Contract by Juno and Brodie - Case Study Example

Breach of Contract Student’s Name Course Name & Number Date of Submission Word Count: 2,390 Introduction When parties enter into a contract, each have the obligation to fulfill the promise made according to the terms of the agreement. This implies that each of the parties have a duty to perform their promise; otherwise it would amount to a breach of contract. A breach of contract, therefore, refers to a situation where one of the parties to a contract fails to perform their obligation in the contract causing damages to the other party1. Filing lawsuits for a breach of contract can be a tedious exercise, but this can sometimes be the only option available for the aggrieved party in the contract. However, with the right preparation, one can successfully sue for a breach of contract. The case provided involves a breach of contract by Juno (contractor) who had been contracted by Brodie to replace old windows and door of his house. Although the terms of the agreement were clear that the cracked windows be replaced with Georgian windows and doors by oak Wood doors, Juno breaches this contract and Brodie suffers injuries as a result. This essay analyzes the case so as to identify any claim that Brodie could have against Juno for the breach of contract. Elements of A Contract That Must Be Proved A contract is any promise that is legally enforceable by law. When parties enter into a binding contract and one of the parties fail to fulfill the promise, the aggrieved party has the right to seek recourse by suing for the contract breach2. However, in order to succeed in a case involving a breach of contract, there are three important elements that the aggrieved party (Brodie) must prove. a. Existence of a Valid Contract In order for Brodie to successfully sue Juno for breach of contract, the first thing that he must do is to prove to the court that there was a valid contract3. This is important because any contract that is not valid is not legally enforceable under common law. It is important to note that a contract does not necessarily have to be in writing to be valid. Instead, even oral contracts can be valid as long as a party can prove their existence4. There are three elements that a party has to prove to demonstrate the existence of a valid contract. Offer: An offer is the first element that a party must prove to show that there was a valid contract in a breach of contract case5. An offer basically denotes the intention of the parties to enter into a contract. In this respect, a party has to show that both parties had the intention to enter into a contract be it in writing or orally6. With respect to the case provided, there are all indications that there was an offer made by Brodie to Juno. The offer in this case was for Juno to replace the cracked windows and doors with quality materials specified in the agreement. Acceptance: The second element of a valid contract that must be proved in court is that an offer was made by one of the parties that have been accepted by the other party7. Acceptance in this case means that all the parties have agreed to all the terms of the contract. In the contract between Brodie and Juno, it is clear that there was acceptance of the other made for the replacement of the house windows and doors by contractor Juno. Although the contract was not in writing, Juno expressly agreed to the contract terms and even went ahead to start performing the agreement and this suggests that the offer was indeed accepted by Juno. Consideration: A contract is considered valid only if there is a consideration. Consideration implies that each party in the contract must give and receive something of value. In the contract between Juno and Brodie, there was a consideration as, whereas Juno was to offer services by replacing the cracked windows and doors, Brodie was to pay him £17,500 for the work that he was supposed to do. According to the case, this amount consisted of money that Juno was to use to purchase materials of £12,000 for windows and £3,000 for doors. Therefore, from the analysis of the elements of a valid contract, it becomes clear that there was a valid contract between Juno and Brodie that is enforceable by law. b. Breach of Contract Once Brodie has proved the existence of a valid contract as described above, the next burden for him is to prove that the contract was actually breached by Juno. A breach of contract occurs when one party to the contract fails to perform the promise as agreed under the terms of the contract8. However, under common law, only materials breaches are enforceable, meaning that the breach must result in loss of material value to the aggrieved party. From the case, it emerges that Juno breached the contract as he failed to perform the work according to the terms of the agreement. c. Damages for Breach of Contract In order to succeed in a breach of contract case, the aggrieved parties must prove that they suffered damages or loss as a direct result of the breach of contract9. In a construction contract, as the one entered into between Brodie and Juno, there are three categories of damages that the plaintiff can claim, including damages for defective workmanship, time related damages and damages for performance failure. Damages for Defective Performance In construction contracts, most cases involve those where the constructor fully performs the contract, but the work performed has defects or fail to meet the standards expected10. Defects in construction contracts give rise to a variety of recoverable damages though the damages vary depending on the nature, extent and the scope of the project and the degree to which the defect deny the owner the use of the property or cause disruption to the owner’s business11. Construction defect damages fall into two categories namely direct damages and consequential damages. Direct damages refer to the loss in value suffered by the aggrieved party due to poor workmanship of the contractor. In the case of Brodie vs. Juno, it emerges that Brodie suffered direct damages due to the defective work performed by the contractor12. For instance, the case indicates that, upon returning from holiday, Brodie discovered that his contractor Juno had not fitted the 15 upstairs windows and this allowed a recent storm to cause serious damages in the upstairs rooms. Among the items damages by the storm in the upstairs rooms as a result of Juno’s poor workmanship included an expensive shag pile carpet