A Contract of the English National Operetta - Essay Example

A contract is an agreement which is enforceable by law and which creates rights and duties between the parties involved. This can also be a promise between two parties that one or both of them has to do something. This is usually binding and legally enforceable but it also has to be noted that not all agreements between people are binding (Macintyre 2010). According to Harvey v Facey [1893] AC552, every contract consists of an offer made by one party and accepted by the other. Against this background, this essay seeks to advise the English National Operetta Company about its legal rights, if any, in relation to Costumes R Us, Pristine Printers Ltd and Prompt Printers Ltd with regards to the given scenario involving the sale of goods. In the first scenario, it can be noted that The English National Operetta Company entered into a contract with Costumes R Us for the purchase of theatre costumes which were to be made according to designs supplied by the English National Operetta Company. All terms were agreed and the initial deposit was paid where the remaining balance will be paid upon delivery of the goods. Unfortunately, the premises of Costumes R Us were destroyed by fire before the delivery day. By any standard, this scenario represents a typical contract explained in the definition above. This type of contract involves the sale of goods and is governed by the Sale of Goods Act of 1979. Gibson (1988) suggests that the seller has a duty to deliver the goods purchased upon payment and the buyer has a duty to pay for the goods where ownership can be exchanged. The S.2(1) of The Sale of Goods Act 1979 concurs with this assertion and goes on to define a contract for the sale of goods as: ‘A contract by which a seller transfers or agrees to transfer the property (ownership) in goods to a buyer for a money consideration called the price.’ The contracting partners in this case are bound by certain conditions which are very important to the contract so as to protect the victim in the event of breach of contract which entitles him to repudiate and sue for damages. From this given scenario, it can be noted that there is a valid contract between English National Operetta Company and Costumes R Us. Legally, English National Operetta Company is entitled to claim for its refund of the amount paid following the failure by Costumes R Us to deliver the consignment before the date. Though it may be argued that this is a breach of a contract, it can be noted that to a greater extent, this scenario was a result of circumstances that were beyond the control of the suppliers of the costumes. Their premises were gutted by fire which was caused by the children playing so it would be unfair to lay the blame on them. This unfortunate incidence is what is normally called frustration of contract. Macintyre (2010) posits to the effect that the result of an event which occurs after offer and acceptance (the agreement) which prevents performance being carried out and which, as a consequence will terminate the contract legally with no risk to either party to be sued for breach. In this scenario, it will be unfair to say that Costumes R Us has breached a contract given that that the frustrating event involving the outbreak of fire is not the fault or a result of the actions of this organisation in question. It becomes impossible for the other party to fulfil their duty in the event of destruction of the subject matter of the contract for example Taylor v. Caldwell (1863). In such a situation, it is assumed that the contract has been cancelled naturally. Against this background, it is therefore advisable to English National Operetta Company not to sue this company for damages given that there will be likely chances that they will lose the case. It is the duty of the court of law to weigh the circumstances surrounding the frustration of the contract and come with an informed decision hence the chances of winning this case are very few. However, it is advisable that English National Operetta Company can claim a refund for the deposit that was paid in advance before the full amount upon delivery of the goods. It is legally entitled to this deposit since the contract has been cancelled as a result of circumstances not caused by it. This initial deposit paid has no strings attached hence English National Operetta Company should get back its money regardless of the unfortunate incidence of the destruction of Costumes R Us’ premises by fire. Thus, legal effects of frustration are governed by the Law Reform (Frustrated Contracts) Act 1943 whereby the other party is entitled to get the monies paid before the frustrating event such as deposit as noted above. In the second scenario, the English National Operetta Company ordered 5,000 theatre programmes from Pristine Printers Ltd and more emphasis in this contract was put on the importance of time factor on the delivery of the programmes and this was considered as a condition of the contract. However, the programmes were never delivered and the English National Operetta Company had to find an alternative. By any standard, this is a legally binding contract which has been breached by Pristine Printers Ltd. In this case, one party fails to perform their part of the bargain and the major consideration here is that National Operetta Company has suffered the consequences of the breach of contract is entitled to get a remedy. Indeed, cancellation is the most viable option that can be advisable to English National Operetta Company given that the party to the contract who is in breach may not be compelled to perform his party given that time is the most important condition of the contract in this given scenario for example Poussard v. Spiers (1876). English National Operetta Company has suffered a loss of