Contract Case Law Theory of Contract Law

Question: Discuss about the Report for Contract Case Law the Theory of Contract Law. Answer: 1. According to contract, there are certain essential elements that have to be present to which an agreement becomes legally enforceable contract. For example, in such a case, an offer should be made by one party and the other party should accept the offer. Valid consideration is also required and similarly the parties should also have the intention of creating legal relations. Apart from it, the party should have the capacity to contact (McDonald, 2015). In the present case, the principles of contract law have been applied to the given situation and advice has been given to be concerned persons. Advice for Connor: In this case, Connor had placed a notice on the windscreen of his car in which he has expressed his desire to sell his car for $26,000. According to the law of contract, this notice cannot be considered as an offer but it is merely an invitation to treat. The difference between the two is that while an offer can be accepted for creating a valid contract, if other essential elements are present, an invitation to treat is made only with a view to invite offers from the other parties (Partridge v Crittenden, 1968). Therefore in the present case, the notice is an invitation to treat. Moreover, one that had decided to accept the offer made by Dolly and he wrote a letter to Dolly in which he agreed to sell the car for $20,000 on 2:30 PM Monday. This letter was received on Wednesday at 10 AM. However later on, Connor received the note written by Eileen in which she had stressed her desire to purchase the car for $26,000. Conner immediately leaves a message on the answering machine of Dolly in which he tells Dolly to ignore the letter of acceptance received by her and calls off the deal. However the law of contract provides that once an offer has been accepted, it cannot be revoked by using a faster means of communication (Atiyah, 1990). In this regard the postal role of acceptance is also applicable to the letters of acceptance and provides that once a letter carrying the acceptance of the offer has been posted, the acceptance is complete. Advice for Dolly: the law of contract provides that once an offer has been accepted, it cannot be revoked by the party accepting the offer, by using a faster means of communication. At the same time, the law also provides that the postal rule of acceptance is also applicable in such cases. According to this rule, the acceptance of the offer is complete as soon as the letter containing the acceptance is placed in the mailbox (Beale, (ed) 2002). In this way, this rule provides an exception to the general rule which provides that the acceptance of the offer is considered to be effective only when it has been communicated to the party making the offer (Dickinson v Dodds, 1876). In the present case, Dolly saw notice on the windscreen of the car but she decided not to stop and therefore she made a phone call to Connor and said that she can give $23,000 for the car. In this way, it can be said that in return of the invitation to treat (Fisher v Bell, 1961) made by Connor, Dolly had made an offer for purchasi ng the car at $23,000. Connor did not accept the offer immediately but promised to think over it. Therefore on Monday, Connor decided to accept the offer and wrote a letter in which he had accepted the offer made by Dolly and agreed to sell the car for $23,000. The postal rule of acceptance was provided by the court for the first time in Adams v Lindsell (1818) when the court stated that generally any form of acceptance needs to be communicated expressly to the party making the offer but when the letter of acceptance has been posted, the acceptance is considered to be complete as soon as the letter of acceptance is put in the mailbox. Therefore in the present case, it can be said that Dolly has a contract with Connor for purchasing the car at a price of $23,000. Advice for Eileen: in the present case, Eileen also saw the car and she went to Connor's home. However he was not at home and Eileen met her daughter, Hetti. Therefore, Eileen gave a note to Hetti in which it was written that she will come to take the car on Monday 11.05 a.m. she also enclosed a check for $26,000 along with the note. Hetti left this note on Connor's desk by before he could see the note and the cheque, Connor decided to accept the offer made by Dolly. However in this regard, the law of contract provides that according to the general rule, the acceptance of the offer needs to be communicated to the party that has made the offer. Therefore, in this context, acceptance can be described as an unequivocal statement, whether in writing or oral or in some cases by conduct, by the offeree through which it has agreed to the offer. The law also provides that the offer can only be accepted by the person to whom it has been directed. In order to constitute a valid acceptance, the statement or the c onduct amounting to acceptance should take place in response to the offer (Benson, (ed) 2001). An obligation cannot be imposed on the other party to expressly reject or accept the offer (Felthouse v Bindley, 1862).In the present case, the notice placed by Connor on the windscreen of the car cannot be considered as an offer but it was merely an invitation to treat (Crown v Clarke, 1927). On the other hand, in the present case, Eileen could have made an offer to purchase the car in return of the invitation to treat made by Connor and it was up to Connor to accept or reject the offer made by Eileen to purchase the car at $26,000. Therefore in this case, Eileen does not have a contract with Connor. Advice for Fiona: In this case, after seeing the notice placed by Connor, Fianna decided to accept the offer and she posted a letter in which she had accepted to buy the car for $26,000. She also sent a cheque for $26,000 along with the letter. However, she did not address the letter correctly and as a result; the letter was received by Connor only on Friday. Under the circumstances, it needs to be considered if the postal acceptance rule can be applied in the present case and it can be said that the offer has been accepted by Fiona as soon as she had placed the letter carrying the acceptance of the offer in the mail box (Burrows, Finn and Todd, 2002). The law provides that when post has been condemned alleged by the parties as the means of communicating the offer and acceptance, the acceptance will be completed as soon as the letter containing the acceptance has been placed in the mailbox (Craswell and Schwartz, (eds) 1994). But in such cases it is required that the letter containing the acceptance s hould be properly addressed (Re London Northern Bank, ex p. Jones, 1900). But in the present case, Fiona had not properly addressed the letter. The effect of this situation is that it cannot be said that the acceptance of the offer one part of Fiona was complete as soon as she placed the letter in the mail box. At the same time, it also needs to be noted that in this case the notice placed by Connor cannot be treated as an offer but it was only an invitation to treat. Therefore, it can be said that in this case there is no contract between Fiona and Connor. Advice Dan whether he is entitled to compensation from Toff Dry Cleaners This issue has arisen in the present case because when Dan took his dinner suit and the silk dress of his wife to Toff dry cleaners, a firm that has been used by his family for dry cleaning in the past also. However, Dan was given a docket and as usual, a put it in his pocket without reading it. When Dan returned to collect the clothes, he was told by the firm that his dinner suit was missing and moreover the silk dress of his wife has been badly stained. The firm gave no explanation for the stained dress. However, when Dan asked for compensation for his loss, the owner of the firm pointed out towards a clause present on the docket according to which the firm was not liable for any loss or damage to the clothes that were left for cleaning. In this regard, the owner of the firm also pointed out towards a sign present at the back of the shop in which it was stated that although the firm takes all the care in dry cleaning the clothes of their customers but they cannot be held responsibl e for any loss or damage howsoever it may be caused. On the other hand, Dan claims that he had not read the clause mentioned that the back of the docket and neither did he saw the sign present at the back of the shop. Under the circumstances, it needs to be considered if Toff Dry Cleaners can rely on this exclusion clause for the purpose of excluding their liability for the damage suffered by Dan. An exclusion clause is used by one party to the contract for the purpose of limiting or excluding its liability (McDonald, 2015). The legal position in this regard that as is the case with any of the term of the contract, an exclusion clause can also be incorporated in a contract if it is present in assigned contractual document and it does not matter if the other party has not read or understood the term (McDonald, 2008). Therefore the law provides that when the parties have entered into a written contract and signed the document, the parties will be bound by all the terms of the contract regardless of the fact that one party to the contract has not read the term (Conaghan and Mansell, 1993). A leading case in this regard is that of L'Estrange v Graucob (1934). In this case, a cigarette vending machine has been purchased by the claimant that was going to be used in a caf. In this case, the claimant signed the order form and on it, it has been mentioned in small print that any express or implied condition or warranty is excluded. Therefore when the vending machine did not work properly, the claimant tried to reject the machine in accordance with the Sale of Goods Act and claimed that the machine was not of merchantable quality. However, the court stated that the defendant was protected by the exclusion clause. By signing the order form, the claimant was bound by all the terms that were present