Law of Contract - Good Buys - Essay Example

BUSINESS LAW Question This work will cover the background of contractual liability and concern itself on what Simon ought to doin regards to his situation with Arthur and Fernando. The case highlighted conforms to contractual liability. Contractual liability1 has a very broad meaning and is not always understood. From a lay perspective, the following example will give a simple case of contractual liability. John wants his house painted; so he goes on to hire Peter. They come into an agreement that Peter will paint the house for a stipend fee of $1000 of which $500 is to be paid before the job and the remaining $ 500 on completion of the job. Prior to commencement of the job, Peter receives a better paying job, and does not show up for work. John can go to court and claim the $500 initial payment on grounds that Peter has breached the contract. Such a claim would be referred to as contractual liability claim. It is common occurrence for businesses, individuals or organizations to get into agreement, often in writing, for the purpose of taking on the liability or a duty of some other entity. Usually the liability is something they would otherwise not have. Such an arrangement where one entity assumes or takes on the liability of another by contract is referred to as an indemnity agreement. Each state has diverse laws on indemnity laws though they usually override common law. Indemnity agreements often form the basis of a contractual liability claim. Contractual liability may come into play in several other scenarios. Examples of such scenarios include assumption of duty, assuming of liability, contractual liability insurance, breach of contract claims, and coverage by insurance. In the UK, contractual liability fall under the Unfair Contract Term Act of 1977, which is an Act of the Parliament of the United Kingdom, charged with regulating contracts by restriction of operation and legality of contract terms. In this case study, we are going to use ILAC method to better advice Simon on the best way forward in regards to his situation. ILAC stands for Issue, Law, Application, and conclusion. This technique provide a more logical way of addressing case studies. Issue The facts of this case study are that Fernado and Arthur have sent Simon cheques of varying amount and expect, to receive the book. Also, Simon has since sold the book to a Gollum Book Ltd. According to misrepresentation2 concepts of contract law of England, it is possible to make a misrepresentation either by conduct or words although not all things done or said constitute to misrepresentation. Statements of interest or opinions are generally not statements of facts as applicable to misrepresentation. In the case above, Simon may be liable for misrepresentation depending on how he acts moving forward. Law In order to prove misrepresentation, three criteria must be met. 1) False statement must have been made by the defendant. 2) The statements must have been directed to the plaintiff and 3) the statement must have induced the plaintiff to contract. Also, the defendant may have put forward a statement that is theoretically true. This is where a defendant fails to include information that may critically alter the interpretation of facts in the contract. Negotiations take time and issue of learned falsity may arise in the course of negotiation. With the passage of time circumstances change and previously true facts may become false. Accordingly, original statements should be amended to be consistent with the changing circumstances. Application In the case of With v O’flanagan, WIth had entered into contract with O flanagan for the purchase of Oflanagans medical practice. With was made to believe that the practice would generate £ 2000 a year. The practice lost value with the passage of time before the contract was signed. Nevertheless, With was never notified of these development and thus processed to sign the contract. He was to learn of this development when he was the owner of the medical practice. Accordingly, he filed a petition on grounds of misrepresentation. The petition was successful, as Oflanagan had failed to inform him of the changing circumstances. Conclusion Simon will only be liable for misrepresentation if he does not return both cheques to Fenardo and Arthur. On receipt of the cheques he should sent them back with notes of regrets that he has since sold the book. If he cashes the cheques, he will be liable to contractual liability. Question two. Fern may have tortious claims against Joe and Good Buys. In this section, we give Fern advice on the best course of action in regards to the above case and whether her tortures claims may be successful. Issue. In the above case study, issues of recklessness3 arise. Fact in the case include 1) Fern was knocked down by Joe while cycling 2) Joe is a driver at Good Buys. 3) Fern was not wearing a helmet while riding her bike and was knocked down unconscious. 4) Good Buys had put up a notice indicating that it would not be liable for any damages or loss that may occur to a person irrespective of how the loss came about and 5) Joe was driving too first and showing off to his friends. In criminal law4 it must be proved beyond reasonable doubt the constituting of mens rea “guilty mind”, that is, there must be knowledge, appropriate intension, criminal negligence or recklessness at the time when the incident occurred. In the above scenario, there appears to be recklessness on the part of Joe. Recklessness may be defined as the pursuing of a course of action in disregard that the action may give rise to unjustifiable and substantial risk. It can be proved that Joe was driving fast and trying to show off to his friends. Joe’s action constitute to recklessness as his actions have led to unjustifiable and substantial risk on the life of Fern. Law In determining the case of recklessness, a court will delve on three factors to prove mens rea. The court judgment may be objective were it reviews what the person was thinking at the time of the occurrence. It may also be subjective were it reviews what a reasonable man would have done in the scenario at hand or in may be hybrid i.e. test both subjective and objective. Often recklessness arises where the accused is aware of the potential of adverse effects of their planned course of action but processed with this actions anyways; deeds which exposes others to the risk of suffering. The accused usually does not desire to cause injury to the victim. The accused usually is represented as a social danger since they gamble with the safety of their victims. 5 Application In R v Caldwell6 recklessness was defined in a new light. In this case Caldwell a former hotel employee who had been fired resulted to induce himself with alcohol and later on set his former employer’s hotel on fire. At the time of his arsonist activities, there were guests at the hotel who were asleep. Though the fire was quickly put off and these guests safely evacuated from the building, charges of arsonist and intent to endanger human life were brought against Caldwell. Conclusion Good Buys let Joe drive around though he does not have enough experience to drive as he has passed his driving test recently. Good Buys is aware of this fact but proceeds to hire him anyways. Joe is driving fast conscious of the fact that his action may cause risk to others but proceeds to drive fast anyways. Both these scenarios are clear indications of recklessness. That said, Fern should push on litigation against Joe and Good Buys since she is likely to win. Bibliography Harpwood V, Modern tort law (Portland, Or.: Cavendish Pub., 2003) Herring J, Criminal damage act (1st, Oxford University Press, Oxford 2012) Hilliard J and O’Sullivan J, The law of contract (Oxford University Press, 2014.) Hollin C, Psychology and Crime: An Introduction to Criminological Psychology (Routledge, 1989.) Hood P, Principles of Lender Liability (Oxford University Press, 2012) Jackson M, Criminal Law in Hong Kong (Hong Kong University Press, 2003.) Mason J, Business Law (Oxford University press, cop. 2013) Martin J, Key Facts Criminal Law Fourth Edition (Routledge, 2013) Monaghan N, Criminal law (Oxford University Press, 2014.) Molan M and Douglas G, Questions & answers : criminal law (Oxford University Press, 2008) Rahnavard D, Course Notes: Contract Law (Routledge, 2013) Roach L, Card and James Business Law (Oxford University Press, 2014) Sharma V, Information Technology Law and Practice (Universal Law Publishing, 2004) Stone R and Devenney J, Text, Cases and Materials on Contract Law (Routledge, 2014). Wishart M, Contract Law (Oxford University Press, cop. 2012) Read More

 

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