more than £500 when it contracted Prompt Printing Ltd to supply the needed programmes. In this scenario, it can be noted that the organisation in question has suffered damages in that instead of getting its programmes as per agreement in the contract, it ended up paying more money to get the same programmes. Apparently, it can be noted that this warranties some form of compensation given that English National Operetta Company does not only fail to get the programmes but it also lost its money which was not anticipated. Indeed, this can be regarded as unprecedented loss incurred as a result of the conduct of Pristine Printers Ltd which warranties a payment of damages. The defaulting partner should have informed the other party in reasonable time so as to avoid the inconvenience that was later caused. Basically, time is the essence of the contract which also entails that time is regarded as a material factor in this particular case. Given that time is the major factor of the contract, the plaintiff is forced to repudiate the contract having realized that the other contracting partner was not in a position to meet his contractual obligations. It is apparently clear from the onset English National Operetta Company is particularly concerned with the time factor and this factor can be equated to material value which can be denoted in monitory value. As noted already, the plaintiff is forced to fork out more money as a result of the breach of contract by Pristine Printers. It is therefore advisable that English National Operetta Company should seek a remedy in form of compensation for the extra costs incurred since this was not anticipated in the original contract. Indeed, there is abundant evidence to show that English National Operetta Company has suffered extra costs as a result of the breach of contract by the other party. In the same vein, it has not been reasonably foreseeable in the first instance that Pristine Printers will fail to honour their obligation which makes them liable for the unexpected damages. They should have notified their contracting partner that they were not able to meet the terms and conditions of the contract which makes them legally bound. Where there is agreement and mutual understanding in a contract, it means that the contract is legally binding unless otherwise stated by the other party. In this case, nothing is stated which brings us to the conclusion that the default might have been intentional. In such a scenario, a lawsuit can be filed against the defaulter as is the case here. In the third scenario, Prompt Printing Ltd supplied the programmes on time but it was realized that they were printed on very poor quality paper which was not of the standard that had been agreed in the contract. This resulted in English National Operetta Company refunding the audience members the money they had paid and it can be noted that by any standard this is a loss incurred as a result of the poor products by Prompt Printers Ltd which is now denying responsibility citing a clause at the back of the invoice. It can be seen that this is a contract of goods that is governed by Sale of Goods Act 1979 which gives certain legal rights to buyers of goods. By s.14(2) of the Sale of Goods Act (as amended by the Sale and Supply of Goods Act 1994): Where the seller sells in the course of a business there is an implied condition that the goods are of satisfactory quality. Satisfactory quality is met if the goods meet the standard that a reasonable person would regard as satisfactory taking into account any description of the goods, the price and all other relevant circumstances. The buyer, English National Operator company is not made aware of the defects of the goods before the contract is made he does not have the opportunity to examine the goods before they are supplied. Against this background, they are entitled to claim damages as well as refund since the goods provided were in breach of s.14(2) of the Sale of Goods Act 1949). In this case, the buyer makes it known to the seller the purpose of buying the goods. It can be argued that under EU law, The Sale and Supply of Goods to Consumers Regulations 2002, a consumer may claim alternative remedies in respect of a breach of s.13 and s.14 of the Sale of Goods Act 1979. The buyer can claim a refund or replacement of the defective goods supplied. The law goes on to suggest that any defect on the goods noticed within the first six months of purchase will be assumed to have been there by the time of sale of the goods unless the seller can prove the other way round. This makes English National Operetta Company legible to claim for damages for these defective goods. It is therefore advised that the above mentioned organisation should file a lawsuit as stipulated by the law. With regards to the exclusion clause contained on the back of the invoice supplied with the programmes which stipulates that: ‘Prompt Printers Ltd denies all legal responsibility for any faults, defects or mis-descriptions in relation to any goods supplied to its customers,’ it can be argued that this is null and void given that it could have been used in the first place if they wanted it to be part of the contract for example Olley v. Marlborough Court. If the party using this clause behind the receipt would have taken reasonable steps to bring it to the attention of the party being subjected to it, then it could be binding but in this case it is null and void. It is therefore advisable to English National Operetta Company to file a lawsuit against Prompt Printers Ltd as they have all the legal ground to their favour and stand better chances of winning their case. (words 1989) References Gibson G.T.R. (1988). South African mercantile and company law. Cape Town. JUTA & Co LTD. Macintyre. E, (2010) Business Law. Fifth Edition. Pearson Longman. Read More