Law of Contract: Analysis of Bruce v. Matildas Home Garden Case - Essay Example

Law of Contract--- Case Study Module Module ID: Bruce v. Matilda’s Home Garden Contract Law: Contract Law serves as one of the most essential branches of Mercantile Law, which describes and determines the nature and scope of the agreements entered into between two or more parties signed with the intention of creating legal bindings against some consideration established by the parties to the contract out of their free consent. “The Law of Contract is intended to ensure that what a man has been led to expect shall come to pass and that what has been promised to him shall be performed.”1 Consequently, Contract Law lays stress upon the enforcement of promises made by the parties to contract.2 Similarly, Contract Law also provides remedies against the breach of the terms of contract entered into by the parties. The Facts associated with the Case: The present research aims to provide the piece of legal advice to Bruce against the breach of contract he has entered into with Matilda’s Home Garden Ltd with regards to decorating the public and private parts of the garden his owns adjacent to his residence. As per the details of the case, Bruce had hired the services of Matilda’s Home Garden, a landscape developing service organisation, for getting his garden to be more attractive, congenial and pleasing by including a mix of new plants and landscaping. Bruce had entered into detailed conversation with the experts of Matilda’s, and both the parties agreed on the following points with regards to the landscaping plan: a. That the plan was discussed with regards to landscaping to be made in public and private parts of the garden owned by Bruce b. The plans would not only include a mix of new plants and landscaping, but also maintenance of some of the existing mature plants in the garden was also to be made c. That the small maple sapling, which had been planted with the ashes of his deceased cat was not to be removed or damaged altogether d. That Bruce had signed the extensive terms and conditions mentioned in the agreement form of Matilda’s Somehow, the performance made by the service company not only turned out to be unsuccessful one according to Bruce in fulfilling his requirements, but also it caused serious harm to the already existing garden by destroying the beauty of the garden on the one side, and causing contagious infection to Bruce on the other. Hence, Bruce looks seeking the compensation against Restitution Interest & Unjust Enrichment3 against the breach of contract on the one side, and damage occurred in the wake of adverse performance made by Matilda’s on the other, in the first instance. Legal Issues: In the case under-examination, Bruce intends to sue Matilda’s Home and Garden, under the relationship created in the wake of their entering into contract with each other, and former’s claim on the latter, which had created breach of contract on the basis of the terms of Implied Contract. The following legal issues have been raised in this case: a. Whether the Matilda’s Ltd to be sued at the court of law can completely rely upon the clauses of the terms & conditions it has mentioned while entering into agreement with all the clients. b. Whether or not Matilda’s had provided the service as per the request made by Bruce as an offeree with regards to growing the flowers and plants according to the desire made by Bruce. c. Whether or not Bruce could be prevented from suing the company because of the harm caused by Matilda’s on Bruce’s health and his garden as well. d. Whether or not the aggrieved party could have its legal right to take an action according to the provisions of Law of Contract for the breach of contract made on the part of one party against the other. However, before embarking upon the case under-analysis, and giving legal advice to Bruce in the light of the statutes of Contract Law, it would be appropriate to define contract, and its provisions related to the case under-examination. Contract: Contract has been defined as an agreement enforceable at law.4 Consequently, an agreement that has been made with the explicit and/or implicit terms of developing legal relationship between the parties in the wake of entering into the agreement is called a contract. In the case under-analysis, the legal contract has been entered into between Bruce and Matilda’s Home Garden. Essentials of a valid contract: A legal contract enforceable at law contains the following essential elements: a. Two or more persons or parties to the contract b. There must be some agreement between the parties c. The agreement must be enforceable at Law. d. There should be some lawful consideration. e. The consideration should be adequate and as per the terms determined in the contract. f. The parties should have intention of developing legal relationship. Hence, consideration embodies ideals of reciprocity, quid pro quo and thereby fairness.5 In the under-analysis case, the contract had been entered into between Bruce and Matilda’s Home Garden Ltd, which appears to be fulfilling all the essentials of a valid contract. Agreement: Agreement has been defined in these words: Every promise or every set of promises forming the consideration