QUESTION 3. (15 Marks) Costas operated a restaurant and wanted to change its image through buying some new furniture for

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QUESTION 3. (15 Marks)
Costas operated a restaurant and wanted to change its image
through buying some new furniture for the restaurant. He decided on
some table and chairs which he purchased for a total of $45,000
from Liberty Furniture in Parramatta. Costas was handed a written
sales contract which he was required to sign. However, before he
signed the written contract, he asked the sales representative from
Liberty Furniture, “I am only going to sign this contract if I have
a guarantee that these tables and chairs are of good quality”. The
sales representative then stated, “We stand behind every item of
furniture we sell and offer full refunds where customers are not
fully satisfied. We have been in business for 50 years without any
complaints”. Costas then said “That is exactly what I wanted to
hear and so now I will sign this contract”. Immediately after this
discussion, Costas and the sales representative of Liberty
Furniture then proceeded to sign the sales contract. Included in
this written sales contract were details about the items purchased
(100 chairs and 50 matching tables said to be of commercial grade
and long-lasting), the price paid, the delivery date and place.
There was also, hidden away in fine print at the bottom of the
document, a clause, clause 5, which stated: “Liberty Furniture
accepts no responsibility for the furniture items supplied as these
have been supplied by third parties to Liberty Furniture.
Accordingly, Liberty Furniture provides no warranty, refund or any
other remedy if a customer is unhappy with any furniture item or
items for any reason.” Costas had never purchased any item from
Liberty Furniture previously and no one at Liberty Furniture at any
time pointed out to him what was contained in clause 5 of the
written sales contract. The terms of clause 5 are unlike any terms
used by any other furniture retailer in Australia. The new
furniture looked impressive but unfortunately for Costas the
quality turned out to not be satisfactory. After only 2-3 weeks
from purchase, Costas was made aware by some of his unhappy
customers that some chairs started breaking and even some table
legs from some tables had started coming off. What made things even
worse was that the slightest of scratches against the items of
furniture would leave noticeable and lasting marks. It seems this
was because the type of timber used in the manufacture of the
furniture items made them unsuitable for commercial use. Costas is
furious and has contacted the manager of Liberty Furniture and
demanded that either the damaged items are replaced, at no cost to
Costas, or that he should be able to return all the furniture and
obtain a full refund. The manager of Liberty Furniture is refusing
to take either of those actions and points to clause 5 of the sales
contract denying any liability. Less than 4 weeks after the
purchase, on checking all the furniture carefully, Costas has
determined that 48 of the 100 chairs purchased are either already
badly scratched or broken. Of the 50 tables purchased, Costas has
found that all 50 of the tables have already been badly scratched
so much so that their appearance is unsightly and that 24 of these
tables have lost either 1 or 2 of their four legs. Costas has also
discovered that Liberty Furniture has had many hundreds of
complaints over the years and is well known to consumer protection
agencies in NSW. He has also discovered in another clause written
in fine print within the contract document that Liberty Furniture
only offer full refunds when a customer agrees to pay an additional
fee of 50% of the purchase price.
a) Advise Costas, referring to (separately) BOTH the common law
contract law provisions AND the consumer law statutory guarantees
as to what, if any, legal rights Costas has against Liberty
Furniture. (12 marks).
b) What remedies, if any, can Costas seek from Liberty Furniture
should he succeed in his legal action against them? (3 marks).