paraphrase and reference correctly.

OR

Consider the following statement and write a short essay-style response.

A contract which has been frustrated always results in unfair outcomes for parties. Is this an accurate statement?

Note: There is no set way (‘model’ way) to respond to the statement. However, it must be written in essay format. Please include an Introduction, Main Body and Conclusion. As well as referring to the text book (Fitzpatrick, J., Symes, C., Veljanovski A. & Parker, D. Business and Corporations Law (any edition) you are required to reference at least two other academic sources to support your arguments. You must use Harvard Style referencing (in text) (See University Writing Centre Harvard Style Guide) and provide a Reference List at the end of your essay (Reference List is NOT included in word count).

A few things you may like to think about as you are preparing/researching include: Common law position on frustration, frustration under statute (hint they may produce different outcomes for parties). The theme of frustration was touched upon in Lecture 4.

Remember to present your essay in accordance with the rules relating to Academic Integrity. I have included writing resources for you on the MyUni page (see Modules Tab). Included here are slides written by an expert from the University Writing Centre. Please make sure you quote, paraphrase and reference correctly.