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Sam was interested in buying a television. He advertised in the local newspaper as follows: ‘Wanted: 80 cm colour television. Good condition. ‘Will pay a good price but need to collect by Friday.

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Sam was interested in buying a television. He advertised in the local newspaper as follows: ‘Wanted: 80 cm colour television. Good condition. ‘Will pay a good price but need to collect by Friday’. The next morning Bernie rang, saying that he had a television fitting the description. He said he would bring it around to Sam’s house at 3 pm. A few minutes later Peter rang. He said he had a good television for sale, but it was a television/DVD unit combined. Sam thought this sounded like a good idea and he drove around to Peter’s house to have a look. Peter s...

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Question Preview:

Sam was interested in buying a television. He advertised in the local newspaper as follows: ‘Wanted: 80 cm colour television. Good condition. ‘Will pay a good price but need to collect by Friday’. The next morning Bernie rang, saying that he had a television fitting the description. He said he would bring it around to Sam’s house at 3 pm. A few minutes later Peter rang. He said he had a good television for sale, but it was a television/DVD unit combined. Sam thought this sounded like a good idea and he drove around to Peter’s house to have a look. Peter showed Sam the television and the television was finished in a nice matt black finish and with soft, fluid lines. Sam said to Peter: “Have you ever had any problems with the picture?” Peter told him that the television was a colour television and had always worked well and there were no problems with the picture. Peter set up the television and showed Sam how the television worked. Peter also described the television as having UHF frequencies which really appealed to Sam. The program showing on the screen during the demonstration was an old and timeless black and white movie. Sam asked how much he wanted for the television and Peter replied that he would want $600. Sam said he would be prepared to pay $540. Peter agreed. Sam took the television home and found Bernie waiting by the door. He said that he had the television and wanted the $600 that it was worth. Sam was confused, and said that he never said he would buy the television. Bernie became very angry, and told Sam that if he did not agree to buy the television he might find himself seriously harmed. Sam was frightened, and therefore agreed to buy the television. He asked Bernie to bring the television around the next day when he would have the money. When Sam got inside he set up the television which he had just purchased from Peter. He watched it for a couple of minutes and discovered that it did not transmit UHF frequencies and in fact, it seemed like a black and white television as no colour worked. Sam was upset, and took the television to an electrician. The electrician said that there was a major fault and that it had most certainly been faulty when he purchased it. The colour was not operable and the television was not designed to transmit UHF. Sam had planned to use his television for a business presentation the following week and now stands to lose $2,000 as he will not able to complete the presentation. Required: Discuss all of the potential issues arising from this scenario in contract law for any party mentioned. You should use a problem-solving format when answering this question. Hints: In your answer, refer to the law of contract only. You do not need to consider Sale of Goods Acts or the Australian Consumer Law in your answer.

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Solution Preview

Sam was interested in buying a television. For the purpose of buying, he gave an advertisement in the local newspaper. In the advertisement, he mentioned the following specifications for the television required–:

a) It should be of 80 cm,

b) It should be a color television, and

c) It should be in good condition,

However, he did not mention the exact price but mentioned that he will pay a good price. Also he mentioned the delivery date which was “By Friday”.

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