Travel, Tourism and Hospitality Law - Case Study Example

Name) (Instructors’ name) (Course) (Date) Introduction A contract has various elements that make it legal. They comprise bargain and acceptance, intent to make legal relations, consideration, legal capacity and consent. Chen and Lin required the services of Elena. They agreed on specific terms and Chen did his part by depositing two hundred dollars too Elena’s bank account. He paid because he was assured that the service being offered is what he expected. Offer and Acceptance Elena, the owner of the car hire business, placed an advert on her website. She lets cars to clients who are mainly tourists. The advert was photos of a black luxurious Porsche Boxter that she had recently acquired. The advert indicated that the car was very popular and the fee was affordable. It further indicated that the model of the car a 2012 model. By doing so, she made an offer to the public (Anolik 30). Both local and international clients could access the offer. Chen from Singapore saw the photos of the car and was interested in it. He contacted Elena through her personal email. Chen made his intentions about the car clear. He expected a good car that was easy to drive. He needed it for his honeymoon in Melbourne hence did not want a vehicle in a poor state. Elena assured him that the car was in perfect condition and he did not need to be worried (Atherton 44). Chen made a few more inquiries about the state of the car. Following the confirmation about the state of the car by Elena, Chen deposited two hundred dollars to Elena’s bank account. Upon the arrival at the airport with his wife Lin, the couple visited Flash cars to pick up the car. The car appeared in perfect condition. The couple were impressed and were eager to take the car for a drive. Chen made no counter offer as he accepted the initial offer. Elena did not withdraw the offer an action suggesting she made an offer by availing the correct information and had the resource to provide the service (Keenan 70). The emails exchanged between Chen and Elena confirm the terms of the agreement. They indicate the expectations of both parties. Elena offered her services and Chen accepted. Chen was willing to pay for the offer if it met all his expectations. Elena was sure that she could provide the offer and she assured Chen. The element of offer and acceptance of a contract has been met. The element relies on correct information so that both parties consent to something they are ready to do (Anolik 130). Intention to create legal relations Both parties in a valid contract must intend to enter into a legally binding agreement. The legal agreement is seldom stated openly but it can be inferred from the conditions in which the agreement was made. Elena was willing to offer her service to Chen. The service was going to cost Chen two hundred dollars. It was therefore a commercial agreement. There is a presumption with all commercial agreements that both parties aim to have a legally binding agreement. This move intends to compel both parties stick to their part of the agreement (Atherton 44). Chen planned to hire a car for his honeymoon. Elena provided the car that was needed. Both parties were going to benefit from the arrangement. Elena’s business was flourishing while Chen had the opportunity to spend his honeymoon at Melbourne with his wife. The agreement by both parties therefore had the intention to create legal relations hence fulfilling the second requirement of a valid standard form contract (Anolik 104). Consideration Consideration element is essential for a contract to be legally binding. Both parties promised and gave something. Elena gave her Porsche while Chen paid an amount for the service. Elena promised that the car was in perfect condition Legal Capacity Both parties are adults of sound mind. Chen and Elena are not bankrupt, mentally impaired or underage. They both are aware of the consequences of their actions. Consent Entering into a contract must involve free will and proper understanding. The accord of both parties must be honest. Mistakes and false statements may affect proper consent. Elena knew that the car was a 2009 model and had not been serviced regularly. She did not reveal this information on her website. Chen agreed to the terms based on false statements. The type o false statement made by Elena was a fraudulent misinterpretation. She knew the car was not a 2014 model and it had not been serviced lately. She however went ahead and claimed that the car was in perfect condition (Anolik 94). Chen and Lin should sue damages and deceit. The car broke down mid-way to the Yarra valley where the couple was to spend their honeymoon. Smoke was coming out of the engine indicating that the car had not been serviced lately. Chen could not locate Elena on phone. He made numerous calls but they went straight to her voice mail. The couple waited two hours by the roadside before Elena finally called back informing them that she had sent a mechanic. They waited one more hour before the mechanic arrived to inspect the car. The mechanic confirmed that the car had not been serviced for a long time and that the engine needed a replacement (Poustie 98). A registration sticker on the car indicated that the Porsche was a 2009 model. Chen calls the hotel to send them a car to pick them up. They cut short their honeymoon plans and return to the hotel. He calls Elena demanding for a full refund, but she refuses saying that he will have