Legal Principles Contract Act

Question: 1. Connor urgently needed cash. So he decided to sell his car by parking it outside his house with a notice on the windscreen stating: For sale. Excellent condition-one owner. $26,000 or nearest offer. Please call here at my home number 48 or phone 100 333 only. On Monday at 9am Dolly saw the car but decided not to stop as she was late for work. She phoned from work and told Connor that she would give him $23,000 for his car. Connor said he would consider it. Eileen saw the car and called at number 48 on Monday at 11am. However, the only person there was Connors daughter, Hetti. Eileen wrote a note saying: Monday 11.05 am. Please keep the car for me. Here is my cheque for $26,000Eileen. Hetti left the note on Connors desk in his study. On Monday afternoon Connor decided to sell the car to Dolly for $23,000. He posted a letter at 2.30pm that day to Dollys business address stating: I agree to sell you my car on your terms. This letter was received by Dolly on Wednesday at 10am. At 4.30pm on Monday Connor read Eileens note. He immediately phoned Dollys business address and left a message on her recorded answering service: Ignore my letter that you will receive the deal for my car is off. Dolly was away on business and listened to the recorded message only on Wednesday evening at 8pm. At 2.15pm on Monday Fiona saw the notice on the car and hurriedly posted a letter stating that she would buy the car for the price of $26,000. She sent a cheque with the letter and posted the letter just in time for the 3.30pm postal collection. Unfortunately, as Fiona failed to address the letter correctly it arrived only on Friday. Advise: a.Connor b.Dolly c.Eileen, and d.Fiona of their legal rights and obligations in relation to the above matters. You are required to support your answer by reference to relevant legal authority. 2. Dan took his dinner suit and his wifes silk dress to the Toff Dry Cleaners, a firm his family used whenever they had dry cleaning to be done. He was handed a docket and as usual he placed it in his wallet without reading it. When Dan called to collect the clothing he was told that his dinner suit was missing and his wifes silk dress was badly stained. No explanation was given about the stained dress. However, one of the assistants recalled handing the dinner suit to a customer who had apparently lost his docket but was able to identify the dinner suit when allowed to sort through the rack of dry cleaned clothing awaiting collection by customers. Dan demanded compensation but the owner of Toff Dry Cleaners referred Dan to a clause on the docket which read: We will not be liable for any loss or damage to clothing left for cleaning. The owner also pointed to a sign at the back of the shop which had been displayed there for some time. The sign said: We take all care in the dry cleaning of our customers clothing but we regret we cannot take any responsibility for loss or damage however caused. Dan protested that he had never read the sign or the docket. 1.Advise Dan whether he is entitled to compensation from Toff Dry Cleaners. 2.Would it make any difference if Dan had noticed the clause on the docket and theassistant had said: That excludes liability for damage to buttons and zippers(2 marks) 3.ASSUME that Dan is entitled to compensation for the loss of his dinner suit and the stainedsilk dress. He now tells you that because of what has happened his wife has sufferedemotional distress because the dress was a family heirloom. He also tells you that he andhis wife had to hire, at considerable expense, a dinner suit and a dress for a formal occasionbecause of the loss and damage. Answer: 1. Issue Offer advice to some individuals i.e. Connor, Dolly, Eileen and Flora in light of the facts involved along with the applicable legal principles. Law To execute a legally valid contract, it is mandatory to have a lawful agreement in place. An agreement of such nature would involve a valid offer from the offeror and a valid acceptance from the offeree. Besides, it is required that the acceptance offered should be unconditional or else It may amount to a counter offer (Carter, 2012). Further, it is required to understand the difference between an offer and an invitation to treat. Various advertisements in order to inform the audience about the good being put to sale does not amount to an offer but amounts to only an invitation to treat. Since there is no offer communicated through the advertisement, hence acceptance on the part of the other party would not amount to the execution of a contract. This understanding is derived from the Partridge v Crittenden[1968] verdict. In this case, an advertisement was placed to communicate sale regarding certain protected birds. This advertisement formed the basis of a charge against the advertiser when he was not able to fulfil the promise. The matter went to court where it the court clarified that the advertisement amounted to an invitation to treat and hence no contract has been formed (Lindgren, 2011). Additionally, the opinion given by Lord Parker is relevant in this regard as he advocates that if advertisements were to b e regarded as offers, it would be in violation of business sense as a host of people may give acceptance due to which the obligation on the owner may well exceed the quantity of good owned by the person floating the