Analysis of Law of Contract Cases - Assignment Example

Word count: 1990 Order # 351913 d 18th January Law of contract Question Case study On 9th December 2009, Abdul, placed a notice on the University notice board as follows: “Secondhand computer. Good condition. Worth £1,000. Selling for £175. Will sell to the first person to notify me by 13th January 2010. Telephone: 020 7320 9876. Email abdul0231@xyz.com Address: 1A, High Street, New Town, London E1.” Samson posted a letter on 8th January 2010, by first class recorded delivery post, agreeing to buy the computer for £175. Owing to the negligence of the Post Office the letter was delivered to Abdul only on 14th January 2010. Diana read the notice, telephoned Abdul on 12th January and left a message on his answer-phone, agreeing to buy the computer for £175, but asked whether she could pay for the computer when she received her student loan money. Abdul listened to this message only on 14th January. Maggie sent an email on 10th January agreeing to buy the computer for £175. Abdul read the email on the 12th and sent a reply to Maggie giving her an appointment to collect the computer on 16th January at 8 pm. Maggie responded by email saying that she will pay the money when she collects the computer. On 16th January, a leading computer shop in London decides to do a clearance sale and is selling good, brand new computers at £150 each. Samson, Diana, and Maggie no longer wish to buy Abdul’s computer. Advise Abdul whether Samson, Diana and Maggie are under a contractual obligation to buy his computer. Analysis: Yes, all the three persons i.e. Samson, Diana and Maggie are under contractual obligations to buy computers from Abdul according to the English contract law. Had they agreed to purchase, Abdul also would be considered to bind to the contract law provisions for selling his computer according to the terms and conditions mentioned in the notice placed in the University notice board. The English contract law clearly mentions that the buyer and seller have to bind themselves to the terms and conditions mentioned at the time of the notice or contract and the persons violating the same may be punished under the legal system (Bradney et al., 1995). This was made to ensure the successful implementation of the terms of contract and to provide the meaningful justice to the genuine parties. In the present case study, Abdul has place the notice for selling his second hand or used computer @ $175 and clearly stated that who ever agrees to offer this price early would be preferred. Three responses have come from Samson, Diana and Maggie out of which the message sent by Maggie (through email) reached Abdul early and hence he committed to sell his computer and gave appointment to Maggie. Though Samson initiated his communication for purchase of computer earlier than the other two parties, his communication couldn’t reach Abdul in time due to mistake of Post Office for which Abdul is not responsible. Similarly, the message sent by the Diana on 12th reached Abdul only on 14th. In both these cases, the message reached Abdul later than the communication time of Maggie. Hence, Abdul is not responsible for the delay in communication process of Diana and Samson. The contract law clearly states that once the agreement was made, the terms and conditions must be accurately followed with minor exceptions only with sufficient justification. Hence the seller (Abdul) should file a case in the court of law to get the justice. The violation of contract law was clearly committed by the buyer (Maggie) with ill intention of purchasing new computers from other agency. The case can be filed against the buyer as it violated both English contract law and unfair contract terms act (1977). This has been found to be in violation with the principles of European contract law (Ole Lando et al., 2003) . He agreed to complete transaction to Maggie on 16th and due to the new development i.e. a leading computer shop in London declared a clearance sale of good condition brand new computers for $ 150 which is lower than the price committed for second hand computer from Abdul, Maggie changed her mind and is not willing to purchase from Abdul. This is really unfair as she communicated to Abdul to purchase the computer on 16th for $175. This is against the principles of English contract law. This also violated the principle of reasonableness. European contract law also mentions that the buyer has to purchase from the seller once the terms of the contract are accepted at a fixed point of time irrespective of the new developments in later stage. 2. Question 2: Case study 2: Debra hired Simon, a builder, to construct a single storey extension on the back of her house. Simon promised to complete the work by 30th December for £10,000. Debra agreed and paid Simon a deposit of £3,000. Simon commenced the work on time but due to his poor health and a failure to supervise his workers, the job fell significantly behind schedule. Debra, who was hoping to throw a New Years Eve party in the new extension, was eager to ensure that the work would be completed on time. She promised Simon an extra £2,000 provided that he meets the original 30th December deadline. Simon agreed. The work was completed on December 29th and Simon sent Debra an invoice for £9,000. Debra told Simon that she was in financial difficulties and could only pay £7,000. Simon needed this money in order to buy materials for his next job and so he felt that he had no alternative but to accept this amount in full and final settlement. Simon has recently read that Debra has won £1m on the National Lottery. Advise Simon whether he is entitled to demand the extra £2,000 promised by Debra. Analysis: Yes. Simon is entitled to demand the extra £2,000 promised by Debra according to the provisions of the English contract law. Had Debra not promised to pay extra