Contract between Mariko and Joaquin - Assignment Example

Introduction to Business Law Name: Institution: Date: Question 1 Issue Eric while shopping at Foodmart groceries slipped and hurt his back in the course of packing a mango into his basket. The floor was wet and there was no signs warning the customers on the conditions of the floor. Does Eric have a case against Foodmart or Grabriele, an employee, in negligence? How much is Eric entitled to in the claim? What would be the case be different if there were warning signs in front of the wet floor and towels as the procedure of Foodmart on spills? Rule Negligence means a failure in law to perform what a reasonable person would have done in similar circumstances. It is upon the plaintiff to prove that the defendant owed a duty of care towards him or her; the defendant breached the duty of care and that property damage or personal injury suffered by the plaintiff is as a direct result of the breach (causation). The current law of negligence was founded in Donoghue v Stevenson [1932] AC 562. For a negligence claim to be successful it has to prove that the defendant owed a duty of care to the plaintiff, the defendant was in breach of duty, the breach duty caused damage or personal injury to the plaintiff; and the damage or injury was not remote1. The plaintiff has to demonstrate the existence of duty of care and the defendant was at fault. First, it has to be determined if the risk was foreseeable. An individual is not negligent in taking precaution against a risk of harm unless the risk was foreseeable; the risk was not insignificant and within the prevailing circumstances a person who is reasonable would have taken precaution2. A court of law has to determine the probability of whether the harm could have happened if care had been taken, the likelihood of the harm’s seriousness, burden of taking precautions in avoiding the risk of harm, and the social utility of the activity which caused the harm. The conduct of the defendant is often judged against an objective standard and is determined through the court measurement of the conduct of the defendant against the standard of care that any reasonable person in the position of the defendant would have taken in response to the prevailing circumstances at the time in response to a foreseeable and not insignificant risk3. The loss or damage to the plaintiff has to be directly caused by the breach of duty of care by the defendant. Application/analysis An objective test has to be applied to determine if Foodmart is in breach of duty. It is important to determine if Foodmart owed Eric a duty of care and whether it acted negligently in allowing the spills without warning signs. It is crucial also to determine if the risks were foreseeable and if they could be reduced of limited if the defendant (Foodmart) acted reasonably. In Donoghue vs. Stevenson case, Lord Atkin established the foundation of duty of care. Using the ‘neighbors principles’ a defendant has to avoid omissions or acts which will foreseeably harm people who are directly and closely affected by the acts or omissions that he has to consider as being so affected. In Anns v Merton London Borough Council [1978] AC 728 (Anns), the presiding judge concluded that duty of care is made up of two stages. The initial stage is derived from the neighbor principle where the relationship of proximity or neighborhood is based on foreseeability of harm. Secondly, it is to consider the policy factors that reduce or limit the scope of the duty or the persons to whom it is owed. In Anns v London Borough Council case it was decided the council owed a duty of care in exercising a statutory function. Anns had been wrongly decided4. Foodmart owed Eric a duty of care and the risks of acting negligently were foreseeable. Foodmart had established a procedure for spills that had been recommended by a risk management expert. Once a spill happens, two warning signs have to be put on the floor on each side of the spill o warn the customers. Grabriele forgot to put the warning signs as required and did not find a mop and a bucket. The wet towel put on the floor made it worse. Eric stepped on it, slipped and fell hurting his back. If the warning signs had been put in good time, then Eric would have seen them and avoided the place or Foodmart would have absolved themselves from the blame. Since the warning signs were not there and Foodmart owes a duty of care to its customers. The wet floor bore a foreseeable risk that could be avoided. Eric fell and hurt his back due to negligence of Foodmart staff. He spent $1,500 on medical and failed to catch a flight to Sydney Conclusion (a)The grocery store did not act reasonable to avert any kind of accident in case of a wet floor. The employee forgot to put the warning signs on the either side of the floor. Eric suffered damages that were not remote and he hurt his back leading to him to miss a flight to Sydney hence by another ticket