Contract between MCM and Mackat - Assignment Example

Business Law Name Institution 1(a) The main issue involves one of the parties involved in the contract not respecting the terms of contract which were based on a word of mouth. The MacKat has not observed the terms in which it entered with MCM. It has partly done as per the contract as it has given a number of additional conditions in which it would do the delivery. Whole of agreement clause is a term in contract law which is also referred to as integration clause or merger clause or the entire agreement clause. It is a term in contracts which is used to make the declaration of a contract as the complete and final agreement between the parties concerned. The clause is placed towards the end or at the end of the contract. The effects of such a clause is normally not conclusive evidence that no varied or additional conditions exist, respect to the performance of the agreement beyond those that have been placed in writing. Instead, it is simply the evidence of that fact (Cook, 2005) A contract with such a clause could be deemed an integrated contract and any earlier negotiations where parties in the contract had considered varied terms would be deemed superseded by the final writing (Carvan, 2005). The Parol evidence rule on the other hand is a substantives common law rule in the issues of contracts. The main purpose of this clause is to prevent a party to a written agreement or contract from putting forth extrinsic evidence which contradicts or even add to the terms of the written contact that is the whole. The supporting reason or rationale in this clause is that since the parties in the contract have reduced their agreement to a writing which is final and single, the extrinsic evidence involved in the past agreements or rather terms need not to be considered in the interpretation of the writing, since the parties had already decided to ultimately not to include them in the contract (Carvan, 2005). A combination of the whole of agreement clause and Parol rule do does not exclude the word of mouth bargain in the March 2010 contract between MCM and MacKat. This is been based on the fact that any agreement with additional agreement apart from the written down contract would be superseded by the final contract which is in writing. This is based on the whole of agreement clause. On the other hand, the Parol evidence clause applies to oral evidence and also other extrinsic evidence which may include written information that is not part of a separate contract. In case a contract is in put in writing and final to at least then parol extrinsic evidence would out rightly be excluded. The verbal testimony by MCM would contradict the written contract between the two parties. However MacKart has offered to supply the replacement tyres to MC. (b) In the above case, where the word- of-mouth bargain legally binding, going by the response in which the TasKat resorted to in the delivery of the replacement to MC, the terms would have then been frustrated owing to the unexpected 250% rise in the prices of the mining truck tyres. The frustration of the terms of contracts arises where MacKart offers to deliver the replacement tyres to MC but under two conditions. The first condition involves MCM agreeing to waiver any rights that it might have against TasKat under any original word-of –mouth agreement if indeed it existed. TasKat denied the existence of any such rights which indeed strained or rather frustrated the contract between the two parties. Secondly TasKat offered to undertake the supply of the tyres under the condition that MCM agree for the four year warranty period to be shortened to two years, that is, to expire in 2012. (c) Literalism as a concept in the legal field highlights the scope of the legal rules that are in force: whether they apply to one party or to more parties. From a bargaining point of view, literalism points to the format of negotiation that preside over the making of the relationship or rather the contract as captured by the arrangement at the negotiation table. It relates to whether the parties should be treated equally or differently according to the disparities in the capacity or the power of the parties (Cook, 2005) Bilateral agreements allow the customization of privileges and obligations to each of the individual member in the contract. The two parties negotiate and settle in a conclusion with the view and wishes of their brought into consideration. The parties must coordinate on this decision prior to them making substantive regulations, rules and institutional designs choices, which might thereafter be influenced by the format adopted. The question of literalism from a normative point of view relates to whether parties should be treated equally under the contractual law or differently based on the disparities in the power or the capacity of the parties (Carvan, 2005). Bilateralism is an arrangement involving two parties. The parties have equal right and can articulate their wishes in the contract. "Bilateralism differentiates relations case-by-case based principally on a priori particularistic grounds or situational exigencies" (Ruggie, 1992: 571). The way this issue is practice is usually viewed as a result of the prevailing norms or rather of the bargaining power, with some parties advocating more uniform rights, privileges and obligations while others calling for differential treatment. It is argued that the result is also influenced by the variables that have been highlighted here therefore by efficiency concerns (Cook, 2005) Unilateralism is recognized as a distinct and enforceable kind of obligation in law based on one party as far as negotiations are concerned (Crawford & Opeskin, 2004) Waiver is a term that is used in many legal contexts. It is essentially a unilateral act of an individual which results in the surrender of the legal right that that person had as far as the contract is concerned. The legal right held by the individual could be constitutional, contractual or statutory. However the key point for a court that is reviewing a claim of waiver is whether the individual or party voluntarily