The of an Accountant - Case Study Example

The Brief facts of the case are . Blake, an accountant, owns a number of Apropex X18 computers. At the start of this year Blake was concerned that herequired higher specification computers but could not afford the outlay involved in purchasing an entirely new set of computers. He was advised that it would be possible to have his existing machines upgraded so that they could perform more complicated programmes and decided to go ahead with this. In March Blake received a circular from Watt A. Racket plc, a company specialising in computer maintenance and upgrading of a variety of different computers including his Apropex X18s. This circular contained details of the cost of upgrading and at the bottom of the first page there was a picture of a small red hand together with the words "see last page" in feint black print. On the final page of this six page circular, in a central position, there was a box containing the following words: "The Company undertakes no responsibility of any kind for any loss damage, injury or depreciation in value arising (regardless of cause) during maintenance or upgrading operations. Customers are advised to take out independent insurance". Blake was impressed at the reasonable charges quoted and failed to notice this clause. He immediately telephoned Racket plc and engaged their services to upgrade three computers. He was told that a confirmation of his order would be sent immediately. The confirmation, which Blake read, arrived the following day and stated that "All work is subject to conditions set out in the company's circular". When Racket plc came to collect the computers, one of them was dropped onto Blake's foot by a Racket employee. The second computer was destroyed by a fire at the warehouse, which was started inadvertently by another Racket employee, and the third computer was returned with an irreparable defect and cannot be used by Blake. According to general rules of contract law pertaining to offer, acceptance and consideration it can be said that if A makes a proposal to B it will be considered as an offer extended from A to B and if B says yes to the offer made by A then the offer will be considered as accepted. The offer will now be called as a Promise in contractual terms and 'A' will be called the 'promisor and 'B' who has accepted the offer/proposal will be called the 'promisee'. According to Atiyah,Essays on contract(1986) 'Consideration is the doctrine to establish which promises should be legally enforceable'. Also in 'Currie v. Misa(1875)L.R.10Ex.153,at p.162' Lush J. stated: A valuable consideration, in the sense of the law, may consist in some right, interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the other. Every promise and every set of promises, forming the consideration for each other, is an agreement; and afterwards it culminates in to contract. Consent given should always be free consent in terms of that it should not have been obtained through any fraud, by employing coercion, exerting undue influence or through misrepresentation of facts. These basic rules of offer, acceptance and invitation to treat etc are amply illustrated in the cases 'Pharmaceutical Society of Great Britain v. Boots Cash Chemicals Ltd.(1952)2 Q.B.795' and 'Felthouse v. Bindley(1862)6L.T.157' and also in 'Fisher v. Bell (1961) 1Q.B. 394' The acceptance must assent unequivocally and without qualification to the terms of the offer. The acceptance may also be qualified by reference to the preparation of a more formal contract or by reference to terms, which have still to be negotiated. In this case as it appears on the face of it that Blake on the sending of circular by Watt A that can be taken as invitation to treat offered them to buy computers from them, that the company accepted subject to some terms and conditions. So broadly construing the terms of the contract it seems that they bind Blake. Especially in view of Thompson v. London, Midland and Scottish Ry. Co. [1930] 1 K. B. 41 Blake is bound by the conditions set out in the company's circular as he had had sufficient notice of the special contract printed on the circular. There were special marks created to call attention of the prospective customers so that they can be made aware of the special conditions and not kept in dark. According to Parker v. South Eastern Ry.(1877)2C.P.D.416 "a person who signs a document which contains contractual terms is normally bound by them even though that person has not read them and is ignorant of their precise legal effect" But it is also mandatory in order that a term should become as part of the contract it must be brought to the notice of the contracting party before or at the time that the contract is made. If it is not communicated until afterwards, it will be of no effect. 'Levison v. Patent Steam Carpet Cleaning Co. Ltd.(1978)Q.B.69' An illustration of the necessity for contemporaneity of the notice is also provided by Olley v. Marlborough Court Ltd.(1949)1K.B.532 . In order that a contract should come in to existence, normally the terms of the contract should be communicated, that is to say the offeree should be made subjectively aware of their nature and extent. According to Parker v. South Eastern Ry.(1877)2C.P.D.416 the example of a railway or cloakroom ticket has been cited and it has been said that a person receiving the ticket who did not see or know that there was any writing on the ticket will not be bound by the conditions. It was also ruled in the same case that a person may be bound by an exemption clause in a standard form document, even though subjectively ignorant of its content, if the party seeking to rely on the clause has done what was reasonably sufficient in the circumstances to bring it to the other party's notice. In Blake's case the other party i.e. Watt A never made any kind of effort to make Blake aware about the conditions printed at the back of the circular specially in the manner they were printed any body could have overseen them so in these circumstances Blake should have been made aware about the existence of them by Watt A. The term incorporated at the back of the circular was neither depicted in a bold manner and naturally Blake over shot it. Otherwise also it was a unusual term keeping in view the nature of business that has to be conducted between Blake and Watt A. According to 'Interfoto Picture Library Ltd. v. Stiletto Visual Programmes Ltd(1989)Q.B. 433' that if in a particular class of contract a party seeks exemption from liability by pointing to any condition and if that particular condition is unusual according to normal course of business then that party is obliged to bring that condition to the notice of the second party to the contract by employing special measures. In 'J Spurling Ltd v Bradshaw (1956) 1 W.L.R. 461' it was said that some clauses 'would need to be printed in red ink on the face of the document with a red hand pointing to it before the notice could be held to be sufficient.' It is very much apparent from the facts of Blake's case that sufficient notice was not given to Blake and though on the circular a small red hand was printed but it was not pointing to any trade term but it was not more than a sign for PTO(Please turn over) and that too was non-descript. So in the light of these facts Blake should have been given special notice of the conditions by Watt A or atleast be notified about the presence of terms and conditions present at the back page of the circular. According to 'Harling v. Eddy(1951)2K.B.739' the terms of the notice must be 'brought home' to the party affected and accepted by that party as part of the contract. Also according to Parker v. South Eastern Ry.(1877)2C.P.D.416 if the document is one which the person receiving it would scarcely expect to contain conditions, for example, if it consisted of the sort of ticket which a reasonable person would suppose to be merely voucher or receipt, it cannot be said that the notice given was reasonably sufficient in the circumstances. It would be 'quite reasonable' that the party receiving it should assume that the writing contained in it no condition, and should put it in his pocket unread'. In 'Chapelton v. Barry U.D.C.(1940)1K.B.532' C wished to hire a deck chair on the beach. He took two from a pile belonging to the defendant, paying 2 dollars for each and received 2 tickets from an attendant. He set the chairs up firmly, sat on one and went through the canvas. C sued the defendants for personal injuries sustained and the defendant pleaded the exemption clause printed at the back of the ticket. The Court held that the defendants were not protected. The case of Blake will also come under Unfair Terms in Consumer Contracts Regulations 1999 which are not just restricted to exemption and limitation clauses, but subject to all the terms of the contract between a seller or supplier of goods or services and a consumer that have not been individually negotiated to a requirement of fairness. The regulations deals with statutory controls on unfair and unconscionable bargains. In a nut shell I will advise Blake that he has a strong case against the computer company for damages for the loss as well as for the injuries sustained by him. Bibliography J.Beatson. Anson's Law of Contract (28th ed.) Oxford University Press. www.westlaw.co.uk Janet O'Sullivan & Jonathan Hillard The Law of Contract (oxford) Read More