Contract Law Questions - Assignment Example

Question One Issues The issues to be addressed are whether there is a valid contract between Flavio and Marco with Nuriya. Whether Nuriya is liable for any breach of contract, in respect of the construction contract. Rule The acceptance of an offer should conform to the terms of the offer. It should be unconditional; and if any qualifications or new terms are introduced, then it is transformed into a counter offer. A counter offer serves to rescind the previous offer1. Analysis Flavio and Marco requested a quotation from Nuriya. Thereupon, she offered to completed the task, within four months at a cost of £ 200, 500. The former made some changes to Nuriya’s offer and informed her accordingly. This constitutes a counter offer, as they had modified the original offer made by Nuriya. She retransmitted a document to Flavio and Marco, wherein she indicated that she was agreeable to her initial offer. This constitutes a fresh offer from Nuriya and not the acceptance of Flavio and Marco’s counter offer. Subsequent, to receiving this fresh offer from Nuriya, the latter signed the contract and paid the first instalment to her. This constitutes their acceptance of Nuriya’s final offer. An agreement is incomplete, if any term is disputed, or a condition of subject to contract is present. A contract can also be formed on the basis of the conduct or verbal statement of the parties. In view of the difficulty involved in ascertaining the binding terms of the contract, the courts take into account, the history of the statements made by the parties to the contract and their subsequent performance, on the basis of such statements2. An offer has to be unambiguous, firm and final to constitute a valid offer3.A covert act does not result in a binding contract. In Denton v Great Northern Railway Company 5 E. & B. 860, the plaintiff, performed an act, based upon the statement of the defendant company. A contract becomes binding acceptance of the offer must be communicated; on in the alternative, there should be an overt action with regard to the contract4. As per the ruling in Brogden v. Metropolitan Railway Co (1877) 2 App Cas 666 there was a contract established between these two parties, on the basis of conduct. The conduct in this case was the payment of the first instalment, as agreed upon in the contract document. Conclusion The terms agreed upon between these two parties, were based upon her first offer. These were that the work was to be completed within four months; the cost of the work was to be £200, 500; and the roof was to be constructed of timber and glass. Since, the time specified for the completion of the work was four months; Nuriya has time to complete the contract. She has not breached any contractual terms relating to the time of completion. In respect of the retractable roof and the material to be used in the construction of the spa, there was no mention in Nuriya’s offer. Hence, she is not liable for any breach of contract, under the provisions of the Supply of Goods and Services Act 1994. Question Two Issues The issues to address in respect of Remi’s accident are; whether Flavio and Marco can exclude liability, on the basis of exclusion clauses. Rule Exclusion clauses in contracts, attempt to avoid liability. Their validity is strictly controlled by the Unfair Contract Terms Act 1977 (UCTA) and the Unfair Terms of the Consumer Contract Regulations 1999 (UTCCR). Section 1 (3) of the UCTA makes businesses liable for violations or circumvention of statutory obligations and duties, in the normal course of business5. Analysis Reasonableness is of great importance in contractual terms. The UCTA examines whether the exclusion clause in an agreement is reasonable, after taking considering the circumstances that should have been known to the parties to the contract, in the usual course of business6. In Thornton v. Shoe Lane Parking, (1971) 1 All ER 686, It was held that the contract was formed at the time that Thornton entered the car park7. The carelessly placed boxes, on the floor of the hotel’s bar, caused Remy to fall down. This resulted in grievous injury to him, and irreparable damage to his wristwatch. It is the duty of the hotel management to keep the premises clean and free of danger to the consumers. The hotel management is liable under Occupiers liability Act 1957 and 1984, for having failed to ensure the safety of consumers, on its premises. The Unfair Contract Terms Act 1977, states a contractual term cannot exclude liability for negligence, if there is personal injury, death or loss of property. For evading such liability, reasonable notice has to be provided to the aggrieved party. In this case, no such notice was given. As per the case law discussed, the exclusion term should have been incorporated in to the contract before its completion. As such, the contract between Remy and the hotel was concluded as soon as he entered the premises, whereas the exclusion clause could be seen, only after reaching the reception area. Hence, it was not included in to the contract, and the hotel management is liable under the provisions of the Unfair Terms act. Conclusion Remy can claim damages for the loss to his watch and the grievous injuries suffered by him, under the provisions of the Unfair Contract Terms Act, the Unfair Terms of the Consumer Contract Regulations and the Occupier’s Liability Act. The hotel cannot evade liability on the basis of exclusion clauses. Question Three Issues The issues to be considered, in respect of loss caused to Claude are; whether the shop is liable for any breach of contract, under the provisions of the Sale of Goods Act, and whether the shop management is liable for misrepresentation, under the provisions of the Misrepresentation Act. Rule Under the provisions of section 14(2) of the Sale of Goods Act 1979, the goods sold in the normal course of business are to be of satisfactory quality8. Section 13 states that goods sold by description, should conform to their description; otherwise, these goods can be rejected9. Section 2 of the Misrepresentation Act allows a plaintiff who suffers a loss, on account of fraudulent misrepresentation by the defendant, to claim damages, in respect of this loss10. Analysis Claude purchased speakers for use in his car; however, finding them to be unsuitable for such use, he utilised them at his home. According to the representation made by the salesperson, these speakers were to be used at home. After a week’s time, the speakers exploded. According to the provisions of the Sale of Goods Act, goods sold should be suitable for the purpose for which they had been purchased. In addition, there is an implied contractual term, which requires goods sold to conform to their description, and to be of reasonably good quality. In Godley v Perry 1960 1 All ER 36 QB, it was held that a defect that renders a product unsafe for use, also renders it unsatisfactory11. In Lambert v Lewis 1982 AC 225, it was held that the coupling was defective at the time of purchase as it had not lasted for a reasonable period of time12. In Hedley Byrne v Heller (1964) AC 465, it was held that compensation could be claimed for damages in tort, in respect of negligent misstatements13. In Spice Gils Ltd v Aprilia World Service BV (2000) EMLR 478, misrepresentation by conduct was defined14. Conclusion The implied terms are statutory conditions, their infringement by the seller, empowers the buyer to reject such goods, and claim a full refund of their price. Since, the speakers exploded on use, the seller as well as the manufacturer is liable for breach of contract, under the provisions of the Sale of Goods Act. Moreover, the seller is liable under the provisions of the Misrepresentation Act. Claude can claim a total refund or replacement of the speakers from the seller. He can also claim damages for breach of contract and the loss caused to him, by the exploding speakers, from the seller, as well as their manufacturer. List of References Business & Commercial Contract Disputes [online] available from < http://www.gillhams.com/articles/325.cfm> [6 January 2010] Denton v Great Northern Railway Company 5 E. & B. 860 Godley v Perry (1960) 1 All ER 36 QB Hedley Byrne v Heller (1964) AC 465 Horton, Rachel (2005) What’s a Contract? [online] available from http://www.communitylegaladvice.org.uk/media/808/FB/advicenow_contract.pdf [6 January 2010] Lambert v Lewis (1982) AC 225 Unfair Contract Terms Act 1977 Misrepresentation Act 1967 Sale of Goods Act 1979 Spice Gils Ltd v Aprilia World Service BV (2000) EMLR 478 Thornton v. Shoe Lane Parking, (1971) 1 All ER 686 Wearne, Stephen. (1989) Civil engineering contracts: an introduction to construction contracts and ... Thomas Telford Read More