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Basic knowledge of Contract Law - Case Study Example

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Basic knowledge of Contract Law

Shiny Ltd. faces the prospects of grappling with breach of contract cases after three separate retailers found the orders delivered to them deficient. The purpose of this paper is to advise Shiny Ltd. of its legal position on these cases, which suggest breach of contract.
Retailer 1 - Mohammed personally placed an order for 75 pieces of the orange plastic buckets that he saw at the display room of Shiny Ltd. He specified that he wanted the handles of the same buckets to be replaced with metal ones. The retailer learned that these buckets were the last items of that type and color that Shiny Ltd. had in stock. When Shiny Ltd. agreed to the additional specification, Mohammed paid for the order in cash with the understanding that delivery will be made the following week
Retailer 2 - At about the same time, another retailer by the name of Navraj telephoned Shiny Ltd. to order 120 black buckets. The supplier had 180 of such black-colored buckets stored in its warehouse and informed Navraj that his order would be sourced from that stock. Delivery was arranged for the following week with payment to be made within 10 days of delivery. Immediately after the telephone call, the manager of Shiny Ltd. went to the warehouse and made a separate stack of 120 black buckets from the 180 in stock. The stack of 120 black buckets was then labeled: "Property of Mr. Navraj."

Before any delivery was made to either Mohammed or Navraj, however, there was a fire at the supplier's warehouse that, before it was put out in time, completely burned the 120 black buckets destined for Navraj and partially destroyed the 25 orange buckets ordered by Mohammed. The stack of 60 black buckets that was separated from Navraj's order was rescued from the fire. When informed of the accidental fire, Navraj and Mohammed indicated that they wanted Shiny Ltd. to fulfill their orders.

Retailer 3 - The third retailer, Oliver, ordered and paid for 100 lightweight plastic buckets without specifying any color, to be delivered the very next day. Shiny Ltd. duly loaded the buckets onto a lorry owned by an independent carrier for delivery to Oliver. When the buckets arrived at Oliver's premises he found that a number of the bucket handles had been damaged. The buckets apparently sustained the damage because they were not properly secured in transit. Oliver wanted to return his order to Shiny Ltd. and get his money back plus damages.

Legal Principles

The term breach of contract is defined in law as the "failure without legal reason or legal excuse to comply with the terms of a contract or to perform any promise which forms the whole or part of the contract." Shiny Ltd. definitely has the "legal excuse" for failing to meet the terms of the three aforementioned purchase orders, which represent the breached contracts. The firm may have fallen short of the retailers' expectations on three counts, failing to deliver the orders of Mohammed and Navraj on time and having partially damaged goods delivered to Oliver. However, no willful conduct and gross negligence were involved at all in these shortcomings of Shiny Ltd. In the US and many other countries, punitive damages are awarded on breach of ...Show more

Summary

A contract is commonly defined as an oral, written or implied agreement between two or more persons. This contract is breached or violated when the agreed-upon exchange, such as a purchase order for consumer products, is not honored by one or more of the parties involved…
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Basic knowledge of Contract Law essay example
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