Business Law

There is an upcoming art exhibition at ‘Gallery Vista’ in North Melbourne. The gallery’s organisers sell tickets for the exhibition at their ticket booth. You visit the booth to purchase tickets. On the booth counter, there is a sign displaying the following exclusion clause:

“The gallery organisers are not responsible for any damages to artwork or personal belongings of visitors attending events at Gallery Vista.”

You fail to notice this statement when you buy your tickets because the ticket seller has placed their coat over it. It remains concealed from your view at the time. This is your first time buying tickets at Gallery Vista and so you do not know about the sign.

Two weeks later, you attend the art exhibition at Gallery Vista. While viewing a painting, a security guard employed by Gallery Vista spills coffee on you and ruins your expensive camera that you had brought with you to take photos of the artworks.

You are upset about the damage to your expensive camera. The gallery organisers wish to rely on the exclusion clause on the sign at the ticket office to argue that they are not liable for the damage to your camera. Given your uncertainty about the enforceability of this exclusion clause, you turn to a Generative AI system for legal guidance regarding this situation. The Generative AI system offers the following response:

‘Is the exclusion clause valid? Can the gallery organisers use it to avoid liability? In contract law, for a clause to be considered a part of the contract, it needs to be clearly communicated and deemed reasonable. In this situation, the notice at the ticket booth could be seen as a part of the contract if it was adequately shown to the ticket buyer. However, because it was hidden by a coat, it might not have been effectively communicated or made a part of the contract. As a result, the gallery organisers might face challenges when trying to use this clause to avoid liability for the damage to your camera.’

Part A (2 marks): Using the Generative AI produced response above, identify the elements of the IRAC method that are reflected in this response. That is, identify which sentence(s) addresses the issue, rule, application, and conclusion steps of the IRAC process. Please type your answer directly into the box below.

There is an upcoming art exhibition at ‘Gallery Vista’ in North Melbourne. The gallery’s organisers sell tickets for the exhibition at their ticket booth. You visit the booth to purchase tickets. On the booth counter, there is a sign displaying the following exclusion clause:

“The gallery organisers are not responsible for any damages to artwork or personal belongings of visitors attending events at Gallery Vista.”

You fail to notice this statement when you buy your tickets because the ticket seller has placed their coat over it. It remains concealed from your view at the time. This is your first time buying tickets at Gallery Vista and so you do not know about the sign.

Two weeks later, you attend the art exhibition at Gallery Vista. While viewing a painting, a security guard employed by Gallery Vista spills coffee on you and ruins your expensive camera that you had brought with you to take photos of the artworks.

You are upset about the damage to your expensive camera. The gallery organisers wish to rely on the exclusion clause on the sign at the ticket office to argue that they are not liable for the damage to your camera. Given your uncertainty about the enforceability of this exclusion clause, you turn to a Generative AI system for legal guidance regarding this situation. The Generative AI system offers the following response:

‘Is the exclusion clause valid? Can the gallery organisers use it to avoid liability? In contract law, for a clause to be considered a part of the contract, it needs to be clearly communicated and deemed reasonable. In this situation, the notice at the ticket booth could be seen as a part of the contract if it was adequately shown to the ticket buyer. However, because it was hidden by a coat, it might not have been effectively communicated or made a part of the contract. As a result, the gallery organisers might face challenges when trying to use this clause to avoid liability for the damage to your camera.’

Part B (8 marks): The Generative AI response provided is incorrect and lacks identification of all legal issues. Additionally, it does not accurately apply the law to the facts. Your task is to present a clear overview of the legal situation as it relates to the status of the statement on the sign.

You are therefore required to write a new response that accurately addresses the following legal issues:

· Is the exclusion clause incorporated into the contract?

· Does the exclusion clause, according to its wording and given the events that have occurred, exclude or limit Gallery Vista’s liability for the damage caused to your camera?

You must refer to our contract law course materials to support your response.

For this question, please address contract law rules relating to incorporation and interpretation only. ( Do not address the issues of breach or damages in this question.)

Ensure that you fully explain your answer, and that you apply relevant sources of law (case law and legislation) as appropriate. Please type your answer directly into the box below.

