Principles of the English Law of Contract and of Agency - Book Report/Review Example

Case Study Part A The focus, in this respect is, to ascertain whether Codford can argue that his contract with Miranda was frustrated due to the shortage of Lobsters that he was supposed to supply. In order to determine whether that is tenable, it is important to define frustration. According to Morgan(2012),the doctrine of frustration was firstestablished in the case of Taylor v Caldwell (1863).In this case the claimant sought for compensation arguing that the respondent (owner of a hall) had breached contract for failing to provide the hall through which music concert would be held. Despite the claimant incurring a lot of expense in preparing the hall, it later burnt down. The court held that the contract was discharged on a count of frustration; as such terminated.From that case, it is clear that the eventuality was beyond the control of both parties(Beatson 2009). According to Adams (2014), from law of contract perspective, frustration can lead to the discharge of the contract when some circumstances emerge that make the contract impossible to carry through. The circumstance in question must interfere with the physical or commercial viability of the matter in hand. In Davis Contractors Ltd v Fareham U.D.C, it is clear that for frustration to be used as a means of discharging a contract there must be circumstances that arenot as a result of fault of either parties; and the fault must alter the performance of the contract significantly(Smith 2013). The most significant attribute that was derived from theDavis Contractors Ltd v Fareham U.D.C, was that for frustration to qualify, the performance of the contract, given the facts and prevailing circumstances, must be significantly different from what had been, initially, contemplated. In this regard, the courts failed to pronounce frustration in the case of Bunge SA v Kyla Shipping (2012). In that case, a ship that was supposed to lease to the claimant was subsequently involved in collision and the cost of repairing it surpassed the cost of making a new one. As such, the owner (defendant) argued that the contract had been frustrated and thus the plaintiff could not claim for any damage. The court ruled that there was no frustration because; accordingly, performance of that contract, given the facts and circumstance, would not be materially and significantly different from what has been envisaged in the initial contract(Andrews 2011). In course of time, the English law has developed mechanism through which the doctrine of frustration can be examined. The first; being that, as a result of the frustration the common law requirement that parties perform their duties and obligations is quashed. Secondly, frustration liberates the parties from any liability. Thirdly, as a result of the frustration, the contact stands discharged. Fourthly, for the doctrine to succeed, it should not have occurred as a result of the actions of the party that would rely on it. Fifthly, for the doctrine to succeed, the actions should not be self-induced(Wishart 2010). In view of the above definition and determinations on frustration, as a means of discharging contract, it follows that Martin Codford cannot rely on frustration merely because of shortage of lobsters. In the case Davis Contractors v Fareham UDC [1956] AC 696, it was held that frustration in a contract cannot qualify merely because the performance has become more difficult or more expensive to perform. Similarly, given the facts and circumstances, performance of that contract cannot amount to significant difference of what had been agreed upon initially(Singh 2010). Moreover, from the case study, there is evidence that Cordford had been supplied with 150 lobsters, more than what Miranda had ordered, but he opted to supply to other customers. Equally, Codford’s argument that he could not supply the 90 lobsters at a cost 450 implies that , he is incapable due to increased cost but this cannot hold as was held in the above case; frustration cannot happen because discharge has become more difficult or more expensive(Rainey 2013). Part B) In this section, the focus would be to determine whether, despite purchasing the lobsters from the local supermarket, Miranda could, still, sue Codford for breach; and if so, how much is she likely to gain as damages. It is important to point out that Miranda could still sue Martin Codford despite purchasing the lobsters elsewhere. She could claim damages because she incurred loss when she bought the lobsters from the supermarket. On the same note, she could claim damages on the basis of distress she went through as a result of the actions of Martin Codford(Mawrey 2012). Traditionally, under the English law doctrines, the awards for damages have been centred on putting the aggrieved party back to the spot they would be in, had the breach not occurred. The court in Farley v Skinner, held that damages could be rewarded for non-pecuniary loss incurred(Anson 2009). Consequently, the Sale of Goods Act of 1979, provides in, section 51 that, in a case where a seller of certain goods refuses to provide those goods to the buyer, the valuation of the loss, with regard to the price of the goods, is tabulated as the difference between the value held in the contract and the price at which the buyer, subsequently, bought goods at. This phenomenon was articulated in the case pitting Williams Bros v ET Agius Ltd [1914] AC 510 (HL). In this case the seller (defendant) failed to deliver some goods to the claimant at the agreed price. At the time of refusal to deliver, the value of the goods had risen by a significant margin. The claimant, as a result of the refusal by the defendant to deliver the goods, was forced to source for the goods elsewhere at a price that was much higher than the agreed upon. On the same note, the claimant had sought those goods with an intentionto sell them to a third party (Adams 2014). The court,while making determination