I would like some advice on what legal action, if any, I can take against a Silk Rug retailer who has committed a fraud. I will try to give as much background as possible.

In May 2012, we inspected and agreed to purchase a silk rug from a wholesale manufacturer in Turkey (after witnessing how the silk was extracted, the rugs were made and seeing the difference between excellent and low quality rugs). We were not able to take the rug with us from the manufacturer on the day as we were traveling for the next 3 months. They agreed to send the rug to us (in Australia) upon our return.

We have not paid for the rug in full, but have agreed to pay in installments. The first installment was agreed to be paid on August 15th (as per our contract) however the payment was taken early, on August 2nd, before we had even received the rug. My first question is - is this breach of contract by taken payment before authorisation?

The most concerning thing is, that upon inspection of the rug, we immediately felt that it was not the rug we had inspected and agreed to purchase at the manufacturer, but that they had sent us a far inferior product. The silk was of much poorer quality, not as soft and silkly to touch and the rug was covered in imperfections which were not on the rug we purchased.

We have since had the rug valued and the valuer also believes we have been given a "copy" based on his observation of the rug and the photos we provided of the REAL rug that we agreed to purchase in Turkey. This was based on 3 core observations: The tassles on the rug we have received are around 2cm shorter than on the rug we photographed, the colours are slightly different and the rug does not have the same shimmer that you get from high quality silk, and crucially, the rug we have received is 1cm longer and 2cm wider than the rug on our "certificate of authenticity". As silk is highly valuable and rugs are sold by size, it is not feasible that they would give us a larger rug than on the purchase documentation. Furthermore, the valuation of the rug we have received is almost a third of the value of the rug we committed to buy so it is clear they have not sent the real rug.

QUESTION: Is this considered a breach of the contract of sale by not providing the goods which we have committed to buy, and by attempting to defaud us by deliberately providing an inferior copy of the real product? Are we entitled to exit from the contract of sale? Is there any legal action we can take against this retailer for breach of contract in Turkey as that is where the contract was signed?

Many thanks for any assistance and advice.