common law about contract law

8/14/2019 common law about contract law

1/19


2/19

2

example is Jun walks into a newsstand and places a quarter and a dime on the counter,

taking a copy of The New York Times from a rack to her right. In these two examples it

shows that the parties have entered an implied contract. There was actually no words

involved but the action took place which made them agree on the terms.

Bilateral Contract.

A bilateral contract is formed when the two parties exchange promise to perform some

act in the future. This is also called two sided contract because it is an exchange of

promise whereby both parties bind themselves to undertake some future action.

Example of this contract includes; Jennifer offers to sell his phone to Jessica if he will

pay her $100. Jessica accepts the offer. Another example is Fatma offers to sing at

Hazims nightclub next Friday, Saturday, and Sunday if he will pay her $ 5,000 per

night. He agrees. In these two examples both parties are obligating themselves to take

some action in the future. As soon as both of them accept the offer then it is a valid

contract. If for instances one party fails to meet the future demands then the other

party then the other party has a right to sue him for the damages.

Unilateral Contract.

As was seen in the bilateral contract that both parties exchange promise to each other

while in unilateral contract, one party makes the promise to the other party that can

only be accepted by the others performance. This is different from bilateral where it

comes about when one gives a promise but in unilateral it begins with the performance

of the requested act. Example includes; Keri promises to pay $500 if Ashley will

decorate Harriet house. Ashley goes over to Harriets house and begins decorating it.

She has accepted Keris unilateral promise by undertaking the desired task. In this

example it shows the offeree (the person to whom the offer is made) is not obligated to

do anything but only the offeror is obligated to do some act.

Simple Contract.

A simple contract is any oral or written agreement that is not required to follow a

specific form or to be signed, witnessed or sealed. Most of the contracts entered into by

businesses and private individuals are simple contracts even though some may seem

rather complex and go on for many pages.

Formal contracts.


3/19

3

A formal contract is the opposite of simple contract because in this contract it needs to

be written, witnessed, signed and sealed by the parties.

BASIC ELEMENTS FOR A VALID CONTRACT

A contract is an agreement reached after sufficient consideration between two or more

parties that is binding in law. A contract is considered valid or legal when both or more

parties with capacity come under an agreement after involving valid consideration. A

contract contains some elements and if these elements exist then the contract is

considered valid while if one or more of these necessary elements happen to be missing

then the contract is void or voidable. This means that the contract is basically not a true

contract and it can be enforced. Briefly void contract or an agreement is actually not a

contract at all. It can be enforced by law. An example of a contract being void is when a

drug dealer and a buyer agree to do business together, when caught nobody has a case

because the terms of a contract are illegal under the court of law. These parties

performed an illegal act when doing this type of business. While voidable contract is

valid, and one party of the contract is bound unless an entitled party (the party who has

legal grounds to reject the contract) voids it. Example, depending on jurisdiction, a

minor has a right to repudiate certain contract. Any contract involving a minor is

considered voidable because a defect exists. The three basic components of a contract

are offer, acceptance, and consideration.

The following are seven elements that are able to determine whether or not the basic

components are present and meet legal criteria for a valid contract:

1) Agreement

2) Consideration

3) Intention To Be legally Bound

4) Form

5) Capacity.

6) Genuineness of Consent

7)Legality


4/19

4

AGREEMENT

The agreement in a valid contract needs to have an offer in which there is an offeree

and an offeror. An offer, according to Business Law, by Dennis Keenan and Sara

Riches, is a proposal made on certain terms by the offeror together with a promise to be

bound by the proposal if the offeree accepts the stated terms. We feel this definition is

accurate as it means, in simpler terms-you make the offer, youre prepared to be bound

by the terms if someone accepts. Acceptance is one persons compliances with the terms

of an offer made by another. It is an agreement to receive something which has been

offered. For example Peter offer to sell his watch to Paul for $50 and Paul accepts then

this is considered as acceptance. In business dealings between merchants, a buyer

demonstrates his or her acceptance of goods that are no exactly what he or she ordered

from the seller by telling the seller that he or she will keep the goods even though they

are not what was ordered. This is called acceptance. An acceptance may be conditional

express or implied.

