Contractual Issues, Breach of Contract and Remedial Measures - Assignment Example

Contractual Issues, Breach of Contract and Remedial Measures A contract is a legally enforceable binding on one or more parties mentioned in the agreement executed for the performance of specific assignment (Graw, 2002). Breach of agreement invokes legal course of action against the non-performer. The remedy in law available for breach of contract designed for specific performance attracts damages or claim of monetary compensation (Graw, 2002). As per common law of Australia, contractual obligations are mutually agreed upon by the party or parties signed the contract. The salient feature of contract is one who draws it and the other accepts it. This is considered to be the mutual consensus of one or more parties. In implied contract or quasi contract, some of the terms are not expressed in writing. (Holm, 2009) Take the example of an electrician who visits a house for electrification work. The owner of the house is a person who agrees to pay the fee for the services rendered by the electrician. If he/she (owner of the house) refuses to pay the reasonable fee or decided fee, it means that the landlord breached the contract or quasi contract, thus providing an opportunity to the aggrieved person to knock at the door of a competent court of law for remedy or justice (Heffey, et al, 2002). Following are the important components of a contract (Heffey, et al, 2002): Party or parties should have the capacity to execute contract Contract must be lawful Form of contract must be legal Party or parties to establish legal relationship Party or parties must have consent for the specific performance In commercial contract, both the parties have to take into account the following ingredients (Crosling & Murphy, 2000): Delivery date Price Terms of payment Mode of payment Date of payment Items to be delivered Type of service to be provided Without meeting one of the above conditions, an offer of sale does not consider a valid legal offer (Crosling & Murphy, 2000). In Australia, law of contract is primarily regulated by the common law. The breach of contract comes to surface at a time when the performer fails to perform his / her specific obligations as mentioned in the contract. Breach of contract may be actual or anticipatory in nature (Barron, 2006). Here in our case under discussion, Georgia is responsible for not performing her duties to the entire satisfaction of her client. Her action defeats the very purpose of caring pet rabbit and tropical fish of Malcolm. Had she not provided wrong feeds to fish and rabbit the specific task assigned as per the contract would be fulfilled in its true spirit. The negligence in performing the assigned obligations by Malcolm to Georgia attracts damages or monetary compensation from the service provider. This indicates cause of action against Georgia since due to her action, the life of an expensive tropical fish worth thousands of dollars comes to an end although there is a clause in the agreement that Georgia should not be held accountable for “death or illness of tropical fish due to specific vulnerabilities”. Further, the rabbit, an award winning pet animal, may not lose hair due to negligible performance. In accordance with the section 4F entitled “Reference to Purpose or Reason” and section 4K relating to “ Loss or damage to include injury” of Competition and Consumer Act-2010, Malcolm may file damages suit against Georgia for monetary compensation for the losses occurred due to irresponsible attitude of Georgia in the competent court of law. We quote here relevant sections of Competition and Consumer Act-2010 for ease of reference: 4F References to purpose or reason (1) For the purposes of this Act according to Comlaw (2011): (a) That Provision of a contract, arrangement or understanding or of a proposed contract, arrangement or understanding, or a covenant or a proposed covenant, shall be deemed to have had, or to have, a particular purpose if: (i) That provision was included in the contract, arrangement or understanding or is to be included in the proposed contract, arrangement or understanding, or the covenant was required to be given or the proposed covenant is to be required to be given, as the case may be, for that purpose or for purposes that included or include that purpose; and (ii) That purpose was or is a substantial purpose; and (b) That person shall be deemed to have engaged or to engage in conduct for a particular purpose or a particular reason if: (i) That person engaged or engages in the conduct for purposes that included or include that purpose or for reasons that included or include that reason, as the case may be; and (ii) That purpose or reason was or is a substantial purpose or reason. 