Commercial Law - Roland and Belle - Math Problem Example

Commercial Law: Case Analysis Name Course Tutor Date Total Word Count: 1, 649 Commercial Law: Case Analysis Issues In reference to the provided case involving the transaction between Roland and Belle, G Shepherd and Co, David from Pitt and Bull solicitors and Basil the assessor, four key legal issues are evident. Firstly, this case raises the question whether there is any legally binding arrangement between Roland and Belle and their real estate agent, solicitor and the assessor particularly in relations to the asbestos insulation. Secondly, another issue that is evident in this case relates to whether there was any breach of contract between Roland and Bell and their real estate agent, solicitor and the assessor. Thirdly, an issue arises regarding which of the proprietors owes Roland and Belle a duty of care as a result of the losses they have incurred due to the poor installation of asbestos insulation? In addition to this, the question arises on which grounds can Roland and Belle use to take legal action against either of the parties liable. Rules In order for any agreement or arrangement to be considered as legally binding, three key conditions must be met. Foremost, the intention to develop a legal relation must be established by both parties. In essence, both parties must intend to enter into a legally binding contract that has legal consequences in case any party fails to meet the conditions established in the contract.1 Secondly, there must be a consideration. This entails what is given or promised by one party in exchange for what is given or promised by the other party2. Thirdly, a legally binding agreement must have an offer and consent3. The offer made by one party must be accepted by other party in order for a contract to be considered valid and enforceable4. In a case where it is established that there was a legally binding agreement between Roland and Belle and their real estate agent, solicitor and the assessor particularly in relations to the asbestos insulation, a breach can be established. In this case, a breach can be established if it is demonstrated that either of the parties failed to meet the conditions set out in the contract. Where a breach of the contract is established, the non-breaching party, in this case Roland and Belle will be entitled to remedies5. In relation to the third issue that this case raises, the concept of duty of care emerges. 6Duty of care is essentially an obligation recognised under law to take reasonable care so that others are not harmed7. If a reasonable risk of harm is identified, reasonable care must be taken in the response to the risk. Although the law does not have a clear-cut formula to establish instances when the duty of care is enforceable, there two key elements established in Donoghue v Stevenson that are often used to establish duty of care owed to one party by the other8. One of the element is reasonable foreseeability. If one party knows or has reasonable ground to predict that their act of omissions or commission may cause harm to the other party, then the duty of care is established9. The other element is proximity. This element relates to whether there is a relationship that would evoke a duty of care. The relationship could be familial or a commercial relationship between parties who have entered into a contract10. In a case where the duty of care is applicable and it is further established that one of the parties failed to uphold this obligation, then the element of negligence may arise. Negligence can be described as the omission or failure to do something which any reasonable person would do in order to prevent harm. In reference to Section 5 of the Civil Liability Act 2002, negligence can also be viewed as the failure to exercise reasonable skill and care11. Negligence can be established by taking into account three key elements. Firstly, a plaintiff must establish that the defendant owes him/her a duty of care. Secondly, the plaintiff must prove that the duty of care was breached. Lastly, the plaintiff must prove that due to this breach they suffered some form of damage12. Application In order for Roland and Belle to take any legal action, they must prove that they had a legally binding agreement between them and real the estate agent, solicitor and the assessor particularly in relations to the asbestos insulation. Given the nature of their relationship with the real the estate agent, solicitor and the assessor, it is apparent that their agreement is was in a commercial context. Therefore, drawing on Ermogenous v Greek Orthodox the law is likely to presume that the parties involved intended to create legal relations13. Nevertheless, taking into account the principles set in Coulls v Bagot’s Executor and Trustee Co Ltd particularly in relations to the element of consideration, it may be a challenge to establish that the real the estate agent, solicitor and the assessor breached the condition of their contract. Firstly, when it comes to Roland and Belle’s agreement with the real estate agent and the solicitor it is likely that they can use the lack of consideration as a defense. Given the fact that the real estate agent had disclosed in the contract that the asbestos insulation had been removed from the property in 1989, they can argue that there was no promise made in the contract pertaining to the asbestos insulation14. Therefore, there was no breach. Nonetheless, when it comes to Basil, the assessor for loose asbestos insulation, a breach of contract can be established since he was specifically contracted to assess the loose fill asbestos. Thus in this case there was an exchange of money and a promise to perform an obligation15. By proving that the assessor breached the contract by failing to effectively detect the presence of loose asbestos insulation, Roland and Belle are likely to get monetary compensation for the economic loss that they suffered. One of the plausible grounds that Roland and Belle can use to take legal action against and their real estate agent, solicitor and the assessor revolves around the elements of duty of care and negligence. It is foremost crucial for them to prove that these proprietors owe them a duty. Using the elements established in Donoghue v Stevenson, it is plausible to argue that their real estate agent, solicitor and the assessor owes them a duty of care16. In relations to the foreseeability element, there are reasonable grounds for the real estate agent, solicitor and the assessor to predict that there may be loose asbestos insulation since the property initially had installation of asbestos insulation. On the grounds of the second element, i.e promiximity, the duty of care can be established since Roland and Belle have a commercial relationship with their real estate agent, solicitor and the assessor. However, there are certain defences that the real estate agent, the solicitor and the assessor can use in order to avoid the duty of care claims. As seen in Palsgraf v Long Island R R Co17, 18, the real estate agent can argue that they had no reasonable ground to foresee that there were loose asbestos insulation in the property since they were removed in the house in 1989. The solicitor can argue that they discharged they duty of care accordingly by hiring an assessor to detect whether there were loose asbestos insulation in the property. On the other hand, the assessor can find defense that he does not owe the plaintiff a duty of care on the basis of proximity. Given the fact that Basil, the assessor was contracted by the solicitor, he can argue that he does not have a commercial relationship with Roland and Belle19. In a case where the duty of care is established Roland and Belle take legal action against their real estate agent, solicitor and assessor for negligence. Using the elements of negligence established in Donoghue v Stevenson , they can show that the duty of care was breached and they suffered damage as a result. By proving that the real estate agent and the assessor were negligent Roland and Belle are likely to get monetary compensation for the economic loss that they suffered20. Conclusion Based on the various arguments discussed in this paper, it is plausible to argue that as far as the breach of contract is concerned, Roland and Belle have a strong case against the solicitor and assessor. However, when it comes to the real estate agent it may be difficult to prove a breach of contract since there is no consideration. Nevertheless, Roland and Belle have strong grounds to prove that the real estate agent and the assessor breached the duty of care and are thus negligent. References Australian Contract Law, Overview of Australian Contract Law (2010) Coulls v Bagot’s Executor and Trustee Co Ltd (1967) 119 CLR 460 Donoghue v Stevenson [1932] AC 562 Empirnall Holdings Pty Ltd v Machon Paul Partners Pty Ltd (1988) 14 NSWLR 523. Ermogenous v Greek Orthodox Community of South Australia Incorporated (2001) 209 CLR 95. French v QBE Insurance (Australia) Limited & Ors - [2011] QSC 105 Latimer Paul, Australian Business Law (CCH Australia Limited, 2012) 295 Lunney Mark & Oliphant Ken, Tort Law: Text and Materials (Oxford University Press, 2013) 120-121. Roscorla v Thomas [1842] 3 QB 234 Sappideen, Vines, Grant & Watson, Torts: Commentary and Materials (Lawbook Co, 10th ed, 2009) 159-164. Read More