Discuss the legal issues arose. Explain your answers with relevant legal principles (business law) and cases. Make reasonable assumptions if necessary, state these assumptions clearly in your answers.
Justin is a vase manufacturer and has posted the following advertisement in a local newspaper:
Explain what can be done to overcome the errors and biases in the appraisal system?Best vases in town! Dont get surprises from your bills anymore as we charge a fixed fee at HK$3,500 per vase. Send in your design with a bearer cheque and we will make you the perfect vase! If you find any cracks or defects, get a full refund PLUS HK$10,000 to compensate for your inconvenience. This is how good and confident we are. A simple FACT, our vases are PERFECT!
Johnson is employed by Neoma, a furniture dealer. She instructed Johnson to find a manufacturer to make her newly designed vases. Johnson found the above advertisement when reading the newspaper and wrote to Justin, requesting 20 vases being made according to a sample image attached with the letter. A bearer cheque, with the drawer named Sam, of HK$70,000 has been enclosed in the letter. Justin delivered the 20 vases, made in accordance with the sample image, to Johnson after a week. Johnson checked the vases briefly and accepted the delivery with a receipt being issued by Justin. On the back of the receipt, a disclaimer precludes all liabilities, including any cracks or defects on the vases. Johnson brought the vase to Neoma and Neoma noticed that there are some tiny, almost unnoticeable, cracks. Neoma was angry and fired Johnson immediately. She also withheld Johnsons salary for the last month to compensate her business loss, since she paid for some defective, although may not be immediately unsafe, vases. More importantly, she can no longer fulfil the orders of vases placed by some customers because of his stupid mistake.
After delivering the vases, Justin went to the bank and the teller, Sam, noticed that it was the cheque he lost in a robbery. Sam refused to honour the cheque, claiming that he did not authorize Justin to take his money, and asked where Justin got it. Justin [not Sam] did not reveal anything, called the police and reported that Sam was stealing the money he earned from his ordinary business activity.