Compensation of a Breached Contract - Coursework Example

?COMPENSATION OF A BREACHED CONTRACT Most transactions have terms, the law covers these parties involved for the purposes of protecting their terms of agreement, the act responsible this is the sale of goods act of 1979. All transactions that have terms are usually made and amended protect the terms of the agreement in case a transaction fails to uphold the agreement terms, when either or both of the parties fail to keep the terms of the contract. Most of the laws are bound to protect the buyer and to an extent protect the seller in case of his or her sincerely in keeping the contract terms. Basing on the Sale of Goods Acts, the terms of the contract protect Sprewfit since Mr. Greg signed a delivery note upon delivery of the pipes and affixed his signature to this same delivery note acknowledging that the buyer has examined the goods and accepted them as they conform to his specifications upon delivery. This report seeks to illuminate the weaknesses and strengths of Mr. Greg’s case of suing Sprewfits’ and his quest to receive compensation for damages upon the breaching of the contract terms. Mr. Greg ripped one of the pipes from the plastic and made an observation based on sight. Section 15 clearly states that if items are bought in a large amount or bulk and tests a sample of the item the supplier has to make sure that all the remaining should correspond with the sample1. The act clearly states that the buyer checks a small number and verifies the delivery goods. Mr. Greg rips one off and verifies it out. Apparently it happens to be one of the best pipes. If Mr. Greg would have checked for a couple more others, there is the probability that he would have seen at least one default pipe and reject the goods, but because of the trust in his supplier, one was all it took. In this case, an assumption was correctly made by Mr. Greg. The product looked okay prompting him to sign the delivery report, from which he made an assumption that all the pipes were all correct; in this case, an assumption of reasonableness. 25% of the pipes proved defective; they were either large or bent beyond use and most of them did not go in line with the sample. This does not make the cut under the contract of sale of goods act, by law these pipes have to be compensated even though there is no legal and direct warranty. Mr. Greg can however, have the terms of the contract withdrawn in case one of the parties takes advantage of the terms of the contract. According to the unfair contract terms of 1979, a contract of terms may be rendered useless or the contract withdrawn if one of the parties seems to make a deliberate breach knowing that the contract covers to protect his breach. The law has the power to render the contract powerless with the fact that Sprewfit intentionally delivered wrong goods as per the contract terms. In this case, Mr. Greg may have the contract nullified and have the faulty goods replaced with quality ones. Sprewfit is liable for replacement and compensation of the faulty good to Mr. Greg. According to the Unfair contract terms act 1979, subject to section 2 of the negligence of liability2. The act makes it clear that the a person can not be referred to a contract term when he or she intentionally breaches the agreement; and then claim to have the contract restrict him from liability for negligence, in this case it has resulted in a loss and a damage. This act makes Sprewfits responsible for the results of his act of negligence and is entitled to compensate Mr. Greg on the related sections. Mr. Greg describes the kind of pipes he needed to Ajay as 10mill in diameter, 1000 meters in total length and of high temperature resistance. Section 13 (1) provides that where the buyer is sold commodities by description, the goods must be in line with this description, for instance the Harlington v Christopher Hull case. He did not get that, if in any case the supplier had brought the right pipes and they were damaged then it would be considered as negligence on Mr. Greg’s side but he did not get the right pipes so there has to be compensation on the basis of section 13(1) of the sale of goods act. Mr. Greg has a right to get compensation for the full purchase price of all of the commodities in this case the pipes coming to 50,000 pounds. For the pipes that had observable damages the sale of goods act protects Sprewfit from all liabilities but they were not represented by the sample used and hence they need compensatation. The fact that the terms were not easily seen since they were at the bottom of the contract may also be seen as a sign of hiding very important information may be Sprewfit’s fault. Such important and crucial information needs to be large and at a visible position on the delivery note. Section 14 (2) deals with satisfaction of the sale of goods. This section clearly provides that the satisfaction is getting through different means including consideration of description, price, and any other relevant factors in regards to specific sales. In this case, Mr. Greg clearly described to Ajay that he recommended a special form of plaster which he says is aimed at Grade II listed properties and that it comes from a company called Grade Listed Plaster Company. Gregg orders 3000 litres of the plaster at a cost of ?2500. After the use of the plaster brought he realised that there were cracks on an inspection by a surveyor. The surveyor then advises that the plaster were not suitable for Grade II listed properties. Under section 14 (2); this action does not have any satisfactory qualification of the terms of sale based on class in specific grade II listed plaster. It then validates Mr. Greg’s suit on the basis that the goods never satisfied the function of acquisition. Mr. Greg suffers a loss from misrepresentation hence