Business & Employment Law - Essay Example

work Business and Employment Law Question One – Poppy Poppy threatened Bart with legal action for rejecting her offer to buy the painting displayed in his shop window. For advising Bart with respect to his liabilities towards Poppy, the following issues need to be considered. Issues Whether the display of the goods in the shop window amounts to an offer. Whether Poppy has any contractual rights against Bart. Rule of Law Advertisements and shop window displays are usually considered as nothing more than an invitation to treat.1 Acceptance is essential for forming a legally binding contract. In the absence of a valid offer and acceptance, there cannot be a legally binding contract. The acceptance of an offer is valid, only if it is unconditional, unequivocal, and has been communicated effectively to the offeror. 2 Application There has to be a definite assurance to be bound, provided certain specified terms are present, if an offer is to transform into an agreement, upon its acceptance.3 Advertisements and shop window displays are usually deemed to be nothing more than an invitation to treat. As held in Spencer v Harding, this holds good even if the term offer is employed.4 Consequently, the offer arises when the customer presents the goods at the cash counter. However, and the seller enjoys the right to sell the goods or refuse to do so. This rule was reiterated in Pharmaceutical Society of GB v Boots Cash Chemists.5 Similarly in our problem, the display of the painting amounts to an invitation to treat. Poppy’s disclosure of her intention to purchase it can be deemed the offer. From the perspective of the law, an invitation to treat does not constitute a contractual offer. In an invitation to treat, one of the parties invites the other to furnish it with an offer. Thereafter, the former either accepts or rejects the offer so made. On the other hand, in an offer, the mere acceptance by the other party, results in a contract. When the intention is to begin negotiations and not to be bound by the terms of an offer, then an invitation to treat comes into existence. 6 However, in Carlill v Carbolic Smoke Ball Co,7 Carlill developed influenza, despite having carrying out the specified instructions. The court held that the advertisement was an offer of a unilateral contract. 8 Conclusion At the time of determining whether it is an invitation to treat or an offer, the courts tend to accord importance to the intention of the parties and the surrounding circumstances. In our problem, Poppy’s intention can be deemed as an offer to purchase, in response to the invitation to treat, namely the shop window display of the painting. Bart had rejected Poppy’s offer to buy the painting. Hence, there was no legally binding contract between Poppy and Bart. Consequently, Bart will not be liable for any legal claims raised by Poppy in this regard. Question Two – Lovely Lighting Ltd Bart sustained burn injuries and his valuable painting was irretrievably ruined, while installing the sign board. Lovely Lighting Ltd refused to accept responsibility for these losses. Issue Whether Lovely Lighting Ltd can rely on the exclusion clause for evading liability with respect to the losses caused to Bart. Whether Bart will have any remedy against Lovely Lighting Ltd for the losses suffered by him, due to the negligence of Lovely Lighting Ltd. Rule of Law Section 2(1) of the UCTA precludes exclusion clauses that attempt to restrict or exclude liability for death or physical injury consequent upon negligence. With regard to other loss or damage, Section 2(2) of the UCTA provides that liability cannot be restricted or excluded for negligence. 9 Sections 13 to 15 of the Sale of Goods Act 1979 deal with the issues of conformity with description, fitness for purpose and quality of the goods supplied. 10 Any endeavour to exclude liability, by resorting to Section 13 of the Sale of Goods Act 1979 (SGA)11 tends to be subject to Section 6 of the UCTA.12 Application A contractual term that attempts to exclude or restrict the liability of a contractual party to the other party; which would otherwise be owed to the other party, is termed an exclusion clause.13 Section 13 of the Unfair Contract Terms Act 1977 (UCTA) 14 states that goods should be in conformity with their description, whenever the sale is by description. Whenever, the description does not embody a term of the contract, it becomes subject to the test of expectations.15 For an exclusion clause to be effective, its presence in the contract has to be clearly indicated. Moreover, it should be in unambiguous and clear language. Failure to do so will defeat the purpose of the party employing it to limit or exclude its liability. This constitutes the doctrine of contra proferentem. There can be no contractual clause that limits or excludes liability for personal injury or death. In other situations, an exclusion clause will be effective, only when it is reasonable.16 In Thornton v Shoe Lane Parking Ltd17 and Olley v Marlborough Court,18 the courts accorded considerable significance to the time at which the exclusion clause had been brought to the notice of the other party. In both of these cases, the other party had not been apprised of the exclusion clause, prior to the formation of the contract, and the courts barred reliance upon the exclusion clause. 