gave up the right. An express waiver is therefore one in which a party voluntary surrenders the right (Carvan, 2005). If MCM agreed to TasKat formal written offer, even if the prior word-of-mouth bargain was legally valid, the new arrangement as a unilateral waiver. This is because TasKat has accorded itself the duty to set the conditions for the new arrangement without seeking the opinion of MCM. It would have surrendered its legal right. The condition within which the new arrangement is to be based has not been made jointly by the two parties which were involved in the contract. It therefore means that accepting the arrangement MCM is voluntarily surrendering its legal right of being supplied with replacement tyres and also having the supply period reduced without the other party seeking her view and opinions on the same. TasKat has not supplied any additional consideration in circumstances described since it has not offered any other compensation to MCM for the inconveniences that have come with the new arrangement initiated by TasKat. In fact it has infringed on the rights of the other party has it has not hold up to the contract that they entered in the sealing of the deal. 2 In the Australian legal system principles such as judicial precedent, procedural fairness and separation of power are essential. The common law as practiced in the Australian judicial system has the broader concept of an agent. An agent is a person entrusted with an authority or rather capacity to make or affect legal relations between an individual and a third party. The common law hence is to regulate the formation, the functioning as well as the termination of the agency relationship. It is also concerned with the right and the duties of the agent, the principle and the third party. (Crawford & Opeskin, 2004) A principle in the Australian legal system is an individual or person who confers upon an agent with the authority to perform a duty on behalf of the individual for the purpose of making or affecting legal rights and duties that exist between the individual and the third party. Furthermore, termination of an agreement under Australian law does not have any statutory requirement in form of notice period to be issued or even the form or type that the notice of termination should take. The termination of an arrangement of an agency would usually be established as per the terms of the relevant agency contract. Any right related to damages, loses or unpaid commission that result from termination of the agency contract are determined according to common law principles (Cook, 2005) Upon the termination of the agency contract, an agent shall not have any other entitlements which are non-contractual specifically in relation to the agency relationship. Nevertheless, there might be other rights commonly available in the situations of contractual termination (Carvan, 2005). Based on the Australian common law Rupert had a right to get access to information about the market from the agent upon which it had entrusted Melbourne Realty Pty Ltd with the responsibility of selling the building. The law governing agency in Australian is based on the principle that each and every individual should get access to information in the different governmental departments, which Melbourne Realty Pty Ltd falls under c since it is registered as an agent under the Australian law. Melbourne Realty Pty Ltd breached the principle of law that governs the agents in the state by giving false information to Rupert Holmes regarding the prices at the market. It is evidenced that Melbourne Realty Pty Ltd had intensions of defrauding Rupert Holmes by setting the prices of the property at $ 12 and thereafter (Crawford & Opeskin, 2004) In as much as the contract between Rupert Holmes and Melbourne Realty Pty Ltd (“MRP”) would have ended upon the sale of the building, the rights of Rupert Holmes were infringed as it was given the wrong information by Judith Moran acting on behalf of Melbourne Realty Pty Ltd (“MRP”). It is clear that the individuals, Moran and Rivkin had a conspiracy to give false information to Rupert Holmes so as to make business gains out of its property. By funding Rivkin with $1 million and thereafter arranging for a loan for the remaining $ 11 million from the State Bank of Melbourne (“SBM”) with which Moran excellent business links had, the two individuals, Moran and Rivkin had motives of making gains out the property of Moran’s client. Rupert therefore has the right by law to sue Moran and for causing loses to it through conspiracy and provision of wrong information in terms of the situations of the market prices. The common law of Australia would determine the case based on the principles of agency. Rupert Holmes should therefore demonstrate or rather indicate that the agent, which for this case is Melbourne Realty Pty Ltd (“MRP”) indeed cave it wrong information regarding the prices of the property in the market. The second step is that Rupert should proof that indeed Moran financed the buying of the property by funding Rivkin. It has to establish and proof to the criminal justice system that the three parties, Moran, Ravkin and the State Bank of Melbourne (“SBM”) worked jointly to ensure that it property was bought by Moran under the name of Rivkin. The third stem or element is for Rupert to proof that the property was resold by Moran acting as Rivkin’s agent for the $15 million, an amount which Moran had declared that it was unrealistic in the market. 