Rachel recently purchased a new home and went to Snazzy Stores Ltd to buy curtains. She explained to the salesman that she suffers from severe allergies to wool, and that she requires wool-free curtains. The salesman explained that he has lots of wool-free curtain material.

The salesman showed Rachel some sample fabrics, and Rachel chose a design she liked. She showed the salesman the window measurements for her bedrooms and living room, and the salesman told her that his fabrics would be fine.

Rachel then signed a written contract for $10,000 for the manufacture and installation of the curtains for her house. Clause 3 of the contract states that:

‘All statutory guarantees are excluded from this contract, and the liability of Snazzy Stores Ltd for any loss or injury resulting from the installation or manufacture of our curtains is limited to the repair or replacement of the installed curtains.’

A week after the curtains were installed Rachel has been hospitalized for a severe allergic reaction that was caused due to the curtain fabric. Rachel later finds that the curtain fabric is 25 per cent wool and 75 per cent cotton. Rachel’s hospital bills are $20,000.

(a) Advise Rachel whether she has any rights under the ACL for breach of the statutory guarantees of acceptable quality and fitness for disclosed purpose?

 (8 marks – approximately 16 minutes of writing time)

(a) Apart from the above statutory rights, what other rights does Rachel have under the ACL? Use appropriate sections and cases to support your answer.

(7 marks – approximately 14 marks of writing time)