Winston Graham and Daly Car Sales Ltd Law Contract - Essay Example

 Law Case Study Introduction This case represents a contract of sale whereby, Winston Graham purchases a second hand vehicle from Daly Car Sales Ltd. A contract of sale, as such, is a form of a legal contract involving exchange of goods, properties as well as services for a mutually agreed amount of money or its equivalent, which, according to the terms of the contract, can be paid at that instance or a promise to pay could as well be involved. It is usually a contract involving the buyer and the vendor and this qualifies it as a specific kind of a legal contract. Statutory law today governs an ancient exchange of goods and services or properties in various jurisdictions set by the common-law, which is obvious (Statsky & Sarachan 2009). This statutory law is designed in such a way that there is transparency and straightforwardness in the transactions between consumers and merchants. Moreover, they are usually made in a way that they are easily comprehensible. The purpose of this analysis is to closely examine the case of Winston Graham and Daly Car Sales Ltd and hence depict out the legal issues involved. The study will also aim at explaining a contract of sale in finer details to enable one to understand this case. To understand the legal issue underlying in this particular case, it necessitates explanation of certain terms as pertaining a contract of sale of goods, properties or services. Express and Implied Terms In order to explain these, one is required to ask himself a question. How is the incorporation of terms done in a contract? At a first glance, the question might look unqualified since one would expect the terms to be included in the contract explicitly. In regard to Express Terms, they are those terms, which have been stipulated and agreed by the parties at the instance of making the contract (Statsky & Sarachan 2009). Express terms could be expressed in writing or orally. On the other hand, implied terms are usually not mentioned when entering into a contract but nonetheless, they are included in the contract. Often, this is due to the fact that there is no commercial sense in regard to the contract if the term is not incorporated. According to the Sale of Goods act, the key provision, which the seller of the light truck has breached are; section 14 of the statue that states that goods ought to be of satisfactory quality (Shouzhi, Xiang & Mei 2011). As such, it is a must that they meet the standards a person, who is reasonable, would consider satisfactory. Moreover, if the buyer makes a clear specification that he is buying for a stipulated purpose, then the underlying implied term is that the purpose of the goods then must be fit. This therefore, introduces the first legal issue, which is breach of the contract. However, this issue will be discussed among the legal issues imminent in the case (Borchel 2005). Consumer and non consumer goods Consumer goods are read as any item, which is movable and movable but with the exception of; goods sold engaging execution way of selling or otherwise sold due to authority of law and gas as well as water whereby, they have neither been put up for sale in a quantity, which has been set nor in a limited volume. Still, consumer goods exclude electricity. Selling of consumer goods must be in such a way that they are in conformity with the sale contract. As such, as with this case, they are regarded as in conformity with the contract of sale if the goods are fit for the intended purpose in regard to the use of the same type of goods (Borchel 2005). Furthermore, they conform to the sale contract if they are fit for a specified purpose required by the consumer and for which the buyer has explicitly informed the seller about at the time the contract is being concluded and at the time the seller accepts the contract. Moreover, they are said to conform with the contract of sale if their quality and performance are indeed satisfactory. This is if at all the nature of the consumer goods and the statements publicly made by the seller, the representatives or the producer concerning the goods, are taken into account. On the other hand, Non Consumer goods refer to those goods whose use is mainly in the field of production (Borchel 2005). As such, they include those goods used in production associated with agriculture as well as construction of materials. In this case, the truck can be said to be a consumer good. A seller has the liability if the consumer goods sold lacks conformity prevailing at the time the delivery of goods is being done to the consumer. However, the seller is no way liable if at the moment the contract is being concluded, the buyer indeed knew, or otherwise could not have had a reasonable awareness concerning the lack of conformity in regard to the good. Legal issues in the contract of sale between Winston Graham and Daly Car Sales Ltd Delivery and Acceptance Consumer goods, in most cases are composed of numerous parts. As such, it is a custom that the delivery of the goods should prevail with the conjunction of a sequence of an assembly. There are certain procedures followed due to