Business Law - Contracts in English Law - Assignment Example

English Law of Contract Module Module Number Academic Year Seminar Essay Question: Case Studies about English Contract Law number Part A The agreement between Mr Dabur and his employer regarding the parking services arguably constitutes a valid contract. As such, both parties are obliged to perform their sides of the bargain in good faith. The relationship meets the four primary elements of a contract, which are: an offer, acceptance, intent to create a legal relationship and consideration. All of these elements are present in this case as follows: first; there is an offer by the university to provide parking services for the staffs. According to the ruling in Williams v Carwardine [1833] 5 C & P 566, Dabir is well aware of the definite, clearly indicated offer to provide parking services. Second, in Chappell v Nestle [1959] 2 All ER 701 the court decided that a valid acceptance must have some value. In this case Dabir accepted only what the university offered, which was parking services for a £100 fee. This implies that by parking his car at the university parking lot, he had accepted the proposal without any other conditions such as a counter-offer. As such, this case constituted an agreement in this respect because of the lack of a counter offer by the professor. The general rule does not limit the making of the final offer to any party; rather what matters is the acceptance of the offer in question, which then ends the negotiations by setting up the rules of engagement under the contract. In this case, Mr Dabir communicated his acceptance of the offer by action; he practically drove his car to the parking lot. Third, an enforceable contract requires parties to demonstrate their intent to enter into an agreement that is legally binding. In this case, both the university and Mr Dabir showed their intent to set up an enforceable legal relationship. Despite the fact that the intent to create enforceable relations was not made in writing, the employer’s offer to provide parking services and Mr Dabir’s acceptance of the offer suggests the intent of both parties to create an enforceable relationship, which would be geared towards the employer being able to earn the parking fee from Mr Dabir who would, in return benefit from his private means of transport the parking services. Owing to the lack of express communication suggesting the offeror’s lack of intent to create legal relations, the contract between the two parties is legally enforceable. This case is similar to that of Bowerman v ABTA [1996] CLC 451 in which ABTA members had received communication through their offices, which the court considered as constituting the offeror’s intent to create legal relations with the defendant1. Finally, consideration in this case comes in the form in the university’s promise to provide parking services in return for the annual fee. Although, consideration involves the payment for a good or service, it may not be. Consideration constitutes anything of importance to the contract including a pledge to or not to engage in particular practices under the contract. Consideration in this case was met by Mr Dabir, considering that in Williams v Roffey [1990] 1 AER 512, the court said positioning oneself to benefit from a contract would practically amount to consideration2. Besides, Mar Dabir made the consideration without any duress as many other persons were also willing to use the limited parking services provided by the university. In general therefore, there is an enforceable contract between Mr Dabir and the university through the latter’s agents in the parking attendants and the security personnel. Damages and compensation In light of the damages upon Dabir in his lost car and high commuting costs, he has sufficient grounds to sue the University for the losses. In response, however, the university could argue that it had acted reasonably by effectively incorporating the exclusion clause in the parking contract with the university staffs. The university may argue that it satisfied the test provided under Thornton v Shoe Lane Parking Ltd [1971] 2 QB 163, where the court said the exclusion clause violated the principle of incorporation. Unlike in Thornton where exclusion from damages was printed on the back of the parking ticket, the university may argue that its exemption term was well written at the entrance to the parking lot where every reasonable driver would see it. In addition, the university may argue that Mr Dabir was 0.05 miles from qualifying for the parking services at the university facility. According to the university parking services is meant for staffs staying more than 10 miles away. As such, Mr Dabir does not qualify for compensation for any losses at the parking. Nonetheless, Dabir can then argue that the exclusion terms of the contract are unfair and the distance limitation is too immaterial to rely upon. According to the Unfair Contract Terms Act 1977, under Section II and Second Schedule, contractual clauses or terms restricting liability for negligence will only apply where they meet the reasonableness test. In light of this provision, Dabir may argue that the university was better-placed to provide security of drivers and their cars in the parking lot, but it did not despite having better bargaining power by virtue of its enormous resources including security at its disposal. In addition, the university’s act goes against Section 2(1) of the Act, seeking the annulment of any term restricting liability for an individual’s death or injury to their person. Therefore, the university’s act to provide parking services at an annual fee of £100 whilst excluding itself from any losses resulting from the arrangement fails the reasonableness test under Section 2(2) of the Act3. In respect of the ruling in C&P Haulage v Middleton [1983]1 WLR in which the court said plaintiffs should stand to gain no damages if they have not suffered any substantial losses under the contract, the losses upon Dabir are too material for a court to order performance. Dabir’s case may be decided in the same way as Farley v Skinner [2001] UKHL 49, where the court undertook the complex