Oral Terms of a Contractual Nature - Essay Example

TOPIC FOUR Qn. No Exclusion clauses -Oral terms of a contractual nature. Terms of a contract are important to understand the intention of the parties to the contract. The terms can be oral or in writing or both which are express terms. Besides, there can be implied terms determined by customs, usage, statutes or case law. Terms discussed prior to making of a contract are not binding on the parties except those that are made in the form of representation inducing a party to enter into contract. However Parol evidence rule makes it non binding if the oral representation is capable of varying or contradicting or adding to the written portion of the contract. Turning to the case on hand, Dean proposed to Sam an advertisement campaign in the latter's 'Oh My Manor' boutique hotel to launch his vintage wine. At first, Sam without mentioning details of how the launch was going to be made, merely quoted @$75 per head for 100 delegates and a venue fee of $ 2500 thus totaling the contract amount as $10,000. Dean was unimpressed and hence declined Sam's offer. It was only after this; Sam mentioned that a famous Chef Yahoo Nim would attend the event and that a special promotional invitation on Oh My Manor's letter head would be prepared and sent by Sam to the 100 delegates three weeks before launch date. Besides, he also promised to use his own influence to ensure attendance. Dean was apparently induced by these statements of Sam and agreed to Sam's price quoted following which he paid an advance $ 3,000 and received the receipt from Sam mentioning only the price and how total sum was arrived at. Hence successful performance of the contract means that the celebrity Chef Yahoo Nim should have prepared the food and attended the function, Sam should have sent the invitation as stipulated and 100 people should have attended by Sam's influence. But none of these happened resulting in poor attendance of 35 people since only 45 invitations were sent. These can not therefore be a mere parol evidence. These are express terms and hence should be taken as collateral contract though made orally. The collateral contract concept is a device to circumvent the Parol Evidence Rule but also as a means of holding that a statement which is not a term of the main contract can be enforced as a collateral contract i.e. collateral warranty. Some of the cases which can be cited in support of this are ESSO PETROLEUM V MARDEN (1976), DE LASALLE V GUILDFORD (1901), RECORD V BELL (1991) and COMMISSION FOR THE NEW TOWNS V COOPER (CA) (1995) (TheLawsite). Hence Sam is bound by these terms and is liable for damages for breach of contract. Dean is not required to pay the balance amount of $7,000 and he can proceed against Sam for damages for his breach of contract since pressure of work is no excuse. Qn 2 Zander mad it known to Puffy his exact requirements to which Puffy also agreed. Hence the software supplied by Puffy is not in accordance with the terms agreed upon prior to signing of contract Zander signed the contract only on being assured that the software would meet with all the current Government regulatory requirements. But for this he would not have signed the contract. But there is a point against Zander. What Puffy was making was only an opinion and not a condition or representation. She offered him three packages and Zander chose one. It was open to him to verify and then make a purchase. Even though before signing of the contract, Zander insisted, he chose the package at his own risk. If the software package had been a defective one, it would have been a different issue. Hence Puffy is in not breach of contract and consequently Zander is not entitled to refund of the money paid. Qn No 3 In this case, even though Zander did not read the clause No 53 which avoided any liability whatsoever, he is deemed to have read it due to the explicitly mentioned clause on the website. This is an exclusion clause binding on the acceptor. In its absence, the offeror would have been liable for the non-performance or defective performance. In the case of L'Estange v Graucob (1923) 2KB 394. , the plaintiff purchased cigarette vending machine from the defendants after signing the order form which contained the following term in small print: 'any express and implied condition, statement or warranty, statutory or otherwise not stated herein is hereby excluded.' But the machine did not work satisfactorily. Even though the plaintiff argued that it was implied that a machine should perform for which it was purchased, court held as the plaintiff had signed the written contract without any inducement or misrepresentation, she was bound by its terms. Not having read the terms therefore could not be an excuse for the plaintiff. (usq.edu.au) Qn No 5 In this case, Giles has not performed his contract as agreed within six weeks. He has only partly performed. He is taking time though not declared that he is unable to perform any further. In law, a contract can be discharged by performance, agreement, frustration, operation of law and breach. Since Giles has not performed the contract in full within the time limit agreed, Zander can proceed against him for breach of contract claiming only damages for not having performed the third condition satisfactorily and for not having performed at all the fourth condition. Court will allow him damages if losses anticipated by him are not too remote. The fourth condition of obtaining an autograph from the celebrity would certainly result is loss of expected business, if not complied with.. And hence the damages would be proportionate to the contract value already paid if any or if he has not paid, he would be discharged from any part payment. Case laws available on the subjects are Victoria Laundry (Windsor) Ltd v Newman (1949) 2KB 528 and Commonwealth v Amann Aviation Pty Ltd (1991)104 ALR 283. Qn 6 Suzy, the jazz singer could not perform as she met with an accident. She is not responsible for the frustrating act of accident. This is an unforeseen event and therefore Suzy will be in no way held responsible. The case laws are Krell v Henry (1903) 2 KB 740, Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337. In the case of Krell v Henry, the booking of tickets to witness the King's coronation event could not be performed due to the King's sudden illness and consequent cancellation of the event. Though it is a frustrating event, the service provider could have very well anticipated disappointments. Hence, in the present case while the singer could be excused from performing, the event holder is bound to refund te value of tickets to the audience since he could have very well anticipated cancellation and after all he can also claim back his advance money from so whoever he has paid. Qn 7 The baking machine damaged at the time of installation by the manufacturer himself was an unexpected event. But this was part of his business risk he should have anticipated and provided for. The anticipated delay of six month in repair would result in loss of business and profit for the bakery. Although the bakery is entitled of for damages, quantum would depend upon the circumstances of the case. Court would look into whether there was a breach of contract. And whether it has resulted in loss. And if the loss is too remote. Whether there is a breach, can be answered in the negative because the manufacturer did deliver the machine and it was at the time of installation, it got damaged unexpectedly. Hence there was no negligence on the part of the manufacturer. The circumstances point out that the bakery was only hoping to secure a contract from hotel chain. There was no contract yet and also not known to the manufacturer. Even other wise, the extra business due to the extra oven also was only in anticipation of the machine newly ordered. There have been no commitments on the part of the bakery and this break down has happened in the normal course of the business. Hence the loss claimed by the bakersy is too remote. Hence the baker is not entitled for any damages for imaginary loss of profit. References The Lawsite, accessed 22nd February 2008 http://groups.msn.com/thelawsite/contentsofacontract.msnw usq.edu.au, accessed 22nd February 2008 Read More