to pay for the repairs since he is the one that caused the engine to burn. Chen had signed the hire contract that had two main important clauses. Clause 2.1 indicated that the client agrees to return the vehicle on the indicated date in the same state, as it was when the customer took it and with a full tank of fuel. Clause 2.2 stated that the customer consents to pay for any damages caused (Poustie 100). The contract was however based on intentional false statements. The Porsche was not in good condition and the break down was therefore not Chen fault. The information on the Elena’s website was misleading. The couple committed on the initial agreement based on false statements. Chen should not pay for the repairs. Elena should instead compensate him for the damages in the form of time wasted and the deceit. The signed contract was a product of the initial contract that was breached by Elena (Poustie 87). Chen would not have signed the contract if he knew the condition of the car. He would have picked another car or even looked for the service from another business. He is not compelled to move on with terms of the signed contract that indicate that he has to pay for the maintenance of the Porsche. Elena should give a full refund and pay for the inconvenience she caused the couple. (b) If there is a contract, their common law rights under contract law. There are solemn fabricated statements and minor false declarations that may be made during a contract by one of the parties or both parties. The statements have different consequences under contract law depending on their gravity. The false statements may be made in two major ways. The first is when one of the parties has been motivated to enter the agreement by a statement of fact that is said or written. The second way is when both parties agree but one of the parties made a false statement (Poustie 20). Chen agreed to the terms based on the information he read on the website. The information motivated him because it indicated that the car was in perfect condition and that the car was a 2012 model. Elena knew that the information was not correct but she did not reveal it on her website. This is a serious false statement by one of the parties (Keenan 70). False statements question whether a contract exists or not. Serious fabricated statements would make a court of law view the contract as void and unenforceable. Their result is that money be paid to the wronged party back to their original position. Less serious statements would find the contract valid but the wronged party is entitled to reject the contract (Keenan 43). In a situation where the fabricated statements have put the victimized party at a disadvantage, but not sufficient harm to validate terminating the contract, then the contract will be binding and the offended party will be bound to the contract, but eligible to appropriate financial damages to make up for the loss or inconvenience caused. Chen is the wronged party (Poustie 67). He has the right to be compensated fully. He also has the right to terminate the contract following the false statements. He therefore does not have to pay for the repair of the car. There are two major aspects considered to define the level of seriousness of a deceitful statement. They include conditions and warranties. The conditions are so vital that without them one of the parties would not enter the agreement. If the fabricated statement amounts to a condition of the contract, the victimized party is eligible to rescind the contract. The court views the conditions so seriously that without it the contract is void (Keenan 59). The condition of the agreement between Chen and Elena was that the car was a 2012 model in good condition. Chen would not have entered in the agreement if he knew the car was a 2009 model that had not been serviced regularly. Elena has violated the major condition of the contract. Conclusion Not all contracts are binding. Contracts absolutely prohibited by law will be void regardless of whether the parties know of the illegality or not. Contracts made void by statute remain valid but the courts will not enforce them. Elena committed fraud by giving incorrect information to run her business. Chen and Lin had an agreement. Their initial agreement fulfilled all the requirements of a valid contract (Keenan 70). The information offered in offer by Elena was misleading. It had a serious false statement. Chen signed a contract that gave his consent to paying for the damage in case of any damages caused to the car. He did this knowing that the car was in perfect condition and nothing bad was going to happen to it. The major condition of the contract was missing. Chen should be compensated for the time lost and inconvenience the situation caused him and his wife. He is not to pay any money for the repair of the Porsche. The car was in poor conditioned as confirmed by the mechanic. He should be refunded the full amount of two hundred dollars he deposited to Elena’s bank account (Poustie 23). Works Cited Anolik, Alexander. Travel, tourism, and hospitality law. Elmsford, NY: National Publishers of the Black Hills, 1988. Print. Atherton, Trevor, and Trudie Atherton. Tourism, travel and hospitality law. North Ryde, N.S.W.: LBC Information Services, 1997. Print. Keenan, Denis J., and Sarah Riches. Business law. 8th ed. Harlow: Pearson Longman, 2007. Print. Poustie, Mark. Hospitality and tourism law. London: International Thomson Business Press, 1999. Print. Read More