Gibson v Manchester City Council is an English contract law case that took place in 1979 in which the House of Lords firmly reasserted that agreement can only exist in those circumstances where a clear offer is reflected by clear acceptance. Manchester City Council controlled by the Conservative Party advertised the details of a program for tenants that allowed buying council houses from the corporation.
Mr. Gibson was interested in this program and asked about the price for buying one of the houses. Sometime after sending the letter, Mr. Gibson received a reply from the city treasurer. The letter said that the corporation might be prepared to sell the house for £2,180. However, the letter was not to be considered as a firm offer of a mortgage (“Gibson v Manchester City Council”). Therefore, Mr. Gibson had to fill in a special form to make a formal application. When filling in the form, he left the purchase price section blank and wrote about some defects in the property.
After making the application, Mr. Gibson was informed by the Council that the price for the property had been fixed in accordance with its condition. Mr. Gibson wrote that he wanted to proceed on the basis of this application. The Council removed the house from the list of the houses occupied by other residents, as it was to be maintained by them, and added it to their house purchaser list. However, as a consequence of a local election, the Labour Party took control of the Council and nullified the program of selling council houses. Now, the Council would sell exclusively those houses where a legally binding agreement had been made (“Invitation to Treat”). Thus, Mr. Gibson had to go to court to prove his right to buy the house.
Decision
As a result of the trial, the Court of Appeal admitted that there was an agreement and ordered a particular performance, namely, an order that would oblige the Manchester Council to sell the property to Mr. Gibson. During the trial procedure, Lord Denning claimed that both parties managed to reach an agreement regarding the material aspect and that this was evidenced by their conduct and correspondence. To prove his point, he stated that despite all the formalities being not completed, the agreement between the parties had been concluded; therefore, Mr. Gibson had the right to proceed with it (Stone and Devenney 324). In addition, he strongly criticized the traditional approach which focused on the analysis of every contract solely on the basis of offer and acceptance.
Reasoning
Thus, the House of Lords accepted the Council’s appeal and clarified that the price for the house that the Council had written to Mr. Gibson was not an offer to him but only one of the stages in the process of the negotiations (Poole 94). The reason for such a decision was that the language used by a treasurer in the letter did not presuppose that the price was fixed. Rather, it merely stated that the house “may be prepared to sell” (Poole 37) and that the letter was not a “firm offer of a mortgage” (Pathak 113). In response to the statement that the parties’ agreement could be demonstrated by their conduct, it can be stated that their conduct was rather equivocal (Pathak 246).
Consequences
As a result of the trial, the house was removed from the list of properties controlled by the Council. However, this action could be merely an indication that the house was to be sold in the near future and that it could happen as a consequence of any other agreement. The most unpleasant fact for the plaintiff was that he was uncertain whether he would receive a mortgage or not (Bailey 174). Furthermore, due to this situation, he did not know if there was any sense for him to go ahead or it would be better to stop the procedure.
Works Cited
Bailey, Veronica E. Cape Law: Text and Cases: Contract Law, Tort Law, and Real Property. 2nd ed., AuthorHouse, 2016.
The term “contract” is used in business to refer to an obligation and a commitment of two parties connected by an object of offer and acceptance. Contracts are typically defined as an agreement enforceable by law (Maggi & Staiger, 2011). A contract entails a promise that must be fulfilled through legal means (Kanakri & Al-Mulla, 2015). However, it is important to note that not all promises or agreements during the execution of a contract can be deemed as legally important. Two parties conclude a contract by exchanging their corresponding intents based on the specific issues illustrated in the contract law. Under the law of the United Arabs Emirates, contract requirements are detailed in the Civil Transactions Act. Both local and foreign investors in the UAE must negotiate their contracts based on the UAE Contract Laws. In this context, the fundamental features of the contract law in the UAE are examined (Gulf Talent, 2007).
Background Information about the UAE Contract Law
The major objective of entering into a contract as stated the relevant UAE laws is to enhance the agreement between the two parties as an official process that depends on a specific theme or subject. There is an extremely wide range of issues and matters that can attract the need to execute a standard contract. These include the procedures such as property rights management (including physical and intellectual types thereof), marital issues, relationships between a company and its staff members, etc. To understand the contract law through the prism of the UAE legal system, it is important to discuss the principles of the laws and provisions of a contract. Traditionally, good faith, adhesion, contractual liability and the interpretation of contract laws are considered the essential components, among other aspects (Kanakri & Al-Mulla, 2015).
Compared to well-established contract laws such as those of the UK and the United States, the contract law in the UAE includes different compensation principles, among other specifics. Furthermore, the UA contract law implies that the parties must agree on the basic elements of the contract obligation. However, the parties can defer the discussion- and the agreement-related processes as explained under Article 141 of the Civil Code (Gulf Talent, 2007). In case a dispute occurs before the matters are discussed in detail, the court will base its ruling on the missing terms of the contract as stated in the provisions of the contract law. Still, it is essential that the intent of the parties to sign a contract or have a verbal agreement could be proven to the jury with the help of the necessary evidence. This part differentiates the contract law in the UAE context from other popular contract laws (Latham & Watkins, Inc., 2011).
Furthermore, in case the participants do not reach an agreement and, instead, resort to the support of the third party, under the UAE legislation, they may be accused of deception and even fraud. Particularly, when a party fails to make reasonable efforts to reach an agreement or enter into the necessary parallel negotiation with a third party, this is considered a breach of contract (Flannery & Merkin, 2015). Therefore, the law of contract in the legal context of the UAE asserts that the parties must state their intention for the contract to be based on the needs specified in the Article 141 before entering into a written agreement (Kanakri & Al-Mulla, 2015). The law requires the parties to state their intent at the beginning of the negotiation, which is important in case of a legal litigation.
Types of Contract
The crucial applied contract law in the UAE context is the employment contract, which tends to address all issues involving the relationship between employees and their employers in the UAE (Latham & Watkins, Inc., 2011). The state laws prohibit the parties engaged in a contract to have written agreements. The legal outline of the country permits two types of contracts, which are defined as limited and fixed term contracts. A fixed term contract can be ended at any time upon the consent of the parties. A limited contract, in its turn, is imposed for a specific employment term that was agreed upon by the employer and employee. In the UAE, the law accepts the employment of a candidate on a probationary condition. In this sense, both parties can cancel the contract upon agreement. Furthermore, the parties can make the compensation agreement. In this context, the two can agree to offer the payment on a monthly, weekly or daily basis. They can also agree that the employee is paid the compensation in a specific currency, which may be either foreign or local.
Building or Construction is another type of contract commonly executed under the laws of the UAE. According to the Civil Code of the UAE, the specified type of contracts can be declared null and void either by the parties or by the court (Latham & Watkins, Inc., 2011). There are specific provisions that address issues concerning the building and construction contract. These provisions allow the parties to terminate the contract in case there is a default. Another example is the tenancy related contract law, which allows the parties to make a free agreement on the initial rents. However, the law does not permit for the escalation of rent in the first two years of the tenancy contract.
