Agreement between Orlando and Helen - Assignment Example

BUSINESS LAW STUDENT NAME POFESSOR’S NAME COURSE TITLE DATE PART A Question 1 The issue is the case is whether there existed an agreement between Orlando and Helen and whether Helen does have to sell the special offer set to Orlando? This arose out of the fact that Helen sold the antique broach and hair clip to Anglelica despite having created an open offer with Orlando who had communicated acceptance at 10pm. An offer in law is the willingness of parties to be bound by the stated terms of a contract1. In Harvey v Facey2, Harvey sent a telegram to Facey stating whether he would sell him a bumper hall pen and Facey replied by stating the lowest price of $900, and Harvey replied to Facey saying he sends the deed for early possession. The Privy Council stated there was no offer hence no contract. A general rule in communicating an offer requires that there must be an effective communication of acceptance of the offer. In the case of Entores v Miles Far East, the court held that acceptance needs to be communicated for it to be effective. The method of acceptance is important especially when the offeror specifically communicates the mode of acceptance and that that the acceptance reaches the offeror by the specific mode of communication3. In case where there is breach of contract, a claimant is allowed to sue for breach of contract as was held in Adams v Lindsell4 where the claimant sued for breach of contract when the defendant sold wool to another customer despite having sent a letter of acceptance that was delayed in the course of posting. The court held that the acceptance was effective as soon as the letter was posted and not when the defendant receives it. In the law of contract, an offeror needs to communicate the revocation of an offer to the offeree and if the offeror fails to revoke an offer, then the offer is still effective as held in Bryne v Tienhoven5 . The revocation of an offer needs to be personal to the offeree or through a reliable third party6. The law in instantaneous communication regarding communication of acceptance has been set in the case of Brinkinbon v Stahad Stahl Gmbh7 that once one communicates acceptance through an instantaneous communication the contract is valid when the communication of acceptance is received. A term of a contract whether express or implied include any statement that appears on a written agreement and makes the contract more binding as held in Routledge v McKay8 with the statement going into the root of the contract. A term is determined when it can be inferred from the parties conduct that there was an intention for inclusion of that particular statement in a contractual document. Pre-contractual terms form part of a contract if the parties intend that the term will be part of the contract9. In the case of Helen v Orlando, the parties made a pre-contractual statement that she will keep the offer open for acceptance until 10 am the next day. This constituted an open offer since Orlando was allowed to communicate acceptance by 10am Thursday. There was a valid offer as was the case in Harvey v Facey10and acceptance as was the case in Brinkinbon v Stahad Stahl Gmbh11 since the acceptance is deemed to have been received when it was made at 10pm. There was no valid revocation of the contract since Helen contacted Orlando at 10am when she had already sold the broach and hair clip at 9.30am before the expiration of the terms to leave the offer open and the law clearly states that the revocation of the offer needs to be communicated. The fact that Helen contacted Orlando after selling the subject matter of the contract implies that she was in breach of the contract. In conclusion, there is a valid contract between Orlando and Helen and that Orlando can sue for specific performance to compel Helen to sell to him the antique broach and the hair clip. Question 2 The legal issue for determination is what are the terms agreed in relation to the restringing of Sybil’s racquets, whether Jeffery restringing can rely on the exclusion clause in the contract and whether there was a warranty or a condition in the contract. A term of a contract sets out the duties of each party under the agreement. In the case of Bannerman v White12 that if a statement is so important that a party would not have entered into the contract, then the statement made is a term of the contract. In law if one of the parties to the contract makes a statement with special knowledge and expertise on matters, the court deems the statement as forming part of the contract as opposed to when it is made by a person with no expertise as held in the case of Bentley Productions Ltd v Harold Smith (Motors) Ltd13. In contract law, a serious breach of the conditions of terms of the contract entitles the innocent party to repudiate the contract and sue for damages14. An exclusion clause or exemption/limitation clause in law is effective to limit the liability of the party that seeks to rely