Mutuality means that all parties to the contract are interested in its terms and intend an

agreement to which they will be legally bound. For this to occur both parties must make

sure they understand the agreement and they should not be any misunderstanding

involved or else mutuality would not exist. Mutuality is also sometimes called meeting

of the minds and is established when an offer has been made by an offeror and then

accepted by the offeree. An offer is a communication that gives the listener the power to

conclude the contract. The general rule is that it must be reasonable under the

circumstances for the recipient to believe that the communication is an offer. If an offer

spells terms such as quantity, quality, price then the court may find that an offer was

made. Example if a merchant says to a customer I will sell you a dozen high-grade

widgets for $100 each to be delivered to your shop on Dec 31 then this can be labelled

as an offer and not a statement like I am thinking of selling some widgets. An offer

must be differentiated from an invitation to treat. Advertisements are considered

invitation for offers. The making of an offer is the first of three steps in the traditional


5/19

5

process of forming a valid contract: an offer, an acceptance of the offer, and an

exchange of consideration.

An important thing to note is how the acceptance or revocation is communicated to the

offeror and offeree. With todays technology, things are getting more and more instant

and communication can be made in a rapid and simple way through advanced cellular

phones and wireless internet accessing gadgets. Despite all this, the court is adamant in

stating that the contract will come into being whence acceptance is received and the

person is notified.

Should a person send a fax to communicate an acceptance, then the communication is

made and the contract starts when it is sent no matter what time of day the other end

reads it. This also depends. If the fax is sent outside of working hours, then it is

communicated when working hours start back up. If it is through the mail, then

acceptance is made when it is posted, following the postal rule. The postal rule states

that the acceptance by post has been requested and is completed when the letter is

posted. So, the same goes to text messages and emails. Communication is made when the

person sends the text message, like when Hazim communicated his orders to Shikin who

claimed that she did not receive the message because her area supposedly has bad

reception (though June could access 3line there), Hazim has done his part.

CONSIDERATION

Consideration is the act of doing something or promising to do something that a person

is not legally required to do, or the promise to forbear from doing something that he or

she has the legal right to do. An exchange of consideration must be included in any valid

contract. Between the parties, something of real value must be exchanged whether it can

be cash, tangible objects, and the performance of an act. Consideration should not be

confused with a unilateral promise. A unilateral promise is a promise to do something

without an exchange of consideration. Example If Rihanna tells Ciara that she will give

her a ride to a club, Rihanna has made a promise. If on the other hand, Rihanna tells

Ciara she will give her a ride to a club in exchange for parking money, consideration

has been exchanged.


6/19

6

INTENTION TO BE LEGALLY BOUND

Capacity happens when the parties involved have understood the terms of the contract.

Usually adults have capacity because the tend to understand the terms of the agreement

but minor, mentally incompetent and intoxicated people do not have capacity. A person

is considered a minor when he is below 18 and when they enter a contract is considered

voidable because they have a right to terminate or cancel the contract before reaching

18. The minors are considered incapable of understanding the terms because they are

still underage while for mentally incompetent and intoxicated people they usually fail to

understand the terms, and people like these do not have capacity.

Many advertisements nowadays are mere puffs and do not show any intention to be

legally bound such as:

SALE 20 % OFF

But if the advertisement states something similar to the one in the given scenario, then it

would be considered as an offer with the intention to be legally bound.

They have business/commercial agreements in which the intention is looked at by the

law with a critical eye. It is automatically assumed that the parties intended to make a

legally enforceable contract. But this can be removed through the addition of an express

statement.

They also have social and domestic agreements with the same social and domestic

intentions. This is usually an involvement of friends and family members ina dispute.

Someimtes, as in the case of Simpkins v Pays, there is a business backed intention which

had three relatives entering a running competition as one entitiy so the prize money was

shared in thirds.

FORM

Form means any formalities that come attached to the contract especially if it involves

sales of goods by either party. This is usually to comply with government requirements

and regulations.

CAPACITY

Capacity happens when the parties involved have understood the terms of the contract.Usually adults have capacity because the tend to understand the terms of the agreement


7/19

7

but minor, mentally incompetent and intoxicated people do not have capacity. A person

is considered a minor when he is below 18 and when they enter a contract is considered

voidable because they have a right to terminate or cancel the contract before reaching

18. The minors are considered incapable of understanding the terms because they are

still underage while for mentally incompetent and intoxicated people they usually fail to

understand the terms, and people like these do not have capacity. A special case which

has minors entering a legally binding contract recognized by the government is a

student loan or scholarship like the one MARA currently has with hundreds of students

across the country.

