Business And The Law Assignment 2: Case Study

LEGT 1710 BUSINESS AND THE LAW ASSIGNMENT 2: Semester 2, 2013 Length: 2000 words Worth: 20 Marks Due date: Monday 23 September 2013, by 5pm (See Course Outline Part A at para 4.4 for Submission Procedure) Winston operates a business, painting murals and other art works in offices and other commercial buildings. Over the past two years he has bought paint twice a month from Ron, a local paint manufacturer. Recently, Winston bought 100 cans of paint from Ron, which Winston then put in his storeroom together with some valuable works of art. Over the next week, Winston used 10 cans of the paint on one of his jobs, but because of negligent manufacture by Ron, the paint was of poor quality and cased damage to the client’s building. Winston had to pay $20, 000 compensation to the client. Later, 40 of the other cans exploded in the storeroom and damaged Winston’s valuable works of art. This happened because Jeff, one of Ron’s employees, had a personal grievance against Winston and deliberately put the wrong substance into those 40 cans. The damage to the works of art is worth $40, 000. Winston has demanded compensation from Ron. However, there is a notice on the receipt that Ron gave to Winston at the time of purchase that states: “Ron is not liable for any loss or damage caused by the paint, regardless of how much loss or damage may be caused.” The same words also appear on a small sign on the counter of
Winston has never read either the notice on the receipt or the sign. You are now asked to advise Winston whether: (a) He is bound by the words on the receipt or the sign? (15 marks) (b) Would it have made any difference to your answer if Winston had read the sign at the time of buying the paint and had asked what it meant and been told by Ron’s salesman that it excluded Ron for liability only if the paint fumes affected people with an allergy to those fumes? (5