Business Law Problems - Assignment Example

Business Law Problems Angelina and her Stolen Jewellery I would advice Angelina as follows: An exclusion clause, to be valid, should have been included in the contract either at the time of forming the contract or prior to it1. In Olley, a notice had been displayed in a hotel room that could not have been observed at the time of booking the hotel room. Therefore, the court ruled that the exclusion clause, inherent in that notice could not have been incorporated into the contract2. The Uxbridge Mill House Hotel management cannot rely on exclusion clauses for evading liability, in respect of Angelina’s stolen jewellery. A proper notice had not been displayed and the exclusion clause had not been included in the contractual terms. The notices were so located that they were not visible at the time of entering the contract. In addition, the Unfair Contract Terms Act 1977 specifies that no contractual exclusion term can exclude or limit liability, if there had been negligence that had resulted in injury, death, or other loss or damage, where the term of the notice is unreasonable3. The Uxbridge Mill House Hotel’s contention The validity of an exclusion clause is to be verified, by invoking the provisions of the Unfair Contracts Terms Act (UCTA) 19774 and the Unfair Terms in Consumer Contracts Regulations (UTCCR) 19995. In Curtis, the court held that the defendant company was unable to evade liability, on the basis of an exclusion clause; as it had been distorted by its sales personnel6. In Thornton v Shoe Lane Parking, the court ruled that the defendant was liable for the injury, because the contract had been concluded at the time of purchasing the ticket at the ticket dispensing machine7. An exclusion clause averts liability, only if it is a part of the contract. Moreover, in the absence of adequate notice, an exclusion clause is ineffective. This is axiomatic in contract law. In L’Estrange the exclusion clause being printed in a manner that was difficult to read, was held to be inapplicable by the court8. Therefore, the Uxbridge Hotel’s contention, relying on the exclusion clause, is not tenable. Conclusion Therefore, the Uxbridge Mill House Hotel management cannot rely on exclusion clauses for evading liability, in respect of Angelina’s stolen jewellery. A proper notice had not been displayed and the notice had not been included in the contractual terms. The notices were so located that they were not visible at the time of entering the contract. In addition, the Unfair Contract Terms Act 1977 specifies that no contractual exclusion term can exclude or limit liability, if there had been negligence that had resulted in injury, death, or other loss or damage, where the term of the notice is unreasonable9. Therefore, as per the case law discussed above, the hotel management is liable for the loss caused to Angelina. 2) Pracash and Kali are angry about the Membership fee; The Uxbridge Mill House Hotel had offered to reduce membership by half, and this offer had been kept open till the 17th of June. Pracash and Kali posted the completed application on the 12th of June; however, due to delay in the postal service their acceptance letter reached only on the 19th, and they were not given the benefit of the concession. I would advice Pracash and Kali as follows: The advertisement given by the Hotel management is to be deemed an offer; in accordance with the decision in Carlill v Smokeball, wherein the Smokeball Company had contended that its advertisement was for the general public and not an offer. However, the court ruled that a contract had been formed, as the plaintiff had complied with the terms of the offer10. Pracash and Kali, subsequent to perusing the Hotel’s advertisement, completed the application for concessional membership and posted it. This shows that they had responded to this advertisement, which constitutes an acceptance. They had posted the application on the 12th of June. As per the postal rule, acceptance was completed when they had posted the letter of acceptance. Thus, acceptance is to be construed to have been completed on the 12th of June. The relevant case law is that of Adams v Lindsell, in which it was held that acceptance transpires when the letter of acceptance is posted, and not when it is received. As such, the court ruled that placing the letter of acceptance in the mailbox was tantamount to an explicit act of acceptance11 (Adams v. Lindsell, 1818). Contention by the Hotel Management The Hotel management contends that the concessional offer was closed on the 17th of June, whereas the application was received by them only on the 19th of June; and that as a result, they were ineligible for the concession. Their stance was that the application from Pracash and Kali reached them after the offer was closed. This is not tenable, because as per the postal acceptance rule, the contract was completed, at the time of posting the letter of acceptance. Since Pracash and Kali had posted the letter of acceptance before the offer was closed, the hotel Management will be responsible for a breach of contract, if they fail to provide a fee concession, as agreed upon by them in their advertisement. Therefore, the Uxbridge Mill House Hotel will be liable for breach of contract, if it fails to allow a concession in the membership fees to Pracash and Kali. In addition, the Hotel management has to refund the excess amount charged. 3) Compensation for Pracash’s Injury I would like to advice Pracash as follows: Pracash was seriously injured, due to the negligence of the Hotel management, as well as the Pro Fit Company that had manufactured the exercise device. Relying on the statement of the employee of the Hotel, Pracash suffered an injury, after using the defective product. Hence the Uxbridge Mill House Hotel is liable for the misrepresentation made by its employee. A false statement of fact, while forming a contract constitutes a misrepresentation. If a party to a contract undergoes loss due to a misrepresentation by the other party, then that party can claim damages or cancellation of the contract. In Derry v. Peek, the House of Lords held that it was sufficient for the plaintiff to establish that the defendant either knew or believed the statement to be false12. Consequently, the Hotel is liable for the damages, in respect of the injuries caused to Pracash. As per the provisions of the Supply of Goods and Services Act 1982, the Hotel management is required to provide its services, with reasonable care and skill13. Hence, it cannot evade liability, under