GENUINENESS OF CONSENT

The genuineness of consent means that neither party is forced into entering the contract

and are doing on their own free thinking. For example, if Fatma threatened to kill

Junes hamster should she not sign the contract, then June is not entering the contract

out of free will. Both have to be willing.

LEGALITY

The contract has to be legal. Such is the case with Fisher v Bell, in which the object

being sold was an illegal object. The same can be said with Partridge v Crittenden in

which illegal birds were being caught in the transactions.


8/19

8

TASK 2 (LOC 1:AC1, AC2,AC3, and AC4) ADVISE CLIVE AS TO WHETHERTHERE IS A VALID CONTRACT WITH DATA LTD.

In order to advise Clive, we are to look at the facts of the scenario. Data Ltd. Had

advertised outside their showroom for a Grand Sale. The advertisement stated that

laser printers would be sold for RM50 each to the first ten customers to walk into the

showroom on Tuesday morning. The advertisement was put out on Monday. Clive, an

accountant, had waited outside all night so he could be the first one in but on that

Tuesday morning, the manager of Data Ltd. Came out to inform him that the sale wascancelled, meaning that Clive could not get the printer for the RM50 price.


9/19

9

An offer is a legal agreement between Clive and Data Ltd. An offer is basically some

sort of clear statement of the terms of which one party, in this case, Data Ltd. Is

prepared to do business with another party, which would be Clive. There are two types

of offers, but the one that Data Ltd. supposedly (this will be reviewed later) made is to

be considered as a unilateral offer which is common for advertisements to carry out. A

unilateral offer is defined here as a promise made in return for the completion of a

particular task and in this scenario, the promise would be the RM50 laser printer price

tag for the first ten customers to walk into the showroom on Tuesday morning, which in

essence is the act in question. A legally binding offer would include clearly stated terms.

An important part of a would be contract between Clive and data ltd. would be the

agreement.

Such as the case of Guthing v Lynn in which the defendant had promised to pay the

plaintiff that he would pay an extra 5 pounds if the horse turned out to be lucky for

him. The court held that this was too vague to be enforceable. In the scenario though,

you have the advertisement which clearly states what its offering and it clearly states

what task has to be completed by the offeree in order to obtain the reward.

Another aspect of what a contract is, is the intention to do business. Here, you could say

that Data Ltd. Was definitely willing to do business, thus separating it from what

advertisers like to haze up with an invitation to treat. When a statement advertising

goods or services does not necessarily communicate a willingness to enter a legally

binding contract, then this statement is merely inviting a customer to make an offer. It

is therefore, an invitation to treat. Liken this to Fisher v Bell of 1961, when a knife was

displayed for a specific price, but as it turns out, the price was merely a mislead. The

court held that in this case, the customer is making offers by showing that they are

prepared to do business at the price shown and the contract is made when they bring

the goods to the counter. The vendor or seller then gets to decide to accept or decline the

offer. In this case, the advertisement is being deemed an offer, instead of an invitation to

treat.

A case which saw the court upending the defendant in favour of the plaintiff because an

attempt at disguising an offer as an invitation to treat failed can be reviewed through

Carlill v Carbolic Smoke Ball. In this case, the defendant had put out an advertisement

offering anyone who used the Carbollic Smoke Ball and contracted influenza after using

it for two weeks, twice daily. The plaintiff had used the Smoke Ball and had contracted


10/19

10

the flu after using it exactly as directed. In this case, the defendants, who were actually

the vendors and proprietors of a poorly named medicine called The Carbolic Smoke

Ball, and they proposed that anyone who used the medicine three times daily for a span

of two weeks and contracted the flu or any sort of fever within three days of using the

medicine would be qualified to obtain a sum of 100 pounds. The defendant had

deposited 1000 pounds into Alliance Bank on Regent, displaying and proving their

sincerity in following up on the promises that they had made to whomever uses their

Carbolic Smoke Ball. In the essence of the time back then which was 1891, the epidemic

flu was common and the ways in which the flu could be prevented were far and few in

between, and using the Carbolic Snoke Ball could not determine whether or not you

were contracting the disease from the medicine you were using or from another person

who had the flu before.

