The Performance between the Two Parties - Chen And John - Essay Example

a) What arguments could Chen use to support his refusal to pay John more than the original agreed price? The performance between the two parties is to be put into contract with the specification of the time and location. If there is failure to perform according to the time specified, there will be a ‘breach of contract’ (Jenkins, 1969). Chen’s argument could be based on the grounds that John did not complete the construction work according the time specified in the contract. As per the agreement, John did not complete the work by the end of June which is against the time specified in the contract. This failure is a breach of contract and Chen can sue John for the damages. According to Herlihy (2011), if there is agreement to execute work at the right time according to the contract, then at this point time is of essence to the contract. If one fails to execute work in accordance to the terms specified in the contract, this will be deemed as a breach of contract and one loses his or her rights under the contract. In addition, the one breaching the contract will then be held responsible for further damages and losses that the other party might sustain due to failure of contract consummation. In this case, Chen gave clear indications to John that the completion for the construction must be by the end of June as Chen’s parents from overseas were visiting him and were to stay in that house. This shows that ‘time was of essence’ in this contract for Chen and Chen would not have entered into this contract if John clarified that construction would not be through by the end of June. As John breaches the contract, he should then be responsible for the losses incurred by Chen as he failed to complete the construction as per the contract. In Bunge Corporation New York v Tradax Export SA Panamat (1981) the requirement on time is very essential and should be strictly adhered to. The kind of breach in this case is being late. In this case, it is shown that time requirement is very important and if one of the party could have realised that the other party was not valuing the essence of time, he would not made have made a progress of entering into an agreement (Rossiter, 2001). Chen was very anxious that John could complete the construction by the end of June and this is the main reason that drove Chen to reluctantly change the price on the contract. However, Chen can argue that the essence of tie for completion of this construction is a condition that was set at the beginning of the agreement. John then went on and breached the contract by being late. In Union Eagle Ltd v Golden Achievement Ltd (1997) equity cannot prevail if important factors such as time are not adhered to. This shows that, for Chen’s case, a considerable performance will be based on completion of the project at the right time in order to serve the right purpose. This means that for the construction to serve the right purpose at the right time, John was required to complete it by the end of June. Chen may argue that, John’s failure to complete this construction by the end of June with corresponding increase in prices was a breach of contract and he should be held responsible for the damages (Norton, 1941). Chen may also apply section 18 of the Australian consumer law for deceptive conduct where this agreement was made in the course of trade, John deceived Chen as he relied on him to be able to complete the construction by the end of June and finally, there is a breach of the this law. This shows that Chen can sue John for the damages he incurred (Carter, 2006). b) What arguments could Chen use to support his claim for compensation? The claim for compensation can be base on the argument that the construction that was put into agreement by the two was not completed as per the agreed time. This made Chen to spend $1500 in order to pay for his family’s accommodation in a hotel while it was clear that John was fully informed about this when the contract began. From this, Chen can argue that John breached the contract as he failed to complete the construction before the end of June. This gives Chen the right to take a legal action for the damages and losses incurred (Jenkins, 1969). If there is an agreement to perform work as per the terms of the contract, any failure to perform this work in accordance to the contract is regarded as breach of contract. The one who breaches this contract will lose his or her rights based on the contract. He or she will also be held responsible for further damages and losses that are incurred as a result of failure to adhere to the terms of the contract (Herlihy, 2011). John can be held responsible for the $1500 extra expenses incurred by Chen on accommodating his family as it was his failure to complete the construction within the specified time. This shows that Chen can take a legal action for the breach of contract. In Scandinavian Trading Tanker Co AB v Flota Petrolera Ecuatoriana (1983), a contract can be terminated on the grounds of lateness. Chen will argue that the construction was not completed within by the end of the agreed time. From the beginning of the contract, John was aware that Chen’s family was planning to use the house by the end of June. John later failed to complete the construction as per the agreement. This led to additional expenses for Chen as he used $1500 to pay for his family’s accommodation in the hotel as a result of John’s breach of contract. Through this argument, Chen can sue John for the compensation on damages and losses incurred as a result of lateness. Chen can base his arguments that although John knew that he would not complete the work as per the agreed time, he did not take any step by informing Chen that the completion will be delayed. This made Chen to undergo extra $1500 on payment of accommodation for his family in the hotel. He could also argue that, if John could have completed the renovations, Chen could not have spent the $1500 on accommodation. This shows that Chen can sue John for breaching of the contract in order to be compensated for the loss incurred and also to put his condition to the level that he would be if John did not breach the contract. In Smilie Pty Ltd v Bruce (1998), the completion of a contract at the right time is very essential and failure to complete will lead to termination due to the breach of contract. Chen can argue that the time of completion agreed between him and John was not met and hence John breached the contract. This led to more expenses on accommodation. Using this argument, Chen can take a legal action against John where John is supposed to compensate him for the money spent on accommodation and other losses and damages incurred as a result of failure to complete renovation by the end of June (Rossiter, 2001). Chen’s compensation could be also based on deceiving under section 18 of the ACL. Chen could argue that John’s misleading led to breaching of the contract which made him to go extra expenses of $1500 to accommodate his family in hotels. By breaching of this section, Chen could argue that John will pay the $1500 as he failed to complete the construction within the agreed time and in addition he should also compensate him for other losses caused by the delay (Carter, 2006). c) What arguments could John use to support his claim to the $10,000 he wants Chen to pay? In the case of Lohar Corp Pty Ltd v Dibu Pty Ltd (1976), it was found that the essential obligation for completion was based on substantial performance but not strict performance. John can argue that what was important in the construction was to do a work that was considerable. He may argue that they focused more on the quality of the work and they did not put more emphasis on the time of completion of the work by the end of June. He can argue that his performance was substantial and claim to be paid $10,000 from Chen. In Ta Ho Ma Pty Ltd v Allen, it was found that it was deemed not rational for the party that is petitioning to put more emphasis on evaluation while it is not in the verge of making further enquiries. Using this case, John can argue that when John quoted the new price on the contract, Chen did not make any effort for further enquiries for the purpose of making sure that the construction will be completed in time. John will also argue that the completion of the construction on the specified time was not in relying on presentation. John could argue on the grounds of the deceiving and misleading on the section 18 of the Australian consumer laws. He could argue that his will to enter into contract with Chen was on the grounds of John’s skills in construction not on the basis of his abilities to complete the work on the date specified. Hence, he could argue that he did not breach the contract by misleading or deceiving Chen as the contract was based on his skills and the quality of work but not on the completion of the construction by the time specified by Chen (Carter, 2006). In Tang v Chong (1989), the completion time was not so essential to the parties. John could base his argument on this case claiming that the agreement between them did not put so much emphasis on the time of completion but on the construction skills. John could claim that, based on the skills and the commitment to the construction of Chen’s house, Chen should pay the $10,000 to him (Rossiter, 2001). References Carter, J. W. (2006). Carter’s guide to Australian contract law. Chatswood, NSW: Butterworths. Herlihy, L. (2011). Newsroom: Time of the Essence. http://wellslaw.com/time.html Jenkins, D. (1969).the Essence of the Contract, the Cambridge Law Journal Vol. 27, No. 2, pp. 251-272 Norton, J. P. (1941). A Treatise on Equity Jurisprudence. 5th edition, vol 3, pt 2, Pp. 823. United Kingdom. Rossiter, C. J. (2001). The Essence of Punctuality: Termination of Contracts for the Sale of Land for Late Performance and Relief in Equity. University of New South Wales Law Journal 1, 24(1). Read More