the pretext that only Pro Fit is liable for the injury caused to Pracash. Contention by the Hotel The Sale of Goods Act 1979 requires goods to be suitable for the purpose for which they are manufactured and sold14. In addition, this act specifies that in sale of goods by description, the goods have to conform to their description15. Moreover, incorrectly described goods can be returned by a buyer who had relied upon the description, for making the purchase. In Beale v Taylor, a vehicle purchased on the basis of its description by the seller, was deemed to be a sale by description16. However, in Slater v Finning Ltd the court held that if the buyer wished to use the product for an abnormal purpose that had not been revealed to the seller, then a claim under the Sale of Goods Act would not succeed17. The Uxbridge Mill House Hotel can proceed against the Pro Fit Company for breach of implied terms under the provisions of Sale of Goods Act. They can claim a replacement or repair, in addition to damages for breach of contract. Conclusion The manageress Carlotta’s refusal to accept liability for the injury sustained by Pracash, due to the use of the defective exercise equipment, by drawing attention to the exclusion clause printed at the foot of the application in fine print, is not tenable. This is due to the fact that no contractual term can limit or exclude liability in cases of personal injury, death or loss to property. Moreover, the Pro Fit Company is liable for the damages caused, to the Hotel, as well as Pracash; for breach of implied terms, regarding the quality of the product sold. This is in accordance with the provisions of the Sale of Goods Act 1977 and the Supply of Goods and Services Act 1982. 4) Dean’s Dismissal I would advice Dean as follows: Dean had been employed with this Hotel for more than two years. Therefore, he is to be considered an employee of the Uxbridge Hotel, as per the provisions of employment law. At the time of his appointment, Dean had been provided with a copy of the rules applicable to employees. The rules had clearly specified that whenever there were clients, the gymnasium was not to be left unattended. Dean contented that he had left the gymnasium for a brief period, and that the injury was occasioned by the defective equipment and not due to his absence. This explanation was rejected and Dean was dismissed from service, with two month’s pay instead of a notice. The injury to Pracash was on account of the defective exercise equipment, and not due to the momentary absence of Dean. Therefore, Dean is not guilty of gross misconduct. The Employment Rights Act 1996 declares that a fair dismissal should necessarily be related to conduct, capability, redundancy, retirement, statutory illegality or some other substantial reason18. In the absence of one of these reasons, the dismissal will be deemed to be unfair. Moreover, fairness is ascertained by observing whether the employer had been reasonable in dismissing the employee19. A disciplinary procedure should be consistent, effective and equitable. The outcome of the procedure is to be informed to the employee in writing. In the event of misconduct being established, the erring employee is to be given a written warning. If the employee’s conduct does not improve then a final written warning is to be issued20. The ERA provides an employee with the right not to be dismissed by the employer21. In accordance with the decision in Mennell v Newall, termination of employment, in the absence of adequate notice, renders the employer liable for legal action22. An employee should be dismissed, only by a suitably authorised manager. In addition, the employee has to be provided with the reason for such dismissal, the appropriate period of notice and a right of appeal23. Contention of the Uxbridge Mill House Fitness Centre This incident had occurred in the absence of the duty manager, Dean, at the Fitness Centre. Carlotta expressed her displeasure with Dean, for his absence, and informed him that a disciplinary hearing was to be conducted, and that Dean was liable for gross misconduct. Dismissal without notice is only permitted for gross misconduct, for instance if violent behaviour is involved24. The Hotel Management had interpreted Dean’s momentary absence from the gymnasium as an act of gross misconduct, and terminated his employment without notice. Conclusion Dean was dismissed for alleged gross misconduct, without any warning being issued to him. An employee with more than a year’s service has the right, not to be dismissed unfairly25. He had represented that he was always in the habit of being present at the gymnasium, and that only on one particular occasion he had been absent for a short duration. Thus, Dean is not guilty of gross misconduct. Hence, the Hotel management should have given him a warning, before taking any serious action against him. Consequently, the disciplinary proceedings were patently unfair. As such, Dean’s dismissal is in breach of the Employment Rights Act 1996. Consequently, Dean can approach an employment tribunal for redress of his unfair dismissal. He can claim reinstatement to the same job, re – engagement to a different job, or compensation for the losses suffered by him, on account of his dismissal. List of References Acas 2009. Code of Practice 1. Disciplinary and grievance procedures. Available from < http://www.acas.org.uk/CHttpHandler.ashx?id=1041 > [1 December 2009] Acas 2009. Discipline and grievances at work. Available from < http://www.acas.org.uk/CHttpHandler.ashx?id=1043 > [1 December 2009] Adams v Lindsell (1818) EWHC KB J59 Beale v Taylor (1967) 1 WLR 1193 Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1 Curtis v Chemical Cleaning and Dyeing Co Ltd (1951) 1 HB 805, 1 All ER 631 Derry v Peek (1889) LR 14 App Cas 337 Directgov. Being dismissed by your employer. Available from < http://www.direct.gov.uk/en/Employment/RedundancyAndLeavingYourJob/Dismissal/DG_10026619 > [1 December 2009] Employee Rights Act 1996 Hardwick Game Farm v Suffolk Agricultural etc Association (1969) 2 AC 31 Holland, James & Burnett, Stuart. Employment Law Legal practice course guides. 2007. Oxford University Press L’ Estrange v Graucob (1934) 2 KB 394 Mennell v Newell & Wright (Transport Contractors) Ltd [1997] IRLR 519 (CA) Olley v Marlborough Court Hotel (1949) 1 KB 532 Sale of Goods Act 1979 Slater v Finning Ltd (1996) 3 WLR 190 Supply of Goods and Services Act 1982 Thornton v Shoe Lane Parking (1971) 1 All ER 686 Unfair Contract Terms Act 1977 Unfair Terms in Consumer Contracts Regulations 1999 Read More