Australian Contract Law - Case Study Example

Australian Contract Law Name of Student: Instructor’s Name: Course Code and Name: Institution: Date of Submission: Question 1 Introduction The question as to whether or not Mary can sue Ali on the basis of a breach of contract is not a direct one. In order to determine whether Ali stands in breach of contract, it is imperative that it be established that, indeed, there was a contract in place in the first place. This is because contractual breach is secondary to the contract itself. A contract can be defined as an official agreement between two or more people, stating what each will do.1 Further, it may also refer to an agreement between two or more parties creating obligations that are enforceable or otherwise recognizable at law.2 Creation of a Contract A valid contract must have a number of ingredients, namely offer, acceptance, consideration, intention to create legal relationship as between the parties and the requisite contractual capacity between the parties seeking to contract.3 An offer is a promise to do or refrain from doing some specified thing in the future, conditioned on an act, forbearance, or return promise being given in exchange for the promise or its performance.4 An acceptance, within the meaning of the law of contract, refers to an offeree’s assent, either by express act or by implication from conduct, to the terms of an offer in a manner authorized or requested by the offeror, so that a binding contract is formed.5 (Garner 2004, p. 12). From the foregoing definition, it is to be understood that acceptance means the act of an offeree by which he or she accepts the offer made to them by the offeror in order to create legally binding agreement. Consideration may loosely be taken to refer to the word used to denote the bargain element in a contract.6 However, at a more specific level, it is understood to signify some benefit or advantage going to one party or some loss or detriment suffered by the other party.7 Another ingredient of a contract is the parties’ intention to create a legal relationship as between themselves. Thus, parties are at liberty to exclude the law in their contract since they cannot be compelled otherwise. This was illustrated in Rose and Frank Co. v. Crompton and Brothers.8 The parties were traders who had an agreement which completely excluded the operation of the law. Upon the breach of the agreement by one of the parties who failed to deliver the goods, an action for the enforcement of the provisions of the agreement was defeated out of the express denial of the contractual intention. The question to be had is whether the agreement between Ali and Mary had the five ingredients outlined hereinabove so as to constitute a valid contract capable of being breached. Indeed, the agreement had all the hallmarks of a contract since there was an offer for the sale of the house; which offer was accepted by Mary. Mary then paid the purchase price which constituted the consideration. Finally, the two parties may be presumed to have been having the requisite legal besides having had the intention to be legally bound from their transaction. Needless to say therefore, there was a valid contract in place between Ali and Mary for the sale and purchase respectively of the house. Now that it is a settled fact that there was indeed a contract between the two people, the next issue now turns to the issue of whether or not Ali breached the provisions of the said contract between him and Mary. The particular act and or conduct of Ali which was likely to raise the likelihood of contractual breach concerned his representations to Mary on the stability of the garage. While Ali insisted to Mary that the garage had been in the lean state for years and he was vouching for its strength. However, from the facts of the case, this was completely untrue since, as it emerges from the story by the neighbour, the representations by Ali to Mary were completely untruthful. Consequently, this raises the issue of misrepresentation as a vitiating factor to a contract.9 The act of misrepresentation involves the making of false of misleading claim (assertion) about something with the intent to deceive a third party.10 Besides, misrepresentation is not constituted only by the act in question. Further, misrepresentation also includes the assertions made falsely with the intention to deceive. Misrepresentation therefore may be understood as false representations.11 Can it be said that the presence of the misrepresentation was of itself enough to constitute a contractual breach to Mary the offeree? A statement constitutes misrepresentation only if it was one of fact, and not opinion.12 This was very much the situation with the facts of the case since the statement by Ali to the effect that the lean on the garage had taken so many years constituted a factual, rather than an opinion statement. As such therefore, the said statement constituted a misrepresentation in much the same way as was the case in Bisset v. Wilkinson.13 The facts of Bisset v. Wilkinson had been that the plaintiff buyer bought part of the defendant’s farm which he intended to use for sheep rearing. When the buyer sought the seller’s opinion as to how many sheep the property could take, the seller gave an estimate number of 2000 sheep; a value which however turned out to be an overestimate. On a suit by the buyer over the seller’s estimate, it was held that the seller could not be liable on his statement because it was only one of opinion, rather than fact. Thus, owing to the fact