amount of £2,000 to Simon, it would have bee n difficult to collect the additional amount as the contract made in the initial period mentioned for only £10,000. But the promise made by Debra in the later stage to pay £12,000 instead of £10,000 ensured the demand of extra amount of £2,000 to be paid from Debra to Simon. If Debra doesn’t pay this amount, Simon is advised to proceed legally by filing a case against Debra which will certainly result in favorable judgment for Simon. The following points must be highlighted by the Simon to win the case if negotiations with Debra fail. a) After reviewing the health status of Simon and poor supervision of workers due to his ill health, Debra came forward with a new provision in the contract i.e. modification mentioning clearly about the revision of the contractual amount to £12,000 instead of £10,000. This means that the contract is finally committed for £12,000 instead of £10,000 and hence the violation of this norm would certainly come under violation of English contract law and hence legally Debra can be punished. b) The principle of reasonableness also was violated by Debra denying the payment of £12,000 instead of £10,000 to Simon. c) The English contract law strictly prohibits the actions relating to the breach of contract (Samuel Williston, 1903). As Debra violated the basic provisions of this law, he may be punished under court of law. Moreover, the action of Debra was also found to be against the fair trading and hence comes under unfair contract terms act (1977) and this narrows down the gap between the classic theory of contract law and social reality and hence found to be effective in providing justice to the innocent clients like Simon (Hugh Beal, 1978). d) Only problem faced by Simon was in the form of accepting the final settlement for £10,000 due to the poor financial status of Debra. This may go in favor of Debra as Simon agreed to accept the initial amount. However, as Debra won £1m on the National Lottery recently, his reason for not paying extra amount may not be considered as valid and the demand for extra amount can be made by Simon initially through negotiations. If the negotiations fail, Simon should proceed legally explaining the situation to the Jury under which the contract was modified and later the manner in which Debra denied to pay the same quoting the poor financial status. As the financial status of Debra improved now, he should be asked to pay the extra amount to Simon. If all the provisions of the English contract law and test of reasonableness is applied, there is every likelihood that Simon will win the case against Debra. 3. Question 3: Discuss, by reference to relevant statute and case law, the various factors a court may consider in deciding whether or not to imply a term into a contract. The court of law would consider the nature of English contract law that fits in to the cases under judicial review. The contract law states that when an agreement is made between two parties either orally or in written form, it has its high validity (Elliott and Quinn, 2003). The contract can also be defined as a legally binding exchange of promises between parties that the law will enforce. If any violation of the contract by any party occurs, it comes under breach of contract and which is well recognized by the law and accordingly remedies can be provided. The contracts are basically of two types i.e. written and oral forms. Though the written contract has an advantage over oral form, the oral contracts are also enforceable completely. Hence, the court of law would see the principle of reasonableness in the case under review than the emphasis on type of contract made. Based on this, if false representation or misrepresentation is made by either of the parties, the court would consider it as serious offence as it affects the interests of the genuine people involved in business or trade transactions significantly. The principles of European contract law and unfair contract terms act (1977) would also be considered by the court of law along with the interpretation of English contract law before delivering the judgment (The Commission on European contract law, 1999). The court would certainly analyze the attitude of seller and if it finds that it is violating the Sale of goods act (1979), the seller would be punished legally. The court may also concentrate on clause 8 of sale of goods act (1979) which describes about ascertainment of price of goods. It also mentions that the price in a contract of sale may be denoted by the contract, or it may be left to be fixed in a mechanism or procedure agreed upon by the contract. Some times, it may be decided by the future course of dealing between the parties or signatories of the contract. In this way the court of law would consider the genuineness of the claims made by both the parties of the contract and also analyzes the legal statues like English contract law and European contract law before delivering the final judgment. References Bradney, A., Fisher, V., Masson, J., Neal, A. and Newell, D. (1995). How to Study Law. Sweet & Maxwell publication. ISBN: 0421439998. Elliott, C. and Quinn, F. (2003). Contract law. Longman publication, p:384. ISBN-10: 0582473306. Hugh Beale. (1978), Unfair Contract Terms Act 1977, British Journal of Law and Society, Vol. 5, No. 1, pp. 114-121. Lando, O., Clive, E., Prum, A. and Zimmerman, A. (2003), Principles of European contract law. Part 3, Kluwer Law international publication. P:352. ISBN: 9041119612. Samuel Williston. (1903), Rescission for Breach of Warranty, Harvard Law Review, Vol. 16, No. 7 , pp. 465-475. Sale of goods act (1979). http://www.lawteacher.net/Contract/SGA%201979%201.htm. Accessed on 17.1.2010. The commission on European contract law. 1999, Principles of European contract law. Part 1 &2, Brill publication, P:512.ISBN: 9041113053. Read More