Law of Contract and Tort - Coursework Example

Construction Management: “Law of Contract and Tort” Name: Institution: Course Title: Instructor: Date: Executive Summary The purpose of this report was to outline the laws that govern construction management process using the case examples of two articles that examines the concept of law of contract and law of tort. The issue addressed in this report is based on the fact that construction process involves being contracted and in the process disagreements might arise. Secondly while conducting the process of construction, damages might emerge. The basic is to understand these and how they can be avoided or be counteracted. The emerging finding is that the law of contract is limited to the contents of agreement and involves the two. The main argument is that law of contract tries to establish damages based on agreements. On the other hand, law of tort is based on protecting rights provided in the laws so long as one is able to prove that the defendant owes him or her legal responsibility and that the same defendant is the cause of the fault and should be held liable. As a concluding remark, the report acknowledges that the merging theme is that the two categories of law are important in guiding the operations of a contractor in construction sector. The first is based on the fact that one will be engaged in contracts and can sue or be sued for breach of contracts and thus, one must know the simple elements of a contract before entering into one to avoid legal complications. Based on law or tort and especially tort of negligence, one has to be sure of his/ her responsibility towards clients and general public outside the terms stated in the contract. This helps in guiding one avoid factors like omission that are used in prosecuting law of tort. Table of Contents Executive Summary i Table of Contents 1 Introduction 2 Part 1 2 Essentials of a Valid Simple Contract 2 Part 2 4 Theory of Tort and Liabilities 4 Possible Defences 6 Conclusion 7 References 8 Introduction In various aspects of life people do engage in contract. For the contract to be legally binding there has to be offer and acceptance. Moreover, various elements of the contract have to be fulfilled. There are various laws pertaining to contracts depending on the sector one is in (Andrews, 2011:36). This is equally critically in construction sector where the contractor has to meet the clients need according to agreed time and resources. On the other hand the clients have to fulfil the conditions stated out for the contractor to actualise their expectations. Contract law in Australia is based on common law and supported by various statutory legislations at national or state level (Svantensson, 2008:3). Contrary to other laws, law of contract does not indicate the rights and duties which it will guarantee. It only avails wide ranging limiting principles. It is based on these principles that the two parties create the rules for their engagement (Simpson Solicitors, 2000:10). In a nutshell, contract law allows for the involved parties to define their level of engagement so long those rules do not surpass the established principles in the legislation. This report outlines the concept of law of contract and tort in the context of construction management using two case reports. Part 1 Essentials of a Valid Simple Contract The essential element of a simple contract from the narrative is that there has to be an offer (Balachandran and Thothadri, 2009:17). An offer can be defined as “an expression on willingness to be bound on terms”. The above statement is corroborated by the happenings in the narrative of Christine Rider v Kevin Reeves. Christine Rider as the plaintiff sought the help of Kevin so that he could procure an individual who would help end her life. The offer here is the procuring of an individual who could commit the act of killing. The second critical element is the presence of an “offeror.” The offer has to be offered by the party known as “offeror” this is the contracting party which needs the services or a product. This party sets the terms and conditions to be met. Irrespective other legal provisions on contracting, Christine had given an offer to Kevin through advanced payment so that he would procure for her the person to kill her. This means that by agreeing Kevin is the “offeree”. Moreover, this statement shows that there is the meeting of minds. The meeting of minds to form an agreement is known as mutuality of obligation. This is usually seen from the objective framework of law rather than the subjective view. The meeting of the minds of these two parties started at the hospital. The next essential element then would be the acceptance of the offer from the “offeror” by the “offeree” in this context this is the contracted party who is supposed to provide the required services (Balachandran and Thothadri, 2009:18). Kevin as defendant accepted the role of the person who will look for the other individual who will actualise the plan of Christine. In a critical analysis perspective, it shows that there was an offer and subsequent acceptance. The acceptance is seen when he agrees and takes the advance payment of 2, 500 pounds. The existence of agreement is seen whenever Kevin