valued at £4,500 and a new dressing table worth £7,000. These damages occurred because of Juno’s poor performance of the agreed contract. For example, the terms of the contract stated clearly that the contractor was supposed to use Oak Wood doors; instead Juno decides to cut cost by using Cheaper Pine wood doors that cost half the price. Accordingly, replacing the doors with cheaper woods that do not conform to the contract terms amount to poor workmanship. Besides, the failure of the contractor to fit the 15 upstairs windows also amounted to poor performance the consequences of which have been serious damages to Brodie. In this case, therefore, Brodie can sue Juno for the recovery of the difference between the value of the work that Juno had completed and the value that he would have received had the work been completed according to the terms of the contract. At the same time, considering the case facts, Brodie can sue for the cost of correcting the defects to make the windows and doors conform to the contract specifications. This is because it emerged from the case that the contractor failed to use the Oak Wood for the doors as specified in the contract terms, but instead used cheaper Pine Wood. As such, Brodie can succeed in suing Juno for the cost that he would incur in correcting the mistakes made by the contractor so as to ensure that his house doors and windows conform to the contract specifications. Consequential Damages Brodie also has the right to sue Juno for Juno for consequential/incidental damages. In common law, damages are awarded to the aggrieved party in an attempt to bring the non-breaching party to the position that they would have been if the contract had been performed as agreed under the contract13. This implies that, in addition to the damages awarded for loss of value, the non-breaching party is entitled to recover other losses suffered other than loss in value; otherwise called incidental or consequential damages14. The recovery incidental damages is provided for under the second Hadley test in Hadley v Baxendale in which the court ruled that any the defendant is responsible for damages suffered that may have reasonably been foreseen at the time of entering the contract15. Therefore, looking at the case of Brodie vs. Juno, it is clear that the contractor could have reasonably foreseen that failing to properly fit the windows and the doors could allow heavy storm to damage Brodie’s properties in the room. In fact, one of the reasons that Brodie was replacing the cracked windows was to ensure that his valuables inside the room are protected from storm and other external factors. Therefore, based on the second Hadley test, Juno was is liable for consequential damages. As such, other than suing for the value lost, Brodie should proceed to sue for the consequential damages caused by the storm as they were reasonably foreseeable by both parties as held in Hadley v Baxendale16. However, it is important to point out that there would be no recourse for the injuries suffered by him crashing his Mercedes car on a tree as he drove to Juno’s place. Although the crash was caused by his anger over Juno’s poor workmanship, with the crash causing a damage of £4,000, the fact that the crash was not reasonably foreseen at the time of entering the contract by both parties means that there would be no remedy available for Brodie for this damages as held in Hadley v Baxendale17. In Hadley’s case, the court held that only damages that could have been reasonably been foreseen by parties at the time of entering into a contract are enforceable. As such, the fact that Brodie and Juno could not have foreseen the anger and the subsequent crash at the time of entering the contract means that Brodie cannot succeed in suing for the injuries sustained and the damages suffered as a result of the car crash. Schedule Related Damages Brodie also has recourse for schedule related damages. According to the terms of the contract, the replacement of the windows and doors was to be completed by 1st October. Unfortunately, the work was not completed as agreed upon by both parties at the time of entering into the contract. This is because Brodie came back after 1st October to find that work had not been completed as doors were yet to be fitted and with wrong woods. The common law provides that, when the contractor is at fault in completing a contract as is the case of Brodie vs. Juno, the owner is entitled to damages for (1) administration cost and extended contract inspection (2) lost revenue caused by contract delay, (3) loss of use of the facility, such as cost of having to rent another house (4) loss of value of the facility caused by the delay18. For this reasons, therefore, Brodie can successfully sue for schedule related damages. Conclusion The case of Brodie vs. Juno involves a breach of contract. The analysis confirms that there was a valid contract entered into between Juno (contractor) and Brodie (facility owner). However, the contract was breached by poor workmanship and wrongful delay, the consequences of which Brodie suffered damages to his properties, including a carpet, a dressing table, damage to his car and bodily harm. From the analysis, it emerged that Brodie can successfully sue Juno for the recovery of the difference between the value of the work that Juno had completed and the value that he would have received had the work been completed according to the terms of the contract. At the same time, Brodie can sue for the cost of correcting the defects to make the windows and doors conform to the contract specifications. Additionally, Brodie can successfully sue for consequential damages; though he would not succeed in suing for damages suffered as a result of a car crash because this does not pass Hadley’s second test. Bibliography Angus, Elizabeth. The Professional Paralegal Workbook (Mason, OH: Cengage Learning, 20 Dec 2012). Eisenberg, Melvin Aron. ‘The Principle of Hadley v. Baxendale, 80 Cal. L. Rev. 563 (1992) 80(3) California Law Review 563-613. Emerson, Robert W. Business Law (London: Barron's Educational Series, 2009). Gillies, Peter. Business Law (London: Federation Press, 2004). Helewitz, Jeffrey A. Basic Contract Law for Paralegals (New York, NY: Aspen Publishers Online, 2010). Krol, John J. P. Construction Contract Law (Hoboken: John Wiley & Sons, 1993). Miller, Roger and Gaylord Jentz. Cengage Advantage Books: Business Law Today: The Essentials (Oxford, NY: Cengage Learning, 2007). Read More