that the contract was procured through misrepresentation, Ali breached his contractual obligations which breaches would have entitled Mary to void the contract if she had not performed her part of the obligations. However, since she had performed her part with the breach having been committed by Ali, Mary can sue Ali for the said breach and be entitled to recover.14 The main remedy that Mary may be able to recover from the losses she has suffered out of the collapse of her garage is damages, i.e. money which is either claimed by a person or if the same is ordered to be paid to a person as compensation for any losses or injury they may have suffered.15 Damages would be the only remedy available to Mary because in this particular case, she has already suffered the loss and non of the other remedies such as injunctions, rescission, quantum meruit among others cannot be of any help to her. The applicability of damages as the only available remedy for Mary may best be illustrated by the decision in the case of Hadley v. Baxendale.16 QUESTION 2 Ching’s injury arose from when the roof of the garage collapsed while she had climbed on it to fix it up. If Ching is to have any claims, the same cannot derive from contract since she had no contractual obligations with anyone for her to perform the job to which she had been injured while doing. Ching’s likelihood of any claims against anyone could likely be out of tortuous liability of negligence. To succeed in negligence, the authority of Blyth v. Birmingham Waterworks17 indicates that a plaintiff (Ching) needs to prove four ingredients. The four include firstly, they need to show that the defendant owed them a duty of care and that the defendant stood in breach of the said duty of care. Finally, the plaintiff needs to create the link between the defendant’s breach of duty of care and the injury they have suffered.18 This was later reinforced in the case of Donoghue v. Stevenson.19 Although the Donoghue case was one that illustrates injuries caused to the plaintiff by the acts of the defendant, the case is nonetheless very crucial as it reinforces the fact of how liability of a defendant arises under negligence. This, it does by restating the position of the law as had been set forth in the Blyth v. Birmingham Waterworks. Thus, in order to determine if Ching would have a right to sue anybody and be entitled, it should first be established that, indeed, either Mary of Ali owed her a duty of care. While she may be considered to have reasonably climbed up to fix the leaning garage roof which later caved in on her during the storm, it can be presumed that indeed, Mary, (and not Ali), owed her a duty of care as understood within the interpretations of the cases outlined above. Secondly, by Mary letting Ching to climb onto the leaning roof so as to try to fix it, can be argued (albeit controversially), that Mary failed to perform the duty of care that she owed to Ching. The only way she would have sufficiently discharged this burden would have been for her to try and dissuade Ching against climbing onto the roof so as to fix it. Since Mary failed to sufficiently discharge this burden, she may thus be held to be in breach of her duty of care towards Ching. Finally, in the terms of the authority of the two cases, it is true that Ching suffered some amount of injuries resulting from the fall in question. Since the fall and the consequent injuries arose from her friend Mary’s failure to discharge her duty of care which she had owed to Ching, it therefore follows that Mary failed in this third step for test for negligence as well. Consequently, it can be seen that Mary’s failure to discharge her expected duty of care caused the tortuous liability of negligence against her in favour of the office. Consequently, Ching may sue her friend Mary whose failure to exercise the requisite duty of care caused her injuries. Conclusion As a wrap up for the two questions, it is imperative to make a few conclusive remarks. Firstly under the first question, the issue was on the determination of whether there was a breach of contract between Ali and Mary concerning the representations and assurances given by the vendor to the Mary purchaser. It was established that indeed, Ali and Mary had a valid contract which Ali breached through misrepresentation. The adverse effects upon Mary with respect to her purchase could be ameliorated through the remedy of damages. On the other hand, at question two, this discussion has argued that Ching cannot claim on the basis of any contractual obligations. Rather, if she needs to make legal claims arising form her injuries, then she stands a remote chance through negligence, and not through contractual remedies.20 BIBLIOGRAPHY Atiyah, P, S 1981, An Introduction to the Law of Contract, Oxford University Press, New York, NY. Bullon, Stephen, (ed), 2003, Longman Dictionary of Contemporary English, Pearson Education Limited, Harlow. Clarke, Julie 2011, Australian Contract and Consumer Law, Viewed May 18, 2011 from Garner, A. Bryan, Black’s Law Dictionary (2004) 341 Garner, A. Bryan, Black’s Law Dictionary (2004) 417 Hodgin, R, W, Law of Contract in East Africa (2006 Hodgin, R, W, Law of Contract in East Africa (2006) 113 Jackson, Tudor, The Law of Kenya (2005) 217 Jackson, Tudor, The Law of Kenya (2005) 217 Case Laws Rose and Frank Co. v. Crompton and Brothers [1923] 2 K. B. 261 Donoghue v. Stevenson (1932) A. C. 562 Hadley v. Baxendale (1854) 9 Ex. 341 Blyth v. Birmingham Waterworks (1856) 11 Exchequer 781 Bisset v. Wilkinson [1927] A. C. 177 Read More