process of calculating the damages for psychological distress. However, unlike the complexity of determining the right amount of damages that would put the plaintiff back to his original position under a fair contract, the Dabir damages are easier to calculate. A court would grant him pecuniary damages that are commensurate to his lost car, commuting costs and any claims of distress that he suffered following the losses. Part B: Edwina v The Bookstore Edwina’s case amounts to misrepresentation. It is an act of inaccurate statement of fact by the bookseller, which then induced her to enter the contract for the sale of the book of Anne Roberts rather than the latest edition by James Roll. The seller’s statement during negotiation may constitute innocent misrepresentation, fraudulent misrepresentation or negligent misrepresentation of fact depending on the available evidence. The impact of Edwina’s finding of the misrepresentation technically leaves the agreement voidable and thus, it may be set aside by court at the buyer’s request. Otherwise, the court would order performance by the seller. The remedy accessible to Edwina would be based on the kind of misrepresentation; however, a court is most likely to order her to return the wrong book and claim damages as the result if the seller is unwilling or unable to perform the contract. Still, Edwina may forfeit her capacity to rescind the sale if the court established that the seller’s conduct was innocent misrepresentation. Regardless, the primary body of law regulating the case is Misrepresentation Act 19674. False statement In order to make a successful claim, Edwina must prove that the seller’s recommendation was indeed a false declaration of fact rather than mere opinion or prediction of future occurrences. In Bisset v Wilkinson [1927] AC 177, the claimant’s prayers were declined by the court on the basis that the perceived declaration of fact was indeed mere opinion. The defendant had not used the piece of land in question, but went ahead to claim that it could accommodate 2,000 sheep. His actions induced the buyer to make the purchase. Regardless, the case of Edwina is different from Bisset in the sense that the negotiation for the sale of the book was not based on any unpredictable future events. In addition, Edwina may bring successful misrepresentation claims against the bookstore and the assistant because, by virtue of assistant’s position, any statement made by him or her should be based on fact. As such, Edwina’s claims are likely to be granted based on the precedent in Smith v Land & House Property Corp (1884) 28 Ch D 7. In the case, the claimant bought a hotel from a seller who then referred to one of the residents as most desirable. In reality, however, the seller was fully aware that the person was bankrupt and had accumulated some arrears as a result of his financial difficulty. The court held the seller’s judgement as a statement based on fact and thus, enforceable. In contrast, the contract between Edwina and the bookstore did not place a fiduciary obligation on the seller as to refuse to disclose the right information regarding the date of publication of each book and any such concealment would not suffice5. Reliance Inducements are unfair influences by a party to a contract based on misstatement of fact. In this case, Once Edwina has proved that the bookstore assistant actually made an inaccurate statement in respect of the book she should shoulder the burden of evidence further and prove that the inaccurate statement induced her to give in to the contract. This may be easier, considering that she was ready to buy whichever of the two books was latest. However, based on the ruling in Horsfall v Thomas [1862] 1 H&C 90, Edwina is likely to lose the grounds for inducement for her inability to recognize the false statement made by the seller regarding the two books. Negligent representation By virtue of the position in which the book seller was serving in, the failure to identify the latest book constitutes negligent misrepresentation under Misrepresentation Act 1967, section 2(1). According to the provision, the assistant is liable for negligent misrepresentation by virtue of the statement given without reasonable basis for trust in its truth. In similar cases, the representor is bound to carry the burden of evidence for trusting the accuracy of the statement which he or she gave. This burden of proof is mostly insurmountable, especially if the seller proves that he or she did not know about the existence of the latest versions of the books in question. The same argument was presented in Howard Marine v Ogden [1978] QB 574, where the court dismissed claims for negligent misrepresentation in the use of a wrong register by a marine excavator and who had faith in the readings6. Remedies In the event that Edwina successfully proves misrepresentation claims against the bookstore, the court is likely to order a replacement of the wrong book with the right one, alongside compensation for her distress. In respect of the ruling in Cutter v Powell [1795] 6 Term Rep 320, the court may hold the assistant personally liable if the right book was in the store when the claimant visited it, but he or she did not make reasonable steps to sell a copy to Edwina. Regardless, all that Edwina needs is to seek the book’s replacement within a reasonable time. Edwina v Uxbridge University In respect of the injury on Edwina’s person following the accidental switch-off of the security lights while she was walking down the stairs, she may bring claims for damages against the university and the lecturer. In order to present successful claims, she should cite a breach of the implied duty of care, which the university through the lecturer’s agency owes to her by virtue of her contract for learning with the former. If successful, she would be compensated for the broken leg, and for the distress of having to tape-record the lectures due to her inability to attend classes as she used to do before the injury. However, a court may affirm the existence of a duty of care, but without a violation of the duty, Edwina would lose any compensation. Interestingly, such decision was taken in Liverpool