for each other.6 Hence, agreement consists of promises or set of promises with the establishing of some explicit consideration to be observed on the part of the parties to the contract. Consequently, consideration serves to be an essential element of a valid contract as per the statutes of Law. Types of Agreements: The agreements are divided into two major categories, which include social agreements and legal agreements. Social agreements could be stated to be the ones that serve as the promises between two or more persons or parties, in which no legal bindings or intentions of suing each other at the court of law in case of breaching are anticipated. Hence, these agreements are social in nature, which could be made between the friends, spouses and other persons and are socially binding the individuals, and thus do not create any legal obligations or requisites altogether. Hence, these agreements do not enjoy the status of a legal contract. For instance, A and B have promised to join each other in the morning walk in some park or ground; and in case, any of the two does not reaches the place decided for the same, no legal remedies could be sought, because of the promise’s being social in nature. Hence, social contracts do not contain any legal intentions in them. Thus, intent to making legal contract is vital in the agreements. In Balfour and Balfour (1919) 2 KB 5717, where a husband has promised to pay his wife some monthly stipend, though he failed to perform the same. The wife sue him at the court, where the court held that such agreements could not be stated to be legal contracts, because the parties did not intend to be attended by legal consequences. In addition, domestic and social agreements also fail to obtain legal status partly due to their being not enforceable through the court of law.8 In the same way, some of the agreements are entered into and promises are made with the intention of creating legal relationship, and non-accomplishment of which leads to legal prosecution subsequently. Hence, in case of entering into legal agreements, the parties to contract not only have legal rights, but also are under legal obligation of demonstrating performance by executing the terms of the legal agreements mentioned in them. Consideration: Consideration simply reflects the performance made by the parties as per their promises with each other; it could be an object, service or money to be executed against the promise made by the parties to the contract, as Contract Law maintains: When at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or abstain from doing something, such an act or abstinence or promise is called a consideration for the promise.9 Consideration serves as one of the most essential elements in a valid contract, without which the contract would be void ab initio. Not only this that the consideration should exist, but also the contract must be entered into against a lawful consideration, which should not be against the principles of moral values. Contract Law tends to deal with bargains, where consideration is determined as the ‘proof’ that a contract existed rather than a merely gratuitous promise.10 Consequently, the return promise is bargained by the promisor in exchange for his promise and is given by the promisee in exchange for that promise. In Belton v. Madden,11 the court held that the plaintiff agrees to do something against the defendant’s agreeing to do something else; and it may be enforced if what the plaintiff has agreed to do is either for the benefit of the defendant or to the trouble or prejudice of the plaintiff.12 In the given case, Bruce’s making payment against the services hired from Matilda’s with regards to decorating his garden serves as consideration for Matilda’s, while decoration of his garden is the consideration on the part of Bruce to be executed for him, by Matilda’s. Consequently, in case, any of the party to the contract fails to get the consideration decided by the other to be paid to the one, the contract could be invalid one. Hence, a contract is valid in case consideration: a. is valid and real in nature b. has been executed in adequate period of time c. has been executed in a proper manner as per the promise made by the party to execute the same d. does not have any malafide intention while providing the other party with the promised consideration e. its quality and quantity is the same as per the terms of the contract made between the parties In Dunlop v. Selfridge (1915)13 it was held that no consideration could be executed that would be detrimental to either of the party to the contract. Hence, an agreement is made out of the offer proposed by the offerer to the offeree, which maintains that “when one person signifies to another his willingness to do or to abstain from doing anything with a view to obtaining the assent of that other to such act or abstinence, he is said to make an offer or proposal.”14 In the same way, “when the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted.”15 In the given case, Bruce serves as the offeree, to whom the offer had been made by Matilda’s Home and Garden for the maintenance and development of his garden. Despite the fact that Bruce had contacted the company for the maintenance of his garden and