Continuing a tenancy contract in the UAE also implies that certain changes to the rent can be made. For instance, a change in the amount of rent paid by the contractor is a possibility in case of an agreement. However, the law prohibits the increase of rent during the renewal of the contract. The regulation can be deemed as applicable when rental fees make at least a quarter of the current rental index determined by the Real Estate Regulatory Agency (RERA) (Gulf Talent, 2007). For the prevailing rent that is less than the threshold, the law tolerates the request of rent caps. Furthermore, a tenant is obligated to submit payment of 5% of the annual rent before moving to the room. The same amount of money is refunded to the tenant when the contract ends. The law requires the tenant pay the annual rental rates in advance. There is a possibility that the contract may fail to provide a detailed description of the rental payment mode. In this instance, the law requires the tenant to pay the fees for the whole year in four equal payments. All the four installments must also be paid in advance (Kanakri & Al-Mulla, 2015).
The law gives the landowners and tenants specific rights during the contract period and eviction time. Nevertheless, the Tenancy Law created in 2007 permitted the implementation of those rights for a written agreement in the contract under the registration of the RERA (Gulf Talent, 2007). An agreement must also be reached between the parties when abrogating the tenancy contract. If either of the parties wants to terminate the tenancy contract prematurely, the law requires the party in question to provide a three-month notice. If the landowner is the one who wants to terminate the contract prematurely, the law requires them to provide the just cause eviction together with the notice. The documents should be given before terminating the contract or executing eviction of the tenant (Gulf Talent, 2007).
Contract Law in the UAE: Foundations
Good faith and liability make the foundation of the contract law in the UAE. However, apart from the issues mentioned above, a standard form contract and contract interpretation are also viewed as essential elements (Latham & Watkins, Inc., 2011). These principles were developed to guide the initiation, execution and termination of contracts in various areas.
Contract of Adhesion
Under the laws of the UAE, the court does not have the authority to interfere with the agreement details between the parties that have engaged in a contract. As a result, the parties involved in a contract are assured that the agreement made when entering into a contract is enforceable. The standard form of contract, however, does not follow the specified principle. Quite on the contrary, Article 248 of the Civil Code makes it clear that a standard form can be deemed as invalid in case it violates the rights of either of the parties The Public Policy gives the authority to the judge to impose fairness during the judgment under Article 248(Kanakri & Al-Mulla, 2015). When a party tries to prevent the judge from executing the authority given by law, the agreement is considered legitimate.
Article 266.1 also states that the vague areas of the agreement must be interpreted in favor of the supplier. However, the rule as suggested in the provision does not apply in the context of the contract of adhesion (Gulf Talent, 2007). Instead, the principle posits that the customer should be favored when solving uncertainties arising in the contract terms. Therefore, the parties should have a full understanding of the differences in the application of the law in the case of signing the contract of adhesion. Article 145 of the Civil Code also states that the principles of the contract of adhesion must be followed when establishing an agreement between a buyer and a supplier. (Latham & Watkins, Inc., 2011). The provision asserts that there should be no negotiations about the terms and conditions.
Contract Interpretation
The UAE Civil Code states explicitly that the contract interpretation must incorporate the ideas and intentions about which the participants are in complete agreement. The intention should become ostensibly important in a written contract (Kanakri & Al-Mulla, 2015). The specified step is necessary so that no conditions other than those discussed in the contract should be considered if a court trial becomes a necessity. However, in the instance where the conditions of a contract exhibit vagueness, the court has the authority to assess the provisions and render their true meanings to the parties. However, the specified procedure will require following the essential principles of honesty and integrity (Latham & Watkins, Inc., 2011).
Good Faith
It is stated explicitly in Article 265 of the UAE Civil Code that the principles of honesty and integrity must become the basis for signing a contract between the parties (Gulf Talent, 2007). In addition, the participants should base their activities on the rule of law, fairness, and reasonability.
Contractual Liability
The provisions of the UAE Civil Code, particularly, Article 124, state that the parties of an agreement must comply with their personal obligations that depend on the circumstances in which the agreement was signed to prevent any damage to the stakeholders (Kanakri & Al-Mulla, 2015).
References
Flannery, L., & Merkin, R. (2015). Emirates trading, good faith, and pre-arbitral ADR clauses: A jurisdictional precondition? Arbitration International, 31(1), 63-106. Web.
Kanakri, C. A., & Al-Mulla, A. (2015). Legal issues relating to construction contracts in the United Arab Emirates. Practical Law: A Thomson Reuters Legal Solution, 1(3), 1-5.
Latham & Watkins, Inc. (2011). Doing business in the United Arabs Emirates. Web.
Maggi, G., & Staiger, R. W. (2011). Optimal design of trade agreements in the presence of renegotiation. American Economic Journal: Microeconomics, 7(1), 109-143. Web.
It is today common to refer to a section of law known as sports law, but in reality, there is no distinct section of the law referred to as ‘sports law’. This, in a way, reflects the importance with which contract law is viewed in sports. In the recent past, sports have seen an immense growth spurt and with these legal issues have arisen. The growth has brought with it increased legal involvement in the many operations and management of sports. This has made these laws that find application in sports to be referred to as ‘sports law’. Important to note is that these laws which find application in sports are the same ones that are applied in all human activities and projects (Sullivan 2010). They are not just unique to sports, even though they have demonstrated their importance in the running of the sport.
One of the laws which play a truly vital part in the regulation of sports activities is the law of contract. It finds application in the sporting world and has allowed the players and teams to come to a mutual understanding and for both parties to have their wants met. Contract law in sports prevents the player from behaving badly; these actions can lead to a bad reputation of the player which translates to a team’s poor reputation. It prevents the team from getting any bad publicity from the actions or words of its players. It is important in that it assures the player of their team position and by offering the sense of security; it encourages a player to give his or her all to the team. It also ensures the team’s security in knowing that the player is committed to it according to the terms set. Another importance of contracts of law to sports is that it ensures both the terms and conditions that are desired by the player and team are met. This ensures the satisfaction of both parties, and that they are not breached since it is legally binding (Sullivan 2010).
The law of contract in sports may require changes or adjustments in correlation with some contracts mostly those which incorporate international agreements, for example, the world anti-doping code or some contracts which involve many parties. Contracts of law, therefore, differ depending on the level of the sport and the type of sport, and there is no one contract that applies to all sports (Sullivan 2010).
The importance of the role of contract law in sports is seen in the case of Buckenara versus Hawthorn Football Club ltd in March of 1987. The plaintiff (Buckenara) filed a case against Hawthorn Football club (the defendant), for a breach in a contract that they had agreed upon in the year 1984. In the agreement, Buckenara had signed a contract to play for Hawthorn football club for two years. The contract had an optional clause that stipulated that it had the right to make an extension that would see the player stay with the team for two more years (Gillies 2008). This extension of the contract could be made without the consent of the player. According to Buckenara, he had entered into a collateral oral contract with the football club (through its agent Lauritz). In this oral contract, they agreed to treat the optional clause as, not binding and, therefore, not enforceable against Buckenara. The case arose due to the enforcement of this optional clause which extended the player’s period by two years. This is the reason the plaintiff filed the case as a breach of the oral contract made earlier. The defendant, in turn, filed a counterclaim that the written contract was binding and that Buckenara should not play for any other team apart from Hawthorn football club during the term of the agreement (Gillies 2008).
References
Gillies, P 2008, Concise contract law, Federation Press, Sydney.
