Analysis of Contract Law Cases - Essay Example

Contract Law Introduction Any contract must have terms in it that bind the contractors after all from the definition of the term contract; it is an agreement between two or more persons that is intended to create legally binding obligations. It is fundamental that the parties to the contract should mutually agree to the terms of the contract the courts shouldn't interfere with what the parties have negotiated upon. But terms of two can be further broken into two 1. conditions 2. warranties A condition is a term of vital importance and goes to the root of the contracted. It is basic and primary to the contract its breach, if committed by the seller gives the buyer a right to reject goods completely and refuse to pay the price and if the price has already been paid to recover the same. The aggrieved party is also entitled to sue for damages. 1 A warranty on the other hand is a secondary term of a contract. It does not go to the root of the contract. Breach of a warranty gives the aggrieved party a right to action for damages. However, unlike an audition, breach of a warranty does not give the defendant a right to repudiate the contract and he can not therefore reject the goods supplied. Whether a term of a contract is a condition or warranty is a question to be determined by the courts. It has to be determined therefore whether there was breach of a condition or warranty in the contract between Keith and Paul. On the other hand, there exists exemption clause in a contract whose primary aim is to limit the liability of the seller of goods to which he could otherwise have been liable. But before the party has to place reliance/defence on an exemption clause, the courts must determine two things. a. That the document containing the clause was part and parcel of the contract. b. That the plaintiffs were made aware of the exemption clause before the sale was made. Additionally, the seller of goods can not have any recourse of law using the exemption clause if he has failed to carry out his primary obligations of the contract. This was held in the case of: Karsale Ltd v Wallis. In this case walls (w) inspected a car and agreed to buy if from Karosale (k). A clause "no condition or warranty that the vehicle is roadworthy or so to its age, condition or fitness for any purpose is given by the ownership implied herein" was incorporated in their agreement. After the car was delivered to w, it was incapable of self starting and he refused to take it. K sued him on the basis of the clause. It was held that there was a breach of condition and the defendants were not entitled to rely on the exemption clause 2 The case My advice to Keith regarding the exemption clause It is not true that Paul had incorporated the clause to the contract because the clause was written at the back of the receipt and not the front. The fact that Keith did not bother to read it cannot be used by Paul as a justification to rely on the exemption clause. It therefore means that the exemption clause WAS NOT brought to the attention of Keith. A similar judgement was passed in the case of CHAPELTON VBABBY U.D.C 1940. In this case, C hired a deck chair from the defendant and paid four pence of which he obtained a ticket. He put the ticket into his pocket without reading what was on it. On the back of the ticket was a printed message that the defendant will not be liable for any accident or damage arising from the use of chairs. But while sitting on the chair it collapsed and he suffered injuries. C sued the defendants HELD- the printed clause on the back of the receipt could not become part of the contract as the defendants did not take reasonable care to bring the clause to the attention of the plaintiff. C was entitled to damages. 3 Relating the above case to the case between Keith and Paul Keith has suffered massive loss on the use of the washing machine. The clause was not brought to his attention as it was written at the back of the receipt. If this was written at the front of the receipt, then maybe Keith could have identified it and could have avoided the contract as such. She has now suffered some damages. Then the question is; is she entitled damages from the awarding of damages point of view Damages This is a common law remedy, claims for damages has two questions; a. For what kind of damages should the plaintiff be compensated i.e. remoteness of damage b. What monetary compensation should the plaintiff receive in respect of damages, which is not too remote I.e. measure of damages. Damage is not too remote if it is a. Such as may fairly and reasonably be considered either as arising naturally i.e. from the usual course of things from the breach itself" or such as may reasonably be supposed to have been in the contemplation of both parties at the time the contract was entered into as the probable of breach This was held in the case of: Hapley Vs. Baxendate Of 1854 In this case, Ps mill shaft broke and had to be sent to the makers at Greenwich to serve as a partner for a replacement. D agreed to transport the shaft to Greenwich, but in breach of contract delayed delivery causing several days loss of production at the mill. P claimed 30 in respect of lost profit. Alderson B stated the two rules quoted above and applied them as follows; 1. The loss did not arise naturally since D could not foresee that his deal would stop the mill. It was quite possible that P might have had a spare shaft or been able to get one 2. The loss could not have been contemplated by both parties at the time of the contract as the probable result of the breach. If D had been told that delay would stop the mill such loss would have been in his contemplation and he may then therefore sort to limit his liability. However, he did not have this information. 4 But relating the above facts to the case, it is a complete contract. It seems that Paul had in contemplation or use death or injury could arise from either the installation or use of the machines. And this might be the reason as to why he placed the exemption clause at the back of the receipt so that it could not be seen by buyers. But some loss could not have been foreseen by the sellers and are therefore remote hence unenforceable for instance, Paul could not foresee that Keith could suffer a loss of 3,000 in profits. This is in contrast to the general rule of measure of damages that plaintiff recover his actual loss. That he is to be placed in the same position as if the contract had been performed. a. Ordinarily/general damages These arise from the breach of the contract itself i.e. the damages must be directly attributed to the contract and no remote damages would be awarded b. Special damages These are those that do not arise naturally from the breach of the contract. They are collateral to the main contract If the plaintiff has to succeed in claiming special damages then he must proof beyond reasonable doubt that he offered the loss. 5 My advice then if