The Principle of Law, and Terms of Contract, Four-Step Approach in Legal Problem of Chicken Galore - Case Study Example

4 STEP PROCESS Introduction In the world of international laws and business, many directors and businessmen have to face and or deal with transactions and contracts most of the time. And for this case, I am going to explain more on the contract terms and as well as discharges. As far as this question is concerned, I will apply these terms and discharges into the case of Chicken Galore and Speciality Printers for a deep and thorough analysis. Four-Step Approach in Legal Problem Question The Principle of Law In order for a contract between two parties to be valid, there must be an agreement reached between the two parties involved in the contract as per the principle of law. The law that is relevant when it comes to this principle is that of the law of contract as far as its terms are concerned. The terms of contract will be fulfilled if three elements of contract law are satisfied. These elements are: offer, acceptance and valid consideration. Terms of Contract The rights and duties of each party under the agreement are usually determined by the terms of the agreement put down. These terms can either be: 1. Express terms: - Those pronounced by the parties themselves either in paper or by word of mouth and can be further categorized into conditions, warranties and innominate terms. 2. Implied terms: - These are the terms read into the party’s contract by the common law (the court) depending on the nature of the contract. Any clear distinction between these terms is very important in that it will help a lot during court disputes on deciding remedies. Conditions, warranties or innominate terms are some of the few contractual terms that are mention here. These contractual terms can be classified accordingly so as to ease in determining the type of term that has been breach and it will help in determining the remedy available. Therefore, a condition is another example of a legal term for anything that must come a head of another event. It is considered as a catalyst because it causes other events to occur. If there is a dispute between the parties of the contract, the court will resolve the case by looking at the condition(s) laid down by the parties at the time of contract. The court will determine if the condition written down in the legal document was fulfilled. Therefore, condition is a very important term and is seen legally as the root of a contract. For example, an innocent party can terminate the contract and go ahead to file a case so as to be paid some kind of remedies (see Poussard v Spiers (1876) 1 QBD 410). Can a Contract be Discharged? Discharge of a contract is whereby a contract is brought to an end due to some circumstances. If the party is discharged, each party will stop continuing its duties under the contract. Ways in which a contract may be discharge are: i. Discharge by Performance: This is where a contract is discharged after the parties have fully performed their obligations. A contract will amount to breach of contract if one of the parties does not fully perform his obligations and the other party may sue for damages. If in case contract ends on completion, price should be paid for the amount of work done. The word here “completion” will trigger the condition of payment i.e. no completion, no payment (see Cutter v Powell [1795] EWHC KB J13). ii. Discharge by repudiatory Breach: This is where a party is not going to perform their contractual duties and the innocent party is not going to wait to the breach to occur before they could in one way or the other (see Hochster v De la Tour (1853) 2 E & B 678). iii. Discharge by Agreement: When both parties agree to terminate their contract and release each from their contractual duties, it is called Discharge by agreement. There must be what is called Accord & Satisfaction when the contract is discharge through agreement. iv. Discharge by Frustration: A contract is said to be frustrated due to some unavoidable circumstances and is not the fault of the party member and they will discharged from any kind obligations under the contract Facts and the Law Chickens Galore was in agreement with Speciality Printers to print all promotional materials for Chicken Galore for the next three years. Unfortunately, due to some errors caused by a vacation student (not an employee), most these promotional materials were spoiled. Therefore, the question here is, does Chickens Galore have a case to sue Speciality Printers for damages. Given that the parties agreed to meet in undisclosed place, though not mentioned in the facts, Chickens Galore and Speciality Printers accepted the offer in front of the lawyers involved in the contract. Due to the fact that Chicken Galore is a chain restaurant in Australia, this can be categorized as a commercial kind of a business and therefore the court will presume that the parties involved in the agreement would be legally binding. And if in case one of the parties tries to deny this, s/he will need to produce evidence to prove otherwise. As far as contract law is concerned, an agreement is enforceable if the parties have the intention being legally bound at the time the contract was made. And in our case there are facts mentioned that suggest Chickens Galore may be able to argue that at the time they made the arrangement they all intended the agreement for Speciality Printers to promotional materials for 3 years. As we have seen above, the contract between Chicken Galore and Speciality Printers was going to be valid for 3 years and the services that Speciality Printers was to worth anything more than $500, though it is not mention in our case. And because of this, Statute of Frauds is applicable here since the contract is going to take more than a year. According to the contract, sign by the two parties, Speciality Printers had promise Chicken Galore two critical things; 1) Ensure that they would exercise reasonable care in proof-reading all materials, 2)That all reasonable care must be taken to ensure that all materials delivered are without errors. Speciality Printers did not fulfil what they had agreed with Chicken Galore. However, there is nothing in the facts to suggest the agreement is in writing but the present of lawyers during the making of contract prove that the contract was legit with an indent. In these circumstances, a reasonable person would regard the agreement as intended to be binding. Therefore it is likely that Chicken Galore will win this case because Speciality Printers did not fulfill its obligations even though the agreement between the two parties had intent to be legally bound. Speciality Printers cannot rely on the exclusion clause in the contract because whoever made an error was not one of their employees, but rather The 2007 decision in Farah has brought about what many judges called it a “profound shift in the rules of judicial engagement” in Australia. Now days, lower courts do not regard themselves as having a duty to obey the Higher Court dicta, as it used to be. Higher Courts only provide guidance to lower courts (see Farah Constructions Pty Ltd v Say-Dee Pty Ltd (‘ Farah’)). References Cutter v Powell [1795] EWHC KB J13 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (‘ Farah’) Hochster v De la Tour (1853) 2 E & B 678). Poussard v Spiers (1876) 1 QBD 410). Read More