of the amount of damages to award the claimant, first tabulated the difference between what had been agreed upon in the initial contract and, the amount the claimant later used to purchase the goods, as a result of the breach of contract by the defendant .The intention of the court, then , was to place the claimant back to the position they were in(Koffman et al 2010). Using the principle that the court used in the above case(Williams Bros v ET Agius Ltd [1914] AC 510 (HL), it follows that Miranda should be awarded damages as a result of the breach of contract by Martin Codford; the facts appear almost similar. The initial agreement between Miranda and Martin Codford was that the 90 lobsters would be supplied at the cost of 450. As a result of non –delivery, Miranda was forced to source for the 90 lobsters at a cost of 15; this totalling to 1350. She therefore spent 900 more. Similarly, upon buying the lobsters, she was to sell them to Air traffic Controllers at a profit(Jonsen 2011). The damages that Miranda can potentially get are 900 plus the amount she would have earned as profit (the loss she incurred as a result of purchasing the lobsters from the local supermarket). That amount couldincrease, considering that she could also claim for non-pecuniary damages as was indicated in the case of Farley v Skinner(Pickford 2009). That amount is not fixed .It could vary; depending on the arguments presented to support distress as a result of non-delivery by Martin Codford. The focus of the damages, as discussed, is not for gain, but to place Miranda back to the position she would have been, had Martin Coford not breached the contract(Mawrey 2012). Part C In this section, Miranda must be informed of the Unfair Terms in Consumer Contracts Regulations 1999. The piece of regulation sought to regulate the use of exclusion clauses while making standard business contract as well as other forms of contracts. The law, as well as the courts, seek justifiable means of reading and interpreting the use of exclusion clauses inserted in the standard conditions of businesses(Twigg‐Flesner 2010). From the onset, it is important to appreciate that the onus of proof is on the party that seeks to rely on the existence of the exclusion clause. In this regard, Guy who claims that there was exclusion has the burden of proof shifted to his side. Section 5 of, “Unfair Terms in Consumer Contracts Regulations 1999.”Provides that, any term within the contract; that is not individually negotiated for, is unfair term. Similarly, individual negotiation means that it must not have been made or drafted before and provided to the other party without according the burden of negotiating on its content(McCracken 2009). Looking at above provisions on regulations of contracts as well as from the statement from Guy with regard to the standard conditions of business, it is clear that the exclusion term was unfair. The statement (by Guy to Miranda) implies that Guy prepared the standard contract and gave it to Miranda without according her the chance to influence the contents. Whereas the burden of proof is on Guy, it appears as though the exclusion clause was not inserted in good faith(Richards 2006). Generally, for the exclusion clause to be effective, the party that relies on it must demonstrate that the other party had a greed o the clause. The knowledge of the term is called notice and it is provided for in two different ways; actual notice or constructive notice. Signing of the contract is consideredas talking notice but there must be actual notice or prove that the party took, all, reasonable steps to alert the other party of the existence of the notice(McKendrick 2007). According to Jonsen(2011), while interpreting exclusion clause, the courts will determine whether the matter under consideration was legal or not. For example, it such exclusion would not be allowed if it is illegal. In this respect, aparty who breaches a contract cannot rely on the exclusion clause. In the case study, it is the legal duty of Guy to supply the 100 truffles to Miranda. The partiesentered into the contract as a result of anagreement that the supplier (Guy) would supply the Truffles and in consideration, Miranda would pay. It would, therefore, be unfair for Guy,who has breached the contract,to claim that the standard contract provide had exclusion clause. Common law practice has been that courts use the doctrine of contra proferentum .This means that in conditions where the clause appears ambiguous, the court willusuallyside with the other party, other than the one that inserted the clause(Meyer 2010). In the case McCutcheon v MacBrayne [1964] 1 WLR 125, it was held that in scenario where the parties had previous dealings, there is no need for the notice of the exclusion clause to be sufficiently elaborated to the other party. This means that even if the other party was not made aware of the clause, but the dealings had been going on for some time, the exclusion clause would apply. The same would apply in case of trade usage or custom, even if there was no previous dealings; and this was elaborated in the case ofHollier v Rambler Motors [1972] 2 AB 71.The discussed matter relating to the two cases (McCutcheon v MacBrayne [1964] 1 WLR 125andHollier v Rambler Motors [1972] 2 AB 71) do not qualify because the exclusion clause that Guy seeks to rely on is both repugnant and inconsistent with the main intention of the contract; the main reason for the contract was to supply Truffles hence not supplying them would amount to breach. This concept is supported by the case ofGlynn v Margetson [1893] AC 351, where it was held that the main purpose cannot be included in an exclusion clause. It follows that Guy cannot rely on the exclusion clause as, has been demonstrated(Thomas 2008). References Adams, A. (2014). Law for Business students (8th ed.). Pearson Education Andrews, N. 2011, “Contract law”. Cambridge: Cambridge University Press. 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