Contract Law Exam seen case study - Essay Example

In order to get that loan, he made Sophia sign on a deed which gave the Bank legal charge over her house. In this case, Tim has an undue influence over Sophia. He stands in a superior position to her and as, according to the given facts, Sophia is expecting her first child and wants to marry Tim, he can persuade her to do anything he wants. Also, Tim is described to be of an aggressive nature. It can be easily construed that Sophia gave the guarantee without knowing the consequences and she did that to secure her future with Tim as he had given assurances to her.

He told her that he could afford to marry her only if he could raise some money and became a partner in the firm. That was the sole reason that Sophia agreed with Tim but she was not aware of the subtleties of this transaction. The only advice that she got in respect of this transaction was from Tim. Tim had undue influence over her and his advice would be disregarded. In Yerkey v Jones, a husband procured a guarantee from her wife against his creditor. It was held that such a guarantee was not valid.

In a special set of circumstances, such a guarantee is invalidated, they are: a. A husband procures his wife’s guarantee to obtain a loan; b. The guarantee is not for the benefit of wife but of husband; c. There is a default in repayment by the husband; d. The creditor relies on the wife to get repaid; e. The creditor does not have sufficient reasons to believe that the wife’s consent was free. Sophia’s consent was not free. Tim is not her husband but his relation with her and the facts of the case are quite similar those of Yerkey v Jones.

The transaction was for the sole benefit of Tim and had nothing in it for Sophia. Tim has left Sophia after having an affair. The Bank seeks to get possession of her house. There are no sufficient grounds for Trusty Bank to believe that Sophia understood the transaction and gave a free consent. It was obtained under undue influence and resulted in a voidable contract. As Sophia is looking to get out of the contract, it can be easily construed that the contract would become void. Sophia’s guarantee would be invalidated and Trusty Bank would not be able to get possession of her house.

Tim is still liable to pay the loan and Trusty Bank has all the rights of a creditor against Tim. Against Deluxe Kitchens Ltd In a legally binding contract, the parties involved must perform their respective promises according to terms on which they agreed on. If any of the parties does not perform its promise correctly, the other party becomes entitled to sue for damages. The damages involve the amounts of losses that are caused directly due to the negligence or fault of the other party. In the given case, Sophia had contracted with Deluxe Kitchens Ltd to build and install some new fitted kitchen units to match existing units and new kitchen equipment for ?15,000. The work was not done as it was promised and Deluxe Kitchens Ltd were 4 weeks late in doing their job.

Also, their work was not satisfactory. Sophia hired them to install units that would match her kitchen and they did not. Furthermore, there were some errors in their working. In order to fix those errors, almost ?3000 would be required. Sophia was without a cooker and she was offered by Deluxe Kitchens Ltd that they would install her old cooker but she refused. Due to delay in getting a new cooker, she was unable to cater for her sister’