Barts Potential Contractual Liability to Poppy - Coursework Example

work Word count: 1583 work January 9, Bart’s potential contractual liability to Poppy Bart is a shop owner and Poppy, during her visit to the shop, notices and likes a painting that is placed for display. She asks Bart to sell the painting to her but Bart declines explaining that the painting s for display and not for sale. This annoys Poppy and she threatens to Bart for refusing to sell the paint to her. The case therefore identifies the need to identify Bart’s potential contractual liability to Poppy and the law of contract’s essential elements of a contract because contractual liability exists when parties and their relationship meets the fundamental elements. One of the fundamental elements of a contract, for contractual obligations, is offer. This defines a communication by a party, the offeror, of intentions to be bound by proposed terms of offer should the other party accepts the offer. The offer also forms the initial legal milestone in a contractual agreement and may be presented by either of the involved parties. Its definition identifies a proposal of conditions of transfer of an object of interest and intentions to be accountable for the offered terms once the terms are accepted. An offer is further valid, and therefore binding, if the parties can prove that it was not made by mistake, if it was actually an offer, and if it still existed at the time of dispute. Communication, for instance, may not constitute an offer if it is a mere invitation to treat that aims at establishing a basis for negotiations and not an offer. In the case of Gibson v Manchester CC (1979), the council made a communication of details for sale of houses that the council intended and the House of Lords Held that such was an invitation to treat and not an offer.1 This was contrary to a decision in which the council had offered information and later confirmed intentions to create legal agreements, case of Storer v Manchester (1974) in which a valid offer was upheld.2 Further, initial stages of negotiations into contractual agreements do not always account to offer. Goods on display on a self service shop and goods that a seller displays on a shop window do not constitute an offer but an invitation to treat and either of the parties may make an offer thereafter. The case of Fisher v Bell (1961) 1 QB 394 explains this. In the case, the law prohibited offer for sale of certain weapons and it was held that the seller’s display of a weapon did not constitute an offer.3 Contractual obligation also does not exist after a valid offer until the other party accepts the offer under rules of offer.4 Acceptance must for example be communicated to the offeror and silence does not constitute acceptance.5 In the case, Bart displayed a painting in his shop and this amounts to invitation to treat and not an offer. Bart or Poppy could then make an offer on the pain and Poppy’s initiative can be considered as an offer to Bart, a case that would require Bart’s acceptance for a contractual obligation to exist. Bart however declines the offer and this means that no agreement existed in the case. Offer an acceptance constitutes agreement between parties and is fundamental to validity of a contract. The parties did not however have an agreement and no valid contract existed even if the parties could have fulfilled other contractual conditions such as payment. Bart therefore has no contractual obligation to Poppy. Lovely Lighting LTD’s liability to Bart under the law of contract and tort Bart and Lovely Lighting LTD, through the company’s agent, enter an agreement for supply of a shop window lighting. The company trades in manufacturing designed shop window lighting and the agreement if for production of a product with the name label of Artybarty. The agreement that Bart signed without contained a clause that excludes the seller’s liability in relation to quality of goods, fitness of purpose, and fitness to description as well as liability to damage and personal injury. Upon delivery of the window lighting, Bart puts it on and moves out to view it. He notes that an error in the naming and before he moves into the shop to contact the seller, the product explodes into fire that spreads to other goods. Bart tries to contain the fire but falls from a wire on the sign and suffers hand and face burns before eventually containing the fire. The issue for determination is Lovely Lighting LTD’s liability to Bart under contract and tort law. Establishing liability under law of contract involves ascertaining fulfilment of essential elements of a valid contract. Agreement is one of the elements and requires presentation of an offer, by one party, which the offeree accepts within stipulated or reasonable conditions of acceptance.6 Consideration must further support the agreement and the contracting parties must have legal capacity to undertake the contract. Conditions for such capacity include majority age for legally acceptable rationale, sound mental potential, and freedom from bankruptcy. Another essential element of a valid contract is legality of the subject matter and a contract is only valid if the subject matter is legal.7 Another important element to determination of existence of a valid contract relates to the doctrine of privity of contract that bars third parties from rights or liability