in the form regardless of the fact that the claimant had not read the form. The result was that the claim was unsuccessful. Would it make any difference if Dan had noticed the clause on the docket and the assistant had said: "That excludes liability for damage to buttons and zippers". In the present case if Dan would have noticed the presence of the exclusion clause on the docket given to him, it could have been said that such a clause is a part of the contract that was created between Dan and Toff Dry Cleaners. However, Toff Dry Cleaners will still not be able to rely on this was for the purpose of excluding their liability for the damage suffered by the silk dress of his wife and the loss of his dinner suit because in this case, it can be said that Dan had entered the contract with Toff Dry Cleaners on the basis of the misrepresentation that was made by an assistant at the shop. In this case, the assistant had told Dan that the exclusion clause mentioned on the docket only excludes the liability of the firm for any damage suffered by buttons and zippers. But in reality, the exclusion clause has been inserted by the firm for the purpose of excluding the liability of the firm for any loss or damage suffered by the clothes of the customers. In this way, it can be s aid that the assistant had made a misrepresentation and Dan had relied on such a misrepresentation by entering into a contract with the firm (Cooke, 2004). As a result, in such a case, even if the exclusion clause has been noticed by Dan and it can be considered as a part of the contract but Dan had entered the contract on the basis of the misrepresentation made by the assistant and therefore, Toff Dry Cleaners cannot rely on this clause for the purpose of excluding their liability. Assume that Dan is entitled to compensation for the loss of his dinner suit and the stained sikk dress. He now tells you that because of what has happened is wife has suffered emotional distress because the dress was a family heirloom. He also tells you that he and his wife had to hire, at considerable expense, a dinner suit and address for a formal occasion because of the loss and damage. The issue that needs to be decided in this question is related to the remoteness of damages. It has to be seen if Dan can claim compensation for the emotional distress suffered by his wife as the damaged this was a family heirloom and also for the expenses incurred by Dan and his wife for hiring clothes at a considerable expense. In order to deal with such cases, the law provides the mechanism of remoteness which places a limit on the ability of the claimant to recover damages to the damages only those were the reasonably foreseeable consequence of the act (Harlow, 2005). In this way, the law provides that the defendant cannot be held liable for the damages that are too remote. The test that can be used to decide the remoteness of damages provides that the damages suffered by the claimant will be considered as too remote if the damages were not reasonably foreseeable by the defendant (Hepple, 1997). As a result in the present case also, it can be said that Dan claim damages for the e motional distress suffered by her wife and also for the expenses incurred by him for hiring a dinner suit and a dress. References Atiyah, P.S. 1990, Essays on Contract, Oxford University Press, New York Beale, H. (ed) 2002, Cases, Materials and Text on Contract Law, Hart Publishing, Oxford Benson, P. (ed) 2001, The Theory of Contract Law: New Essays (Cambridge University Press, Cambridge Burrows, J.F., Finn, J. and Todd, S. 2002, The Law of Contract in New Zealand (2nd ed, LexisNexis NZ, Wellington Conaghan, J and Mansell, W (1993) The Wrongs of Tort , Chapter 2. Pluto Press Cooke, P J (2004) Primary victims: the end of the road? 25(1) Liverpool Law Journal 29 Craswell, R. and Schwartz, A. (eds) 1994, Foundations of Contract Law, Oxford University Press, Oxford Harlow, C (2005) Understanding Tort Law , 3rd edn, Chapter 2. Sweet Maxwell Hepple, B (1997) Negligence: the search for coherence Current Legal Problems McDonald, B. (2008). Contractual exclusions and indemnities of liability for negligence, In GJ Tolhurst, Elisabeth Peden (Eds.), Commercial Issues in Contract Law: Papers from the Commercial Law Quarterly 20th Anniversary Conference, (pp. 7-25) University of Sydney: Ross Parsons Centre of Commercial, Corporate and Taxation Law. McDonald, B. (2015) Chester v Waverley Corporation (1939) Evatt J., Great Australian Dissents Workshop: Gilbert + Tobin Centre of Public Law, Kensington, NSW: Presentation McDonald, B. (2015). Law reform, legislation and the common law, Private Law in 21st Century: TC Beirne School of Law, Brisbane, Qld Case Law Adams v Lindsell (1818) 1 B Ald 681 Crown v Clarke (1927) 40 CLR 227 Curtis v Chemical Cleaning and Dyeing Co Ltd [1951] 1KB 805 Dickinson v Dodds (1876) 2 Ch D 463 Felthouse v Bindley (1862) 142 ER 1037) Fisher v Bell [1961] 1 QB 394 L'Estrange v Graucob [1934] 2 KB 394 Partridge v Crittenden [1968] 1 WLR 1204 Re London Northern Bank, ex p. Jones [1900] 1 Ch 220