City Council v Irwin [1977] AC 239, where the House of Lords established that the landlord (defendant) owed the tenants (claimant) an implied duty to facelift the premises7. However, the court held that the landlord did not breach the implied duty. Similarly, the court may establish that an implied term in a duty of care exists between Edwina and the university, but rule that the implied term was not breached by the accidental act of the lecturer. Specifically, the court could argue that the lecturer’s act was not made in bad faith as to point to the breach of the contract between the institution and the prospective claimant. Part III Professor Fillipo has been an employee of Uxbridge University for twenty years. As such, he qualifies to bring unfair dismissal claims against the employer. Generally, such claims can be brought by any employee who has been employed continuously for a year. In most cases, individuals with protected characteristics can still sue for unfair dismissal claims under the Equality Act 2010, even if their employment term has not lasted for a year. An expectant woman, for example, who has been dismissed on the grounds of her pregnancy may bring unfair dismissal claims under discrimination even if she has just been employed for a few months. According to the Employment Rights Act 1996, the university principal could only dismiss Fillipo fairly if: a) he was incapable of teaching properly; b) his acts amounted to misconduct; c) he had reached retirement age; d) His position was redundant; e) it would be illegal to continue allowing him to perform his duties, for example, after losing his certificate of practice, and; f) any other substantial reason such as business restructuring8. Fillipo’s case, however, did not meet any of these conditions. Besides, the employment contract upon which any such disciplinary actions should be based specifies that he was supposed to retire in a year’s time. In addition, even if Fillipo’s employer proved that Fillipo’s conduct constituted adequate grounds for the summary dismissal, she would still need to show that she acted reasonably. For instance, if the employer cited gross misconduct as the factor that led to her ‘reasonable dismissal decision,’ she would have to strengthen her case before an Employment Tribunal by arguing that the actual ground for the discharge, really was a serious misconduct correctable by such an equally serious response. Still, the employer should also prove that the lecturer’s misconduct was properly investigated by the university and that she was honestly convinced as a reasonable person in a similar situation would, that the lecturer engaged in the misbehaviour. Unfortunately, the case was not investigated nor was the principal’s decision backed by fact or reason. Finally, an Employment Tribunal would then explore whether, in respect of the prevailing circumstances, Fillipo’s dismissal was done fairly and as a necessity to salvage the situation. In this case, the employer is ill-equipped to prove to a Tribunal that her dismissal of Fillipo was fair. Moreover, even if the university principal did have sufficient grounds to dismiss Fillipo, she was bound to initiate a fair procedure as stipulated in the employment contract with the lecturer. In this case, therefore, the employer’s act was unfair because the dismissal did not follow the general provisions of the employment contract or acceptable procedures within the university. Fillipo can therefore bring claims against the employer for violation of the employment contract and seek damages resulting therefrom. Damages The case of Johnson v Agnew [1980] AC 367 would provide direction as to the possible damages that Fillipo can reasonably claim following the employer’s breach of the employment contract. In respect of the decision of Lord Wilberforce in the case, Fillipo should promptly file for claims for the breach. The landmark ruling established five major rules to regulate the awarding of damages; two of which apply in this case are: first, termination of contract over breach should be prospective; however, Fillipo’s employer was retrospective in his dismissal having acted after a two-week review period; and having denied him his secondary benefits. Second, the same rules for granting damages under the common law are applicable to awarding commensurate damages as provided for under the Supreme Court Act 1981, section 509. As such, equitable compensation under the contract would constitute the monetary loss that Fillipo is set to suffer following his unfair dismissal. Fillipo is also under some obligations; for instance, based on the ruling in Payzu v Saunders [1919] 2 KB 581 he is duty-bound to act reasonably and seek employment elsewhere without as soon as it is reasonable in order to mitigate costs. Failure to do so might result in reduced compensation for him. In addition, the compensatory damages may be scaled down if the tribunal established that Fillipo’s actions against the student were the trigger of his dismissal. Yet, if the tribunal established that the acts of misconduct by Fillipo were proportional to the employer’s actions, he would be entitled to half of the entire compensation. The compensation for Fillipo is likely to be decided based on the ruling in Hadley v Baxendale (1854)9 Exch 341, in which the court said such damages should be based on losses reasonably expected by the employee when the contract was in force. As such, the tribunal may, upon establishing the validity of unfair dismissal claims, order Fillipo’s re-instatement to his previous job or re-deployment in another job with similar benefits and or compensation. Compensation for Fillipo would comprise a basic award which is commensurate to legal redundancy pay of up to £10,500, in addition to a compensatory grant for loss of salary and allowances for the entire period of enforcing the employment contract. Fillipo would also stand to gain statutory awards and for expenditures, of up to £66,200 for the remainder of his term under the contract. If Fillipo added a violation of the contract to his claims, he could get a maximum of £25,000 in extra compensation10. 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