Sullivan, A 2010, ‘The Role of Contract in Sports Law’, Australian and New Zealand Sports Law Journal, vol. 5, no. 1, pp. 3-25.
The answer is yes, Big Banks President can rescind the contract under the following special circumstances. In the law of contracts, when a contract is rescinded, it means that the two parties to the contract have been relieved of their obligation in relation to the initial contract entered in the initial agreement.
Mutual rescission
In some cases, in the law of contracts, the two parties may be discharged from their obligations in an agreement to carry out a consideration either in terms of money or otherwise if before its performance, the two parties mutually agree to follow a new agreement after the completion of an initial agreement through mutual assent. In this case, both parties involved are relieved of their contractual obligations.
This is possible even if the contract has express or implied instruction suggesting on the contrary. In this case, there are facts that must be alleged and proved beyond any reasonable doubt, whether the contract is oral or written.
Form of the contract
The form of the contract can either be written or oral, provided that the circumstances of the contract can be proved; the actions of the parties to the contract will not matter as they can be express or implied. The law of contracts on rescission prevails; regardless of the form of the contract provided, there is consideration and supporting circumstances as evidence.
Assent
All the parties to the contract must agree on the action to be taken through mutual agreement. This can only be evident when there is a meeting of the both parties. In some cases, one of the parties may repudiate the contract, and the second party impliedly takes the repudiation as a counter offer leading to a rescission of the contract. It should, however, be noted that this must be clearly expressed.
Consideration
An agreement between the parties to rescind the contract must be supported by sufficient consideration in terms of an inducement with money or otherwise. Unless one of the parties to the contract carries out his/her part of the agreement, he or she must be adequately compensated without any favors.
Operation and effect
In the event that there is rescission of the contract, none of the parties will benefit from the deal and gain more than what he/she has invested in carrying out the contract. None of the parties should gain more from the contract in order not to get a higher financial position than what one originally had, prior to the contract.
Intention of the parties to the contract. Aim
The direction of the contract will always be determined by the aim of entry in the contract by the parties to the contract. In the event that the aim of the contract has been accomplished by the parties, the contract may be made on the grounds of completion of the main objective of the contract.
If Big Bank decides to take legal action against rescission of the contract, it will be very hard for Big Bank to convince the judge on its favor. This is because there is express immunity of System INC against contractual obligation. This is seen in the phrase (f) that excludes System INC from any contractual obligation in case of system omission by system INC.
For example, “in no event will systems inc. Be responsible for special, reliance, indirect, incidental, or consequential damages arising out of any act or omission by systems inc. In connection with this agreement, even if systems INC.” This may complicate the ability of Big Bank to get legal redress in terms of receipt of damages.
Conclusion
There are 3 types of contract performance. One of them is a complete performance where both the parties completely carry out their contractual obligation.
The advantage is that both the parties benefit from that as intended. Secondly, the substantial performance is where most of the work or payment is done by one of the party to the contract. In this case, the remedy is always the compensation based on the quantity of consideration.
Contract law terms require that individuals entering into the contractual agreement should be of majority age. Thus, minors are incapable of entering into legal contracts given that in case there is a breach of the contract liability cannot be imposed on the minor (Cheesman 2010). In this case, the company selling the used car discovered that Jeremy would be unable to pay the remaining installments for the vehicle because he had lost his job, as a result, the company would have no option but to pay back his installments.
According to the law, it is not right for adults to enter into contractual agreements with minors as they end up being declared null and void. In this particular instance, due to the incompetence of the salesman and the sales company to verify the age of Jeremy, it resulted in financial liability to the company. As a result, the company will be forced to pay back Jeremy his total money by the fact that he was a minor at the time of the contract/transaction (Cheesman 2010). But if Jeremy’s actions and the act of entering into the contract was overseen with his parents or guardians in the presence of the sales personnel, the company will be able to sue for damages and the full sum by transferring liability to the parents or guardians who assisted the minor in making the decision and gave consent to the contract.
There is no legal action that could be taken against Jeremy as an individual since he is a minor, he can take action against the used car sales company and recover the full sum of the money which he had paid because contracts entered by minors are null and void (Cheesman 2010).
In the case:
Hallman v. Lemke
99 Wis.2d 241, 298 N.W.2d 562 (Wis. 1980)
“Hallman contracted to buy a car for $1250 from Lemke. Before he had paid off the car, it broke down and he took it in to be repaired (costing $637). He didn’t pay the repair bill, and the garage came after Lemke as the title-holder of the car. At the time, Hallman was still a minor. Hallman paid Lemke $1000 cash and had paid another $100 in installments at the time the car broke down. Lemke then endorsed the title to Halbman to try to avoid liability for repairs. Hallman returned the title and disaffirmed the contract and wanted all the money back that he had paid so far. While under possession the minor of the car was vandalized beyond repair. Hallman was able to disaffirm the contract under the infancy doctrine (aka the doctrine of incapacity), which protects minors from “foolishly squandering their wealth through improvident contracts with crafty adults who would take advantage of them in the marketplace.”Hallman sued Lemke for $1,100, the amount he had paid under the disaffirmed contract, and Lemke countersued for $150, the amount unpaid on the contract.” (Cheesman (2010).
It was held that:
The court held that minors cannot enter into contracts of such magnitude. In this case, Halbman was told to return the car in whatever condition it was in, but he gets all of his money back.
Conclusion
It is almost impossible to hold minors responsible especially when it comes to executable contract laws and bilateral agreements since minors are protected by the infancy doctrine.
Reference
Cheesman. R.H., (2010). The Legal Environment of Business and Online Commerce: Business Ethics, E-Commerce, Regulatory, and International Issues. Sixth Edition. New York: Prentice-Hall.
A contract as an accord between businesses or individuals who may by mutual consent agree to do something or one may agree to undertake something for a consideration.1 Agreements can oral or written, or even implied depending with the issue at hand.2 In most cases, contracts end up in court claims for failure by one arty to fulfill his part of the bargain, whether in part or full.
For any claim to contractual material breach to be successful, the injured party must establish that: indeed there was a contract; the defendant is indeed the right party to bring a claim, the contract was breached, and the claimant suffered monitory losses.
In a similar case held in 1853,3 it was held that if a party privy to the contract has rendered it difficult to fulfill his part of the contractual bargain, at end of the agreed term that party is directly liable for breach.4 This paper will discuss the relevant facts in Mr. Cosimo and Natural Stone House performance case and advice needed by Mr. Cosimo to pursue the case and Natural Stone House to counter the case.
The legal Issue(s) (Contractual)
Relevant facts to the case
Natural Stone House (“NSH”) under Mr. and Mrs. Alfredo was contracted by Mr. and Mrs. Cosimo to supply and install granite surfaces for the kitchen comprising a bench-top, a servery top and splash-backs July 2013. Mr. Alfredo showed to Mr. Cosimo samples of granite. Ultimately, Mr. Cosimo selected Verde Sorrento granite for the kitchen surfaces. A quotation was made by Mr. Cosimo and handed to Mr. Alfredo on 31 July 2013.
The quotation entailed $5,370 for the bench-tops and about $1,595 for the splash-backs. On 12 August 2013, revised the quotation and offered a single price of about $6,495 which was accepted by Mr. Cosimo. Mr. Cosimo also paid 50 percent of the total cost.