advertisement (Pathinayake, 2014). Further, it is imperative that the acceptance must be given before the offer expiry. It is right of the offeror to withdraw offer till the time acceptance is given to the offer. In this regards, mental acceptance without communication to the offeror is incomplete and does not constitute acceptance in accordance with the Bressan v Squires [1974] case (Gibson Fraser, 2014). There are various mediums in which acceptance can be communicated to the offeror. One of these is through post and since there is a time delay in this medium, hence certain rules are pivotal with regards to postal contracts (Pendleton Vickery, 2005). The validity of postal offer is related to the time of receipt of post by the offeree. The validity of postal acceptance happens when the post is mailed with no regards to the time of the actual receipt. The above understanding is derived from the verdict of the Tallerman Co Pty Ltd v Nathan's Merchandise(1957) 98 CLR 93 case (Carter, 2012). Application To apply the above principles, the case facts need to be highlighted as shown below. Case facts There was an advertisement floated by Connor which indicated that he wanted to sell his car. This advertisement contained the consideration expected along with relevant contract details. Dolly saw the advertisement and expressed her desire to procure the car for $ 23,000. Connor did not give an acceptance but assured that he would keep the same in mind. Another customer Eileen contacted Connor at 11 am with an offer of $ 26,000 and left a note with her daughter in this regard. Connor sent an acceptance to Dolly at 2:30 pm through a postal letter. After he had sent this letter to Dolly, he got hold of the note left by Eileen and hence called to withdraw the acceptance but since Dolly was not available, his message was received by her only after couple of days. Further, Fiona was also interested in buying the car and at 2:15 pm posted a $ 26,000c cheque for Connor but due to the address being misprinted, it was received only four days later. Application of Law Based on the legal principles discussed above, it is clear that Connor through the advertisement does not communicate an offer but rather an invitation to treat whereby the aim is to invite offers and choose the best offer. The legal positions of given parties is discussed below. Dolly A valid offer was extended by $ 23,000 to the owner using correct means of communication. Acceptance to offer by Dolly was offered by Connor when he posted the letter that afternoon. In line with postal contract rules, acceptance becomes effective at the same moment when the letter indicating acceptance is sent to the offeror. Thus, in the afternoon on Monday, Connor and Dolly executed a valid contract with regards to the sale of displayed car. Later effort made by Connor to cancel the contract would not be valid until Dolly agrees for the same which is not the case here. Eileen A valid offer was made with a consideration of $ 26,000. Although Connors daughter left a note containing Eileens message, but this was read by Connor only after he had communicated acceptance to Dolly. Since the car was already sold before acceptance could be given by Connor, hence there is no enforceable contract between Eileen and Connor. Fiona An offer was made by her to buy the given car by extending $ 23,000 to the owner. This offer was communicated to Connor using postal medium. As per the information extended, Connor received this mail only on Friday. Hence, as per postal contract rules, the offer came into force on Friday but the car was sold only on Monday. Since the car was already sold before offer could be made to Connor, hence there is no enforceable contract between Eileen and Connor. On the basis of the above discussion, it may be concluded that Connor and Dolly have executed a legal contract in regards to the displayed car. To discharge the contractual obligations, Dolly should offer $ 23,000 to Connor and in turn Connor should turn the possession of his car to Dolly. In case, any of the two fails to comply with their respective obligations, then the result would be in breach of contract and legal implications for the non-compliant party. Conclusion There is valid contract for car sale between Dolly and Connor and both parties should comply with their respective obligations to avoid legal implications. The other parties merely made an offer but failed to get an acceptance from Connor. 2.Part (a)Issue Bases on the case facts, the aim is to advice on the prospects of Dan being successful in receiving compensation from Toff Dry Cleaners. Law With regards to the terms that are mentioned on the receipt, three conditions should be ascertained in order for the court to take cognizance of these. The conditions are as mentioned below. The contract terms must be notified either during the contract execution or before that as has been highlighted in the verdict of Olley v Marlborough Court Hotel[1949] case (Lindgren, 2011). Under one condition the above rule is not obeyed i.e. when the parties involved in the contract have had past dealings and on account of these the terms are implied even without stating (Carter, 2012). The document that contains the terms must be intended towards initiation of contractual relations between the party as indicated through the verdict of Chapelton v Barry Urban District