is prompted by Christine about their agreements he continues to give explanations and hike the price promising to do it once the new fee is settled. Christine does this by banking the money in the hope that the contracted party would fulfil its obligations. The fourth element would be termed as existence of consideration. For people to reach an agreement, in some instance there is the process of bargaining. The ultimate end of this is to reach “the price of the promise” so that the desired end might be delivered. The two parties’ “offeror” (Christine) and “offeree” (Kevin) have engaged in a long process of bargain starting from the first agreement where the fee was set at 2, 500 pounds. Subsequently there have been other bargains by the “offferee” which the “offeror” accepted so that her ultimate goal was attained. This is followed with the intention. From the tone of the engagement, the two parties had the intent of creating a legally committing agreement rather than a social agreement. This is why the “offeror” is giving money which is demanded by the “offeree”. The last element is the certainty. Under this view, the terms and conditions have to be clear so that they be easily implementable (Balachandran and Thothadri, 2009:19 and 20). This is the exact of the narrative. The demand by Christine is to be killed. In a nutshell, the narrative in part one implies that in simplistic view, there has to be two parties who have entered into an agreement on the willingness basis without coercion or duress. Various court cases have analysed the existence of contract in different ways. Existence of contract can be best understood in the context of objective and subjective fundamentals. According to subjective model of contracting, contracting is mere show of the kind of agreement the concerned parties had reached and it is only seen as a persuasive document rather than the final straw as it can be contradicted by the opposing party to show that the agreement was something different. On the other hand, objective model takes agreement as it is as the absolute truth and therefore should be followed (Cole, 2003). The case between Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd [1989] NSWLR 309 states the elements that define an existence of a contract in objective view. This case involved sale of an airline business. The contention of the case was that KS Easter (Holdings) Pty Ltd had cancelled the contract they engaged with Air Great Lakes Pty Ltd. The offeree (Air Great Lakes Pty Ltd) therefore sought for compensation on damages incurred. On the other hand, offeror countered this argument by stating that the document signed had no any intention to legally bind them. Justice Mahoney observed that “the existence of a contract is a consequence which the law imposes upon, or sees as a result of, what the parties have said and done. Actual subjective intention to contract is a factor which the law takes into account in determining whether a contract exists but it is not, or not always, the determining factor” (cited in Clarke, 2010). Part 2 Theory of Tort and Liabilities The concept of tort and coming of tortuous acts originate from the fact that one owes the other duty of care. This duty is created by law (Caldwell, 2008:20). For instance, one should not kill another person. As a driver one has to drive safely so as not to commit accidents. As a contractor or engineer, one as to build safe building that is healthy for human occupation or intended service. This means the building has to be strong and be done in context of safe engineering. The ultimate goal of tort law is to protect rights and compensate victim or his/ her next of kin so that they can be restored to their initial position (Caldwell, 2008:20). For court to award damage to the appellant based on the tort of negligence, the appellant has to prove that the defendant owes him or her duty of care (Caldwell, 2008:22). This is evident in this case where Cittadini the director and engineer of Applied Alloy is convicted on manslaughter. The essence of engineering under the context of safe engineering is to produce products that can withstand extreme conditions without caving in easily. This means that as the director and engineer of the company he had the responsibility to ensure that his company produces Yatch that can withstand extreme conditions on the sea. The court case of Donohue v Stevenson highlights this concern. In this case the plaintiff bought a wine for his girlfriend from a local shop. After consumption the girlfriend got sick. During refilling, it was recognised there was a dead snail inside. The manufacturer was held to be responsible and thus, found liable to the damages suffered by the plaintiff’s girl friend. This context applies to the case of a contractor whereby he owes the owner and the public the duty of building reliable houses that can’t cave in or roads that can’t be easily washed away. Apart from mere approval of being owed duty of care, there has to be an act of omission which is tied to negligence (Caldwell, 2008:39). It is actually this that allows one or his/her representatives to seek for legal or actual damages. The act of omission is what the applicant anchors his or her argument as the cause of damages. The