This meant that Mr. Cosimo had seen that the granite bench-tops supplied by Mr. Alfredo were the material he really needed. NSH supplied the material and as agreed and started work on 21st September the same year. However, Mr. Cosimo was not pleased prompting him to cancel the contract.
Issues
Mr. Cosimo is intending to bring the matter to court. He thinks that NSH has breached the contract by delivering bench-top which was not fit for its purpose and of an unacceptable quality. It is also the view of Mr. Cosimo that the materials supplied must befit the work anticipated. It was also anticipated that NSH would raise counter-claims. Using all relevant contractual principles, this paper advises Mr. Cosimo of the strength of his claims as well as the strength of the anticipated counter-claims.
The reason behind the client’s need to obtain advice
There are various reasons clients want to be advised on legal matters particularly contractual claim. In this case, however, main reason why Mr. Cosimo needs legal advice is basically to know how the court deals with contractual claim cases.
The client may want to be advised on how to adduce the evidence and also convince the judge regarding the facts to the case.5 The client may also want be advised on what kind of evidence if in writing to present before the lord judge. Likewise, if it is oral, then the client may want to know how to proof it existence via circumstantial evidence or witnesses. 6
The client may also want to be advised on how to claim and proof damages resulting from the violated contract.7 That is, the claimant after vividly proving that indeed a contract exited and terms were breached, he or she should then proof to the judge that she or he suffered financial loss in the process.
In most cases, the claimant must present beyond reasonable doubt before the judge some evidence to proof the financial loss.8 Specifically, the claimant will also be seeking to know whether the money claimed would solve the problem.9 The client may also want to know the leverage that defendant is likely to get in terms of claim defenses.
Applying relevant principles of law and authority and Legal advice
The aspect of material breach will no doubt come up. In Suisse Atlantique case (1967) House of Lords defined fundamental breach as a contractual breach which entitles the wronged party to treat or a consideration as it is a violation and rescinds the agreement.10 In this case, the judge would want to know among many other things whether the other party (defendant) did not meet (intentionally) his part of the bargain.
Since, the breaching party (Mr. Alfredo) did not intentionally breach the contract; Mr. Cosimo would argue that though was not stated in the contract, it was within the powers of Mr. Alfredo to supply kitchen graphite bench-tops of high quality and right standards.
However, this would not be a material breach as it does not deprive Mr. Cosimo of the real intention and purpose of the deal. In this case, Mr. Cosimo would not be allowed to repudiate the agreement but would only demand for some cure which would be in the form of fixing the issue or reduction in price of the project.
In the case of the money be claimed, it is likely to be less material if the issue at hand is something that can be made good with less expense or reasonable effort, whilst upholding the agreement. Taking into consideration the goodwill by Mr. Alfredo to fix the problems as well as the willingness to acquire material from a supplier of their choice, probably this would not be a material breach, and as such, Mr. Cosimo would not be able to terminate the contract.
The claimant should also consider the chances that the defendant or breaching party will fix the problem.11 In contract law, in the event that the issue is likely to be fixed and that the breaching party has shown intentions to the same, the court is likely to rule that the contractual violation was immaterial. In this case, Mr. Alfredo offered to exchange it for a different type of granite to the same value to be selected by Mr. Cosimo, either from NSH or an alternative supplier. Mr. Alfredo did this as a gesture of goodwill.
The other aspect that Mr. Cosimo should know before proceeding with the court action is whether Mr. Alfredo breached the agreement in bad faith. In contract law, if the violation of the agreement stemmed from bad faith or was willful and the case is taken to a court of law, the judge is more likely to rule in favor of the claimant because of the material breach.12
For instance, if the court establishes that Mr. Alfredo completely ignored the terms of the contract, then he would have materially repudiated the contract.13 However, if it establishes that a breach or violation emanated from circumstances that were beyond the control of Mr. Alfredo then he is not likely to be held responsible for materially breaching the contract.
Alternative Responses to the Issue
The client (Mr. Cosimo) will respond based on the likely defendant’s counterclaims.
Procedural strategies or tactics
In the case of Mr. Alfredo, there are rules of civil procedure which may be strategically employed. For instance, he may begin by applying for summary judgment, or apply for security for costs or apply strike out the claims altogether.14 Mostly, these tactics are used in cases that are highly importance. In such situation, Mr. Cosimo may employ tactics in order to impart pressure on the other side and in the process form part of a winning approach.
Variation of a written contract
Mr. Alfredo could also file a defense particularly based on supposed variation of a contract after it had been performed. That is, Mr. Cosimo only reacted after the granite bench-top had been put. In addition, it was the same material that Mr. Cosimo had checked in July and made an order.
In contract law, it is common practice claim that the agreement was considerably varied by just a conversation, in this case, by facsimile a letter in response so as to dispute the fact it was violated.15 This would eventually put the judge or courts of law in a challenging position since it would require oral evidence which normally takes place only during the final trail.16 As such, the defendant would have managed to buy more time. This tactic would provide the defendant with more time to put together his evidence particularly the oral evidence.
The premise is that any mistake made in court is likely to cost the party a lot therefore there is need to get prepared well. The defendant may as well argue that the contract was varied. In contract law, it is common practice, even where a contract is written, for the defendant to disown and even argue that it was altered or changed and as such, he or she did not in any way contravene the terms of the contract.
This is also a very risky road to be taken by the defendant therefore he or she must buy enough time in order to put down tangible evidence.
Mr. Cosimo should first know that in a contractual claim, the defendant is allowed to raise enough legal defenses. Usually, it is not enough for the defendant to merely deny legal offenses; he or she must counter the claimant’s allegations with reasonable evidence or argument. The main reason for raising these legal aspects at earlier stages is because he or she may not be allowed to raise them at latter stages.
The outcome of the dispute and remedies are available for the parties
The court is likely to rule that the contractual breach was immaterial and as such the contract was still in force. Therefore, the only cure for Mr. Cosimo is to request for materials that fit her desires. In other words, the only remedy available to Mr. Cosimo is reparation with orders to cost. In the case of Mr. Alfredo, the cure would be restatement of the contract with no orders to cost.
