Good Law 3 Case Study Example

Business and Employment Law

Question 1 3
Issue 3

Application 4
Conclusion 5
Question 2 5
Issue 5
Law 6
Application 7
Conclusion 7
Qustion3 7
Issue 7
Law 8
Application 8
Conclusion 9

Bibliography 10

Question 1
Issue
The main issue in question is whether the exemption or exclusion clause that was incorporated in the contract between Jag and ED can have any effects on Jag’s possible right to sue ED for the loss of his garden. In this contract, it was specifically states that the supplier would not be responsible for any loss or damage caused by any products sold, which in this case is the gas that was supplied under the usual; terms included in a sales form that Jag signed and hence incorporating the unfair terms into the contract of sale. The issue of incorporation does not therefore arise. However, the main issue that arises is the extent to which Ed as a supplier may successfully rely on this exemption clause and hence affect the rights of Jag against him under the contract. Further, the issue of whether or not the exclusion clause is reasonable in the language of the unfair Contract Terms Act 1997 would arise and fall for determination. Finally, another issue for determination is whether or not Jag as the supplier was negligent with reference to the leaking gas that ignited and shot flames on the garden causing it to catch fire and explode.
Law
The law and legal principles applicable to the facts in question are majorly the Unfair Contract Terms Act, Unfair Terms in Consumer Contract Regulations and the common law principles developed through case law precedents. To begin with the statutory provisions, the applicable law is section 2 of the Unfair Contract Terms Act on negligence liability. Specifically, the section provides that:
A person cannot by reference to any contract term or to a notice to persons generally or to a particular persons exclude or restrict liability for death or personal injury resulting from negligence
In 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
Furthermore, section 1 of the Unfair Contract Terms Act defines negligence thus:
For the purposes of this Part of the Act, “negligence” means the breach-
Of any obligation, arising from the express or implied terms of a contract, to take reasonable care or exercise reasonable skill in the performance of the contract;
of any common law duty to take reasonable care or exercise reasonable skill (but not any stricter duty);
Moreover, with regards to enforceability of exemption clauses, the courts have held that the exclusion clause must be certain and unambiguous for it to be valid and have a legal force. If the clause is ambiguous, for instance by using such fake terms as “any loss or damage”, the courts will strike down that clause.
Application
Applying the above legal principles and the law to the facts, it may be argued first, that Jag as the gas supplier was negligent under the meaning in section 1of the Act for failure to take care or use reasonable skill and diligence to ensure that that gas was in proper condition before delivering it to Jag’s place.
Secondly, the exemption clause in the contract does not prevent Jag from suing Ed in contract. This is because it fails the test under section 2, first, for being unreasonable, secondly for being ambiguous and hence fails the test in Houghton V Tafalghar (supra).
However, if Ed can successfully prove that the exclusion clause was reasonable, then it can survive section 2 (1) of the Act since the negligence did not result in personal injury to Jag or death a property which is not covered by this part.
Conclusion
In summary, it may be argued that the signed sales form incorporated in the contract between Jag and Ed for the sale pf the two gas bottles, though acting as an exemption clause, does not have any substantial effects on Jag’s rights as a consumer to sue Jed since it was unreasonable and also diluted by Ed’s negligence in failure to detect the leaking gas. The contra proferentum rule should apply such that the exclusion clause should be interpreted against Ed due to its ambiguity as was stated in Andrew Bros Ltd v Singer Cars.
Question 2
Issue
The main issue in this case is whether Sabba, being a third party injured as a result of negligence of one party to a contract to which she is no party, can successfully sue and obtain compensation for damages. Further, there would be an issue of whether or not Sabba has any enforceable rights against either Ed or Jag.
Law
The main legal principles applicable to this case concerns privity of contract vis-à-vis personal injury under section 2 (1) of the Unfair Contract Terms Act UK. Under this section, an exemption clause which causes personal injury or death is void and hence has no legal effect and hence one cannot rely on it to exclude liability. According to section 2 (2), a person may not rely on an exclusion clause if it is unreasonable. Moreover, according to the privity of contract doctrine, only parties to a contract may enforce their rights and obligations under it and thus third parties to the original contract do not have any enforceable rights therein. This is a common law legal principle evident in Dunlop Pneumatic Tyre Co v Selfridge and Tweddle v Atkinson.
