Question

You are in the train station waiting for your train to arrive. You see a vending machine from where you can buy snacks and chips for $3.50. Posted on the machine is a sign saying: “Property of XYZ Vendsolutions Pty Ltd”. You insert the coins required into the machine and out comes a packet of chips. However, when you open the packet of chips, you find bits of plastic inside and you don’t want to eat the chips. You want your money back.

Required:
With reference to the essential elements for the formation of a contract, explain:
a) Did you enter into a contract in this scenario? (5 marks, maximum 500 words)
b) If your answer is yes, with whom did you enter a contract? (5 marks, maximum 150 words)

Answer 1

a) Did you enter into a contract in this scenario?

No, a contract was not formed in this scenario because even if there were the following elements:

• Offer - the vending machine is offering the snacks
• Acceptance - the customer saw the inside the vending machine, and decided to buy one.
• Consideration - there was consideration because the customer exchanged money for the snack.
• Mutuality of obligation - the customer is obliged to pay, and XYZ Vendsolutions Pty Ltd is obliged to offer the snack.

This last element was not fulfilled:

• Competence - the customer expects to get a snack without pieces of plastic, and XYZ Vendsolutions Pty Ltd was obliged to do so. The customer is entitled to get his money back.