on it if it forms part of the contract and that it covers the breach15. In the case of Oceanic Sun Line Special Shipping Co v Fay16 where a brochure stated that an exclusion clause would be invalid if there are vitiating factors such as fraud, misrepresentation or undue influence, the exemption clause will not be relied upon17. It is important that an exclusion clause forms part of the contract and in the case of Toll (FGCT) Pty Ltd v Alphaharm Pty Ltd18 . In law, an exclusion clause contained in an unsigned document such as a notice then the notice must be brought to the other party’s attention before or at the time the contract is made as held in Olley v Marlbrough Court19. However the courts refuse to acknowledge the exemption clause where there is a total failure of one of the parties to perform their obligations under the contract. In the case of Metrotex Pty Ltd v Freight Investments Pty Ltd20 a contract to carry parcels to Melbourne from Sydney had an exclusion clause saying “the carriage accepts no responsibilities”, the High Court held that the carrier could not rely on the exemption clause since there was failure to perform. The court will also refuse to exclude liability where the defendants engage in a misleading and deceptive conduct21 and where there is fundamental breach that is the performance of the contract does not conform to the terms of the contract as held in Suisse Atlantique Societe d’Armement Maritime S.A v N.V. Rotterdamsche Kolen Centrale22 In this case Sybil relied on the statements made on the internet advertisement that “Jeffery’s Restringing was the best in New South Wales and no one can re-string racquets like them”. The inclusion of the statement in the advertisement informed the decision of Sybil to take her racquets for stringing at Jeffrey’s hence formed part of the contract as the case was in Bentley Productions Ltd v Harlod Smith (Motors) Ltd23 . An exclusion clause will not limit liability for defective goods in cases where there is negligence and poor workmanship contradicting the terms and implied skills of the party. Further Jeffery Restringing failed to inform Sybil about the exclusion clause when she brought the racquets. Jeffrey Restringing exclusion clause will not apply since there is a material breach of the contract terms and the exclusion clause were not displayed in a way in which Sybil could easily read it. Jeffrey Restringing also failed to perform the terms of the contract and liability will not be limited since it failed to perform the contract by the terms and the advertisement was misleading. Part B Where one is faced with conflicting decision of a single Supreme Court of New South Wales and a unanimous Court of Appeal of the Supreme Court of Victoria then one needs to base their decision on the case of Farah Constructions24 . In the strictest sense, a court can only be bound by a decision of another court in the same hierarchy sitting on appeal directly or through intervention of the intermediate appellate court from the first instance decision maker25. A judge is required to make his own decision based on the merits of the case and the interpretation of the law, and a precedent serves as persuasive authority and can bind the court depending on hierarchy. The court held that an intermediate appellate courts and trial judges should not depart from decision in intermediate appellate courts in another jurisdiction on the interpretation of Commonwealth legislation or uniform national legislation unless the interpretation is plainly wrong26. Every court case presented in a court of law is different with its own characteristics, and judicial decisions that a similar or identical in other jurisdiction are guides to but cannot control the meaning of legislation in the court’s jurisdiction. As was held in the case of Marshall v Director-General, Department of Transport27 that judicial decisions do not serve as substitute for the text in a legislation but by reason of precedent and hierarchical nature of the courts systems some courts may be bound to apply decisions of a particular court in the meaning of legislation. However if the judicial power of the Commonwealth was applied in the decision of the tow courts, then the court will be bound by that decision since the dispute was derived from Chapter III of the Constitution. Yes, I would follow a strong decision of the Supreme Court of Singapore on the point of law, but it will be limited to the persuasive nature of the decision. It is already and accepted principle as set out in the case of Cook v Cook28 that the precedents from other legal systems other than Australia are not binding, but are “useful only to the degree of persuasiveness of their reasoning”29. Bibliography Gibson, A. and Fraser, D. Business Law. 7th ed. Sydney: Pearson Education Australia, 2013. Sweeney, B. and O’Reilly, J. Law in Commerce, Sydney: LexisNexis Butterworths, 2004. Trietel G H, Treitel onthe Law of Contract. 9th edn. London: Sweet & Maxwell, 1995. Read More