BUS203: Fabio Visits The Showroom Of Tuscan Ovens Pty Ltd (Tuscan) To Buy A New Pizza Oven: Business Law Case Study, SU, Australia

QUESTION 1

Fabio visits the showroom of Tuscan Ovens Pty Ltd (Tuscan) to buy a new pizza oven for his large Northbridge restaurant called San Marco Pizzeria and Restaurant.  Tuscan specializes in selling heavy-duty commercial-grade gas-fired pizza ovens for restaurants such as the one operated by Fabio.

Fabio tells the manager of Tuscan, Mario that he must have an oven that will cook at least 30 pizzas every hour for 16 continuous hours per day.  “Otherwise”, Fabio says to Mario, the manager of Tuscan, “I will lose customers at the peak and busy hours”.  Mario, as the manager of Tuscan during negotiations, assures Fabio the owner of the business, San Marco Pizzeria and Restaurant business, that the new Italian manufactured ‘Deluxe’ commercial pizza oven will satisfy his requirements adequately.  As a result of Mario’s statements and recommendations as manager of Tuscan and the expert in pizza ovens, Fabio is very satisfied and proceeds to finalize negotiations and entered into a contract with Tuscan and purchases the oven for $20,000.  Soon after the ‘Deluxe’ pizza oven is installed in the Northbridge restaurant, Fabio much to his dismay and frustration discovers that it can only cook 12 pizzas per hour continuously and not 16 pizzas per hour as was required and that it is extremely unreliable.

As a result of the oven’s inadequacy and ongoing problems associated with the new pizza oven, the Northbridge pizzeria and restaurant are losing customers and approximately $15,000 profit per week.

Fabio contacts Mario, the manager of Tuscan to inform him that he wants to rescind the contract and wishes to discuss compensation for his business losses due to the inadequate and unreliable pizza oven.

Mario, the manager of Tuscan reminds Fabio of the large sign above the sales counter that states:

‘IMPORTANT – LIMITATION OF LIABILITY”

 “The liability of Tuscan Ovens Pty Ltd for any loss or damage caused by any defective oven supplied by it shall be limited to the cost of replacement of the oven”.

In your analysis and interpretation of the given facts applying IRAC:

• What rights (if any) does Fabio have against Tuscan Oven Pty Ltd and the manager Mario for breach of any of the implied consumer guarantees under the Australian Consumer Law (ACL)?
• Assume that shortly after the new pizza oven was installed, in the Northbridge restaurant it exploded because the Italian manufacturer installed a faulty gas seal. The pizzeria and restaurant sustains substantial damage and incurred unforeseen expenses and substantial loss of profits due to the explosion and the subsequent closing down of the pizzeria and restaurant.  What action would Fabio have against the Italian manufacturer under s 138 (if any) of the Australian Consumer Law (ACL) (if any)?

In your discussion following the pneumonic IRAC approach of legal analysis and problem-solving and as stated in the written assignment instructions and guide give full details of any legal action, that Fabio can take against Tuscan Ovens Pty Ltd) Tuscan) (the Italian manufacturer of the pizza ovens) and/or Mario the manager of Tuscan under both contract law and the Australian Consumer Law (ACL).

Deal with each of the issues and parties separately using appropriate headings and sub-headings as well as rules, principles, cases, relevant legislation, and referencing.

QUESTION 2

Christina aged 21, lives in Carine and had received a free sample of bath salts in her letterbox from Feel Unique Beauty Products Ltd (Feel Unique).  Christina put the sample on the kitchen table intending to throw it away as she was unsure whether to use them or not.  However as she just came from a hard game of netball, and the packaging looked nice, after some indecision, she decided to take a bath and use the free sample of bath salts that smelled of roses her favorite flower and as she was not going out that evening decided to pamper herself.

After, reading and following the instructions on the packet, Christina lit a few rose-scented candles for the atmosphere and then dissolved half of the contents of the packet of bath salts in a spa-bath of warm water.  Christina then immersed herself in the spa bath for 30 minutes.  While in the spa bath, listening to her favorite classical music and drinking a glass of Italian Rica Donna Champagne, Christina immediately noticed that her skin was becoming very red, itchy, and tingling.  When she emerged from the spa bath she noticed much to her distress and shock that even her face, but more especially other parts of her body had become extremely red as well as blotchy.  After Christina had dried herself very gently with a soft towel as her skin was very sensitive, she gently put on some aloe-vera body lotion all over her body to try to reduce the redness.  Unfortunately, however, despite putting on the aloe-vera body lotion to minimize the redness and itching, much to her horror it continued and spread very quickly all over her body, including face, hands, and feet.

As a result of using the free sample of bath salts, a terrible itch, and skin botching, and slight scaring developed which was very upsetting causing Christina severe stress and anxiety as she was forced housebound as it lasted for six months.  Also, during this period of recovering from the extremely severe skin condition from using the free sample of a bath product, the bath salts, Christina’s social life was adversely affected and she was also unable to play her favorite sport of netball with her friends.

In addition, as a result of the adverse skin condition from using the free sample of bath salts, while she was on sick leave for the first three months she was unable to and failed to share in a significant lotto win through the office syndicate of which she was usually an active and contributing member.

Christina has sought legal advice from a lawyer and now wants to take legal action against Feel Unique Beauty Products Ltd.  Christina wants to sue for damages for the adverse skin condition as a result of using the free sample of bath salts.  Additionally, she is seeking compensation (damages) for the adverse impact on her social life as well as for not being able to share in the significant lotto win at her office due to her sick leave for 6 months, against Feel Unique Beauty Products Ltd.