English Law and Legal Relations and Liabilities - Essay Example

English Law and Legal Relations and Liabilities Number Department Introduction The standpoint that English law allows parties the utmost freedom to agree on their own legal relations and liabilities without interruption or / and limitation can be said to be true, provided the terms and conditions that govern contracts and the principles of tort law have been fully adhered to. This is because a contract is essentially a voluntary organisation which involves two or more willing parties who want to enter into a legitimate exchange. As a matter of fact, a contract is merely an agreement that gives rise to obligations which are recognised and envisioned by the law. This means that a salient factor that distinguishes contractual obligations from other forms of legal obligations is that contracts are premised upon agreements. Likewise, this is important since people can agree to exchange any goods and / or services, provided they are legit. Similarly, if the basic requirements of a contract have been met, then English law may not step in to curtail parties the utmost freedom to agree on their own legal relations and liabilities. Some of these essential requirements include the presence of offer and acceptance, consideration which supports the agreement, and an intention to create legal relations. The exception to this is when the modalities such as the Sales of Goods Act 1979, the Exclusion Clause and UCTA and implied terms therein as laid down to govern contracts have been violated. An exception that curtails the utmost freedom for parties to agree on their legal liabilities and relations without restrictions is the Exclusion Clause. This is because the Exclusion Clause restricts or excludes the liability of one of the parties. Normally, it is the seller whose liability is restricted. However, it is important to note that the Exclusion Clause is not accorded blanket application so that wicked sellers can breach their initially agreed upon contractual obligations. On the contrary, the Exclusion Clause is applied in light of the contra proferentum rule. This can be seen in the case Wallis, Son & Wells v Pratt and Haynes. In this case, a seed sale contract clause argued that sellers did not give any implied or expressed warranties concerning the description of the seeds. The seeds were not found to match the description they had been previously given. In this effect, it was held that the clause was only applicable to the warranty and that the description being referred to was part of the conditions that made the contract. Particularly, the House of Lords ruled that there was no instance in which sellers are not to fulfill their warranty, whether this warranty is implied or direct. This is to the effect that any clause which does not explicitly detail conditions will normally not exclude liability for breach of conditions (House of Lords, 2012, p. 1). The crux of the matter above is that the circumstances which may compel the seller in the contract to apply to be absolved from the responsibilities or liabilities spelt out in the contract must have been caused by unforeseen circumstances (D. Ashcroft and J. Ashcroft, 2010, p. 66). Conversely, in this instance where unforeseen circumstances bedevil the business or the seller, the liability limitation may come into succour businesses which cannot afford to shoulder the burden on consequential and unforeseen losses that may threaten to subject a business to insolvency. Siems (2003, p. 35) explains further that the situation above was exemplified by the case British Fermentation Products Ltd v Compair Reavell Ltd [1999]. In this case, the British Fermentation Products Limited was the purchaser of a compressor of air supply under proper pressure to aerate and mix well, which was to help produce yeast. The supplier would be Compair Reavell Limited. The compressors failed to work well several times even after several replacements were delivered. Even though the amount of damages surpassed ? 1 million, Judge Bowsher Q.C. cited a lower figure to be extended to the plaintiff, British Fermentation Products Limited. LeRoy and Jentz (2010, p. 84) contend that it is important to note that there are certain instances where the Exclusion Clause may come to protect the welfare of the client who has entered into a contractual agreement with the seller. One of the principles of the Exclusion Clause that seeks to protect the interests of the clients is incorporation. The rule of incorporation has it that a clause will not take effect unless it had been incorporated in the contract right at the time of the entering of the contract. The principle of incorporation remains applicable regardless of the nature of the agreement that had been entered into. For this reason, it matters not that the agreement was oral, or a displayed notice. The import of this is that any attempt to incorporate a clause into a contract later on remains null and void. This provision is well underscored by the case Olley v Marlborough Court Hotel [1049] 1 KB 532. In the case, Mrs. Olley as the claimant had booked and checked in at a hotel reception desk. However, upon entering her room, she noticed behind the door a notice which through a claim excluded the hotel’s liability for clients’ property. According to Bradgate and White (2007, p. 71), Mrs. Olley argued that the notice had not been incorporated in the contract, given that it had not been displayed at a visible spot to her as the claimant, at the time the contract was being made. In this regard, the jury, Denning L. J., Bucknill L. J. and Singleton L. J., ruled that Marlborough Court Hotel had failed in taking reasonable care just as Section I of the Innkeeper’s Liability Act of 1863 had mandated it (Valcke, 2009b, p. 44). The judges also continued that the disclaimer was not integral to the contract, and as such, Marlborough Court Hotel could not rely on it. In this regard, the contract for the storage of the coat or any of Mrs. Olley’s belongings was entered into at the hotel’s reception desk. This is because there was no