The Legally Binding Contract - Essay Example

Faculty of Business Environment and Society 14 Module No 102SAM MODULE Management Affairs Following their engagement, Kim and Kanye decide they want… 1) On the requirements and contents of a legally binding contract under English Law 2) Of the consequences if Kim breaches their agreement 3) Advise the Board of Directors of Choc Delux of their liability to Kim under the tort of negligence. Contract law is largely concerned with the economic exchange in the market (Wishart, 2012). One thing should be considered that the UK contract law and the American law are different. In this case the offer is being made by the company, Choc Delux, to the couple, Kim and Kanye. In case the couple accepts the offer, the company and the couple will be bound under the UK law only within the UK. The wedding and the delivery of cake will be made into the US, so the UK contract law will not work in the US. Special circumstances surround this wedding, the couple enjoys international fame. Their wedding is a huge event, anything related to this event also becomes famous. Their wedding cake is no exception. As soon as the couple ‘accepts’ the offer, an agreement is made between two parties to the contract. The legally binding contract is made as soon as the acceptance of the offer is made. The offer will be accepted by Choc Delux as soon as Kim is done negotiating with the company about the cake. Everything that the company communicates to the other party (Kim and Kanye) will become part of their contract agreement. They will be bound by the English law to abide by the agreement as diligently and prudently possible. There is a slight exception about enforceability of the contract; promises made in social/casual agreements are generally not enforceable under the UK Contract Law. However, this case is not social or casual. This is a business and given the magnanimity of the event also binds the two parties in certain obligations. For instance, in general circumstances cancelling an order such as wedding cake would not be much news. This case is different as it will be a breach of agreement since it will be a huge loss to the Choc Delux Company if they lose the spot of providing cake for the big wedding. In case Kim breaches her agreement with the company she will be liable to pay the damages (the claim) from Choc Delux. The contract also states that Choc Delux is the sole provider of the wedding cake which means that if Kim and Kanye buy other cakes for their wedding then they will be in breach of the contract and will have to pay the claim in damages to the company. In case the breach happens from the couple’s side the company will see fit as to what kind of amount it seeks in damages. If the couple agrees to pay the exact amount (or any other form of compensation that the company sees fit) then the matter will be resolved. If the couple challenges the claim then they will have to settle it among themselves through out of court settlement. In case one party is still not satisfied then they have the right to appeal in court and claim damages. However, this is always the last option because court settlements are complicated; they consume a lot of time in decision making and on top of that, the hiring lawyers is not cheap. Moreover, it will bring negative publicity to both parties as the media will be eagerly chasing the story. Under the English law, Choc Delux has a duty of care towards their clients. It is obvious that the company is liable for the damages as it was their negligence that cost the client pain and financial loss. The company is liable for negligence. If they had been careful in making and packing the cake Kim would not be in pain. The company reasonably falls under the scope of liability. There was a causation and remoteness element in it. The company is guilty under the following categories. First and foremost the company has a duty of care to its clients. Kim and Kanye bought the company’s cake, it is company’s responsibility to make sure that the cake is up to the desired standards. When Kim bit into that cake and hurt herself for there was a fake nail in it, it was evident of breach of duty on the company’s part. This breach of duty caused harm. Kim broke her tooth and felt distressed because of this incident. She had to pay the dentist fee to fix her tooth. The harm was not remote. The company supplied a product directly at the doorstep of the couple. The company is liable until the cake is consumed. The couple did not breach any rule. The cake was presumably fresh and edible when Kim ate it. There cannot be any rebuttal from the company. Kim could not reasonably foresaw that there could be something inedible in the cake. There was no way of telling there could be harmful elements in the cake. The only leverage the company has is provision for extending the period in respect of latent damage (Bar & Drobnig, 2004). But that means they will have to either settle it through a mediator or go to the court. Given the fame this couple has it is not a good idea to highlight as the rival party against an international celebrity couple. The world will think of the company as evil and negligent and that will be bad for their business. The company does not have the leverage to say that the contract (a purchase of a cake on time) did not mention anything about nonedible things in the cake. The official bystander test derived from Shirlaw v Southern Foundaries (1926) suggest that prima facie is that in any contract there are certain things that are too obvious and it is common understanding that they are included in the contract whether explicitly stated or not (Poole, 2012). It is obvious that the company owes a duty of care to Kim and Kanye. It is common sense to expect a cake that is not filled fake nails. They simply cannot use the claim of ‘buyer beware’. There is no foreseeability in it that would have warned the couple before eating the cake. References Bar, C. V. & Drobnig, U., 2004. The interaction of contract law, tort and property law in Europe: A comparative study. Sellier European Law Publication. Poole, J. 2012. Textbook on contract law. Oxford University Press. Read More