worth $550 the following day. The accident leading to Eric being injured was caused by the wet floor without a warning sign. Therefore, Eric has a case against Foodmart in negligence. (b) The amount of damages will be the cost of medical expenses plus the air ticket that he had to buy. Costs of damages $(1500+550) = $ 2050. (c) It would have been totally different if Gabriele had put warning signs in front of the wet towels and wet floor as recommended by the risk management procedure. Foodmart would not have been liable for any damages or injury caused since it would have acted reasonably to put the warning signs alerting customers of the looming danger. Failure to put the warning signs at the prescribed places makes the grocery store culpable. Question 2 Issue Mariko makes wedding invitations during her spare time. Her campus friend Joaquin is getting married in three months’ time. Joaquin asks Mariko to help him with wedding invitations. After a back and forth she agrees to make the invitations at a fee of $450. Is there a contract between Mariko and Joaquin? When the contract formed and what are the terms of the contract? Rule According to Halsbury’s Laws of Australia [110-1] a contract is an agreement that is binding between two or more people or companies governing their relationships and setting out what they must not do or must do. Essential elements of a contract entails an offer that is accepted and valid consideration given, an intention to create a legal relationship; and certainty of terms. In Biotechnology Australia Pty Ltd v Pace (1988) 15, Pace was promised to participate in the company’s senior staff equity sharing scheme5. The terms were regarded as illusory promises because scheme had been formed. There were no objective terms. In order for a contract to exist there must be an offer that has to be communicated. The offer can be revoked prior to acceptance. The acceptance has to be communicated and not assumed. The consideration refers to the price of the contract with regard to the promise. The parties involved have the intention of being bound by the contract. There should be certainty on the parties, the subject matter as well as the price. The parties involved in a contract have to be adults and of sound mind. Where a breach happens the non-breaching party is entitled to remedies. When someone enters into a contract he is legally bound into an obligation that he has to perform. Breach of contract is the refusal to perform the agreed obligations6. Refusing to perform the obligations is a considered a breach and the aggrieved party can go to court to file a case suit. The Breach of contract results to loss on the side of the aggrieved party. The aggrieved party is entitled to damages. Application/Analysis Joaquin and Mariko are adults of sound mind and hence legal allowed to enter into a contract that is legally binding. Being friends, Joaquin asks Mariko to make wedding invitations for him. Mariko sends two designs for Joaquin to have a look at them. He chooses the second design and asks Mariko to make 75 wedding invitations. At this point there is an offer by Joaquin but there is no price to it. While Mariko promises to start the work right away, there is no consideration. Consequently she wants to back out owing to lack of time. They agree on her making 75 cards by the following Monday at a fee of $450. At this point all features of a contract has been met, there is an offer, acceptance, consideration and certainty of terms. In Beaton v McDivitt (1987) 13 the appeal was dismissed for lack of valuable consideration7. Consideration is an important part of a contract. In case Mariko makes the wedding invitations and Joaquin turns her down, Estoppel can be applied where he can be prevented from avoiding his contractual obligations owing to the promise that he made to offer Mariko $450 for her work. At this point Mariko cannot back down on making the wedding invitations. Conclusion There is a contract between Mariko and Joaquin. There is an offer by Joaquin to Mariko asking her to make wedding invitations. Mariko accepts the offer at a consideration of $450. She agrees to make 75 wedding invitations by the following Monday. The terms of the contract are certain and the parties are adults of sound mind. (b) The contract was formed when Mariko accepted the offer of $450 to make 75 wedding invitations before then there was not price or consideration. (c)The terms of the contract is for Mariko to make 75 wedding invitations by 8am the following Monday at a fee of $450. References Anns v Merton London Borough Council [1978] AC 728 Beaton v McDivitt (1987) 13 NSWLR 162 Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130 Clive Turner and John Trone, Australian Commercial Law (Thomson Reuters, 29th ed, 2013) 735. Donoghue v Stevenson [1932] AC 562 Andy Gibson and Douglas Frazer, Business Law (Pearson, 8th ed, 2014) 155 Sullivan v Moody [2001] HCA 59; (2001) 207 CLR 562 Read More