The female plaintiff, Carlill, had used the smoke ball from November 20, 1891 until

January 17,1982 when she had contracted influenza. Acting on advise, she had

proceeded to claim the 100 pounds, but the lawyers for the defendants, QC and Terrell

argued that the advertisement was too basic to argue on whether or not there was an

offer in play or it was actually, an invitation to treat.

We look at the advertisement as an offer because we liken it to Data Ltd. extended the

hand to Clive. Here, Clive is facing an offer because he has the decision to refuse or

accept to enter the unilateral contract. Here, we say that the agreement comes when

Clive and data ltd. accept.

One cannot mistake it for an invitation to treat mainly because of the fact that so many

advertisements depend on trade puffs being vague and ambiguous. In this case, the

advertisement clearly stated:

CLEARANCE SALE: SERIES 3 LASER PRINTERS.

SPECIAL PRICE RM50 EACH TO THE FIRST TEN CUSTOMERS IN THE

SHOWROMM ON TUESDAY MORNING

It is very specific, and the RM50 for the laser printer statement proves data Ltds

intention to be legally bound. The intention to be legally bound cements the

advertisement posted by the company which had posted it only one day before the

actual sale, as an offer, not an invitation to treat.


11/19

11

Now here is where it gets tricky. If Data Ltd is the offeror, then the one who has the

right to accept or reject is Clive and under the law of court, there are rules of

acceptance. Of course, the usual things are checked in such as the acceptance must be

unconditional. There are no new conditions to be considered a counter offer or any

further request for information. The thing is, the acceptance must be communicated to

the offeror. Acceptance does not happen unless the offeree communicates it to the

offeror.

In a unilateral contract, the performance of the stipulated act is to be construed as an

acceptance. If someone has started to perform the offer, the offer cannot be revoked.

We can liken the scenario to the case of Errington v Errington. In this case, the father

had bought a house for his son and daughter in law to live in. It was under the fathers

name. He promised to transfer the house to their name once the mortgage was paid with

each monthly instalments. He attempted to revoke the offer he had made when the son

and daughter in law were almost finished paying for the house, but the court held that

the offer could not be revoked.

Here, we liken Clive to the son and daughter in law. He ad been waiting outside in the

showroom all night in order to be the first customer into the showroom. He is already

waiting out all night. He is communicating acceptance to the company because he is in

the act of waiting outside and being ready to be one of the first ten customers to walk

into the showroom.

It is known that an offer may be revoked before acceptance but for this scenario, the

acceptance has been communicated as Clive is there before the manager came to open

up. There was a period given by data Ld as to how long the offer would stand, and that

would be until the tenth customer walked into the showroom on Tuesday morning.

Liken this to the case of Dickinson v Dodds in which Dodds had offered to sell property

to Dickinson. The offer was left open until 9 am, Friday. Come Thursday morning, he

heard that Dodds had sold the property to somebody else. But Dodds had already

written a letter which reached Dickinson by 7 am on that Friday. The court held that

since it was communicated, it was acceptable-the revocation, we mean. In this case, the

first customer hadnt even walked in yet, but the manager had cancelled the sale when

it was too late. Clive was in the act of accepting. The sale advertisement had been put up

just one day before the sale, and the point of the Dickinson v Dodds case is that should

there be a revocation, then there should be reasonable steps to communicate it. If your


12/19

12

medium for making an offer is a commercial on radio, then it should be communicated

through radio as well should there be a revocation. In this case, the offer was made

through an advertisement in the showroom, so it should be that a revocation would be

made through the same notices and advertisements as well. Since the advertisement s

werent there when Clive was there, waiting out all night, then it isnt communicated

and the revocation should not be recognized. Instead, the manager himself informed

Clive, a different medium and method than the one used to communicate the offer.

In the contract that we feel exists between Clive and Data ltd, the consideration is there,

in that one party promises and understands that an act must be done for a return . In

this case, Clive enters the showroom as one of the first ten customers and purchases a

laser printer and Data ltd. sells it for RM50 as offered.

