A. Jack is completing his fifth week as a student at Deakin College. Jack wants to purchase a computer that can run a special app for his Business Analytics unit. He drops into the Apple Store in Chadstone and checks the available models. He is happy with the latest model and asks Ming, the sales representative, whether that particular model will run this specific app that he needs for his studies. Ming assures him that it will work and that he had sold that model to several other students who wanted to use the same app. After hearing the reassuring words of Ming, Jack signs the contract. The signed contract contained no specific reference to the requirement that the computer could run the app Jack wanted.

The contract contained an exclusion clause which stated that:

The Supplier is not liable to the Purchaser for any breach of warranty expressed or implied as to the ability of the Hardware to run any software.

Jack is unable to install the app, and essentially, the computer is useless to him.

Jack seeks your advice as to the following:

1. Is Mings statement about the computers ability to run the app a representation or a term of the contract?

2. Can Jack argue that the statement about the computers ability to run the app is an express term of the contract/collateral contract?

3. Is the express term about the computers ability to run the app a condition or a warranty?

4. Is the exclusion clause valid?

5. Would your answer to question (4) above would be different if Jack asks about the effect of this exclusion before signing the contract, and if Ming replies that it is just a standard clause in the computer industry and exclude liability only for failure of the hardware to run a pirated version of Microsoft Office?

B. In order to determine the rights and obligations of the parties to a contract, it may be necessary to consider both incorporation and interpretation issues. Explain, in broad terms, what is meant by incorporation and interpretation.