You have entered into a contract with a catering company called Gourmet Delights Catering Pty Ltd (referred to as ‘Gourmet Delights’) to provide catering services for a launch party celebrating the official opening of your new business. The party will take place at your new office.

Your contract with Gourmet Delights outlines that they are responsible for preparing and serving food to your guests. It also states that Gourmet Delights can use your office kitchen to prepare the food, but that they must take care to prevent damage to your kitchen facilities.

On the day of the launch party, Gourmet Delights arrives late and unprepared. They rush to serve food to your guests without taking proper care in using the kitchen at your office. Unfortunately, their actions lead to damage to the oven, resulting in a fire in your new office space.

As a consequence of this fire, Gourmet Delights fails to fulfil their contractual obligation to serve food to your guests. Furthermore, due to the damage caused by the fire, you are forced to close your office space for three months. This closure results in a loss of $25,000 in profits.

Now, you are considering terminating your contract with Gourmet Delights and seeking compensation for the losses incurred as a result of their breach of contract. You are uncertain about whether you have the right to do so, which is why you seek advice from a Generative AI system, which has provided the following response:

‘Can you terminate the contract with Gourmet Delights and seek damages for the losses incurred as a result of their breach of contract? In contract law, damages are a monetary award given to the innocent party to compensate for any losses suffered as a result of the breach of contract. Gourmet Delights breached the contract by failing to fulfil their obligations and causing damage to your office space. The fire and subsequent closure of your office space resulted in significant financial losses. You can terminate the contract with Gourmet Delights and seek compensation for the losses incurred as a result of their breach of contract.’

Part A (2 marks): Using the Generative AI produced response above, identify the elements of the IRAC method that are reflected in this response. That is, identify which sentence(s) addresses the issue, rule, application, and conclusion steps of the IRAC process. Please type your answer directly into the box below.

You have entered into a contract with a catering company called Gourmet Delights Catering Pty Ltd (referred to as ‘Gourmet Delights’) to provide catering services for a launch party celebrating the official opening of your new business. The party will take place at your new office.

Your contract with Gourmet Delights outlines that they are responsible for preparing and serving food to your guests. It also states that Gourmet Delights can use your office kitchen to prepare the food, but that they must take care to prevent damage to your kitchen facilities.

On the day of the launch party, Gourmet Delights arrives late and unprepared. They rush to serve food to your guests without taking proper care in using the kitchen at your office. Unfortunately, their actions lead to damage to the oven, resulting in a fire in your new office space.

As a consequence of this fire, Gourmet Delights fails to fulfil their contractual obligation to serve food to your guests. Furthermore, due to the damage caused by the fire, you are forced to close your office space for three months. This closure results in a loss of $25,000 in profits.

Now, you are considering terminating your contract with Gourmet Delights and seeking compensation for the losses incurred as a result of their breach of contract. You are uncertain about whether you have the right to do so, which is why you seek advice from a Generative AI system, which has provided the following response:

‘Can you terminate the contract with Gourmet Delights and seek damages for the losses incurred as a result of their breach of contract? In contract law, damages are a monetary award given to the innocent party to compensate for any losses suffered as a result of the breach of contract. Gourmet Delights breached the contract by failing to fulfil their obligations and causing damage to your office space. The fire and subsequent closure of your office space resulted in significant financial losses. You can terminate the contract with Gourmet Delights and seek compensation for the losses incurred as a result of their breach of contract.’

Part B (8 marks): The Generative AI response provided is incorrect and lacks identification of all legal issues. Additionally, it does not accurately apply the law to the facts. Your task is to present a clear overview of the legal situation.

You are therefore required to write a new response that accurately addresses the following questions:

· Has there has been a breach of contract?

· Can you terminate the contract?

· Can damages be awarded in this situation? In assessing if damages will be awarded, be sure to have regard all steps in a damages analysis, including: measure of damages, causation, remoteness and mitigation.

You must refer to our contract law course materials to support your response.

For this question, please address contract law rules relating to breach of contract, termination, and damages only. ( Do not address the issues of incorporation and interpretation in this question.)

Ensure that you fully explain your answer, and that you apply relevant sources of law (case law and legislation) as appropriate. Please type your answer directly into the box below.