The intention to be legally bound is definitely there for Clive and though the manager

may want to cancel it, the original offer had a concrete intention to be bound, not being

just a puff. The advertisement had an intention to create a legal relationship because of

the words RM50 each to the first ten customers to walk into the showroom on

Tuesday morning. If it had stated simply that there was a sale, then that would be a

mere puff and is not intended to be formed as the basis of a binding contract. This can

be viewed through Carlill v carbolic Smoke Ball again in which the money deposited by

the defendant was considered as strong evidence that the defendant had every intention

of being legally bound.

The next thing is form. With form, there are formalities to follow. Data ltd and Clive

would be forming a contract for the sale of something, so under the Law of Property

Act 1989, there needs to be some sort of written agreement. This would surface when

Clive has paid for the printer, but the contract that binds them both already exists in

non-written form because of the advertisement as an offer and the act of waiting outside

and being the first before everybody else to enter the showroom as the acceptance.

Capacity requires both parties to be able to comprehend the terms and conditions of the

contract. This usually means that minors cant enter a contract. We are assuming that

since hes an accountant, Clive is capable of entering the contract and that the other

party is legally able to do so as well.

The genuineness of consent is there since nobody is forcing either party to enter the

contract. They are both entering on their own free thinking.


13/19

13

Data Ltd. is not offering anything illegal such as the case with Partridge v Crittenden or

Fisher v Bell. Clive is also not doing anything illegal as part of the condition. So this

should be considered as a legal contract that would be recognized by the law of court.

Assuming that it is an invitation to treat, then an offer would be made by Clive in which

hed make the offer to Data Ltd stating that hed buy the printers for the price of RM50

if he was one of the first ten customers to enter the showroom on that Tuesday morning.

The acceptance would then hang on data Ltds decision whether theyd take it or not

and sell Clive the laser printers for RM50 should he be one of the first ten customers.

Then the cancellation is just a rejection of an offer, and thus, the manager and his

company would not be responsible for selling the printer to Clive for RM50 and

continuing on with the sale as originally intended.

In conclusion, we would have to tell Clive that he deserves the printer for RM50 because

he and Data Ltd. have fulfilled all the elements of a valid contract and we would inform

Data Ltd. that they have failed to revoke before acceptance and that their advertisement

is in fact an offer to commit to a unilateral contract, thus meaning that they cant cancel

during the act of acceptance, they way the manager had attempted to do when he

arrived to open up and tell Clive that the sale had been cancelled.

TASK 3 (LOC 2:AC1) ANALYZE THE IMPORTANCE BETWEEN CONDITION

AND WARRANTY

If you want to determine the terms of a contract, you need to understand whats being

said and whats being written by yourself and the other party. Contractual terms can

come under either a condition or a warranty, both important and both distinct in their

own way. Conditions and warranties are expressed terms. What are express terms, you

may ask? Express terms are basically the details in a contract which had been

specifically agreed upon between the parties involved in the contract. It can be

contained in a document or verbal, or it can be a mixture of both.

CONDITION

Conditions are a very important part of contractual terms. If you breach the condition,

then youre breaching the contract and if youre breaching the contract the other party

can take an action and sue you. The other party can still go on with the contract and


14/19

14

recover the damages later. If Fatma were to go to work and they told her that she would

need to pay for the uniforms herself, otherwise, she cant work there, then that is a

breach of contract. Fatma can still continue on working there, but claim for the

damages later. This is common practise.

WARRANTY

Warranties are less important than the conditions as it does not go to the foundation of

the contract. The breach of warranties, while still considered serious, does not give the

person the right to break the contract, but still allows for the victim to claim damages.

If we were to look at the differing degrees of importance between a condition and a

warranty, we can take a look at these two examples

CASE ONE

Britney Spears was signed on to a contract in which she was obligated to perform on the

first night of her Circus album tour to promote a perfume brand, Circus. Because she

was tending to her sick child, she was not able to perform on the first night despite the

tickets being sold out. The obligation to perform on the first night was a condition of the

contract. Concert organizers and the endorsed brand paying for the performance have

the right to repudiate or take back the contract from Britney Spears as well as bring an

action against her in court.

CASE TWO

Taylor Swift was scheduled to appear in a season of showcases and acoustic live

performances. She was supposed to be at the arena in Dallas, Texas, at least five days

before the showcases started to rehearse, but due to her sick horse which she was forced

to attend to in Anchorage, Alaska, she arrived two days late. The concert organizers do

not have the right to repudiate, but they can still claim for damages later.