the various deliveries, inspections as well as installations during the time at which the contract is being performed (Reiley 2008). They include; Inspection The whole or parts of the non consumer good, which are operated independently ought to be tested accordingly. As such, the Daly car Sales Ltd did not test the vehicle and due to this ignorance, the truck later on experienced multiple functionality failures. Mechanical Test This follows the installation. As such, it allows the consumer good to run, not withstanding any scheduled task. This therefore tends to ensure and verify that the equipment indeed has the capability of running. Being a dealer of cars, Daly Car Sale Ltd did not perform this task and according to the law governing the sale of a non consumer good, the car company has a liability. Commissioning and Performance Test After completing both the mechanical and the installation tests, both parties are supposed to come up with an agreement on a specified period during which, commissioning will be done. Commissioning is an important as greatly significant procedure for one to consider accepting a consumer well (Reiley 2008). Commissioning involves the running of the consumer good for a considerable period of time, usually a minimum of one week and a maximum of one month. In this period, the performance of the consumer good is tested in an effort towards checking whether the good has the capabilities of producing products, which are qualified or in regard to this case, making complete deliveries effectively. Moreover, the good is tested to ensure that it is capable of maintaining the technical aspects and parameters that had been agreed on as well as the maintaining the capacity of production (Klotz 2008). Acceptance Right after Commissioning, after ensuring that the consumer good complies with the indices of technicality as well as productivity, then the buyer do confirm the acceptance. On the other hand, failure of the good to meet the performance indices, which is pursuant to the sale contract, the buyer ought to make a request to the seller that he makes improvements to the good delivered at its own cost or rather pay a penalty proportional to the good’s cost. It should only when the acceptance criteria is certified that the buyer should accept the good and therefore, this paves way for the warranty period to commence running (Reiley 2008). Warranty Period This usually takes a minimum of six months and a maximum of twelve months during which the good will be put into in use. During this period, if a defect crops up, and after both parties confirm the defect after doing adequate investigations concerning the course of the defect, the seller ought to take responsibility of the of supplementing, repairing or even replacing the part, which is defective. Still, according to the terms of the contract, the seller could decide to compensate. However, failure of the buyer to perform a timely installation as well as commissioning immediately after the rights are transferred to him, then the seller is most probably going to be liable for the limited warranty period. In the case between Winston Graham and Daly Car Sales Ltd, the company ought to have stated the warranty period as required in a sale contract but he refused to issue. This therefore, in every aspect, makes the seller liable for the breach of contract (Reiley 2008). Documentary evidence keeping during Delivery and acceptance Selling of a consumer good involves acceptance procedures as is usually a subject of complexity. As such, it is mandatory that the underlying procedures be entailed in writing. After a joint inspection that is open-packaged, the records of inspection shall be signed by the seller and the buyer. There shall follow an issuance of a Mechanical Test certificate from the buyer immediately after installation. Thereafter, the records of technical parameters are then signed by both parties. This comes during the commissioning of the consumer good. Following this, a certificate of acceptance shall be issued buyer in situations where the good has been accepted and where it has not, the certificate is not issued (Klotz 2008). These documentary evidences are crucial and as such, they constitute a significant proof if disputes arise in the future in regard to the good performance or even issues concerning its quality. It is a responsibility of the seller to ensure that each procedure is signed against it before commencing on the next procedure. If not signed against, then it becomes a challenge in trying to allocate a liability to each party if the buyer comes to claim that the good has some defects in the future. However, the buyer must maintain cautiousness with every signature he signs since it is usually a confirmation as well as an approval at the time of acceptance. This is because the buyer will face difficulties in trying to raise objections thereafter. In the case described, Winston Graham failed to be take caution and since the vehicle turned out to be defective, he may have problems in trying to push for justice. He may have a chance since the seller did not produce a contract with the various procedures, which he ought to