hence made invitation to offer;16 it was actually Matilda’s that presented its terms and conditions as formal offer, which Bruce had made the acceptance. So in this case, Matilda’s Home and Garden is offerer, while Bruce is offeree. Since Bruce had accepted the service for the development of his garden, he could not find any pleasant and positive changes at the garden altogether. On the contrary, after returning home from a week’s holiday with his mother, the changes in the garden horrified Bruce, which included: a. Almost none of the plants he and Matilda had agreed upon in their plan had been planted b. The cheaper varieties had been used instead of the high quality plants promised by the company. c. In addition his rosemary and sage plants looked trampled. d. Moreover, Bruce’s mature roses seemed to be dying due to the use of herbicide in the garden. e. The most startling issue appeared in the garden included the replacement of his beloved maple sapling with a juniper bush. f. In addition, the changes also caused itchiness and soreness in Bruce’s hands, and resulted in his falling ill. Hence, here appears the question of performing and execution of contract. Performance of Contract: Performance of a contract refers to the execution of legal obligations created by a contract.17 In simple terms, performance reflects the accomplishment of the terms mentioned in the contract. The performance is valid and legal provided it fulfils the following conditions: a. Performance has been executed in accordance with the terms and conditions of the contract b. Quality and quantity of the product or service has been observed by the parties c. Performance has been made within the appropriate period of time d. Performance has been made in an appropriate mode. In case the performance has not been made in accordance with the terms agreed by the parties in the contract, either or both of the parties could seek advice or support from some impartial expert. The parties can exchange knowledge and expertise in order to improve the competitiveness of the product or service.18 Since Bruce had undergone serious losses in the form of destruction of most parts of his garden, including the replacement of maple saplings, withering of roses and ruination of other areas, he threatened to sue Matilda’s over phone at the court of law for the loss of his property as well as the injuries he had received. However, instead of making any compensation of the losses its services inflicted upon Bruce, Matilda’s Ltd sent legal notice warning the buyer of suing the company. The legal notice maintained that the company had explicitly written in its agreement that it reserved the right to deviate from the original landscaping plans made with the buyer in case its planned was affected by weather conditions or the discovery of inappropriate soil composition for particular plants, etcetera. Somehow, here appears the question of intention of the parties to the contract, where in case the terms of an agreement have mistakenly been violated, it comes under the category of misrepresentation. However, the damage caused on the garden as well as on Bruce’s hands demonstrates the negligence of Matilda’s, where the company looks attempting to forbid the buyer from taking legal action against it because of the losses he had undergone in the wake of providing the landscaping services. It not only proves the criminal intentions of Matilda’s, but also comes under the definition of breach of contract. Breach of Contract: Breach of contract appears when a party breaks its obligation which the terms of a contract impose on both the parties. The English Contract Law manifestly states that no contract could be made on the foundation of: a. malafide intention b. coercion c. undue influence d. fraudulence e. misrepresentation Consequently, a contract performed in an inadequate way or against and contrary to the terms made with the other party, comes under the definition of breach of contract. In Oscar Chess v. Williams, where the car dealer company Oscar Chess (plaintiff) sued the seller William (defendant) for making alterations in the registration papers, the judge Denning L.J. declared: “It is sometimes supposed that the tribunal must look into the minds of the parties to see what they themselves intended; that whether the act is a mistake, or has been committed deliberately. The question of whether a warranty was intended depends on the conduct of the parties.”19 Hence, the court held that the representee, Oscar Chess Ltd as a car dealer, had the greater knowledge and would be in a better position to know the age of the manufacture than the defendant;20 the same is equally the case with Matilda’s. Being the professional and experienced landscaping service providing company, Matilda’s experts must have obtained sufficient knowledge and information about the nature and situation of the soil on which they intended to exercise their services. As a result, the question of their being unaware of such a serious reaction of their work on the garden does not make any sense altogether. On the contrary, it partly displays the serious negligence committed by Matilda’s while rendering service to Bruce. As a result, the contract is voidable on the part of