Bibliography
Casenote Legal Briefs, Contracts Murphy Speidel and Ayres (Aspen Law & Business, 2008)
Davies, Paul, Graham Virgo and E Burn, Equity & trusts: text, cases, and materials (Oxford University Press, 2013)
Forte, Angelo, Good faith in contract and property( Hart Publishers, 1999)
Furmston, M, G Cheshire, and C Fifoot, Cheshire, Fifoot and Furmston’s law of contract (Oxford University Press, 2012)
Hochster v. De La Tour (unreported, the Queen’s Bench, n.d 1853)
McKendrick, Ewan, Contract law : text, cases, and materials ( Oxford University Press, 2012)
Radan, Peter and John Gooley, Principles of Australian contract law (LexisNexis Butterworths, 2009)
Rowan, Solène, Remedies for Breach of Contract: A Comparative Analysis of the Protection of Performance (OUP Oxford, 2012)
Seddon, N, and M Ellinghaus, Cheshire & Fifoot Law of Contract (Butterworths,10th ed, 2012)
Stone, Richard, James Devenney and Ralph Cunnington, Text, Cases and Materials on Contract Law (Routledge, 2011)
Societe d’Armament SA v NV Rotterdamsche Kolen Centrale ( Unreported, House of Lords, July 1967)
Thampapillai, Dilan, Vivi Tan and Claudio Bozzi, Contract law : text and cases (Oxford University Press, 2012)
Footnotes
1 Radan, Peter and John Gooley, Principles of Australian contract law (LexisNexis Butterworths, 2009)
2 Thampapillai, Dilan, Vivi Tan and Claudio Bozzi, Contract law : text and cases (Oxford University Press, 2012)
3Hochster v. De La Tour (unreported, the Queen’s Bench, n.d 1853)
4 Seddon, N, and M Ellinghaus, Cheshire & Fifoot Law of Contract (Butterworths,10th ed, 2012)
5 Furmston, M, G Cheshire, and C Fifoot, Cheshire, Fifoot and Furmston’s law of contract (Oxford University Press, 2012) 30.
6 McKendrick, Ewan, Contract law : text, cases, and materials ( Oxford University Press, 2012) 390.
7 Forte, Angelo, Good faith in contract and property( Hart Publishers, 1999) 11
8 Casenote Legal Briefs, Contracts Murphy Speidel and Ayres (Aspen Law & Business, 2008) 1-2.
9 Thampapillai, Dilan, Vivi Tan and Claudio Bozzi, Contract law : text and cases (Oxford University Press, 2012)
10Societe d’Armament SA v NV Rotterdamsche Kolen Centrale ( Unreported, House of Lords, July 1967).
11 Ibid.
12 Seddon, N, and M Ellinghaus, Cheshire & Fifoot Law of Contract (Butterworths,10th ed, 2012)
13 Rowan, Solène, Remedies for Breach of Contract: A Comparative Analysis of the Protection of Performance (OUP Oxford, 2012)
14 Stone, Richard, James Devenney and Ralph Cunnington, Text, Cases and Materials on Contract Law (Routledge, 2011) 1-4.
15 Davies, Paul, Graham Virgo and E Burn, Equity & trusts: text, cases, and materials (Oxford University Press, 2013) 9.
16 Seddon, N, and M Ellinghaus, Cheshire & Fifoot Law of Contract (Butterworths,10th ed, 2012)
Generally, an advertisement whether electronic or otherwise is considered just as an invitation to treat and not as an offer per se. This is because every supplier has limited supply because of economic, financial, or in some instances natural constraints. In legal terms, an invitation to negotiate is just an intention of one party to make an offer and is not an offer by itself. Consequently, the advert made by Hanes Audio cannot be taken to be an offer per se. As outlined by the Electronic Transactions Act chapter 88 Sec 14, any electronic communication that is not made to an individual or specific group of people should be considered as an invitation to make an offer unless stated otherwise (Tabalujan & Toit-Low, 2009). This includes proposals that make use of interactive applications for the placement of orders. As it was held in Patridge v Crittenden (1968), advertisement is an invitation to treat or negotiate and not an offer.
However, when an order is made following an online advertisement and the supplier accepts the order and goes ahead to deliver goods, then a binding contract comes into existence. The Electronic Transactions Act chapter 88 Sec 11(2) clearly explains that when electronic communication is used in the formation of a contract then the contract cannot be denied validity just because electronic communication was used (Tabalujan & Toit-Low, 2009). In this regard, there was a contract between Clara and Hanes Audio the moment Hanes Audio accepted to deliver the phone as advertised. It is important to also note that Clara paid for the phone without giving conditions.
In the case of Carlill v Carbolic Smoke Ball Company (1893), the court of appeal held that the advert made had all the requirements of an offer and was, therefore, an offer in itself. On the same note, in the case of Perry v, Suffield’s Ltd the court held that there was an abiding contract though other crucial points were not expressly discussed. In the Digilandmall case (2004), the court held that the automated acceptance of the orders created a binding contract (O’sullivan & Hillard, 2012). In this case, Hanes Audio communicated its acceptance of the contract by delivering the phone as was ordered by Clara. In the advert that was placed by Hanes, there was nothing left for negotiation. Therefore, following the ruling on the case of Lefkowitz v Great Minneapolis Surplus Store (1957), Hanes’s advertisement can be taken to be an offer (Phang & Yihan, 2012).
For the second part, Clara had the opportunity and time to read all the conditions that were given as regards the advertisement. Unfortunately, she was reluctant and ignorant to read them. Consequently, she cannot use the excuse that she did not read the terms of the contract to exonerate herself from negligence (Chitty, 2012). Given that Hanes Audio had expressly communicated the terms and conditions of the contract, they can be exempted from blame. Consequently, Hanes had stuck to their end of the bargain by replacing the phone that was requested with another one and provided change on the same (Chitty, 2012). Clara will, therefore, be under obligation to accept the UL210 and the voucher. Hanes Audio is not under any obligation to accept back the UL210 phone and was doing Clara a favor by giving her a two weeks grace period.
References
O’Sullivan, J. & Hilliard, J. (2012). The Law of Contract. London: Oxford University Press.
Chitty, J. (2012). Chitty on Contracts. London: Sweet & Maxwell.
Phang, A. B. & Yihan, G. (2012). Contract Law in Singapore. Alphen aan den Rijn: Kluwer Law International.
Tabalujan, B. S. & Toit-Low, V. D. (2009). Singapore Business Law. Singapore: Business Law Asia.
If a person is in another person’s premises and their relationship is such that the occupier and the invitee mutually benefit, then there is a duty of contract. In this regard, the occupier is responsible for ensuring that the premises are safe and the invitee cannot be harmed while at the premises. It is stated in the Contributory Negligence and Personal Injuries Act chapter 54 that the occupier must take reasonable steps to prevent any foreseen harm to invitees. In this case, Kelsey Parks was an invitee to D & D shopping mall (Phang & Yihan, 2012). Consequently, D & D shopping mall had a duty to protect Parks from any possible harm.
In suing for damages, Parks will need to show her contractual relationship with D & D shopping mall. She comes to the shopping mall every weekend and usually uses the car park. Therefore, there was no reason why she would not have used the parking that day. Even though there was a notice, Parks can still sue the shopping mall for damages. The red hand rule, as explained by Lord Denning in Thornton, requires any peculiar clause to be brought to the attention of people in the clearest method possible. However, for the case of Parks, the warning was not in the manner that any person would see. Nevertheless, the shopping mall may argue that Parks ought to have seen the notice on the entrance. However, according to Contributory Negligence and Personal Injuries Act, section 3(1) the fault of the claimant for damage shall not be used as an excuse to defeat the claim but can only reduce the claim (O’Sullivan & Hilliard, 2012).
On the other hand, Parks may not be able to exempt herself from the fact that she ought to have known that cars are parked at owners’ risk which had been on the notice from the beginning. It was determined in J. Spurling Ltd v Bradshaw (1956) having had several dealings of the same nature before, the defendant ought to have been aware of the exemption clause. Parks had dealt with D & D shopping mall for a long time and therefore ought to have known that the mall accepted no liability for any vehicle in the parking lot. Consequently, the shopping mall may be exempted from liability. On the same note, the exemption clause requires that reasonable notice be made. As was held in the case of Thompson v London Midland & Scottish Railway (1930) there was a reasonable notice despite the exemption clause being referred to in a different place (Tabalujan & Toit-Low, 2009). Therefore, D & D shopping mall would be exempted from the damage of the car because they had referred to the clause in red.