for Keith to Sue Paul and recover: - (a) The 2000 that the damage caused by the water to the kitchen and hallway flooring. (b) The 500 that was damage t o the plumbing pasts that kitchen had been starting in the hallway. These two damages arose naturally from the beach of contract and could be foreseen. But for the Keith it succeed in claiming 3000 being profit that he could made from the contract must proof to the courts that he normally makes such profits from the contracts acquired from third parties. He must come up with a valid compact agreement t6hat he had made which was to bring the 300 profit. He also had to convince the courts how she again decided to use machine for commercial proposes and yet in the beginning this intention was to use it domestically. From this argument Keith is unlikely to succeed in claiming the 3000 he had lost out of an unfulfilled contract. But his action to recover the 2000 and 5000 would succeed. Another rule of measure of damages is that the fact that damages are difficult to asses does not prevent the injured party from recovering them. The fact that the 3000 profit lost as a result of the damage caused by the machine cannot prevent Keith from recovering it. So Keith should use all available mechanisms of measuring reliably the 3000 loss. If it can be found out by the courts that he indeed lost 3000 then he can be rewarded the same. 6 Another principle in the measuring of damages is the fact that in assessing the awards of damages, the courts may take into account inconvenience and annoyance This was held in the case of JARBLS vs. SWAN TOURS 1973. The plaintiff paid 63 for a two-week winter sports holiday. It differed adversely from what was advertised. There was a written holiday atmosphere. The hotel staff did not speak English and in the second week he was the only guest at the hotel. He recovered 125 damages for his upset and annoyance due to having his holiday spoilt. 7 In Keith's case it can be noted that she severely suffered burns to his hands which saw her hospitalized for a whole six weeks. Regaining her physical health condition can turn to be difficult using similar principles as those of Jarbis vs. Swan Tours, Keith can successfully be awarded damages on account of inconvenience and annoyance caused. Contrary to what is stipulated in the contract, that damages payable for breach of contract shall be equivalent to the purchase price of the goods purchased the courts shall not be bound by such a statement. The plaintiff may suffer more loss than the actual finance paid for the good. From the above case of Jarbis vs. swan tours. It can be noted that the plaintiffs received more monetary compensation (125) than actually paid (63). My advice then to Keith is to pass for more compensation owing to the enormous loss incurred both financial loss and boldly harm Under the sale of goods Act, certain conditions and warranties are implied. Very fundamental is the condition that goods must be fit for the purpose for which they are intended to be placed on. This was hold in the case of priest v last. A customer went to a chemist shop to buy as hot water bottle. He asked whether it would stand bonding water. He bought the bottle and after 5 days it bust while being used and he claimed for damages. It was held that the bottle was not fit for the purpose for use as a hot water bottle. Keith correctly installed the washing machine but still the machine leaked due to a defective water pump. If this washing machine was really fit for the purpose for which it was made, then a mechanism could, re been placed in it to counter any pressure from defective water pumps. A regulator could have been installed in it to give it a protection against such probable events. Again no attention was brought to Keith on the precautions top follow while installing or using the washing machine. Had a clause been incorporated into the contract washing the buyers against using defective water pumps on the washing machines, the Keith could not have had any recover of law. But now since such was absent from the contract Paul has no any defence in law and has to compensate Keith. Keith can also use the condition of merchantability in suing Paul for damages. It is a general rule and also an implied condition that goods sold are merchantable i.e. they must be of high quality unless defect is brought to the attention of the buyer before the contract or the buyer examines the goods before the contract is made. The goods should be of merchantable quality even at the time of delivery. In Wren vs. Holt, It was held that the beer which contained abnormal quantity of a certain acid was not merchantable. The plaintiff became sick. This proofed its unfitness for the general use as beer. 8 From Keith's case, it is not understood why she was immediately electrocuted on turning off the machine. It could mean that the machine was not correctly plugged to avoid such an incident. Consequently, two weeks is a very short time for a new equipment to develop technical problems. Even if the water pump was defective it could've at least taken some considerable time before experiencing such technical problems from the washing machine. This raises the question of merchantability both at the time of sale and delivery. But she was both proofs to the court that she made an attempt, a reasonable one, to inspect the washing machine for quality and fitness of propose before purchase. I would also ask Keith to keenly prepare herself for a controversial defence that Paul has placed on the contract. That "all conditions and warranties are hereby excluded". What this means is that all those conditions and warranties associated implied under the sale of goods Act shall be ignored in this contract. What this means is that:- (a) Keith cannot sue Paul for damages because the machine was not fit for the purpose intended. (b) He cannot sue Paul for damages because the machine sold was not merchantable. It is a general rule that a clause in a contract / sale which expressly excludes a condition or warranty does not exclude liability for bleach a condition. This was hold in the case of Andrew vs. singer b34 In this case singer contracted to supply a "new singer car" to the plaintiff. The contract excluded all warranties, conditions and liabilities implied by law. Singer delivered a car that was being unused for demonstration. It was held that singer could rely on the exclusion clause because they had broken an express condition of a "new car". In Keith is case, Keith purchase a new washing machine. Something new is something new and not otherwise. While using the machine, it was broken down and started leaking in merely two weeks. It doesn't matter the fact that any claims were to be brought to the attention of the sellers in a week's time. Paul cannot be allowed to protect defence himself using the exclusion clause because he had broken an express condition of " a new machine". 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