Commercial and Corporation Law Problem Solving - Case Study Example

Commercial and Corporation law Students Name Institution Supervisors Name Date Facts This case is about a mechanic by the name Oscar who makes an offer to loyal clients and later on withdraws the offer after looking at the cost of the offer. In addition , Oscar’s garage is spread with tools and metal all over, however, inside the garage there is a sign that reads, ‘owners liability at own risk, please do not enter’, meaning that any accident that occurs in the garage would not be the liability of the owner. According to facts laid, during the time he made the offer for discount for his 50 most loyal customers, so long as the customer will reply within two months of receiving the letter, he later withdrew the offer. Unfortunately for him, one of his customers Christine already sent a letter of acceptance the offer of a discount and posts the letter back to Oscar. She later received a letter from Oscar withdrawing the offer just after she had sent a letter of acceptance. The other fact is from another customer by the name Rick, who walked in to Oscar’s garage to check his care and accidentally slips on some oil on the garage floor. Due to this, rick suffers a concussion and a broken wrist and is not able to go to work for 6 months. To add on this, Rick incurs huge medical expenses as he had not paid his health insurance on time. Legal Issue The legal issue here is whether Oscar was first of all in the breach of contract or not with regard to Christine, the other issue here is whether Rick, the plaintiff was owed a duty of care by Oscar[Bor10]. When we look at the facts of the situation, it should first be noted that on grounds of duty of care, there is Oscar had put a sign in his garage which warned customers not to enter in the garage, that ‘owners liability at own risk, please do not enter’. In this instance, we can say that Rick acted with negligence in this particular situation. Negligence is the omission to do something, that any reasonable man, who is guided with considerations that ordinary regulate the conduct of any human affairs, would do, or a situation where a person does something that any prudent man would not do. The case is like that of Bolton v Stone1 where a ball was stuck out of a cricket ground and hit the plaintiff. As the evidence was brought forward, it indicated that the ball had only been hit out of the ground six times over the past thirty years. The court thus held that the likelihood for the person to be injured was low; meaning that there was no way the cricket club was negligent in allowing cricket to be played without additional precautions. In the case of Oscar and Rick, we find that in the garage, Oscar knowing the dangers that were associated with his garage, he warned his customer not to enter and that the one who ignored the sign and entered, did that at his own risk[Phiic]. It is also found out that Rick suffered medical and economic damage, this is because, as he slid to the floor of the garage, he suffered concussions and broke his wrist, to add on this, he also suffered economic damage has he had to incur medical costs since he had not renewed his health insurance[JLR10]. However, due to the warning sign that was provided by Oscar, it would not be easy for Rick to claim for damage, in Bolitho v City and Hackney Health Authority2, where a claimant seeked medical support, it was found that one must deemed logically defensible by court itself. In this case, Rick will need to provide substantial grounds as to why Oscar should pay for the damages incurred. With regard to Christine, we look at whether Oscar was in breach of contract or not. This is because after sending a letter of offer of discount to his loyal customer, he realized that the liability will be too high and decided to withdraw the offer. However in the letter he had indicated that the offer would be provided if the customers replied within two months of receiving the letter. Acting on the offer, Christine accepted the offer and replied in that period. After she had sent the letter, she received a letter showing that Oscar had withdrawn the offer[Sim14]. In Felthouse v Bindley3, Mr. Bindley received a letter from his Uncle Felthouse who wanted to sell him a horse, where Felthouse stated that if he heard from his nephew he would consider the horse to be his, however the horse was not delivered, later Bindley sold the horse at an auction. With this regard, Felthouse sued the auctioneer and his action; however it has to be proven whether Felthouse owned the horse. In the case of Christine and Oscar, after Oscar made an offer, Christine accepted the offer; it was then that she received a letter indicating that Oscar had withdrawn the offer. This means that Oscar was in breach, since there was an acceptance of the offer by Christine. This means that Oscar will have to stick to the offer or go ahead and pay Christine for damages incurred due to the offer provided. Applicable Law In the case of Christine, the applicable law here would be the law of contract. According to Section 2(h) of the Contract Act4, it states that ‘an agreement that is enforceable by law is known as a contract’ In addition, there must be proof of an offer and acceptance to that offer. In addition, an agreement can only be legally bound if there is proof that the two parties intended that it should be legally bound[Pat12]. In this case, Oscar made the offer because he wanted to retain his loyal customers; in addition, Christine accepted the offer knowing that it would save him or her some mechanical costs. However, once Oscar failed to live up to the contract, he was in breach. This is because he turned against the offer when Christine had already accepted the offer. in addition, has he withdrew the offer, there is no indication that Christine accepted the withdrawal of the offer[Ada09]. In the case of Rick, the application law will be on the duty of care. In tort law duty of care occurs when an individual is required to adhere to standards of reasonable care during an act that can foreseeably to deem to harm other people. It is usually the first action to be established before the issue can be resolved to be one of negligence. This means that in this case, Rick needs to show the duty of care, with regard to the law, which in his case, Oscar would have breached[Lin05]. Conclusion The above case discussed two areas in law, the breach of contract and duty of care. With regard to Oscar and Christine, it is realized here that Christine can proceed to have legal action against Oscar for breach of contract, this is because there was an offer made and she accepted before Oscar withdrew the case. On the issue of Oscar and Rick, there is not case of breach of duty of care since there was a sign in Oscar’s garage with indicated that any visitor would be entering at their own liability and that Oscar will not be held accountable for any accident caused in the process. Sources Bor10: , (Bordia, Restubog, Lloyd, & Bordia, 2010), Phiic: , (Clarke & Clarke, 2012), JLR10: , (Davis, 2010), Sim14: , (Kozlina, Jeannie, Robertson, & Duke, 2014), Pat12: , (Paterson, Marie, Robertson, & Duke, 2012), Ada09: , (Rollnik, 2009), Lin05: , (Willmott, Christensen, & Butler, Contract Law, 2005), Read More