However, the new notice would not exempt D &D from liability. To begin with, Parks was used to get warnings in the parking area and not at the entrance. Similarly, the Unfair Contract Terms Act section 2(1) states that liability for negligence cannot be excluded just because there was a personal injury suffered. In the case of Donoghue v Stevenson (1932), Lord Atkin’s “neighbor” principle provides that one must take reasonable care to avoid acts or omissions that one can reasonably foresee might injure a neighbor (Phang, Chan & Chiu, 2004). In this regard, D & D shopping mall should have gone a step further to even disable the automatic bar to prevent people from entering. The functioning of the automatic bar would have been confused to mean that all was well. Therefore, Parks has ground to sue for body injuries but minimal chances of succeeding in car damages.
References
O’Sullivan, J. & Hilliard, J. (2012). The Law of Contract. London: Oxford University Press.
Phang, A. B., Chan, G., & Chiu, H. Y. (2004). Basic Principles of Singapore Business Law. Stanford: Thomson Learning.
Phang, A. B. & Yihan, G. (2012). Contract Law in Singapore. Alphen aan den Rijn: Kluwer Law International.
Tabalujan, B. S. & Toit-Low, V. D. (2009). Singapore Business Law. Singapore: Business Law Asia.
Contract law refers to agreements between companies and typically includes clauses for recovering damages in case one party fails to uphold its obligations. Alpha Bookstore encountered issues with both its orders, one due to defamation accusations and the other because of unforeseen damage to a warehouse. Regardless of the causes, the bookstore’s plans suffered because it has no ‘Gryffindor Chronicles’ books for a Christmas promotion and no ‘Cabinet Inside Story’ or ‘The Return of 007’ copies to sell.
It is evident that both with the ‘Cabinet Story’ and ‘The Gryffindor Chronicles,’ the Alpha Bookstore does not have a legal remedy that would allow them to receive the books within the set deadline. Therefore, the focus of the remedies should be on receiving compensation for the losses that this bookstore will have due to not being able to sell these books. The area of law that this case relates to is contract law, and the bookstore has remedies for the problems with the contract and lost chance. This case study analysis aims to examine the issues Alpha Bookstore manager Carolina encountered and offer legal advice regarding what can be done to resolve the delivery delays.
Area of Law
Commercial law aims to protect the rights of parties involved in trading. Contract law is an area of commercial law that deals with agreements between parties and each side’s duties (McKendrick, 2018). A typical contract refers to an exchange of goods for money. In the case of Alpha Bookstore, the issue is the exchange of books published by the two companies for an agreed sum.
The principles of commercial law and contract law aim to protect the businesses from losses that resist after one of the contract parties fails to deliver the promised goods or services (McKendrick, 2018). The problems that Alpha Bookstore encountered fall under the experience of contract law.
Under contract law principles, contract frustration is an event that is unforeseeable and serious enough to threaten the ability of parties to adhere to the agreement (Goode, 2017). There is a difference between frustration and force majeure, the latter is usually an event out of control of one party, for instance, a natural disaster, after which this party is not liable for not delivering its obligations. Examples of frustration cases include Maritime National Fish Ltd. v. Ocean Trawlers Ltd, which shows that frustration automatically ends the contract (Ellis, 2020). The destruction of the subject matter is one factor that results in frustration and the court will have to review the case to determine further obligations of parties in the case of ‘Gryffindor Chronicles.’
One can assume that because Alpha Bookstore expects a specific number of books from both publishers at a set data and has to pay an agreed-upon price, the bookstore and the publishers have reached an agreement. According to Anson (2008, p. 31), a contract is ‘an actionable promise or promises.’ Additionally, there is an expression of common intent and dependence of the parties on others upholding their agreed-upon duties.
Having this agreement in written form, although not required by the English law, makes it easier to establish that both parties agreed upon the same conditions (Anson, 2008). Hence, although Carolina from the Alpha Bookstore has correspondence with representatives of both publishers, one must determine if these parties have signed a legal agreement. The case study suggests that Alpha Bookstore had contracts with both publishers with a set number of books, prices, and dates of delivery.
With these contracts, a ‘breach’ refers to actions that go against what was outlined in the agreement and allow a party that suffered to receive a remedy. The benefit of having a ‘breach’ clause in a contract is self-evident: both parties understand the responsibility they have in case they fail to deliver what was promised (McKenrick, 2018). In some cases, penalty clauses are included in contracts. These clauses specify the exact compensations and steps each the breacher has to take to mitigate the consequences of the breach, which are agreed on damages clauses.
The purpose of such a clause is to simplify the process of proving that one party suffered losses and ensure that damages that can be considered remote but result from a contract breach are accounted for in the contract. Hence, in the case of Alpha Bookstore, the first step is to examine the agreement they had with White Owl Publishing and Beta Publishing to determine if potential breaches and actions were predefined in these contracts. If no specific clauses were included in this contract, the bookstore’s remedy is in using the general principles applicable to contract law and contract breaches.
The offer and terms under which it has to be delivered bind both parties legally. From the moment that one party made an offer, and the second one accepted it, both become bound (CEFIMS, 2020 a). This means that each party has to do what they agreed on in the contract. However, there are legal situations where contract obligations may not be fulfilled, for example, when the result of the actions would cause one party to commit a crime (CEFIMS, 2020 a). In that case, the contract is deemed void, and the parties have no obligation to fulfill their duties. This factor may become a problem for Alpha Bookstore’s order of ‘Cabinet Story,’ which will be discussed in detail in the next section.
Remedies for a Breach
There are multiple remedies for a breach of a contract guaranteed to Alpha Bookstore by the general law. However, the parties may have included ways of resolving issues that are not a part of the common law in their agreement (McKenrick, 2018). Firstly, the Alpha Bookstore’s remedy is to ensure that the contracts are terminated. One of the fundamental rights a buyer has is to terminate the contract in case the seller breaches the agreement (McKenrick, 2018).
It is unclear whether the bookstore already paid for the books or if the payment had to be made after the delivery of the items, but the bookstore should ensure that there is a recognition of a contract breach and Alpha Bookstore will not be required to pay the publishers for the books that were never delivered.
An important factor is that a company is not only to be able to terminate the contract and receive the money-back but also have compensation for damages. Since business involves long-term planning, the obligations of a contract are linked to some plans a company has for obtaining a profit. Hence, one party has a right to have compensation for damages that occur as a result of a contract breach (McKenrick, 2018). This compensation may be nominal or substantial, based on whether the party suffered a monetary or non-monetary loss.
This is relevant for the ‘Gryffindor Chronicles’ books because the bookstore planned to promote this publication before Christmas. One can assume that some pre-planning has been done, and Alpha Bookstore has contracts with other companies, for example, agreements to print out promotional materials. Since the bookstore will not receive the books until January. Hence, one potential remedy for this situation is claiming for the damages to account for the losses that are a direct result of not being able to sell the ‘Gryffindor Chronicles’ before Christmas and sell the copies of ‘Cabinet Story.’
