Business Law and Common Law - Case Study Example

Business Law- Common Law BUSINESS LAW- COMMON LAW Georgia is a home pet care provider and is in touch with Malcolm, who shows interest Georgia’s pet care service. On the other hand, Malcolm shows his tropical fish and award winning rabbit to Georgia and mentions that the rabbit will be shown in Melbourne in a while for a sum of ten thousand dollars. Georgia presented Malcolm with an oral promise pertaining to his professionalism; he professed his love for animals, and told Malcolm that no problems will arise when he will be taking care of the pets. Georgia sent Malcolm a contract the next day that contained the clause “Georgia assures the highest standards in animal care. However, Georgia will not be liable for death or illness of tropical fish because of their specific vulnerabilities. Malcolm, this week, is very busy preparing to go away on a trip; therefore, he does not properly read the contract. He instead signs and gives it back to Georgia personally. Georgia frequently attends to Malcolm’s fish and rabbits, but feeds them incorrectly by mixing up their food. Malcolm returns, after one week, to find his thousand dollar tropical fish dead from eating rabbit food. In turn, the dead fish has clogged the fish aquarium causing flooding in Malcolm’s house. The flooding has caused extensive damage to his rented house and furniture. Additionally, his prize-winning rabbit has lost the entirety of its hair from eating fish food and thus, cannot be shown in Melbourne. Malcolm immediately calls his bank and stops the pet care server’s payment. This paper will discuss the contractual issues arising from this situation between Malcolm and Georgia. It will also advise on whether Malcolm can sue Georgia for any breach of contract, as well as offering remedies that he may seek. Rule Basic contract law in common law addresses a couple of issues including; how and when the contract was formed, when a party may escape the obligations of the contract, What meaning and effect the terms of the contract should be afforded, and the remedy that the contract breach should be given (Pentony, 2010: p45). For a contract to be formed, there must be an agreement consisting of offers and an acceptance, consideration and contractual intention so as to a contract can be said to be in existence. Other contractual ingredients include; the form, which must be observed for some formalities, the parties should be legally entitled to enter into a contract, the agreement needs to have been entered into freely and not under the influence or duress, and the agreement ought not to be contrary to the policy of the public or illegal. Only when a contract consists of all this ingredients can it be said to be valid. If an essential element is missing, the contract is un-enforceable, voidable, or void. Most disputes concerning contracts arise from disagreements among the various parties about the things that the parties needed to either do or avoid (Barron, 2006: p13). Many rules of contract law concern the interpretation of contractual terms, which are ambiguous or vague. The parol evidence rule puts a limit to what can be used when interpreting the terms of a contract. There are several things that a contract needs to possess for it to be considered valid. A contract must have a mutual agreement or an expressly implied agreement. The vital requirement is evidence that the parties, from an objective perspective, engaged in assent manifesting conduct, and that a contract is formed when the party meets requirements. A contract based on acceptance and offer is enforced by ensuring the terms can determine a clear path showing that the signees gave an assent on the same terms. Just like manifestation of assent, the terms are objectively determined (Turner, 2011: p20). There also needs to be consideration given by every party involved, meaning every party confers a benefit on the other. Alternatively, the party could sustain detriment that is recognizable such as a reduction in their alternative action courses where they would otherwise act with respect to the subject matter with no limitations. Both Parties also need to understand the contractual terms they are entering in to, as well as all the consequences of entering in to the agreement. Corporations, under the law, are considered persons and can thus enter into contracts. Most jurisdictions, for adults, have statutes that declare the parties’ capacity to a contract is under presumption, such that one resisting a contract’s enforcement on grounds of lacking capacity to be bound shoulders the burden of capacity persuasion. The contract must also possess a lawful purpose (Ciro & Goldwasser, 2006: p67). Contractual murder cannot be covered under this law and thus is not enforceable in court. It counts as void ab initio, from the beginning. Both parties also need to have equal remedy right upon contractual breach by the other party (Ciro & Goldwasser, 2006: p67). Finally, both parties need to have an obligation that they fulfill to the opposite party. This is distinct from consideration which could have been initially an inducement into signing the contract. While oral contracts are still legally valid and binding, written contracts normally carry the most weight (Clarke et al, 2009: p32). The statute of frauds covers the prevention of false allegations being made as to the existence of contracts. Written contracts, generally, bind the parties to the terms regardless of whether the parties signed the contract or not. However, this can be tempered by the omission that if the contractual terms are misrepresented, the plaintiff cannot rely on the contractual terms. Additionally, the