3 Tort law in Australia is the body that contains the precedents and legislations, though to a lesser extent, that together provides the definition of the tort law of Australia. A tort is therefore a civic wrong apart from a breach of contract. Tort law hence a way in which the law can intervene and interfere with the relationships that exist between private individuals. This interference is aimed at correcting a form of conduct, behavior or wrong. A big number of torts exist and they derive their legal status from the common law. Since a court in the Australian legal system can define an existing tort or even recognize new torts by use of the common law, it therefore follows that tort law can a times be regarded as limitless and adaptable for use in the modern situation and the legal circumstances that arise with time. In general terms torts are not defined in specific statutes and they have advanced through judge-made law or common law (Crawford & Opeskin, 2004) Negligence is essentially a failure by an individual or a party to exercise the care that would be done by a reasonably prudent individual in like situations. The area of tort law referred to as negligence in the Australian legal system is a section that involves harm that is caused by carelessness as opposed to intentional harm. According to Jay M. Fernman, the main idea of negligence is that an individual should a reasonable care when he or she is acting by taking in to consideration the potential harm that they can foreseeable cause to other persons. According to him, those individuals or parties who go personally or bring such things as property in places where they really know that they ore it might come into conflict with the persons or even the property of other people have a duty by law cased upon them to make use of reasonable care and the knowledge as well as the skill to avoid such kind of a collision (Fletcher 1966) Through civil litigation, if a person or party can prove that another person or party acted in negligence to cause the person’s injury or loss, he or she or the party can recover damages so as to compensate for the harm caused to him or her. Proving a case that involves negligence can potentially entitle the injured party to compensation for the injury that has been made on his body, financial status, intimate relationships or even mental well-being. Although resulting damages ought to be adequately proven so as to recover compensation in an action involving negligence, the nature and the scope of the damages are not then basic focus of negligence cases. Suits of negligence are analyzed in stages referred to as elements. A crucial concept which is related to elements is that if a plaintiff cannot prove any one element in which his claim goes through then he or she loses on the entire tort claim (Carvan, 2005). Under tort law the elements that ought to be established in each and every negligence case include: duty, causal, breach and damages. However negligence can be specifically be taken to be having three elements namely; conduct, causal and damage (Crawford & Opeskin, 2004) For the case of Wingara Energy Ltd has a right to sue Windamore Engineering Pty Ltd with respect to the 70 wind turbines that it has recently purchased from Windamore Energy Ltd. Wingara Energy Ltd should there act it its ground to prove satisfy all the elements of the principles that govern the tort law according to the legal system f Australia. The first step in the suit is to ensure that Windamore Engineering Pty Ltd was responsible for the design, construction, installation and the commissioning of 70 high efficiency, low maintenance wind turbines, utilizing the latest design and technology available worldwide. It needs to demonstrate that Windmore owed a duty to it. Once it has been established that Windamore Engineering Pty Ltd which in this case is the defendant owed a duty to the plaintiff which in this case is Wingara Energy Ltd, the issue of whether or not the duty was breached must be established. At this point the analysis is both subjective as well as objective. Windamore Engineering Pty, if the previous element is confirmed, would have failed to realize the substantial risks of loses, that it was exposing Wingara Energy Ltd to and hence it would have breached that duty. This is a subjective analysis of the situation. However, Windamore Engineering Pty Ltd, from the objective point of view, would failed to realize the substantial loss or rather the risks of loss to Wingara Energy Ltd which any reasonable individual in similar situation would have clearly realized and hence Windamore Engineering Pty Ltd would have also breached its duty. For Windamore Engineering Pty Ltd to be held liable, Wingara Energy Ltd must demonstrate or rather show that the particular action or the omissions by Windamore Engineering Pty Ltd were the actual causes of the loss or the risks encountered. Even though the notion seems to be simple, the causation between a party’s breach of duty and the harm resulting to another can in some situations is very complicated. The core test is to inquire if the injury or cost would have come about but for, or without, the defendant’s party’s negligence of the duty and responsibility owed to the plaintiff. In being more precise, if a breaching party which in this case is Windamore Engineering Pty Ltd materially increases the risks of harm to the other party which for the case is Wingara Energy Ltd, then Windamore Engineering Pty Ltd can be sued to the value that it caused. Moreover, although there might be a breach of duty or negligence by Windamore Engineering Pty Ltd, Wingara Energy Ltd might not recover the loses unless it proves that Windamore Engineering Pty Ltd’s breach caused a pecuniary harm to it. The firm should not mistake this with the requirements that it prove harm so as to recover. As a rule, a plaintiff may only depend on a legal remedy to the extent that it suffered a loss. It implies that an occurrence more than a pecuniary damage or loss is a obligatory element of the plaintiff’s case in negligence. However, if the loses are not a necessary element Wingara Energy Ltd can win its case even without indicating that it suffered any loss; it would be entitled to nominal damages as well as any other damages according to proof. Wingara Energy Ltd should therefore undertake that it is able to establish the elements of the tort principles as for as negligence is concerned. References Carvan, J. (2005). Understanding the Australian Legal System. Pyrmont Lawbook co. Cook, C et al. (2005). Laying down the Law. LexisNexis Butterworths. Vines, P. (2005). Law & Justice in Australia: Foundations of the Legal System. Melbourne: Oxford University Press. Crawford, J & Opeskin, B. (2004). Australian Courts of Law. Melbourne: Oxford University Press. . Read More