However, over the years, due to the potential injustice and unfairness inherent in this old common law rule, courts have come up with a number of exceptions to its strict application. For instance, in Jackson v Horizon Holidays, the court allowed a third party to claim in a contract to which they were never a party in order to do justice to the victim of breach. Furthermore, the Contract (Rights of Third Parties) Act now allows third parties to enforce certain rights to a contract to which they were never party. Section 1 of this Act provides in part that:
(1)Subject to the provisions of this Act, a person who is not a party to a contract (a “third party”) may in his own right enforce a term of the contract if—
(a) the contract expressly provides that he may, or
(b) subject to subsection (2), the term purports to confer a benefit on him
5) For the purpose of exercising his right to enforce a term of the contract, there shall be available to the third party any remedy that would have been available to him in an action for breach of contract if he had been a party to the contract (and the rules relating to damages, injunctions, specific performance and other relief shall apply accordingly).
Application
Based on the above legal rules and principles, and on sections 1 (1) and 1(5) of the Search Legislation Contracts (Rights of Third Parties) Act 1999, Sabba may be advised to pursue her rights against Ed for compensation in damages due to the personal burns she suffered due to Ed’s negligence and breach of contract with Jag. This is because, in light of section 1(b) of the Act, she stood to benefit from the gas.
Conclusion
Qustion3
Issue
The main legal issues evident in these set of facts in relation to Zaffa are firstly, whether she has any contractual rights against Jag, secondly, whether Jag was in breach of contract with Zaffa to entitle her to any legal rights; and thirdly, whether any contract if any ever came into existence between Zaffa and Jag in relation to the sale of the Range Rover that would create contractual obligations and hence rights. Additionally, an issue arises as to whether the postal rule should apply in case of Zaffa’s mail that went unreturned by Jag.
Law
The law applicable in this case scenario is the rules of the law of contract under statute and common law. At common law, the main elements constituting any valid contract are offer, acceptable, consideration, consent, capacity and legality inter alia. According to Smith V Hughes, offer and acceptance must be communicated by the offeror and offeree respectively in order for a valid contract to come into existence. This was also affirmed in Powell v Lee and Felthouse v Bindley. Further, these cases have established the rule that an offer may only be withdrawn prior to or before its acceptance by the offeree and that an offer cannot be revoked or withdrawn if the offerree has already taken steps towards enforcing the contract. The general law is usually that the acceptance must be communicated to the offeror in person and not through a third party unless the third party is their authorized agent.
Regarding the application of the postal or mail box rule, the general legal principle enunciated in Adams v. Lindsell is that the offer is deemed or considered accepted the moment it is posted. Further, for a revocation of an offer made by post to be effective, the offeree must receive it before have posted their acceptance letter. However, it is yet to be deciding by courts whether the postal rule applies to emails.
Application
Applying the above legal principles to the facts, it may be argued that there was a valid contract between Jag and Zaffa. This is because the acceptance of the offer to pay 25000 pounds was validly communicated to Jag through his assistant who may be said to be his agent as he is authorized to perform roles as delivering office messages to him. The fact that he did not do this is irrelevant and does not bind Zaff as was the case in Stevenson, Jacques & Co v McLean. Further, using the postal rule and the decision in Dunlop v Higgins, it may be argued that Zaffa validly communicated her acceptance by leaving the mail on Jag’s machine. The fact that he considered it a sperm is immaterial.
Conclusion
Bibliography
Legislation.gov.uk, “Legislation Contracts (Rights of Third Parties) Act” (1999) http://www.legislation.gov.uk/ukpga/1999/31/section/1 Accessed January 2016
Legislation.gov.uk, "Unfair Contract Terms Act” (1997) <http://www.legislation.gov.uk/ukpga/1977/50> Accessed 8 January 2016
Legislation.gov.uk, "Unfair Terms in Consumer Contracts Regulations" (1999) < http://www.legislation.gov.uk/uksi/1999/2083/contents/made> accessed 8 January 2016
Errington v Errington Woods [1952] Court of Appeal, 290 EWCA (Court of Appeal)
Stevenson, Jacques & Co v McLean (1880) 5 QBD 346
Jackson v Horizon Holidays 1975] 1 WLR 1468
Dunlop v Higgins (1848) 1 HL Cas 381
Smith V Hughes (1981) LR QB 597
Felthouse v Bindley [1862] EWHC CP J35
Adams v. Lindsell (1818) 106 ER 250
Houghton V Tafalghar [1954] 1 QB 247
Dunlop Pneumatic Tyre Co v Selfridge and Tweddle v Atkinson [1861] EWHC QB J57