essence on this is to ensure people operate within the limits of reasonable behaviours that do not infringe on legal rights of other parties. This is the contrary in this case. The investigating commission found out that the keel that keeps the yatch afloat had been split horizontally and was joined together only by “child like welding”. The emerging question is that how can a vessel used in deep sees that is prone to strong winds have the facility that is used to change sail direction be held by a weekly joined keel. This shows that the company in which the accused was director engaged in an act of omission. The case of Dulieu v White & Sons (1901) shows how proof of omission is important in prosecuting negligence. The essence is to show that one’s act is what has caused the damage. The third element then would be presence of damage as a result of the defendant’s fault or negligence (Caldwell, 2008:23). The presence of damage may be actual where one suffers bodily injuries and death or where the omission violates the right of that individual. For the case of Cittadini the director and engineer of Applied Alloy is the loss of lives. In this event four sailors lost their lives not because the winds were too strong, but because in Yatch engineering perspective the Keel was not strongly welded and the crew could not easily change their direction. Possible Defences In most cases involving tort of negligence, it is the onus of the plaintiff to prove that the defendant owed him/ her legal duty of care, engaged in act of omission and it is these omissions which resulted into the damages sought. On the other hand the defendant can exploit certain provisions in law so that he or she can be acquitted of the charges levelled against him/ her. The first approach is based on Volenti Non fit Injuria (Goudkamp, 2011:477 and 478). In this context the plaintiff should not seek for redress since he or she was aware of the risk associated with the same. For instance, the weather conditions in see can drastically change within few minutes that even highly engineered vessel can/t with stand. The same concept can be applied in construction management where there is possibility of falling objects and slips among others. The second basis for defence is inevitable accident (Goudkamp, 2011:475 and 478). It is true that even with various precautions, some conditions can’t be avoided. Can one stop running into heavy storms that are exponential? This concept is applicable where there is no strict liability. A case involving Stanley against Powell shows the possibility of applying this in one’s defence. The defendant who is a club member where the plaintiff was employed as cartridge carrier tried hitting a target and instead hit a tree. This bounced back and hit the plaintiff. The justice found out that at no any point was the defendant negligible and the accident would have not been avoided. The last point to the defence in this case is in the context of vis major. Vis major is the act of nature or God (Goudkamp, 2011:476 and 479). They include storms, earth quakes and mud slides. This is what happens in the sea, no one is in control of winds. The same can be stated in construction process where natural calamities cause the injury. For instance an earth tremor that cause can employee to fall from say sixth floor. Conclusion The merging theme is that the two categories of law are important in guiding the operations of a contractor in construction sector. The first is based on the fact that one will be engaged in contracts and can sue or be sued for breach of contracts and thus, one must know the simple elements of a contract before entering into one to avoid legal complications. Based on law or tort and especially tort of negligence, one has to be sure of his/ her responsibility towards clients and general public outside the terms stated in the contract. This helps in guiding one avoid factors like omission that are used in prosecuting law of tort. In an event of breach, law of tort is concerned with faults while the one of contract is prosecuted on the basis of the act causing losses. References Andrews, N. (2011). Contract Law. Cambridge, NY: Cambridge University Press. Balachandran V. and Thothadri, S. (2009). Business Law. New Delhi: Tata McGraw-Hill. Caldwell, R. (2008). Guide to the Law of Tort. London: Straight Forward Publishing. Clarke, J. (2010). Australian Contract Law: Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd [1989] 2 NSWLR 309. Retrieved on 3 September, 2012 from: http://www.australiancontractlaw.com/cases/airgreatlakes.html Cole, T. (2003). The Parol Evidence Rule: A Comparative Analysis and Proposal. University of New South Wales Law Journal Vol. 26, No. 3, pp. 680. Goudkamp, J. (2011). A Taxonomy of Tort Law Defences. Retrieved on 3 September, 2012 from: http://www.law.harvard.edu/programs/about/privatelaw/related- content/goudkamp.taxonomy-of-tort-law-defences.pdf Simpson Solicitors (2000).The Principles of Contract. Retrieved on 2 September, 2012 from: http://www.simpsons.com.au/documents/visarts/visarts89/1Princip.pdf. Svantensson, J. B. D. (2008). Codifying Australia’s Contract Law: Time for a Stock Take in the Common Law Factory. Bond Law Review Vol. 20, No. 2, pp. 1-26. Read More