created by contracts.8 Contracts made by agents however bind the respective principals because agents only act as instruments, as long as they operate for identified principals and within their scopes of operations.9 With an assumption of existence of a contract, rights and liability depends on express and implied terms. Some of the implied terms are sale by description, fitness for purpose, and fitness for quality.10 Parties to a contract can however exclude the terms but such exclusions must meet the reasonableness test. It was held in the case of Stewart Gill Ltd v Horatio Myer & Co Ltd (1992) QB 600 an unreasonable clause cannot be used to limit liability in a contract.11 The most likely tort liability in the case is the tort of negligence that defines a breach of care by one party to another that leads to legal harm. Liability on negligence only arises if there is a duty of care on one party to another, if the party breaches the duty of care, and if a relationship exists between the duty of care and the breach leading to a loss on the defendant.12 The cause of the harm must have also been foreseeable.13 In contract law, the seller owes buyers and consumers of the sold commodity a duty of care as was held in the case of Donoghue v Stevenson (1932). In the case, a consumer alledged illness upon consumption of ginger beer that was packed with a snail and the House of Lords held that manufactures are liable for omissions that lead to foreseeable harm.14 In the case, a valid contract exists between Bart and Lovely Lighting LTD because of existence of an agreement, contractual capacity of two business entities, and legality of the subject matter. Lovely Lighting LTD is therefore liable to delivery of commodities that meet safety, quality, and description standards unless stipulated by a reasonable exclusion clause. The exclusion clause is however unreasonable to the buyer and the company is liable for breach of contract under delivery of substandard goods. The delivered window lighting also identifies omissions for malfunctions into the fire incident and the associated losses to create negligent liability for property damages and physical injury suffered by Bart. Lovely Lighting LTD is therefore liable under contract and tort laws. Bart’s potential contractual liability to Rosie Bart lost his pet and he placed a poster, with a $ 50 reward, for return of the dog. Rosie noted the dog in a nearby restaurant and ascertained that no one in the restaurant claimed ownership of the dog. She further noted the tag on the dog and returned it to Bart. Upon leaving Bart’s shop, Rosie noted the reward, asked for it but Bart declined to give the money. The case for determination is whether a general offer binds the offeror if the other party was not aware of the offer before performance. Two rules of offer apply to the case, scope of a general offer and the offeree’s knowledge of the offer before performance. While an offer can be general or specific, a general offer applies to the public unless it defines a particular population. Consequently, any person can accept the offer to create a valid contract. This was held in the case of Carlill v Carbolic Smoke Ball Company in which a price offer was made to the public subject to contracting influenza after using a drug. A woman who heard the advertisement used the drug but still contracted influenza and validity of the offer was upheld despite being a general offer.15 The offer is cannot however be binding if the offeree had no knowledge of the offer before undertaking the subject matter (Tulsian 2-2).16 In the case, Rosie was not aware of the offer for the $ 50 reward until after presenting the dog. This contravenes the rule of prior knowledge of offer and means that no valid offer existed for Rosie. Consequently, there is no contractual obligation because of lack of a valid offer. Bart has no contractual liability to Rosie because there was no offer between the two parties. List of bibliography Goldman, Arnold and Sigismond, William, Business law (Mason, Cengage Learning, 2010). Goldman, Arnold and Sigismond, William, Business law: Principles and practices (Mason, Cengage Learning, 2013). Tuner, Chris and Tuner, Chris, Unlocking contract law (Oxon, Routledge, 2013). Twomei, David and Jennings, Marianne, Business law: Principles for today’s commercial environment (Mason, Cengage Learning, 2007). McKendrick, Ewan, Contract law: Texts, cases, and materials (Oxon, Oxford University Press, 2012). Beatty, Jeffrey, and Samuelson, Susan, Introduction to business law (Mason, Cengage Learning, 2012). Rush, Jon and Ottley, Michael, Business law, (London, Cengage Learning EMEA, 2006). Meena R, Textbook on contract law including specific relief (New Delhi, Universal Law Publishing, 2008). Chen-Wishart, Mindy, Contract law (Oxford, Oxford University Press, 2012). Stone, Richard, Texts, cases and materials on contract law (Oxon, Routledge, 2012). Stone, Richard, The modern law of contract (Oxon, Routledge, 2009). Miller, Roger, Business law today, the essentials: Texts and summarized cases (Mason, Cengage Learning, 2012). Reiner, Schulze, New features in contract law (Munich, sellier. european law publ., 2007). Sulphey M and Basheer, Az-har, Laws for business (New Delhi, PHI Learning Pvt. Ltd., 2011). Tulsian P, Business law for B.Com Hons (New Delhi, Tata McGraw-Hill Education, 2006). Read More