Business Law Issues - Assignment Example

Business Law Task Answer to 4 and then you should tell at the end which ment is appropriate A Company which had taken coal from B, formany years, sent B a written agreement regarding the future supply of coal. (Invitation to treat) 2. B altered the document, signed it and sent it back to the Company (Counter offer) 3. The Company put the signed document in a drawer, where it stayed for two years with no reference. (A contract or nothing at all) 4. The Company ordered coal, which B delivered in accordance with the altered document. (offer) The fourth statement is that Brogden delivered the coal in accordance to the new altered document. Is the appropriate statement the cause for litigation? Brogden v Metropolitan Railway Company (1876-77) L.R. 2 App. Cas. 666 is a case in which the Courts decided that a valid contract could be established by virtue of the conduct of parties. In this case, the Company entered into negotiations for future supply of coal and sent a document to Brogden, a supplier. Brogden, on his part, made changes in the document, but nevertheless wrote ‘Approved’ and signed on it. When this document reached the Company, it was documented and filed and almost forgotten. Supplies were carried out, but later on misunderstandings occurred between the supplier, Brogden and the Company. The former insisted that a contract was not formed, since he received no intimation from the company, the offeror. However, the contemporary Court was of the considered opinion that the contract was validated when he signed ‘approved’ and sent the document back to the company. A similar situation occurred in the case of Re Imperial Land Company of Marseilles, ex parte Harris (1872) Law Rep.7 Ch. App.587. A proposed shareholder for 100 shares of the company applied to the Company, who accepted the same. However, the non-acceptance letter arrived at the Company after the Company had already sent its allotment letter. The Courts decided that the contract was validated as soon as the allotment letter for shares was sent to the party and the fact that the proposed shareholder had negated his earlier application invalid. Brinkibon Ltd v. Stahag Stahl und Stahlwarenhandelsgesellschaft mbH[1983] 2 AC 34 is an English case in which the issue arouse as to how and in which place the contract could be said to have been established. In this case, Brinkibon, an English company based at London, ordered steel from Stahag in Austria. The former sent its acceptance to the latter by teleprinter (telex). However, later wished to send a legal notice to Stahag, but the matter that arouse was whether the contract was formed in London, or Austria. The Courts decided that since the acceptance was received in Austria (Vienna), the contract was formed there, and not in England. Task 2: (i) Decided case of Hollier v Rambler Motors (AMC) Lld 1972 Perhaps, exclusion clauses or exemption clauses were inducted by the trade to escape or reduce liability from one of the major controversies of contract law. Over fast moving time and changing skyline of contractual jurisprudence, Courts have begun to see the fallacy beneath the “small print” in contractual commitments, especially when one party is at the behest of another, and needs to toe the line, in order to ensure performance of critical contracts. One such example of exclusion clause has been the 1972 case of Hollier v. Rambler Motors. The facts run this way – In this 1972 year case, it transpired that during each of the previous occasions, when Hollier had his car repaired, he had signed an Exclusion Clause with the garage owners. However, during the previous occasion he did not sign it, and as fate would have it his car was damaged by fire caused due to negligence on the part of the garage staff. Quick on the rebuff, the defendants took shelter in the Exclusion Clause which denied liability in the event of any accident. To add insult to injury, the Court verdicted that there was enough evidence to substantiate the fact that the plaintiff (Hollier) had been aware about the clause to which he was agreeing and thus, this could not be deemed as “part of his last contract.” (Kelly et al 2005, p.145). In the changed circumstances however, Hollier the applicant, could now invoke the “contra proferentem rule” under which any grey areas in contracts would need to be clarified by the party seeking its reliance. (Kelly et al 2005, p.145). Besides, on most occasions, exclusion or exemption could be claimed only in the event of non negligence and it may need to be invoked in the event of damages occurring due to negligence as happened in this case. Hollier could now claim damages seeking to invalidate the exclusion clause on grounds of its invalidity in the case of negligent care. (ii) Decided case of Olly v Marlborough Court Hotel Ltd (1949) In this case, the lady lost her fur coat in her hotel room. The contract for occupation was signed at the reception, but the disclaimer notice was hung in the room. Olly argued that the disclaimer did not form part of the contract since she was not aware of it at the time of signing the contract at the reception. Hence, the loss being due to negligence of the hotel staff, she must be compensated for it, which she was. The Appeal by the defendant was also rejected by the Court. However, under the present circumstances, it is quite possible that the contract and disclaimer notice would be hung at the reception area itself and thus, the guests would be bound by it and it is presumed that they are aware of the Exemption Clause when they agree to occupy the rooms in the hotel. Task 3: (a)How would the contract be affected, if unknown to both parties the boat did not belong to George: Under such circumstances, the contract is voidable at the option of Freda. In the event the true owner turns up and demands his boat back, Freda would need to deliver the boat to its true owner and claim the purchase price from George. A person who takes goods in good faith has the maximum right over it, against all, except its true owner. (b)How would the contract be affected, if unknown to both parties the boat was unseaworthy: Even though George was unaware of the unseaworthiness, it is incumbent on the part of Freda to check the details of the boat before purchasing it. In this case, Freda needs to bear the loss or make the seller make the boat fully seaworthy before buying it. (c) How would the contract be affected In the event if the boat had been destroyed by fire five minutes before the contact was made: In this case the contract is void ab initio, in that there was no consideration passing from the seller to the buyer, the object of contract- the boat- the contract is a dead one even before it is signed. Neither party has claims to its performance in a void contract. Reference List Kelly, D., et al., 2005. Business law. [Online] Routledge Cavendish, p.145. Available at: http://books.google.co.in/books?id=mSJY7eP0VBgC&pg=PA143&lpg=PA143&dq=What+is+meant+by+exemption+clause+and+what+is+new+idea+regarding+exclusion+clauses+in+contracts&source=bl&ots=m_vbltIXnN&sig=3A8iscryrQRlwtZ0pmnLVwJ_jf0&hl=en&ei=fKQYTPrzEcmRrAf01fXjAQ&sa=X&oi=book_result&ct=result&resnum=2&ved=0CAoQ6AEwAQ#v=onepage&q&f=false [Accessed 16 June 2010]. Read More