Bruce. However, instead of submitting to the mistake its workers had committed, Matilda threatened to sue Bruce on the ground that Matilda’s Home and Garden reserves the right to deviate from the original landscaping plans made with the buyer where those plans become impracticable. Somehow, deviating from the original plan does not mean inflicting of harm and damage to the other party. Since Bruce had already informed Matilda’s regarding the strict implication of the landscape plan as per his long discussion with Matilda’s. As a result, the question of altering the plan does not have any validity in it. Legal Remedies: Restitution simply refers to the reimbursement of the money a party has already paid against the future services as consideration against the same. However, all losses cannot be compensated through the reimbursement of payment only. Rather, the physical sufferings and emotional losses cannot be compensated through the reimbursement of past payment only. Compensation is very much a means to an end rather than an end in itself. That end is the making good of the claimant’s right to performance of the contract.21 Matilda’s also took plea that it shall not be liable for damage to existing vegetation in the landscaping process. Nevertheless, Bruce had manifestly instructed that the maple sapling could not be replaced at any cost. Since Bruce appears to be having emotional attachment with the maple sapling created out of the ashes of his deceased cat, he would not allow destruction of the same, which he had clearly mentioned in his long discussion with Matilda’s. Consequently, Matilda’s to make compensation under Restitution Interest & Unjust Enrichment.22 In Foskett v. Mckeown, where the claimants maintained that they had made payment to Mr Murphy against the investment in land situated in Algarve, Portugal, they also had their right in the insurance policy received by Murphy’s heirs in the wake of his committing suicide.23 The court held that the claimants, including Foskett and others, could get only the amount they had invested due to the very fact that it had caused no harm to them. The court of appeal held that the claimants could get the amount as per the percentage they had as their share in the land, though no amount could be given to them out of the insurance policy of Murphy premiums of which he regularly paid in his life. Thus, the House of Lords held that, since tracing was part of the law of property, considerations of unjust enrichment were irrelevant.24 In addition, Matilda’s does not have any right to forbid Bruce from trying the company at the court of law, because of the serious negligence observed by the workers while working on the garden. However, on the basis of the term that Matilda’s Home and Garden shall not be liable for any personal injuries connected to the work undertaken, no legal remedy could be sought for the personal injuries experienced by Bruce. On the contrary, the following remedies against the breach of contract are available to be made to the aggrieved party: a. Rescission of the contract25 b. Suit for damages c. Suit upon quantum meruit d. Suit for specific performance e. Suit for injunction Bruce could seek the help from the court of law under a, b and d parts of the above-stated five remedies. a. Rescission of the Contract: According to section 65 of Contract Law, “When an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under such agreement or contract is bound to restore it, or to make compensation for it to the person from whom he received it.26 In simple words, in case one of the parties to contract has failed to fulfil his promise with the other, where the aggrieved party has declared the contract to be void under Contract Law, the party who has received benefit out of the agreement, is bound to either restore the agreement, or make compensation against the losses occurred. In the case under-examination, Matilda’s has failed to render the services as per the terms of the contract. Hence, instead of stopping Bruce from suing Matilda’s, the company has to return the amount it has taken from Bruce in advance against developing the landscape in accordance with the terms of the contract, due to the very fact that Matilda’s act comes under the definition of misrepresentation27. In Spence v. Crawford28, where the respondents purchased 2,925 shares from the appellant existing in a private company at the price of £2,250, which sum was made up of the sum of £1,350, being the value of the shares, and the sum of £900, being the amount of a loan which had been granted by the appellant to the company. The respondent, as per the terms of the contract between him and appellant, also undertook to relieve the appellant of his obligations to a bank in respect of the companys overdraft and to have the securities, belonging to the appellant and pledged with the bank against the companys overdraft, transferred back to the appellant within 2 years. The appellant later resigned from the company as director, and did not have any further interest in the profits or losses of the company, or its dividends. However, both the appellant and the respondent duly fulfilled the terms of the contract. Later, the appellant sought to have the contract set aside on the ground that