validating claims on the suit for payment of full purchase price of the plaster acquired. Mr. Greg contacts Sprewfits Company and signs a contract with them about delivery of grade II plasters. These grade II plasters are for renovating the flats that were rated as grade II houses. Sprewfits and Mr. Greg agree on the delivery date. Sprewfits Company calls in and alerts Mr. Greg about the delay of the plasters. Before the delay, the contract existed as an agreement to sell the goods, basing on the act of future goods according to Sale of Goods Act 19793. The call by Sprewfits implying a delay in the goods delivery violates the terms of the contract. The delay forces Mr. Greg and other contracting companies to postpone their operations thereby wasting valuable time and opportunity to make money. According to the Sale of Goods Act 1979, a contract of sell of goods becomes an actual sale upon the reaching of the delivery date. Mr. Greg and other contracting companies are forced to stop construction because of the delays. Sprewfits further goes ahead and delays the delivery of the plasters until 28th of the July. The consequences of this delay prompt Mr. Greg to reduce the prices by 50,000 pounds; he does this because a prospective buyer threatened to pull out. According to the law, the sale of goods act 1979, a contract of sell of goods becomes an actual sale upon the attainment of the delivery date. Sprewfits breaches the contract when they fail to deliver the plasters on the agreed date. However, Mr. Greg’s case qualifies for warranty. According to the Sale of Goods Act 1979 and subject to section 35A and quoting,” Where a contract of sale is not severable and the buyer has accepted the goods or part of them, the breach of a condition to be fulfilled by the seller can only be treated as a breach of warranty, and not as a ground for rejecting the goods and treating the contract as repudiated, unless there is an express or implied term of the contract to that effect.” This act clearly shows that the condition of the contract terms may qualify as a warranty. Mr. Greg is not viable for refund nor is Sprewfits’ Company going to have their deliveries rejected. Since the buyer, Mr. Greg; has accepted the plaster goods despite their fatal condition, he is not liable to return the goods because it is not stipulated in the contract. The transaction is treated as breach of warranty because the supplier breached the condition of contract by delaying the goods as per the date of delivery. In this case, Mr. Greg may have the spoilt items replaced but can not reject the whole bunch of them. Section 35A makes the seller liable for delivery of faulty goods and has him replace them if the terms of the contract missed to bind the warranty. Mr. Greg claims he wants a refund or compensation for the damages he incurred. The damage he particularly wants the compensation to cover is the price reduction. Due to the postponing by Sprewfits on the delivery of grade II plasters, one of the prospective purchasers threatened to pull out forcing Mr. Greg to reduce the purchase price by 50,000 European pounds. In the court of law, compensation refers to an amount of money given in a civil act by a court to assure an individual for the meticulous loss, injury suffered or detriment as a consequence of the unlawful demeanour of another. This compensatory damage is only responsible and accounts for the monetary amount necessary to replace what the plaintiff had lost and nothing more. The delay of the delivery of the grade II plaster meant that the process would delay hence prompting the prospective buyer to pull out. Mr. Greg then out of option reduces the price of the flats houses as a desperate move to keep the prospective buyer. Legally, this move devalues the property of Mr. Greg from 700,000 pounds to 650,000 pounds. This devaluation of property damage is what Mr. Greg wants Sprewfits to account for by paying him a refund otherwise known as compensation4. Mr. Greg’s run for rescue to the court is legal and worthy. The delivery of pipes of different sizes, poor quality and bents in them show how Sprewfit company's intentions of bending the law to fit his misdemeanor actions. Sprewfits Company takes advantage of the customer trust when they deliberately inserted poor and unfit construction material among standard material knowing Mr. Greg will only sample out one. Sprewfits company also betrays customer-seller trust again when he delays to deliver grade II plaster on time as per the contract and then bringing fake merchandise. He takes advantage of the trust Mr. Greg has developed over the years in their business indulgence and decides to sabotage it. A compensation of 50,000 pounds by Sprewfits to compensate the devaluation of the house flats is necessary because Mr. Greg loses 50,000 in reducing the purchase price. Sprewfits show their corny nature by placing a sticker that contains valuable and important information about the contract terms at the bottom of a box. No matter the trust between business partners whether friends or not, justification of the whole items in exchange be done to ensure no counterfeits and breaches of the terms of contract. Work cited Hanes, David G. The First British Workmen's Compensation Act 1897. New Haven, 1968. Print. Howells, Geraint G, and Stephen Weatherill. Consumer Protection Law. Aldershot [u.a.: Ashgate, 2005. Print. Howells, Geraint G, and Stephen Weatherill. Consumer Protection Law. Aldershot [u.a.: Ashgate, 2005. Print. Sealy, L S, and Richard Hooley. Commercial Law: Text, Cases, and Materials. Oxford: Oxford University Press, 2009. Print. Sealy, L S, and Richard Hooley. Commercial Law: Text, Cases, and Materials. Oxford: Oxford University Press, 2009. Print. Thomas, Bill. The Sale of Goods Act 1979: With Annotations. London: Sweet & Maxwell, 1980. Print. Read More