The two cases show the two varying degrees of terms of the contract. In the first case,

Britney Spears had breached a condition and in case two, Taylor Swift had breached a

warranty. Britney Spears faces worse consequences for failing to commit to a major

term of her contract with the concert organizers whereas Taylor swift faces less dire

consequences as she still performed the major portion of the contract. According to the

Sales Of Goods Act 1979, a condition is the breach of which may give rise to treat thecontract as repudiated while a warranty is the breach of which may give rise to a


15/19

15

claim for damages but not a right to reject the goods and treat the contract as

repudiated.

So, in conclusion, the condition in a contract is a more crucial part. If we were to use a

metaphor, wed compare the condition to the heart, a very crucial organ, but the

warranty would be akin to a lock of hair. The condition, in short, is far more important

part of the contract than the warranty, although both should be examined with care in

any contract or agreements being made by two parties.

TASK 4 (LOC 2:AC 2 & AC 3) ADVISE JIMAS TO THE VALIDITY OF THE

EXCLUSION CLAUSE AND ANY CLAIM AGAINST MAYFAIR PARKING

An exclusion, by definition is statement that basically acts as a filter for any actions

people might want to take against the company. In an exclusion clause, the company

will state the things that they claim to not be liable for. An exclusion clause can also be

termed as an exemption clause which a company attempts to attach as part of the

contract. It is supposed to be protecting the company whenever a wrongful action

caused by negligence occurs when carrying out contractual obligations. An example of

when a company uses these clauses as a guardian when carrying out their businessactivities would be when June purchases rolls of film to develop but the company fails to

develop them or worse, damages them, the company might have an exclusion clause that

states that they are only liable for the cost of the film but no for the photos even if they

are worth thousands of dollars or ringgit.

Following the facts of the scenario given, we can see that MayFair Parking have put up

an exclusion clause in the form of a notice at the entrance of the car park. If we were to

look at the avlidity of the exclusion clause, we would have to look at the incorporation of


16/19

16

the clause. The incorporation of the exclusion clause can be done in three ways-

document signed, the requirement of notice, and previous dealings.

In this scenario, what we dont have here is an actual signed document that states Jim

understood the terms and exclusion clauses of the contract. The scenario given in the

brief doesnt state whether he received the parking lot ticket or not, but it should be

assumed that there is, since most parking lots that require for you to pay have. Even so,

there would not be a signature. It is also not very practical to have signatures for the

parking lot tickets.

The requirement of notice requires for the company to notify and inform the customer

before or at the time of acceptance of the contract. In this case, the company is Mayfair

parking and the customer is Jim. Mayfair parking had already put up an exclusion

clause in the form of a notice at the entrance. The matter in question is whether or not

Jim was given proper notification or not.

The clause posted at the entrance of the parking lot is a reasonable location to place a

clause notification because any reasonable man would look at it before entrance. In the

case of Chapelton v Barry Urban District council in which Chapelton had rented out

two deck chairs and received the receipt which stated the exclusion clause terms on the

back of the ticket, but the court had held that it was not a suitable place to put an

exclusion clause as any reasonable man would not think that the receipt would hold an

exclusion clause. In fact, Chapelton being deemed as a reasonable man just put it in his

pocket without reading it. The clause for the scenario however, is in a reasonable

location.

Is the exclusion clause a part of the contract between Jim and Mayfair Parking?

Whether the court would hold this as a yes or not depends on whether Jim was

informed or not. Comparing it to the case of Olley v Marlborough Court Ltd. the

notice given in that case was not sufficient to be considered as part of the contract

terms.

So what basically happened here was that Mr and Mrs Olley had booked a room in a

hotel for a week. There was this notice in the bedroom which stated:

THE PROPRIETORS WILL NOT HOLD THEMSELVES RESPONSIBLE FOR

ARTICLES LOST OR STOLEN UNLESS HANDED TO THE MANAGERS FORSAFE CUSTODY


17/19

17

A stranger had gained access to the hotel room and had stolen Mrs. Olleys furs. The

clourt held that the defendants were liable . This was because Olley only saw the notice

after the contract had concluded, which was when he entered the hotel room after

payment had been made. This meant that the exclusion clause could not protect the

defendant. This means that it had not been incorporated into the contract.

