Common Law Assignment: Terms of a contract (Case Study Sample)

La Trobe University – School of Law LST2BSL Introduction to Business Law and Ethics Semester 2, 2018 Common Law Assignment Instructor’s information: Student Details: Case 1 In this case, the main issue is on unfair terms of a contract. A contract is meant to entered into by parties who are fully aware of what they are getting into, hence, the requirement for there to be an intention for the parties to be bound by the terms of the contract. A challenge presents itself where a party was not fully aware of all the terms of the contract. It might imply that they never intended to have the terms which they were unaware of, bind them. However, where those terms are expressed in writing and both parties signed the contract, there would be no claim that a party was not aware of the challenged term. The presumption here is that they had read all the terms carefully before appending their signature. The party would be bound even where the terms are written in small print, making it almost impossible for the party signing to see clearly the terms challenged.[L'Estrange v Graucob [1934] 2 KB 394] Exceptions have since emerged to prevent against unfair terms binding a party, especially where such terms were expressed in fine print. The principle applied here is reasonableness. As such, where a party puts a term in a contract which would appear to have been unreasonable, or one that proposes a penalty, the party wishing to rely on such a term must make every effort to bring such term to the attention of the other party. If effort is not made to bring the term to the attention of the other party, then such a term would not be binding. Where the term is particularly onerous, the party wishing to rely on it must ensure that the other party is well aware of the existence of such onerous terms. Protection may, however, not apply to a person who is commercially competent, having signed a contract even if an onerous term existed.[Olley v Marlborough Court [1949] 1 K.B. 532] [Interfoto Picture Library v Stilletto [1989] QB 433] [George T Collings (Aust) Pty Ltd V H F Stevenson (Aust) Pty Ltd (1991) ATPR 41-104] In this case, Weitao signs a document with small print, containing an onerous term. Evelyn does not make any effort to bring the onerous term to his attention, even though there is no information about the intellectual or commercial competence of Weitao, there is a clear indication that requiring a party to pay a replacement fee of $1000 as replacement fee after a scratch is made on it is unreasonable and onerous. Evelyn should have made every effort to bring it to his attention. In conclusion, even though signing the document binds Weitao, an exception exist that such onerous terms should not bind a party. Since there is no indication that Weitao was using the projector for commercial purposes and hence commercially competent, the conclusion would be that the term cannot bind Weitao. He is not bound to pay the $1000. Case 2 The issue in this case is the obligation of parties to a contract to act reasonably and in good faith and the obligation not to impede a party from reaping the benefits of a contract. Parties enter into a contract have obligations under the contract. The obligation begins when a contract is concluded by way of offer and acceptance. The obligations placed upon the parties are intended to ensure that the full benefit of the contract is reaped by the parties thereto. As a result, the principle of good faith in all dealings in a contract emerged, requiring all parties to act in good faith. Although court have refused to imply this duty due to the nature of negotiations in some cases, there are still instances where courts have resulted to this principle to solve disputes between parties to a contract. The duty to act in good faith extends to restraining parties from acting in a manner that may impede the other party from fully obtaining the benefits of the contract.[Compass Group UK and Ireland Ltd (t/a Medirest) v Mid Essex Hospital Services NHS Trust [2013] EWCA Civ 200] The obligation to act reasonably has been closely associated with the obligation to act in good faith. Parties are expected to conduct themselves in a manner that is reasonable for the benefit of both parties to a contract. Parties are not only expected not to impede, but also do all that is within their abilities to ensure that the other party derives the full benefit of the contract. Where a party is in breach, the innocent party is entitled to damages, specific performance or even termination of the contract.[Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234] [Butt v M’Donald (1896) 7 QLJ 68] [Perri v Coolangatta Investments Pty Limited (1982) 149 CLR 537] In the given case, Evelyn appears to be impeding Warren from performing his obligations under the contract which would in tern earn him his fees. She therefore, does not act in good faith and prevents both parties from obtaining the full benefit of the contract. In conclusion, Warren is right. He would be entitled to damages, a claim of specific performance or even termination. Case 3 The issue in this case is on whether statements made during contractual negotiations are terms of a contract. Most of the statements made at the time of a contract end up forming part of the terms of a contract, unless the contract was reduced in writing and that particular term was never included in the written contract. Generally, a representation intended to induce the other party into entering into a contract would have repercussions if the other party placed reliance on it and damage resulted. Sometimes statements are made by a party who only intend to attract business or as mere puffs. A mere puff would not constitute a term of a contract. Also, an opinion given by a person of which there is no possible way of verifying its accuracy would not constitute a term of contract. Differentiating between a mere statement of opinion and term is critical since it determines whether the party who made the statement should be bound by the statement.[Heilbut, Symons and Co. v Buckleton [1913] AC 30] [JJ Savage v Blakney (1970) 119 CLR 435] In the give case, Evelyn says that the storage is bigger than most of the tablets in the market. The question that then arises is whether this is an opinion or a statement of fact. She uses the word ‘view’ which suggests that it is her opinion. Secondly, there is no possibly way of verifying whether that particular tablet has a bigger storage than other tablets in the market, verifying the same would mean checking multiple tablets of a wide range to establish whether it is a fact. In conclusion, the statement made is an opinion which cannot be verified, it is a puff. It does not form part of the terms of the contract. Ambreena does not have a remedy in relation to this statement. Case 4 The issue in this...