Legally Binding Contract Definition - Essay Example

? Assignment By Due Answer In order to form a legally binding contract, a valid offer is the first essential. It must be made and communicated to another person, the offeree. Both the parties must agree to the same thing in the same sense. The agreement must have consideration for both the parties involved. An offer once accepted becomes a promise. The parties must have an intention to create legal relations. The object of the contract must be legal. Just like an offer needs to be valid, an acceptance must also be valid. In matters concerning offer and acceptance, communication is of paramount importance. In the given case, Eddie telephoned Adele on Monday to ask for quote for the delivery of 12 wild boar piglets to the Eagle Pub. This is not an offer. It is a mere inquiry and it does not amount to an offer. Adele informed Eddie that the piglets would cost ?1,100 each and would be delivered on Thursday morning at a cost of ?150. This is again just a piece of information and not an offer. Eddie was satisfied with the price but wanted the delivery to be made on Wednesday. From the facts, the conduct of Eddie is such that it can be construed that this was an offer. Adele promised to give an answer on the next morning via fax. She sent a fax next morning confirming that the delivery was possible on Wednesday and it would cost ?13,350 in total. According to the given facts, Eddie was not in his office on Tuesday morning. If the courts are convinced that the aforementioned offer by Eddie was a valid offer, his absence from his office on Tuesday morning would be immaterial. A question can be raised whether Adele’s fax’s communication to Jane was enough. It would also be immaterial. It is because of the establishment of ‘Postal Rule’. In Adams v Lindsell 1818 EWHC KB J59, the defendants offered the plaintiffs through a letter to sell some fleeces of wool and asked them to answer via post. The plaintiffs received the letter late due to misdirection but posted their acceptance right away. Before their acceptance could reach the defendants, the defendants contracted with another party to sell the wool. Almost a similar scenario was encountered in Henthorn v Fraser 1892 2 Ch 27. The courts, therefore, specified a definite time of acceptance via post. The acceptance of an offer would be deemed to have been made when the letter of acceptance is posted and is out of the power of the offeree. This rule can also be stretched to communications with fax. Adele’s acceptance was made when she sent the fax to Eddie’s office. It does not matter whether Eddie saw the fax or not. Since the offer was accepted, the object was legal, both parties had consideration and there was an intention to create legal relations, a contract had formed and was legally binding on both the parties. It had formed at the time when the acceptance was made. Eddie is wrong in his thinking that he owes nothing to Adele. His contract with Peter is a breach of contract with Adele. He can be sued for damages by Adele for his breach of contract. The damages would amount to a sum that puts Adele in such a financial position in which she would have been if there was no breach by Eddie. However, Adele would not be able to recover the loss of ?400. It is because the loss was too remote. In Hadley v Baxendale 1854 9 Exch 341, the defendant contracted to take the plaintiff’s mill shaft to London where it was to be used as a model to build a new one. Due to defendant’s fault, the shaft was returned late and it caused the plaintiff to lose profits. The plaintiff sued to recover damages for loss of profits. It was held that the loss caused was too remote and it could not have been recovered. Therefore, by the application of above case, Eddie would not have to compensate Adele for lost profits of ?400. Answer 2 In the given case, Adele went to Bambi Stores Ltd to purchase some animal feed. She was absolutely unalarmed and unwarned when she was hit by a fork-lift truck driven by Reggie. Reggie was the warehouseman of Bambi Stores Ltd and the accident occurred due to his fault and negligence. In addition to a fractured ankle and wrist, Adele’s Mulberry Ostrich leather Bayswater handbag and Patek Phillip watch were also damaged. Bambi Stores attempted to exclude their liability for the harm caused to Adele by mentioning a notice behind their cash desk. Such a notice would not be able to exclude Bambi Stores Ltd’s liability. According to S.2 (1) of Unfair Contract Terms Act 1977, “A person cannot by reference to any contract term or to a notice given to persons generally or to particular persons exclude or restrict his liability for death or personal injury resulting from negligence.” Adele, being a regular customer, suffered an injury and spent two weeks away from work due to negligence of Bambi Stores Ltd. They would have to compensate Adele for her personal injury. S. 2(2) of UCTA 1979 would be applied in order to determine whether Adele can recover compensation for her handbag and watch. It states that, “In the case of other loss or damage, a person cannot so exclude or restrict his liability for negligence except in so far as the term or notice satisfies the requirement of reasonableness.” In the given case, with respect to the handbag and watch, Adele may not be expected to estimate the loss beforehand that she could have suffered while shopping at Bambi Stores Ltd. Bambi Stores Ltd were acting in the line of business and they are expected to know what harm can be caused