Now, we liken the case to the scenario. We have Jim in Olleys position. He had made

payment to have his car parked in safe place where it wouldnt be damaged. Olley had

made payment for the hotel room where she could keep her things. The exclusion clause

had been brought to Olleys attention after payment. This is the same case with Jim. It

is up to the company in question (for the Olley case, it is the Marlborough Hotel and for

the scenario, it is Mayfair parking) to ensure that the customer has been informed of

the exclusion if there is any. It is their responsibility, regardless of whether the customer

is aware or not. Not all customers are going to check every single detail when it is a

simple transaction or activity like buying groceries or paying for parking. It is up to the

organization or company to bring it to the customers attention. This means, that if the

overgrown bush is part of Mayfair parkings property, then it is THEIR responsibility

to to make sure that THEY maintain their own property, especially if it is hindering

something as important as an exclusion clause. If they fail to do that, then they are

liable for the damages obtained by Jims vehicle while being parked on their property

as part of the contract Jim made when he paid without being informed of the clause all

because of Mayfair parking leaving the exclusion clause covered by overgrown shrubs.

Now, assuming that the overgrown shrubs is on someone elses property, then Mayfair

parking has the right to sue and bring an action against whoever owns the land which

has the shrubs. This would mean that Jim is bringing an action to the wrong party as it

is not Mayfairs fault he wasnt informed of the exclusion clause.

Another part of the incorporation would be previous dealings, but that is not relevant to

the scenario as it doesnt state whether or not Jim has parked with Mayfair parking

before.

The construction of the clause is also very important portion of all of this exclusion

clause business. But it comes after incorporation and since we argued that the exclusion

clause was not incorporated properly into the contract b etween Jim and Mayfair

parking, this isnt to follow suit. Regardless, we will assume that it was incorporatedproperly.


18/19

18

We take a look at the Contra Proferentem Rule or as we like to shorten it as CPR.

Under this rule, reliance on an exclusion clause which is ambiguous and too general is to

be regarded and interpreted as narrowly as possible against the party. This is especially

important if the exclusion clause is trying to avoid an action against negligence.

Then we take a look at the exclusion clause set up by Mayfair parking:

CARS PARKED ENTIRELY AT OWNERS RISK

The important word here is the word entirely. Is it ambiguous? Entirely means in

every way possible or completely, according to Oxford. So here, we have Mayfair

Parking claiming that they not responsible any and every risks or mishaps occurring to

the car. It is not specific, for one thing, what things they cover. Are they saying they

wont be responsible for thefts or damages? Another point to be made is that they are

providing parking space because customers want a safe place to park, so since it is a

condition or express terms that Jim is relying on when he parks the car there, it should

be noted that the exclusion clause doesnt stand.

The exclusion clause can be viewed through a fundamental breach point of view. If

Mayfair parking is supposed to guard the cars, then why is it damaged. The scenario

doesnt state HOW the car was damaged. Was it by another human or a natural

occurrence? If Jim had insurance, surely he would not bring an action against Mayfair

parking if insurance was not willing to cover the damage expenses. Then the damage

would be something caused by something natural, like maybe a tree branch falling on it.

In the case of Photo Production Ltd v Securicor Transport Ltd, the security guard or

patrol guard who was stationed at the claimants factory had accidentally lit a fire

which became uncontrollable and resulted in the whole factory being destroyed to an

amounted 615,000 pounds. Securicor depended on the exclusion clause to protect them

from liabilities avoiding claiming that the patrol guard had been negligent. It was held

that even though the breach of contract had occurred, the exclusion clause was clear

enough to protect them.

Assuming that the exclusion clause had been incorporated properly into the contract

and Jim had been informed, and then of course Mayfair parking would not be liable for

anything since their exclusion clause is very clear that they wont be responsible for any

damages to the vehicles.


19/19

19

So in conclusion, we would argue that the incorporation of the contract was not

executed in the proper manner by Mayfair parking and that if the overgrown shrub

was their responsibility, then maintaining and trimming the shrubs is also their

responsibility. Because of this, Jim has the right to claim for damages against Mayfair

parking who failed to communicate the exclusion clause to him before he had entered

the contract and paid 3 dollars for the parking ticket.

common law about contract law

Documents