have provided (Klotz 2008). Due to the complexity in consumer goods, a very small issue that arises during the course of installation as well commission in most cases do result in malfunctioning of the entire equipment. A good example is the light truck that Winston bought. At first, it had a complication of failing clutch and later on, the vehicle grounded. If he had indeed clinged on the defect he had noted while checking the vehicle, the case would have not been possible to subject the light truck into operation for a long while. As such, in order to ensure that the good is sufficiently efficient, where the parameters of performance deviate from the specifications agreed upon or there are discrepancies’, which are not so significant, within the contract but they do not lead to tremendous adverse effects concerning the capacity to perform. In this regard, the buyer can go ahead and sign the acceptance (Klotz 2008). However, he must ensure that he notes or makes a statement within the acceptance form and thereby reserving the right of raiding an objection regarding the acceptance in the future upon worsening of the problem. As such, the installation, commissioning as well as testing can take effect but the buyer preserves the leeway in which he will raise claims in the future against the seller(Consumer Build n.d). Liabilities for Breach of Contract Determining if the good is defective and which party bears the liability Consumer goods are always technical in nature and as such, defects and the good’s performance is inability to fulfil the criteria are because of numerous factors and therefore, establishing appraisals becomes necessary if liabilities are to be allocated (Klotz 2008). Many are times where a conclusive appraisal report tends not to be forthcoming and consequently, the parties to the contract are left in a dilemma as they faces an inability to protect their rights, which are indeed lawful. In the case of Winston and Daly Car Sale Ltd, the later is responsible for the entire part of the design. Mr Winston indeed entrusted the car company that they would provide the basic design of the truck that would tend to satisfy the normal functions of operation (Shouzhi, Xiang & Mei 2011). At the same time, Winston was to complete the design putting many specifications suitable for his own capacity in production as well as specific and special requirements. However, the light truck recommended eventually turned out that it had defects and could hardly perform. The parties the after held strongly on differentiated opinions in regard to on whose part do liability fall. This therefore requires interception. According to the law, governing a contract, an arbitrator solves these king of issues and if a decision is not forthcoming, then the matter can proceed to the court (Klotz 2008). Arbitration An arbitrator who both the contract parties have mutually agreed upon better resolves a contract of sale subjected to numerous legal issues. As such, it is usually stipulated in the commercial law that an arbitrator should handle any dispute arising from the sale of a good, property of service and in case he fails to settle the dispute, the dispute should be referred to an Industrial Court (Consumer Build n.d). Industrial Court An industrial court is where a judgement on cases involving business related disputes are passed. Most of the cases dealt with are cases involving legal issues concerning the contract of sale. Section 3 of the industrial court Act established this kind of a court. The court has both the criminal as well as civil jurisdictions and thus has the mandate to try any issue that arises out of the set enactments in the Act’s first schedule or any corresponding regulations underlain in those enactments (Shouzhi, Xiang & Mei 2011). Conclusion In the light of analysis of the case involving Winston Graham and Daly Car Sale Ltd, it is evident that there are serious legal issues that emerge such as breach of the contract. Both parties in a sale contract ought to act with utmost good faith in order to ensure that no party is aggrieved. If any disputes arise resulting from these legal issues, an arbitrator intervenes and he proves to be an important factor as in most times, he succeeds in settling the disputes. If he fails to do so, then the case should be taken to the industrial court of law. References Borchel, R, (2005), International Sales Contract Between the Toyota Motor Corp. Cengage Learning, Mason, OH. Consumer Build (n.d), Sale & purchase agreement, ‘Independent advice on building, buying, renovating and maintaining homes,’ Klotz, J.M, (2008),’ International Sales Agreements: An Annotated Drafting and Negotiating Guide,’ Kluwer Law International, London, UK Reiley, E.H, (2008), ‘International sales contracts: the UN convention and related transnational law,’ Carolina Academic Press, Durham, NC. Shouzhi, Z, Xiang, L, & Mei, Z, (2011), China: Legal Issues in Contracts for Sale of Large- sized Complete Set Equipment, ‘International Law.’ Vol. 1, No. 1, pp 1-6. Statsky, W, & Sarachan, R.A, (2009), ‘The New York Paralegal: Essential Rules, Documents, and Resources,’ Cengage Learning, Mason, OH Read More