Hadley v Baxendale is a case that demonstrates the use of the damages principle, where one received compensation for a breach of a contract (McKenrick, 2018). The example of this case explains the issue of remoteness with the lost chance claims since a party may argue that the damages they received are indirect but still relate to the breach. To qualify as being not too remote, such a claim has to either flow naturally from the breach or be in contemplation when the contract was made (McKenrick, 2018).
In Hadley v Baxendale the rule suggests that only reasonable contemplations about the indirect damages. Additionally, in the Sale of Goods Act 1979 in section 54, there is an outline of the unusual losses that can be paid by the breacher if this party was aware that these losses would happen as a result of the breach (Sale of Goods Act, no date). Hence, if this bookstore had any other agreements for the promotion of books, for example, they planned on organizing book launch events or inviting the authors to do book signing sessions and paid to prepare for such events, they may be able to recover the damages for these as well.
Lost chance refers to the business opportunities a company might have had but could not pursue due to the actions of third parties. In this scenario, Alpha Bookstore counted on a change to sell 200 copies of ‘Cabinet Story’ and 500 copies of ‘Gryffindor Chronicles’ and make profits that will help the store pay its bills. However, because these publishers cannot deliver the books, the store lost its chance. The case of Robinson v Harman demonstrates the two methods a court will use to calculate the damages the innocent party suffered.
These methods are different in value and cost of cure, with the most appropriate one used for each individual case (McKenrick, 2018). In terms of legal consequences, this means that Alpha Bookstore may be able to receive compensation for the lost profit that it did not receive because it was unable to sell ‘Gryffindor Chronicles.’
There is a duty to mitigate policy, where a party that suffered losses is obliged to take steps necessary to avoid the losses if they are able to do so (McKenrick, 2018). The publishers may use this duty to prevent covering the losses. However, since the agreed time of delivery was November 1st and the Alpha Bookstore representative contacted the publishers herself on November 3rd, one can argue that the publishers did not take steps to warn the bookstore about the issue and provide them with enough time to avoid the losses.
Regardless, based on the case, the plaintiff has a duty of providing that the innocent party aggravated the losses by not taking steps to mitigate the potential damage (McKenrick, 2018). With White Owl Publishing, the duty to mitigate policy is an issue because the company reached out to the bookstore themselves to notify them about the delay. However, because this was also done on November 3rd and not before the date of delivery, Alpha Bookstore may be able to prove that they did not have enough time to order another pre-Christmas book and arrange for additional events.
Legal Case: Defamation
The issue with the “Cabinet Inside Story”‘ is the defamation case filed against the author by the former Home Secretary. Notably, not all cases of misrepresentation will lead to legal action, but Beta Publishing was warned by the layers that in case they sell any copies of this book, liability will follow. The general legal principle applicable here is that contracts that force a party to commit a crime cannot be considered valid because in Tinsley v Milligan the ruling highlights that one cannot enforce contracts that will result in a crime (CEFIMS, 2020 a).
Defaming someone, as part of the tort law, is among such crimes, as demonstrated by the Clay v Yates case (CEFIMS, 2020 a). However, this is a civil liability issue and not a criminal one. The Alpha Bookstore should be warned that Beta Publishing may use this as a way to omit their obligations under the contract since sending the books to the bookstore would mean defaming the former Home Secretary. Hence, it is possible that there will be no liability for this breach.
From a legal viewpoint, ‘puffs’ or statements of opinion are not regarded as misrepresentation (CEFIMS, 2020 b). However, to determine this, one would have to review the copy of the book to see if the author uses expressions indicating that it is his opinion, such as “I think,” “In my opinion,” and others. Another chance is if the author uses vague statements that the Home Secretary perceived as facts. However, with these statements, both parties have to be aware that the person making claims does not have expertise in the given field (CEFIMS, 2020 b).
One example of a similar legal case is Bisset v Wilkinson about land sold as appropriate for sheep farming despite the fact that the seller never tested this claim (CEFIMS, 2020 b). With ‘Cabinet Inside Story,’ it appears that the writer presents themselves as a former employee sharing secrets about the Cabinet’s work. In this case, the expertise is evident, and the defamation claim may be valid.
Notably, with Beta Publishing, a contract implied a consignment of two books⸺ ‘Cabinet Story’ and ‘The Return of 007’ and both consignments did not arrive despite the fact that only ‘Cabinet Story’ had legal issues. Hence, the defamation claims have no connection to ‘The Return of 007,’ and with this book, the remedy for the bookstore is to claim damages as a result of contract breach.
Due to the issues with defamation associated with the ‘Cabinet Story,’ Alpha Bookstore may be unable to receive compensation for the losses. Hence it is best to focus on recovering the damages from the non-delivery of ‘The Return of 007’. Similar to the White Owl Publishing problem, the bookstore may address the lost chance issue with ‘The Return of 007’ due to its inability to make profits from the sales.
With Beta Publishing, another issue is the fact that this company is also accused of paying wages below the minimum to its warehouse employees. This issue falls under the competency of the director’s duties, a set of legal principles referring to the actions of a company’s owners before the society, shareholders, and other involved parties (McKendrick, 2018).
Director’s duties are outlined in the Company’s Act of 2006 (Comapnies Act 2006, 2006). One of the principles of a director’s responsibilities is the need to maintain the company’s desirability and reputation, which can be done through proper work with suppliers and sellers and by adhering to the laws, such as minimum wage requirements (Lecture 7).
Hence, a potential remedy for Alpha Bookstore is to claim that Beta Publishing’s CEO failed to fulfill its obligations outlined in the Companies Act, which caused damage to the bookstore’s business. The proofs of such adverse actions would include failure to notify the buyer about the potential problems with the ‘Cabinet Story’ book, failure to inform about the supply’s status, and inappropriate wages paid to the employees of this publisher.
Conclusion
In summary, this paper reviews English contract law and its basic principles to provide advice for Alpha Bookstore regarding the damages and contract breach it encountered. Contract law is a part of commercial law, where two parties agree to complete an exchange. Contract frustration ends the contract automatically, which is the case with Gryffindor Chronicles.’ This case study shows the many nuances of the contract law and potential ways of recovering from the financial damages that Alpha Bookstore can use, as well as potential issues with these lawsuits, such as defamation accusations.
With the case of Alpha Bookstore, one can assume that the company had a legal agreement in a written form, and potentially there should be a breach clause that outlines the responsibility of the publishers in case they do not deliver these books. However, because a contract with Beta Publishing is linked with a defamation lawsuit, it may become void. In that case, one remedy is to use the Company’s Act and a familiar of the CEO to fulfill his obligations before the society and the bookstore. With White Owl Publishing, the remedy is to file a lawsuit to recover the lost chance damages because the bookstore is unable to sell items that would be popular in the pre-Christmas period.
Reference List
Anson, W. (2008) Principles of the English contract law. Oxford: Clarendon Press.
Companies Act 2006 (2006). Web.
CEFIMS (2020 a) Lecture 4 [Lecture to Business Law], Business Law. CEFIMS.
CEFIMS (2020 b) Lecture 5 [Lecture to Business Law], Business Law. CEFIMS.