19 In this context, it is sufficient if the other party receives adequate notice of the exclusion clause. This was the ruling in Parker v South Eastern Railway.20 In Richardson, Spence & Co v Rowntree,21 it was held that the exclusion terms should not be obfuscated, by imprinting a date or other stamp upon it. In Henderson v Steven,22 the court held that adequate notice of an exclusion clause printed on the reverse of the document had to be provided to the other party. 23 In our problem, no prominent notice was given to Bart regarding exclusion clause. Conclusion In our problem the lights supplied by Lovely Lighting Ltd were not of good quality. They caught fire at the very first time of use, by Bart. Hence, it can be deemed that Lovely Lighting Ltd had violated the provisions of the contract law with respect to the quality provisions. In addition, Lovely Lighting Ltd cannot rely on exclusion clauses under the provisions of the Unfair Terms in Contracts Act. Exclusion clauses aimed at limiting liability for personal injury or death, are invalid according to the law. Hence, Lovely Lighting Ltd cannot evade liability by relying on the exclusion clause, with respect to the losses suffered by Bart due to their negligence. Bart can seek damages for breach of contract and negligence. Question Three – Rosie Rosie demanded the reward from Bart for bringing back his pet dog, which he refused. Issue Whether there is any binding contract between Rosie and Bart. Whether Bart is liable for breach of contract, if he refuses to pay the reward to Rosie for bringing him his missing dog. Rule In the absence of knowledge regarding a reward being offered for his behaviour, an individual cannot claim the reward as his contractual right24 In R v Clarke it was held that a reward can be made only if an act has been done by the claimant with the knowledge of the offer. Application In R v Clarke,25 the latter performed an action for which a reward had been offered, without expecting the same. The court rejected his subsequent claim for the reward, as he should have acted in reliance on the offer of the reward to accept it. 26 However, in Gibbons v Proctor,27 the court ruled that a police officer was entitled to the reward as he came to know of the same prior to the information reaching the concerned party. Moreover, in Williams v Carwardine,28 Williams was held by the court to be entitled to the reward offered by Carwardine for information relating to her husband’s murder. 29 Thus, it is essential that the offeree should have possessed unequivocal knowledge regarding the existence of the offer to render it enforceable. This was the ruling in Inland Revenue Commissioners v Fry.30 In this case, a cheque for a lesser amount than the self – assessed income tax amount had been transmitted to the department of Inland Revenue, which encashed it. This was not deemed to be an acceptance of Fry’s offer of the amount, as full and final settlement for the amount due to that department. 31 Conclusion In our problem, Rosie, without knowing about the reward, brought back the dog to Bart. In the absence of knowledge of an offer, a binding contract cannot be formed. Even in cases of unilateral contracts, a binding contract is not formed unless an overt act has been done by the offeree after knowing about the offer. Hence, Bart is not liable for any claims made by Rosie, regarding denial of the reward for restoring the pet dog. Bibliography Carlill v Carbolic Smoke Ball Co [1892] EWCA Civ 1. Chandler A and Brown I, Q & A Revision Guide Law of Contract 2013 and 2014 (Oxford University Press 2013). Chen – Wishart M, Contract Law (Oxford University Press 2012). Furmston MP, Cheshire GC and Fifoot CHS, Cheshire, Fifoot and Furmston’s Law of Contract (Oxford University Press 2007). Gibbons v Proctor [1891] 64 LT 594. Henderson v Steven [1875] LR 2 HL (Sc) 470. Inland Revenue Commissioners v Fry [2001] STC 1715. Macdonald E, ‘Exclusion clauses: the ambit of s 13(1) of the Unfair Contract Terms Act 1977’ (1992) 12(3) Legal Studies 277. Masons P, ‘Exclusion and limitation clauses’ (Out – Law.com) < http://www.out-law.com/en/topics/projects--construction/construction-claims/exclusion-and-limitation-clauses/> accessed 1 January 2014. Mulcahy L, Contract Law in Perspective (5th edn, Routledge 2008). Olley v Marlborough Court [1949] 1 KB 532. Parker v South Eastern Railway [1877] 2 CPD 416. Pharmaceutical Society of GB v Boots Cash Chemists [1953] 2 WLR 427. R v Clarke [1927] 40 CLR 227. Rahnavard D, Course Notes Contract Law (Routledge 2012). Richardson, Spence & Co v Rowntree [1894] AC 217. Sale of Goods Act 1979. Spencer v Harding [1870] LR 5 CP 561. Thornton v Shoe Lane Parking Ltd [1971] 2 QB 163. Turner C, Key Facts Contract Law (Routledge 2013). Unfair Contract Terms Act 1977. Williams v Carwardine [1833] EWHC KB J44. Read More