he had been induced to part with the shares by fraudulent misrepresentations on the part of the respondent as to the financial position and prospects of the company, and he also claimed restitution in integrum.29 The court held that, (i) the appellant was induced to enter into the contract by fraudulent misrepresentations on the part of the respondent, who was therefore not entitled in bar of restitution to found on dealings with the subject purchased, which he had been enabled by his fraud to carry out. (ii) the appellant was, therefore, entitled to the remedy of rescission, accompanied by restitution in integrum, as the substantial identity of the subject-matter of the contract remained. b. Suit for Damages: Suit for damages serves as the monetary compensation to be awarded to the aggrieved or injured party for the loss occasioned to him. Damages are of two major types including ordinary and special damages; the former are ordinary in nature, while the latter ones occur about which the parties are aware since the time of their entering into contract. As per the case under-study, Matilda’s were informed in details regarding the changes to be made in the garden. There were also informed that the maple sapling could not be altogether, though Matilda’s trounced and ruined the same, which was strictly against the terms of the contract between Bruce and Matilda’s. In Newbigging v Adam (1886) 34 Ch. D. 58230, Court of Appeal held that no one could be included to enter into partnership through fraudulence or misrepresentation, where the other party does not know the intentions of the first one. Since intention is frequently noticed through conduct performed by the parties, committing of serious negligence and sending notice barring the other from suing also shows malafide intention of Matilda’s. c. Suit for Specific Performance: Specific performance is granted in the following situations:31 1. That compensation in money is not an adequate relief 2. That when there is no standard for ascertaining the actual damage caused by the non-performance 3. That in case the compensation cannot be obtained. In the case under-discussion, since the maple sapling existing in Bruce’s garden had been prepared out of the ashes of Bruce’s deceased cat. In addition, Bruce also experienced personal injuries because of the work performed by Matilda’s in his garden. Consequently, the court can issue order to Matilda’s of making additional payments to the emotional loss occurred due to the company’s explicit negligence. Conclusion: In the light of the judgement described in the cases above-mentioned, it becomes crystal clear that Bruce has every right to sue against the damage caused by Matilda’s because of the serious negligence and malafide intention displayed by Matilda’s Ltd; and he can seek the support of law in the light of the precedents made by the courts of law at different occasions. In addition, Bruce preserves the right for rescission of the contract by demanding the return of his money he had paid to Matilda’s through the cheque of his business account, along with seeking compensation against the losses inflicted by the workers of Matilda’s in his garden. The court could issue order to Matilda’s to pay against the losses appeared in the garden as well as on the health of the plaintiff Bruce as compensation against the financial and physical losses and damage occurred due to the ill intention of the company. Somehow, the company would not be liable for the compensation to be paid against the injuries occurred in Bruce’s hand, because of the explicit mentioning of the same in the terms and conditions of the contract entered into between the parties. Bibliography Anson, Sir William. Principles of the Law of Contract. 28th Edition (Oxford University Press 2002) p.3 ISBN 0199256039 Collins, Hugh. The Law of Contract. Fourth Edition. (Cambridge University Press 2003) 57-62, 330-32 Ferdous, Syed Robayet. ‘Consideration of Contract in English Law & Law of Bangladesh: A Comparative Study.’ (Asian Affairs, Vol. 31, No. 1, 19-38, January-March, CDR B Publication 2009). accessed January 18, 2015. Klass, Gregory. ‘Intent to Contract.’ (Yale Law Education 2008) 44. accessed January 21, 2015. Koffman, Laurence & Macdonald, Elizabeth. The Law of Contract. 6th Edition (Oxford University Press 2007) 109-133 MacMillan, Catharine. & Stone, Richard. ‘Elements of the Law of Contract.’ (University of London International Programmes 2012) 14. accessed January 20, 2015. Neyers, Jason W., McInnes, Mitchell., & Pitel, Stephen G. A. Understanding Unjust Enrichment. (Hart Publishing 2004) 355-59 Pearce, D. & Halson, R. ‘Damages for breach of contract: compensation, restitution, and vindication.’ (Oxford Journal of Legal Studies 2007) 1-28. ISSN 1464-3820 (In Press) White Rose Research Online, Universities of Leeds, Sheffield and York. accessed January 19, 2015. Sachdeva, Aman. & Gupta, B.D. Mercantile and Industrial Law. (Ajanta Prakashan Publishers, Delhi 1999) 28-31 Weitzenböck, Emily M. ‘English Law of Contract: Consideration.’ (Norwegian Research Centre, Universitetet I Oslo 2012) 4-7. accessed January 22, 2015. All England Law Reports, All ER 1939 Volume 3, Spence v Crawford [1939] 3 All ER 271 accessed January 19, 2015. Read More