Mr. Ellis lives in rural Victoria. His property is off the electricity grid and has no independent

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Mr. Ellis lives in rural Victoria. His property is off the electricity grid and has no independent source of power.

On 22 October 2012, he signed a purchase agreement with Bailey Engineering Pty Ltd for a 3.6kW hybrid power system. The model of the system was Firefly CYGNUS 3.6. He dealt with Mr. Bailey, director of the company. The purpose of the system he purchased was to provide power through the combination of a wind turbine and solar panels. The purchase price of $19,800 included full installation. Mr. Ellis paid a deposit of $11,900. The balance of $7,900 was to be paid when the installation was completed and the system generated

power as intended. Mr. Ellis is a tamer and that was the first time he bought a hybrid power system.

Footnote number five in the agreement contained a clause stating that "The batteries installed in the system

are supplied by Bosch Germany. Thus, Bailey Engineering Pty Ltd will not be responsible for their functioning as well as any damage caused by them". Since Mr. Ellis did not read the footnotes in the agreement, he was unaware of that clause when he signed the agreement. One day before the meeting to sign the contract, Mr. Ellis received an email from Mr. Bailey. The email was entitled "Advice on Maintenance". Apart from the detailed information regarding the way the system should be maintained, the last lines of the email also stated that "The batteries installed in the system are supplied by Bosch Germany. Thus, Bailey Engineering Pty Ltd will not be responsible for their functioning as well as any damage caused by them". Mr Ellis opened the email but read it in hurry and thus missed the statement in the last lines of the email. The receipt of the deposit also contained

the same statement. However, it was not clear whether Mr. Ellis checked the receipt or not.

The hybrid power system was installed at Mr. Ellis's property by Bailey Engineering staff on 23 October 2012.

No Energy Efficient Light Bulbs were provided to Mr. Ellis. To reduce costs, Bailey Engineering used the batteries made in China by Amperex Technology to install in the system for Mr. Ellis. When Bailey Engineering staff finished the installation, they turned the system on and left the property. The system ran for a couple of hours and then turned off by itself. Mr. Ellis tried to restart the system many times but the problem persisted.

During the time the system appeared running, it did not generate any power.

On 25 October 2012, Mr. Ellis called Bailey Engineering to report the problem. Bailey Engineering staff came and discovered that the batteries malfunctioned and did not charge sufficiently to generate power. Specifically, it was a 220voltage system, if the battery charge dropped to 200voltage it would shut off. After being informed of the problem and its cause, Mr. Bailey called Mr. Ellis and told him that "if you pay an extra $5000, we will change the batteries and make the system work for you". Mr. Ellis was in need of power and thus he agreed to the requirement.

On 7 November 2012, the batteries of the hybrid power system were replaced by Bailey Engineering staff and the system started generating power. The replacement batteries were also made in China by Ampere Technology.

The hybrid power system worked for five days but then the batteries overheated and exploded, destroying the entire roof of Mr. Ellis’s house. Mr. Ellis had to spend $30,000 to repair his house. During the time the system worked, the batteries can be charged up to 210 voltage only. Being frustrated with the problems, Mr. Ellis refused to pay Bailey Engineering the remaining $7,900 and $5,000.

Discuss who can sue whom for what? (all relevant legal issues should be discussed regardless of whether these relevant legal issues are successful or not).

Do not discuss tort law.