Issue 1

I: Issue

The facts given in the case study depicts the key issue as “vegan leather would be all-natural” could be deemed as a term of contract or not.

L: Law

A contract is a legally binding document which consists of promise by parties for fulfilling the terms of the contract. These promises, when inserted in a contract, give rise to rights and liabilities for the contracting parties (Bonell, 2009). In order to create a contract, which holds validity in eyes of law, there is a need for the presence of elements of contract, which include elements of agreement, i.e., offer and acceptance, and the other elements like clarity, consent, capacity, consideration and intention. Before an offer is made for a contract, negotiations are carried on (McKendrick and Liu, 2015). And instead of deeming these negotiations particularly the puffs as terms of contract, they are deemed as pre-negotiation phase, due to the lack of intention in making these statements by the parties, and thus do not have a legal effect (Mulcahy, 2008).

Presentations are common parlance before forming a contract and these are not expressed in writing. Though, there are cases where such terms become enforceable and an example of this was found in Birch v Paramount Estates Ltd (1856) 16 EG 396. The court was of the view in this case that the verbal statements made during negotiation phase would be deemed as enforceable terms of the contract due to the presence of intention in making these terms and also due to the special knowledge of the defendant. As a result of this, statements made before getting in a contract are deemed as contractual terms where there is presence of intention (Poole, 2016).

This rule can further be substantiated through the Heilbut, Symons & Co v Buckleton [1913] AC 30 case in which the requirement of meeting of minds was put forward in order to show that the parties had the requisite intent in making such statements. So, the parties have to enter in the contract only after believing in this statement, for the same to be enforceable. Bannerman v. White (1861) 10 CBNS 844 came before the earlier ruling and gave the same results. Here it was held that the communication which took place before formation of contract is to be deemed as terms of contract where such statement induces the parties of the contract, where the decision are made by relying on these statements (Latimer, 2012).

A: Application

A contract in this case had been formed in an oral manner. As statements made between Peter and Mikela came before the formation of contract, they cannot be deemed as contractual terms per the general rule. But when the case of Birch v Paramount Estates Ltd is applied, the same would become a term of the contract. And for this, the intention of the two has to be analyzed. The main requirement for the product was to be natural and this had been agreed by Mikela upon being informed by Peter of the same. So, Mikela knew that the requirement was of natural vegan leather, showing meeting of minds. Peter had made the decision for getting in the contract on the basis of this statement only.

Law 1

Thus, based on the applicability of case laws to the case study, it becomes very clear that “vegan leather would be all-natural” needs to be deemed as a term of contract.

I: Issue

The facts given in the case study depicts the key issue as the does being absent of any sort of synthetic material as an implied term of the contract due to the vegan leather being all natural.

L: Law

The contract law dictates that two kinds of terms are present in a contract, i.e., implied and expressed. The expressed terms are clearly written in the contract (Andrews, 2015). The implied terms are such terms which become applicable on the parties due to them being very obvious between the parties, and also as these were properly brought to the parties’ attention when the negotiations of contract were going on. In order to hold if a particular term had been implied or not, the case of Shirlaw v Southern Foundries [1939] 2 KB 206 dictates the need of taking the view of a reasonable bystander (Marson and Ferris, 2015).

In this context, the business efficacy test is also of assistance as had been given in Moorcock (1889) 14 PD 64. As per this case, a term would be implied when it is important for the effective operation of the business. This view was again substantiated in Trollope and Colls Limited v North West Metropolitan Regional Hospital Board [1973] 1 WLR 601, in which it was held by the court that the intention of the parties have to be seen for a term to be implied. In case the intent lacked, the contract could not proceed. So, the implied term has to be a commonality to the business practice (Macdonald and Atkins, 2014).

A: Application

Where the case study is analysed, it comes forth that that the vegan leather had to be all natural and should not cover synthetic ingredients or materials, for the business of Peter. This term was used to obtain clients for Peter. Applying the business efficacy test here, this term was important for the business of Peter to grow and operate. Based on the lack of synthetic ingredients in all natural vegan leather being a commonality in trade practices, it would be deemed as an implied term.