Ellis, L. (2020) Frustration of contracts in law: getting out of contract obligations (termination of contracts). Web.
Goode, R. (2017) Goode on commercial law. Edited by Evan McKendrick. UK: Penguin.
McKenrick, W. (2018) Contract law: text, cases, and materials. 8th edn. Oxford: Oxford University Press.
An agreement involves parties who consent to perform a certain action in consideration of specific guidelines written in the contract that they sign. Although those involved expect transparency from each other, there may be duress and other crucial factors that may lead to lawsuits when discovered long after signing the agreement. For example, parties in an agreement may involve coercion or pressure others to sign contracts for their benefit, even without knowing they are causing harm. In Florida, there have been several cases involving contracts purported to be signed under duress leading courts to make decisions about such cases to establish whether the agreements should be voided (Bix, 2020). Two related cases involved Castro v Castro and Bate v Bate which included contracts purported to have been established under duress.
James D. Casto, Petitioner, v. Donna L. Casto, Respondent
Facts of the Case
The case involved a couple who married in 1964, dissolved in 1966 and remarried in 1967. While the wife had no job, she stayed at home with no children within their marriage duration. At the same time, the husband invested in the development of shopping centers. In 1977, the couple signed a postnuptial agreement stating that the wife would get the home and $100000. The husband was expected to pay the mortgage for a year and contribute to repair worth $5000 (Casto v. Casto, 1987). The contract states that the wife would enjoy health insurance, club membership, and credit cards. Additionally, each party would continue to own any property solely owned before the engagement. Each individual was also expected to pay their attorney in case of any dissolution proceedings.
One year after remarrying, the husband wanted the postnuptial agreement to be approved after filing for dissolution. The wife alleged the agreement was invalid and claimed to have signed under duress and deceiving action because she was unfamiliar with her husband’s worth. In return, the wife sued the husband for coercing her to sign the agreement to get permanent lump sum alimony, associated costs, and attorney’s fees.
Issues Considered
The court investigated whether the wife knew about the husband’s properties, including shopping centers, and if she was advised properly by an attorney. The husband was required to advise and reveal his worth to the wife, and the court assessed if that was the case. Finally, the judges considered whether any form of duress forced the wife to sign the contract by checking the evidence provided by both parties.
The Court’s Decision
The court decided that the agreement was null and void because the wife did not receive adequate advice concerning the husband’s worth before or during the time she was required to sign the agreement. The wife did not have independent knowledge concerning the income and assets owned by her husband, meaning the agreement was not based on full exposure of the real circumstances for informed decision-making. The court stated that the wife did not receive competent counsel assistance from an attorney and the agreement was unjust and unfair to her. She was awarded a lump sum alimony totaling $1.5 million as a five-year payment by the husband (Casto v. Casto, 1987). The district court upheld the judgment but stated that there was compelling evidence to suggest that the wife had the knowledge and adequate independent advice before signing the agreement. However, there was no substantive evidence to reverse the decision of the trial court based on the knowledge available.
Ethical Issues
It was unethical for the husband to state that the wife must sign the agreement lest they lose the house. This indicates that there was clear manipulation and coercion into signing the agreement where the husband purported to gain from the incident. In this case, one of the ethical dilemmas is that inadequate legal counsel could be grounds for nullifying the agreement. The wife consulted two lawyers; hence this can be considered adequate legal counsel.
It can be purported that the contract’s circumstances negated the legal advice provided. First, the husband has influenced the wife to fire her previous attorney. The second attorney, in this case, was only invited to advise about the format of the agreement and not to provide advice regarding the wealth and income of the husband. All these actions from the husband can be purported to negatively affect any ability of the lawyers to provide competent advice to the wife. Third, the attorney stated that he could not have allowed the wife to sign the contract if he understood that the husband was rich. Lastly, it was ethical for the wife to seek to nullify the agreement if she felt that there was duress or unfair influence during the document signing.
Bates vs. Bates Case
Facts of the Case
Paul Evan Bates met with Magda Jhovanna Bates through a matching website. The 40-year-old husband was divorced and a commercial airline pilot with a net worth of 4 million (Scales, 2021). The woman was 18 years old and in her second year of medical school in Columbia. Later during a trip, the couple had sex, and the female got pregnant. The husband paid for the abortion, with the family unaware of the premarital sex, pregnancy, and abortion. During courtship, the husband asks their wife to sign a prenuptial agreement. They never discussed the deal or negotiated any of the terms. A wife is not a conversant speaker of English, and she later sorts the agreement’s translation into Spanish, realizing some form of deceit.
Issues Considered
Later in May 2017, the wife signed a verified petition to dissolve the marriage with minor children. The wife wished to set aside their prenuptial agreement because it was reached under deceit, fraud, coercion, misinterpretation, duress, and overreaching. She says that the contract was executed involuntarily as a result of the timing of the agreement (Scales, 2021). The court entered a bench trial on the validity of their prenuptial agreement.
The wife testified that she was a virgin before the pregnancy, in which the husband paid for the abortion. She was raised in a strict Catholic background where they did not approve of premarital sex or abortion. She says she was in pain and distress and only signed because she could barely walk and was bleeding. She did not read the agreement before signing it and later realized its content after translating it into Spanish. The wife testified that the husband told her repeatedly to sign the deal declaring that she had to sign it as a requirement to enter the States. She later admits that she would have signed anything the husband asked because she loved and wanted to marry him.
The Court’s Decision
The court concluded that coercion was present as Mrs. Bates was in a vulnerable emotional position at the time of the agreement having the wedding scheduled a couple of weeks later. The immigration date was also set shortly after the marriage, and the demand to sign the agreement was high. The court also indicated that due to her religious beliefs, she was not allowed to have sex on their wedding day and had an abortion resulting in more emotional stress and duress. Finally, the court discounted the husband’s testimony that the parties had negotiated and discussed the agreement (Scales, 2021). Here no meaningful negotiations had occurred with complex legal language resulting in barriers.
Ethical Issues
It was unethical for the parties to pressure each other into a contract. The husband took advantage of the current situation to get the wife to sign the agreement. The husband did not consider the language barrier between him and the wife. Discussion of the deal was not present, and the husband’s act pressured the wife into the accord portraying selfish reasons. It is ethical for that wife to avoid the contract after realizing that the husband deceived her into signing it. Another ethical issue identified is that as much as Mrs. Bates was in a tough situation, she should have known that this agreement was important. She should have tried to at least discuss it with Mr. Bates to be able to understand it fully before signing.
Conclusion
In conclusion, the decision concerning the contract signed on duress can vary depending on the reasoning used by the judges. For instance, failure to receive adequate legal advice is not sufficient to nullify an agreement, but how the partners influence the probability of receiving such counsel can determine the court’s final decision. In the two cases, different courts provide the same judgments but with different reasoning, which signifies the subjectivity of the ruling to establish whether agreements were signed under duress or not.
References
Casto v. Casto. (1987). 66325 (458 So.2d 290) –District court of appeal of Florida, fourth district. Web.
Scales, J. (2021). Bates v. Bates. Legal research tools from Casetext. Web.
Bix, B. H. (2020). Family law: Values beyond choice and autonomy? Law and Philosophy, 40(2), 163–183. Web.