way the litigant, Mrs. Olley, could have been aware of the disclaimer which was virtually gainsaying the elements of the contract entered into initially. Because of this, the disclaimer could not in any way be part of the contract (Sealy and Hooley, 2011, p. 11). Twigg-Flesner (2009, p. 55) and Ramsay (2006, p. 31) divulge that another provision in which English law may come into play to limit and interrupt contracting parties the utmost freedom to agree their own legal relations and liabilities is the (consideration of) Unfair Contract Terms Act (UCTA) of 1977. Valcke (2009a, p. 33) points out that as part of English law, this law was passed by an Act of the UK Parliament to help regulate contracts through the restriction of operations and legality of some of the terms that make up a contract. In this case, the law may not hold a contract as legit if it does not meet the pillars of reasonableness such as misrepresentation (as seen in the Misrepresentation Act, 1967), negligence (s 2 (2)), contractual liability (s 3 (2) (a) and (b)), indemnity clauses (s. 4) and The Sale of Goods Act (also seen in s. 6 (3)). Doralt (2011, p. 1332) and Harris (2002, p. 199) divulge that another way in which English law may step in to qualify, regulate or moderate parties the utmost freedom to agree on their own legal relations and liabilities is through the factoring of the Sale of Goods Act of 1979. Particularly, the Sale of Goods Act 1979, through Section 2-15 B, is categorical that in case a contract is entered into with a minor or the mentally challenged, then there must be restrictions characterizing such transactions. Valcke (2009a, p. 42) contends that specifically, in such instances where goods or services are sold to minors or the demented, it is binding that such goods or services that are sold are necessaries (goods or services that are suitable to an individual’s conditions of life). In this case, the minor as the buyer is expected to pay a reasonable price for the goods or services accessed, as is stipulated by section 8 (2). The converse of this is that the Sale of Goods Act may not recognise contracts that are entered into with minors or the mentally unstable if such contracts are not involving the exchange of necessaries. According to Valcke (2009b, p. 32) and Stone (2011, p. 11), the same Sale of Goods Act in Section 13 (1) stipulates or places limits on contractual agreement to the effect that when a contract is made, the buyer must be sold goods or services that correspond with the description that had been specified in the contract. Case laws such as Harlingdon v Christopher Hull also reinforce this stipulation to the effect that the failure to match the object of the contract with the specifications thereof is tantamount to a breach of contract since buyers significantly rely upon product description during the formation of a contract. This stipulation continues to hold, whether the quality of the product is specified or implied (Valcke, 2008, p. 56). There are also other instances where the rights of the seller in the contract are protected. For instance, Section 14 of the Sale of Goods Act 1979 specifies that during the formation of the contract, quality and title of the product remain only relevant where the seller acts within the course of the business. This may mean that there may not be requirements specific to the buyer’s status. Going by the case, Stevenson v Rogers, the phrase in the course of a business is used to encapsulate activities which are loosely related to the businesses of the company involved. For instance, a banking institution which is selling its tangible assets such as furniture may be still deemed as acting in the course of a business (Yeo, 2001, p. 37). Conclusion The foregoing clearly shows that English law allows parties the utmost freedom to agree their own legal relations and liabilities without limitation and interruption, provided that the standards and rules that govern contract formation have been adhered to. However, apart from the cases of a breach of contrast, there are instances where the law emerges to take care of unforeseen eventualities that may accost a contract. It is because of such instances that the law can be said to limit parties’ absolute freedom to agree on their own legal relations and liabilities. References Ashcroft, D. J. and Ashcroft, J. E., 2010. Law for business. Cambridge: CUP. Bradgate, R. and White, F., 2007. Commercial law. Cambridge: CUP. Doralt, W., 2011. The optional European contract law and why success or failure may depend on scope rather than substance. Revue des Contrats, 4 (2), pp. 1313–1342. Harris, L., 2002. Taxicab economics: the freedom to contract for a ride. Georgetown Journal of Law and Public Policy, 1 (2), pp. 195–222. House of Lords, 2012. Sale of Goods Act 1979. [Online] Available at: http://www.legislation.gov.uk/ukpga/1979/54/data.pdf. LeRoy, R. M. and Jentz, M., 2010. Business law today. London: Longman. Ramsay, I., 2006. Models of corporate regulation: the mandatory/enabling debate. Oxford: Hart Publishing. Sealy, L. and Hooley, R. J. A., 2011. Commercial law: texts, cases and materials. London: Longman. Siems, M. M., 2003. Disgorgement of profits for breach of contract: a comparative analysis. Edinburgh Law Review, 7 (9), pp. 27–59. Stone, R., 2011. The modern law of contract. Oxford: OUP. Twigg-Flesner, C., 2009. The implementation of the Unfair Contract Terms Directive in the United Kingdom.” Contemporary Issues in Law, 6 (2), p. 56. Valcke, C., 2008. Convergence and divergence between the English, French, and German conceptions of contract. European Review of Private Law, 16 (1), pp. 29–62. Valcke, C., 2009a. Contractual interpretation at common law and civil law: an exercise in comparative legal rhetoric. Exploring Contract Law, 3 (4), pp. 29–32. Valcke, C., 2009b. On comparing French and English contract law: insights from social contract theory. Toronto: University of Toronto. Yeo, T., 2001. When do third party rights arise under the Contracts (Rights of Third Parties) Act 1999 (UK)? Singapore Academy of Law Journal, 13 (2), p. 37. Read More