Council[1940] case. The summary of the above case judgement that receipt is not a proper document for documenting the clauses of the contract and should be instead stated on a worthy document (Latimer, 2005). Reasonable measures must be undertaken by the party to bring these terms to other partys notice as evident in the verdict of the Parker v South Eastern Railway Company[1877] case. This case highlighted that the party entrusted with the task of receipt issuance is responsible for undertaking reasonable efforts to make the other party aware with the terms. However, in case even after these efforts, the other party may not go through the conditions but then the terms would be enforceable (Gibson Fraser, 2014). A case worth mentioning is the Curtis v Chemical Cleaning Co [1951]. The wedding dress was given by defendants for cleaning and the a receipt was signed while the plaintiffs assistance communicated that there would not be any liability on the part of the cleaner for damage caused to beads and sequins. The assistant had miscommunicated the clause which in actuality absolved the cleaner of all liability in case of any cloth getting damage. The dress got damaged and the courts ruling was that damages be paid by defendant due to miscommunication by assistant (Lindgren, 2011). Also, tort law plays a critical role in commercial transactions as well since the negligible behaviour is not acceptable and inclusion of an exemption clause in the receipt does not indemnify the party of such behaviour. Even if the applicability of the exemption clause is confirmed by meeting all criteria, liability cannot be escaped under the guise of exemption clause in cases of negligent behaviour as reasonable care is expected (Davenport Parker, 2014). Application Dan offers clothes to the cleaner and receives the docket without reading the same, When at the scheduled date, he came for receipt of cleaned clothes, the drycleaner could not find his suit and there were heavy staining of the silk dress which belonging to his wife. Compensation was asked for by Dan but the owner of the shop indicated to exemption clause contained on the back side of the docket. The exemption clause indemnified the cleaner from any loss or damage to the clothes. Dan claimed that he was not aware of this clause and had not read it. On the basis of the discussion in the above section, it may be stated that Dan should get compensation from the owner of the shop. This is because the loss of Dans suit happened because of negligent behaviour by the staff who offered Dans suit to other client whose docket had misplaced. Adequate cross verification was not done. Further, with regards to silk dress getting stained, the exemption clause would not be applicable as reasonable efforts by the dry cleaner have not been taken to draw Dans attention to the exemption clause and despite past dealings, he was unaware about the existence of the same. Now if the Dan was aware about the exclusion clause, then also he would be successful in drawing compensation from the cleaner. Dans suit has been lost due to negligence which is evident that adequate cross verification was not done. There is a tacit duty to care on the cleaner with regards to clothes of customers and this duty has not been adhered to by the cleaner. Thus, Dan is entitled to compensation for the suit. Regarding the silk dress also, Dan is entitled for compensation as the assistant has wrongly stated the exemption clause. Thus, in accordance with the Curtis v Chemical Cleaning Co case, Dan can claim compensation in this case also. In accordance with the legal principles driving tort law, the drycleaner has a duty to care towards the clothes handed over by the customers. It is evident based on the given facts the negligence on account of the drycleaner is the main reason for the damage caused to the dress. Further, due to the negligent behaviour by the drycleaner, inconvenience caused to the customers will have to be borne by the negligent party only. This in in line with the basic principle that damage could have been prevented had the party not breached duty to care. Thus, if the drycleaner was not negligent in its conduct, this damage caused to Dan and his wife would not have taken place (Davenport Parker, 2014). Hence, expenses involved in dress hiring can be claimed and the drycleaner would need to compensate Dan for this damage caused. References Carter, J. (2012), Contract Act in Australia, Sydney: LexisNexis Publications, Davenport, S. and Parker, D. (2014), Business and Law in Australia, Sydney: LexisNexis Publications Gibson, A. and Fraser, D. (2014), Business Law, Sydney: Pearson Publications Latimer, P. (2005), Australian business law, Sydney: CCH Australia Ltd. Lindgren, K.E. (2011), Vermeesch and Lindgren's Business Law of Australia, Sydney: LexisNexis Publications Pendleton, W. and Vickery, N. (2005). Australian business law: principles and applications, Sydney: Pearson Publications Pathinayake, A. (2014), Commercial and Corporations Law, Sydney: Thomson-Reuters, Case Laws Bressan v Squires [1974] 2 NSWLR 460 Chapelton v Barry Urban District Council[1940] 1 KB Curtis v Chemical Cleaning Co [1951] 1 KB 805. Olley v Marlborough Court Hotel[1949] 1 KB 532 Parker v South Eastern Railway Company[1877] 2 CPD 416 Partridge v Crittenden[1968] 1 WLR 1204 Tallerman Co Pty Ltd v Nathan's Merchandise(1957) 98 CLR 93