Breach of Contract - Legal Issue - Case Study Example

Name: xxxxxxxxxxx Institution: xxxxxxxxxxx Course: xxxxxxxxxxx Title: Business Tutor: xxxxxxxxxxx @ 2009 Business Scenario 1 Mrs. Lastic hired three service providers in preparation for her daughter’s wedding. Mr. Johnson was to provide the bridal car, Mr. Leslie was in charge of catering whereas Mrs. Kay was in charge of the wedding photographs. The three service providers received full payments for their services one month prior to the wedding date. Mr Johnson agreed to hire his white Rolls Royce to Mrs. Lastic as a bridal car for her daughter, Lucy upcoming wedding. However, a week before the alleged wedding Mr. Johnson sold his white Rolls Royce to Mildred on the condition that she would ensure that the car was available for hire as a bridal car during Lucy’s wedding. When Mrs. Lastic contacted Mildred a day before the wedding to ensure that the bridal car would be available Mildred denied any knowledge of an arrangement she had with Mr. Johnson to give her the white Rolls Royce as the bridal car. Mrs. Lastic was forced to hire another bridal car at a higher price. Thereafter she intended to sue Mildred for inconveniencing her plans through the breach of contract. On the wedding day, Mrs. Kay’s cameras jammed and thus the photographs came out inappropriately. On the other hand, the catering services provided by Mr. Leslie left the visitors ill since the chicken that was served was contaminated by Salmonella. Evidently, both Lucy and her mother detested the services that were rendered to them. In return they embarked on a mission to sue the three service providers on the grounds that Mr. Johnson and Mildred breached their contract even after Mr. Johnson had received full payment. Conversely, Mr. Leslie and Mrs. Kay had provided services that were not up to the intended standards. This paper seeks to give legal advice to Mr. Johnson, Mrs. Kay, Mr. Leslie, Lucy and Mrs. Lastic in reference to legal principles, legislations and case laws. Case Analysis Key legal issues identified in scenario 1 revolve around the breach of contract. It is apparent that Mrs. Lastic had deliberately entered into a contract with three service providers in preparation of her daughters wedding. According to their contract agreement Mr. Johnson was to rent out his white Rolls Royce as the bridal car. Mr. Leslie was to provide catering services whereas Mrs. Kay was in charge of the wedding photography. According to the law a contract is regarded as a legally biding agreement. An agreement is reached when both parties accept particular terms either in written form or orally. Nevertheless, it is imperative that both parties are able to prove that they indeed entered into a contract by providing material evidence in form of the contract itself or by attesting to the uttered terms in the contract(Smith & Keenan 2007). Failure to perform as stated in the terms of the contract is considered as breach of contract. Several legal actions can be taken in the event that a contract is breached. In accordance to the law parties that breach contracts are in most cases subjected to certain penalties. For instance, in the event that a contract is breached the compensatory damages are rendered to parties that have been affected as a result of the breached contract. There are two forms of compensatory damages namely, direct and consequential damage. Compensatory damages are given in order to compensate the plaintiff to losses and damages that they suffered as a result of the breach of contract (Adams 2006). In reference to the events that took place in scenario 1, the four parties entered into a legally binding agreement. However, these agreements were breached given the fact that Mrs. Lastic and Lucy did not get intended services as agreed in the contracts. Mr. Johnson and Mildred did not deliver whereas Mr. Leslie and Mrs. Kay breached the contract by giving services that were not up to the expected standard. Additionally, the catering services rendered by Mr. Leslie were hazardous to people’s health. A clear example of court cases that somewhat relate to the events in scenario 1 includes the case between the Anglia television versus Reed (Anglia v Reed (1971). In this court case Anglia television, the plaintiff had prepared a television play. Anglia entered into a contract with Robert Reed, the terms of the contract were that Reed was to star in the production. According to the contract Reed was to avail himself in England for rehearsals and the actual act in the film production in exchange for 100 pounds per week as the living expense and 1,050 as his salary for the entire production. Moreover, the Anglia television facilitated for first class air transportation for Mr. Reed between England and the United States. When the production date was due Reed did not avail himself since he had other roles to play. Anglia sued Reed on the grounds of wasted expenditure as a result of his breach of contract. The ruling of the court was that Reed was to compensate the Anglia television. In Jacob& Young v. Kent (1921) the principle of material breach and substantial performance is apparent. Subsequent to the realization that the installed pipes was Cohoes piping instead of Reading piping, the defendant requested the plaintiff to redo work by replacing the Cohoes pipes with the Reading pipe. This meant that the Plaintiff was to demolish the entire pipe system at a great expense. The plaintiff declined leaving the work untouched and asked for his final payment arguing on the grounds of substantial performance. The court ruling was that the defect was insignificant therefore there was substantial performance