document needs to be of a contractual nature. A contract can be void, voidable, or enforceable in a number of circumstances. Void contracts are those that are considered never to have to existence (Gibson & Fraser, 2007: p28). An example is a contract to do something illegal or contrary to the policy of the public. A classic example involves hit-man contracts. These contracts cannot be considered in court, and neither party has the legal entitlement to enforce it. A voidable contract is a contract made such that either party has the right to terminate it. Such contracts involve contracts entered into with minors (Gillies, 2010: p21). An un-enforceable contract, on the other hand, involves a contract where neither of the party can enforce the obligations of the other. Such an example is a contract that violates the statutes of frauds. If the contractual terms seem incomplete or uncertain, the parties are deemed not to have reached a legally binding agreement. An inability to come to an agreement on vital issues could cause the collapse of the entire contract. A court may attempt to give commercial contracts effectiveness if possible via construing reasonable construction of the contract. Courts also sometimes look to external standards mentioned explicitly within the contract or implied via common practice in that field. The court, in addition, could also imply a term; if there is exclusion of the price, they could imply a sum that would be reasonable, excluding land and second hand products (Graw, 2010: p9). Un-enforceable clauses can also be severed depending on various factors (Griggs et al, 2010 p11). If the contract contains incomplete or uncertain clauses, and all the options in resolving its true meaning seem to have failed, the affected clauses can be voided or severed. The rest, whether a clause can be severed, becomes an objective test. It becomes a question of whether a person with reason can see the contract being operational without the clause in dispute. Analysis ‘Georgia maintains the highest standards in animal care. However, Georgia will not be liable for death or illness of tropical fish due to their specific vulnerabilities’. An implied contract consists of those implied in law or in-fact. A contract implied in-fact involves one where the circumstances imply the parties have come to an agreement, even though not in an express manner. For example, in this case, Georgia accepted to take care of Malcolm’s fish and rabbits. By extension, not expressly, he was to ensure that, during his visits, his actions did not lead to any damages to his house. Causing damage to Malcolm’s house constitutes negligence. Some of the contractual terms also seem uncertain. When Georgia sought to move away from responsibility of the tropical fish and their vulnerability, he did not escape liability for negligence. I believe that the tropical fish did not die due to their specific vulnerabilities. The fish can be proven to have died from eating rabbit food, which is not peculiar to tropical fish. No fish has any nutritive business with rabbit food. It would kill them just as it would have killed any other fishes. Since Georgia kept collecting his check, he was still on duty as far as the pets were concerned. Negligence on the part of the Home Pet Care provider also caused the ruin of Malcolm’s champion rabbit. Under the rule of consideration, consideration must be given by both parties conferring a benefit on the other party or sustaining detriment of recognizable proportions where the party would be free for action with respect to the subject matter without any limitation. While Malcolm lost his tropical fish, his champion rabbit for a while, and had his apartment ruined, Georgia continued picking his check. Additionally, the rule of mutual obligation was not followed. The rule states that both parties must possess some obligation for the fulfillment of the other. While consideration also covers this, consideration could involve an initial contractual inducement. Malcolm fulfilled his obligation to Georgia by signing the check for his payment. However, Georgia did not uphold his end of the bargain fully, thus derailing Malcolm’s plans. Conclusion It is advisable that Malcolm seek remedy for his losses incurred due to Georgia’s negligence. The typical remedy in this case would be money damages due to breach of contract. Damages would be calculated by assessing the sum that would restore Malcolm to his earlier economic position. This includes the amount of money that Malcolm was expecting to get from his champion rabbit in Melbourne. He should also sue for damages to his house, aquarium, and furniture. The amount can be calculated from the receipts from the property owner, as well as furniture receipts. References Barron, Margaret. Fundamentals of business law. North Ryde: McGraw-Hill, 2006. Ciro, Tony. Vivien. Law and business: text and tutorials. South Melbourne: Oxford University Press, 2006. Clarke, Phillip. Gamble, Rodger. & Brebner, Julie. Contract law. (Butterworths caseboo k companions) (2nd ed.). Sydney, NSW : Butterworths, 2009. Gibson, Andy & Fraser, Douglas. Business law (3rd ed.). Frenchs Forest, NSW: Pearson, 2007. Gillies, Peter. Business law. (12th ed.). Annandale, NSW : Federation Press., 2010. Graw, Steven. An introduction to the law of contract. (4th ed.). North Ryde, NSW : Law Book Company, 2010. Griggs, Lynden. Clark, Eugene. & Iredale, Ian. Managers and the law. (2nd ed.). Sydney, NSW: Thomson, 2010. Pentony, Brendan. Understanding business law. (3rd ed.). Sydney, NSW: Butterworths, 2010. Turner, Clive. Yorston, Keith. & Fortescu, Eric. Australian commercial law. (26th ed.). Sydney, NSW : Law Book Co., 2011. Read More