if any one of their fork-lifting trucks hits a customer. In Phillips Products v Hyland 1987 1 WLR 659, the plaintiff hired an excavator and a driver from the defendant. Due to the negligence of driver, damage was caused to the plaintiff’s building. The defendant argued that he could rely on an exemption clause that excluded his liability due to negligent acts of his driver. It was held that the exemption clause was not reasonable because the defendant was acting in the course of business while the plaintiff hired excavators rarely. By the application of this case, Bambi Stores would be held liable to compensate Adele for her other loss. Although from the given facts, it is obvious that Adele was not aware of the exemption clause before she was injured, if Bambi Stores Ltd contests that she was aware of the exemption clause, it would also have been immaterial. S.2 (3) of UCTA 1977 states that, “Where a contract term or notice purports to exclude or restrict liability for negligence a person’s agreement to or awareness of it is not of itself to be taken as indicating his voluntary acceptance of any risk.” Even if Adele had seen the notice before her injury, it could not have been construed that she conferred to the notice. The notice could not have rendered Adele devoid of any rights that she had under the UCTA 1977. Therefore, Bambi Stores Ltd would be held liable and Adele can recover compensation from them. Answer 3 According to the given case, Eddie and Jane started a pub called Eagle that sold a range of organic and homemade produce including meat, vegetables along with bread, chutney and wine from a vineyard. From this, it can be construed that their pub primarily dealt with food that was to be used by humans. Samir came to Beryl, sales assistant of the Eagle, and asked for some food that would be suitable for his championship poodle Petski Pouch III. She showed him prime organic cuts of meat on display but at the same time, made it clear that she was not sure if they were suitable for dogs. According to S.14 (3) of Sale of Goods Act, 1979, “…there is an implied condition that the goods supplied under the contract are reasonably fit for that purpose, whether or not that is a purpose for which such goods are commonly supplied, except where the circumstances show that the buyer does not rely, or that it is unreasonable for him to rely, on the skill or judgment of the seller or credit broker.” In this scenario, Beryl was not acting in the course of business. She used to sell food that was suitable for humans and it was a rare case that she had to make a judgment about some meat being suitable for dogs. Here, it is unreasonable for Samir to rely on skill and judgment of Beryl as she made it clear that she was not sure for about the meat’s suitability. According to S. 14 (5) of SOGA 1979, there is no implied condition as to the fitness of purpose of goods if an agent “…is not selling in the course of a business and either the buyer knows that fact or reasonable steps are taken to bring it to the notice of the buyer before the contract is made.” Another aspect of this case concerns with the fact whether the meat was in correspondence with the one shown on display. According to S.15 (2) of SOGA 1979, there are some implied conditions that are to be complied with. It states, “In the case of a contract for sale by sample there is an implied condition- a) that the bulk will correspond with the sample in quality; b) that the buyer will have a reasonable opportunity of comparing the bulk with the sample; c) that the goods will be free from any defect, rendering them unmerchantable, which would not be apparent on reasonable examination of the sample.” In this case, Samir had a reasonable opportunity to compare the meat that he got with the one on the display and Beryl took the meat out of fridge which is a safe place to store meat. But if the meat was contaminated, it could not have been found out by Samir upon reasonable examination. Its contamination renders it unmerchantable as it is not fit for the purpose that it is commonly used for. It should have been wholesome. Therefore, there is a breach of condition by the Eagle and it entitles Samir to treat the contract of sale as repudiated. Eagle Pub would be held liable. As between Beryl and her employers, Eddie and Jane, Beryl was acting as a mercantile agent for them. She acted within the authority given to her and in good faith. There is no indication that at any point, she exceeded her authority or did not act in good faith. Samir had the knowledge and sufficient reasons to believe that Beryl was acting as an agent and within the authority given to her. She acted with ordinary skill and diligence which is obvious from the given facts. A principal is bound for all the acts of his agents that are performed within the scope of his authority. The third party is deemed to be actually dealing with the principal. In the given case, Beryl would be excused of any liability to Samir. In order to be compensated, Samir can sue The Eagle Pub, Eddie and Jane, for damages. References 1. Adams v Lindsell [1818] EWHC KB J59. 2. Hadley v Baxendale [1854] 9 Exch 341. 3. Henthorn v Fraser [1892] 2 Ch 27. 4. Phillips Products v Hyland [1987] 1 WLR 659. 5. Sale of Goods Act, 1979. (UK) s 14 (3). 6. Sale of Goods Act, 1979. (UK) s 14 (5). 7. Sale of Goods Act, 1979. (UK) s 15 (2). 8. Unfair Contract Terms Act 1977. (UK) s 2 (1). 9. Unfair Contract Terms Act 1977. (UK) s 2 (2). 10. Unfair Contract Terms Act 1977. (UK) s 2 (3). Read More