due to the fact that the work appropriately done apart from the brand name which was different from what the plaintiff had requested in the contract. Consequently, the ruling was in favor of the plaintiff, he therefore got his money and did not have to redo the pipe systems. Based on the highlighted legal principles and court cases, Mrs. Lastic and Lucy have legal grounds of obtaining compensation for the damages that occurred as a result of the breach of contract. On the other hand the three service providers stand the chance of eluding compensation payments on the grounds of substantial performance and inevitable circumstances (Smith & Keenan 2007). Legal advice to the involved parties Mrs. Lastic and Lucy can be considered as the plaintiffs in this case. In order for them to receive compensation on the grounds of wasted expenditure and damage they need to fulfill certain obligations. Foremost, they will need to ascertain that there was a contract between them and the three service providers. Furthermore, they need to clearly state the terms of the contract. In order for this to be actualized Mrs. Lastic will have to present a written document that indicates that she had entered into a contract with Mr. Johnson, Mrs. Kay and Mr. Leslie. Nevertheless, if there are no written documents and the contract was contracted orally it will be necessary to prove the existence of the contract by providing witnesses. It will also be necessary to prove the extent of the damages caused and the extra expenses incurred as a result of the breach of contract (Keenan &Riches 2007). Mr. Johnson can be considered as the defendant in this case, his main objective will be to defend himself against charges of breaching his contract with Mrs. Lastic. Foremost, Mr. Johnson will need to substantiate the terms of his contract with Mrs. Lastic. In order for him to elude the damage compensation charges, he will have to prove that he and Mildred agreed that upon the sale of his white Rolls Royce she would avail the car on the date of Lucy’s wedding. So as to settle his scores with Mrs. Lastic Mr. Johnson should deliberately refund Mrs. Lastic the full amount he was given by Mrs. Lastic for the bridal car. In addition he should offer a formal apology for the inconveniences caused. Mildred was consigned into the contract as the third party in order for her to avoid paying Mrs. Lastic damage compensation she will need to prove that she and Mr. Johnson had made no agreements that she would have to deliver the car on the date of Lucy’s wedding. Mrs. Kay and Mr. Leslie on the other hand will need to prove that whatever happened was inevitable and beyond their control and that their oversights and omissions were not deliberate or a matter of carelessness. Alternatively, they could refund the money rendered to them for their services by Mrs. Lastic .Moreover, they could offer formal apology to both Mrs. Lastic and Lucy. Scenario 2 The Manchester and District independent data extraction association (MAD- IDEA) employed Thomas as a hi-tech data handler. As a result of his skills in databases and computer programming Thomas was to receive £10 per hour. This was £3 more than the amount paid to other employees doing the same job. Subsequent to his employment, Thomas proved his brilliance in computer programming by devising a data base that facilitated quick and easy recording of data. Over the course of time, Thomas bluntly revealed his increased wage earnings to Justine a colleague in the same department who carried out the same tasks as Thomas. Justine complained to the managers about the increased wages paid to Thomas citing that she deserved the increased payment since she had worked for the company for three years. Moreover, she was aware of the Incredible Luck Lady (ILL) Directive (90/666) which stipulated that female staff who have been employed in the same department for 2 years should receive a lump sum bonus in regard to their present salary. In addition Justine cited a corresponding, U.K legislation referred to as the Considerate Aid for the Mental Protection of Employees (CAMPE) statue 9119/89 that stipulates that it is compulsory to all employers to provide their employees with stress related weight fluctuation treatment. Justine complained that none of the legislation requirements were given to her however she preferred an increase in her wages. Consequently, Thomas’ daily earnings were reduced by the management. His efforts to appeal to the management were fruitless since he did not have a contract. Thomas dismissed himself from work. He however decided to remove the addresses and names that he had input in the MAD-IDEA data base. Furthermore, he infected the MAD-IDEA systems with viruses such that all the data became jumbled up and none could be extracted. With these he intended to improve the data collection agency, Intertechi 2002 which he planned to purchase as advised by a friend who was an estate agent. The management replaced Thomas with Dominic a 17 year old without computer knowledge. Dominic input data manually and is paid £ 5 per hour. This paper seeks to give legal advice to Justine, Dominic and the MAD- IDEA company in reference to legal principles, legislations and case laws. Case Analysis Legal issues identified in scenario 2 revolve around business and computer law. It is evident that the MAD-IDEA company has certain discrepancies that revolve around wage enumeration. The company lacks protocols of paying their employees in regard to the law. For instance, Justine a female employee has worked in the same department for two years without receiving a raise in her monthly income. This is in contrast to laws of the country