4K Loss or damage to include injury In this Act according to Comlaw (2011): (a) That reference to loss or damage, other than a reference to the amount of any loss or damage, includes a reference to injury. In common law, the defendant being sued for damages due to contributory negligence of the plaintiff as a complete defence to the claim provided the damages suffered by the plaintiff was partly due to the plaintiff's failure to take reasonable care, otherwise plaintiff could not recover damages of any sort from the defendant. A simple example is that if a pedestrian injured by a speeding vehicle, could not claim damages if the pedestrian had contributed to the accident by failing to have a proper look of a coming speeding vehicle (Comlaw, 2011). The Law Reform Act 1995 reshaped the common law by providing room for damages in cases of contributory negligence (Comlaw, 2011). Under the Act, if a plaintiff's damage is the result of plaintiff's fault and partly of the fault of the defendant, the plaintiff can still recover damages from the defendant but the amount of damages is reduced to the extent that the court thinks just and equitable having regard to the plaintiff's share in the responsibility for the damage. The provisions contained in the Act 1952 before replacing the Law Reform Act 1995 were based on United Kingdom legislation. There are similar provisions in the other Australian States and Territories (McGlone & Stickley, 2005). The Provision of “Law Reform (Contributory Negligence) Amendment Bill 2001 is applicable to the claims of negligence and other claims against contributory negligence. Some contracts contain an express or implied terms that one of the parties has a duty to act with reasonable care.” (Austlii, 2001). If that obligation is contravened, in some conditions, the other party may take legal action for violation of obligation of care both in tort and in contract. In some cases, Australian High court is of the view that claims for damages of breach of a contractual duty of care is justifiable, where the duty of care is attributable by the defendant is the same in contract as in tort (McGlone & Stickley, 2005). The High Court of Australia while deciding the case of Astley vs. Austrust Limited (1999) held that provisions contained in the Wrongs Act 1936 of South Australia applied only to claims for damages in tort; they did not apply to claims of breach of contractual duty of care. As a result, if a plaintiff sues a defendant for breach of duty of care in both contract and in tort, the plaintiff's damages may be reduced for contributory negligence in the claim in tort, but not in the claim in contract. (Austlii, 2001) The decision of the court is constrained to litigants, there is a wider depressing influence if higher damages are awarded against individuals, the result is likely to be higher insurance premiums for all. (Austlii, 2001) The Australian High Court acknowledged in its judgment that government may wish to respond by amending the legislation. The majority of the High Court stated: ­ "Perhaps the apportionment statute should be imposed on parties to a contract where damages are payable for breach of a contractual duty of care.” (Austlii, 2001) In the cited case of damages of contributory negligence, the Honourable Justice McMurdo, commented as follows: “where an employee suffers injury in the workplace caused by the employer's breach of contract of employment, damage will no longer be able to be reduced because of the employee's contributory negligence” (Austlii, 2001). In the mentioned case, the honorable justice of High Court made Astely accountable for their negligence/misdeeds consistent with their obligations. The case in hand wherein Malcolm has assigned the task to Georgia to take care of his expensive and award winning rabbit and tropical fish failed miserably in performing assigned task. Her contribution to make tropical fish compelled to die and lose of the hair of the rabbit proved her contributory negligence in performing the given job. So the mentioned scenario attracts Malcolm to invoke the court of competent jurisdiction to claim damages and monetary compensation on account of death of a tropical fish whose determined market price reportedly in thousands of dollars and loss of hair of rabbit, award winning pet animal, awarded USD 10,000/- plus blocking of aquarium filter due to rabbit feeds that enables the water to overflow and make inroads in the renting house of Malcolm to damage the furniture. In light of the decision of above court of law, I would definitely advise Malcolm to go to the competent court of law to seek remedy by filing damages suit since damages occurred due to negligence of Georgia in discharging duties, for monetary compensation and other reliefs, the competent court deems fit and appropriate. References Austlii. (2001). Law Reform (Contributory Negligence) Amendment Bill 2001. State of Queensland. Retrieved on September 19, 2011 from http://www.austlii.edu.au/au/legis/qld/bill_en/lrnab2001452.txt/cgi-bin/download.cgi/download/au/legis/qld/bill_en/lrnab2001452.txt Barron, M. L. (2006). Fundamentals of business law. North Ryde, NSW: McGraw-Hill. Comlaw. (2011). Commonwealth of Australia. Retrieved on September 19, 2011 from http://www.comlaw.gov.au/ Crosling, G. M. & Murphy, H. M. (2000). How to study business law. (3rd ed.). Sydney, NSW: Butterworths. Graw, S. (2002). An introduction to the law of contract. (4th ed.). North Ryde, NSW: Law Book Company. Heffey, P., Paterson, J. & Robertson, A. (2002). Principles of contract law. Pyrmont, NSW: Lawbook Co. Holm, E. (2009). A contract law workbook. Sydney, NSW: Law book Company. McGlone, F. and Stickley, A. (2005). Australian torts law. Sydney, NSW: Butterworths. Read More