Thus, based on the applicability of case laws to the case study, it becomes very clear that the vegan leather being all natural had to be absent of any sort of synthetic material and that this was an implied term of the contract.

I: Issue

The facts given in the case study depicts the key issue as the colour of soles to be tried as either warranty or condition.

L: Law

Condition and warranty are two aspects of contract but the result of breach of these two aspects is different. The breach of condition results in the end of the contract and the breach of warranty does not have this affect and the contract continues to exist even in such cases. This is because condition is such a term without which a contract loses its purpose as it is the base of such contract. Again, when a condition is breached, the defendant cannot sue the plaintiff for breach of contract when they enter into another contract in order to get the condition of the contract fulfilled as was seen in Poussard v Spiers and Pond [1876] 1 QBD 410. In this case, another opera singer had been hired by the defendant and the claim of plaintiff for defendant breaching the contract was rejected (Gibson and Fraser, 2014). In Wills v Amber [1954] 1 Lloyd’s Rep 253 it was held that the contract could be continued even when the warranty was breached (Law Teacher, 2017).

Application 1

A: Application

The sole colour being white was not something which would render the entire contract useless. The sole was something which would remain hidden. Had the outside colour been caramel, then it would have been a condition.

Thus, based on the applicability of case laws to the case study, it becomes very clear that the colour of soles was a warranty.

I: Issue

The facts given in the case study depicts the key issue as Peter being liable for the wrong colour of the sole.

L: Law

Just because a breach of warranty does not result in end of contract, does not mean that no liability is raised for the defendant. Wills v Amber provides that breach of warranty requires damages to be paid to the plaintiff.

Exclusion clauses are such terms in the contract through which the liability raised against the defendant for certain occurrences is restricted or limited. In order for this to happen, there is a need for the exclusion clause to be valid. For this, it needs to be clearly inserted in the contract or be brought to the notice of the party against which the exclusion clause is applicable, for it to be valid (Roach, 2016). Thornton v Shoe Lane Parking Ltd (1971) 2 WLR 585 was a case in which exclusion clause was not deemed as valid as this was stated at the backside of the parking ticket and was not brought to the attention of the parties (E-Law Resources, 2017).

A: Application

Peter had breached the warranty of the drawn contract which makes him liable to pay damages to Geoffrey. However, at the counter where the customers were served by him, the exclusion clause was prominently displayed which restricted his liability from breach of warranty. This would be deemed as valid, as the same is automatically brought before the attention of the parties.

Thus, based on the applicability of case laws to the case study, it becomes very clear that Peter would not be liable even when he breached the warranty of the contract.

References

Andrews, N. (2015) Contract Law. 2^nd ed. UK: Cambridge University Press.

Bonell, M.J. (2009) An International Restatement of Contract Law: The Unidroit Principles of International Commercial Contracts. 3^rd ed. New York: Transnational Publishers, Inc.

E-Law Resources. (2017) Thornton v Shoe Lane Parking [1971] 2 WLR 585 Court of Appeal. [Online] E-Law Resources. Available from: https://www.e-lawresources.co.uk/Thornton-v-Shoe-Lane-Parking.php [Accessed on: 11/12/17]

Gibson, A., and Fraser, D. (2014) Business Law 2014. 8th ed. Melbourne: Pearson Education Australia.

Latimer, P. (2012) Australian Business Law 2012. 31st ed. Sydney, NSW: CCH Australia Limited.

Law Teacher. (2017) Classification of Conditions or Warranties. [Online] Law Teacher. Available from: https://www.lawteacher.net/free-law-essays/contract-law/classification-of-conditions-or-warranties-contract-law-essay.php [Accessed on: 04/12/17]

Macdonald, E., and Atkins, R. (2014) Koffman & Macdonald’s Law of Contract. 8^th ed. Oxford: Oxford University Press.

Marson, J., and Ferris, K. (2015) Business Law. 4th ed. Oxford: Oxford University Press.

Mulcahy, L. (2008) Contract Law in Perspective. 5^th ed. Oxon: Routledge.

Poole, J. (2016) Textbook on Contract Law. 13th ed. Oxford: Oxford University Press.

Roach, L. (2016) Card and James’ Business Law. 4^th ed. Oxford: Oxford University Press.