that stipulate that female staffs who have been employed in the same department for 2 years should receive a lump sum bonus in regard to their present salary. In addition, U.K legislation referred to as the Considerate Aid for the Mental Protection of Employees (CAMPE) statue 9119/89 stipulates that it is compulsory to all employers to provide their employees with stress related weight fluctuation treatment. The management of the MAD-IDEA company barely regards the regulations stipulated in the law about the welfare of the employees. In regard to the employment of Thomas as a hi-tech data handler both the company and Thomas did not consider vital employment practices such as the signing of a contract agreement or wage enumeration. Consequently, the agreed wages that Thomas was supposed to be given drastically changed from £10 to £7 per hour. Thomas’ action of deleting data and infecting the MAD-IDEA systems with virus can be termed as illegal. Furthermore, the use of these data out of the MAD-IDEA scopes could ignite legal reactions (Keenan &Riches 2007). Dominic’s employment on the other hand can be regarded as lopsided since his wage enumeration and work description are tentative. It is also apparent that the MAD-IDEA dealings with the Sofas ‘R’ Us Ltd is skeptical since it involves the analysis of data that are highly sensitive and confidential. The Federal Information Security Management Act of 2002 recognizes the importance of information security to national security and economic interests. According to this Act, information security entails protecting information systems which support the operations of agencies from unauthorized use, modification and destruction. Akdeniz, Walker and Wall (2002) in the book “Internet, law and society” chapter 14 observe that privacy rights and encryption should the liable policies of curbing unauthorized access and destruction to confidential and sensitive data. The unauthorized access to sensitive data has implications to both the society and the law (Akdeniz, Walker, &Wall 2000). The intellectual property law grants exclusive ownership and rights to the proprietors of intangible assets such as designs and exclusive inventions. The exclusive rights listed in this law allow the proprietors of the alleged intellectual property to pay for the costs associated with the research and development of the exclusive inventions and to gain monopoly profits. In Garcia v San Antonio Metropolitan Transit Authority (1985), the decision of the Supreme Court was that the State is invested with power under the commerce clause in the constitution to extend and propose the Fair Labor Standards Acts that require employers to provide to their employees overtime payments and minimum wage. According to this ruling it is clear that the MAD-IDEA company should put into practice the stipulations of the Law in regard to wage enumerations (Rush &Ottley 2006). Legal advice to the involved parties In reference to the Incredible Luck Lady (ILL) Directive (90/666, the Considerate Aid for the Mental Protection of Employees (CAMPE) statue 9119/89 and the Fair Labor Standards Acts, Justine has legal grounds of negotiating a raise in her monthly income. Therefore she should assert her position to the management of the MAD-IDEA company. Alternatively she should seek for a legal representative such as a labor lawyer to facilitate her discussions with the company in regard to her wage enumerations. Dominic on the other hand should seek for a formal work and payment description in form of a contract so as to avoid irregular work and wage retractions (Keenan &Riches 2007). The MAD-IDEA company needs to formulate policies that govern its information systems and wage enumerations. The policies that the company needs to formulate in regard to its information systems should be in line with the stipulations of the Federal Information Security Management Act of 2002 that recognizes the importance of information security to national security and economic interests (Bainbridge 2000). In regard to the policies that revolve around employee wage enumerations the company should ensure that it grants fair wages that comply with the wok descriptions of its various employees. Moreover, the company should ensure that its policies on wage enumeration should be in line with the Fair Labor Standards Acts (Rush &Ottley 2006). Thomas’ action of deleting data and infecting the MAD-IDEA systems with virus is bound to bring about some legal implications. According to the intellectual property law exclusive ownership of the data base belongs to the MAD-IDEA since the company hired and paid Thomas to develop the systems. Furthermore, expenses incurred through research and development of the databases was solely settled by the company. It is therefore prudent for Thomas not to use the information extracted from the MAD-IDEA company to develop his independent agency. In addition Thomas should seek for a formal work and payment description in form of a contract so as to avoid irregular work and wage retractions. Bibliography Adams, A., 2006, Law for business student, 4th.ed.Longman Publishers, UK. Akdeniz, A., Walker, C., &Wall D., 2000, The Internet, law and society, Longman, UK. Bainbridge, D, 2000, Introduction to computer law, 3rd.ed.Longman. UK. Keenan, D &Riches, S, 2007, Business law, 8thed, Pearson Publishers, U.K. Rush, J &Ottley, M, 2006, Business law, Thomson learning, UK. Smith, P & Keenan, D, 2007, Law for business, Longmans, UK. Court Cases Anglia Television Ltd. v. Reed, (1971) 3 All E.R. 690 Garcia v. San Antonio Metropolitan Transit Authority, (1985) 469 U.S. 528 Jacob & Youngs v. Kent, (1921) 230 N.Y. 239 Read More