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Introduction to the cases
This paper will focus on two case examples that will explain the basics of contract law. The first case involves Kathy who works as a human rights public speaker in Brisbane Australia and one day, she is invited to give a keynote address at a conference in Ballarat for two days. The title of the speech is supposed to be interplay between human rights and economic development. The organisers of the conference had promised Kathy that she would be accommodated and given a return ticket from the city hosting the conference to her home city in Melbourne.
According to the contract, Kathy was responsible for her travel to and from Melbourne airport which takes one hour and fifteen minutes by road. Kathy arrives in Balarat and delivers a keynote speech titled Generation Y and economic development and this speech deeply moves the participants, especially Mark and Laura, who are students of fundamental law at the University of Balarat. After the speech, Mark and Laura Join Kathy during the conference lunch and share their views about her moving speech. The two also offer to escort Kathy to the airport when she is returning home. Relying on Mike and Laura, Kathy makes no other travel arrangements. However, neither Mark nor Laura turns up to take her to the airport and she had to take a shuttle bus to the airport and subsequently missed her flight. She had to buy a new ticket to travel back home and this cost her considerably. During the day of departure, Mark and Laura had to submit a paper on fundamental law and that’s why they could not keep their promise. Mark and Laura later sent her a letter of apology but Kathy is seeking compensation for the losses she incurred due to non performance of Mark and Laura.
The second case scenario involves Nonaka and her spouse Namiko who have come from Tokyo to a place called Cairn to see the Great Barrier Reef and they are checked into a hotel called the Happy Stay Hotel. After completing all the paperwork and paying, they sign a terms and conditions form that stipulates the conditions of their stay. The couple was tired from their long journey and were not good in English so they signed the terms and conditions form without reading it and on the second day of their stay, Nonakas expensive camera went missing from their room. When the couple approached the hotel manager, they were referred to the terms and conditions form they had signed as they checked in and one of the terms and conditions read that the hotel will take utmost care of the guests residing within the hotel but the hotel wont take responsibility for any loss of goods belonging to the guests within the premises of that hotel.
Analysis of case 1
The first case pitting Kathy and the organisers of the conference can be tackled by a section of contract law called offer and acceptance. The most important aspect in a contract is offering and accepting and this is what is legally referred to as the concurrence of wills (Cunningham, 1984).Offers and acceptances are not necessarily expressed in writing because they can be oral or implied. An implied contract is a contract that has not been expressed using words and the best example is that of a patient who goes to a doctor and fails to pay. The patient has breached a contract though it has not been written anywhere because the existence of an agreement between the parties is expressed clearly. There is an indication by the person making the offer of the that they are willing to be bound by certain terms which are usually accompanied by an assent to the offer by the person accepting and this means that the offer indicates the intention of the person giving the offer to be bound by terms that have been set out without any further negotiation (Bush, 2002). It is distinguished from an invitation to treat because it involves further negotiations that entail formation of a contract.
An offer is liable to the person who accepts it before it is withdrawn and it includes persons who have not been ascertained but an offer is not effective if it has not been communicated by the person offering or a third party representing the person offering. An acceptance of the offer creates a binding contract and acceptance always corresponds with the offer unequivocally. The second element of a contract is called the consideration and any promise can only be enforced by a law if it is supported by a consideration. A consideration can range from monetary promises or even promises to do or not to do something (Estelle, 2000). In this context, consideration means that a promise is given in return for a promise received and this leads to something called contractual capacity which refers to the ability of a party to enter into a contract that is legally binding, meaning that the person giving the offer is reasonable enough to make engage in a contract. In the case pitting Kathy and the organisers of the conference, there existed a contract though the contract was not written. The organisers had contracted Kathy to fly to their university to give a speech on a legal subject and one of the terms stipulated in the contract is that Kathy would be given a return ticket to her home city after the conference. However, she would cater for her own travel costs from the airport to the university. The organisers kept their word and gave Kathy a return ticket but the contract that the two parties enter into is altered by the offers that Mike and Laura make during the luncheon. The initial contract had stipulated that Kathy would make her own travel arrangements from the airport and to the airport after the conference but Mike and Laura offer to give her a ride to the airport. This offer cancels the conditions laid out in the initial contract because the two have committed themselves to take Kathy to the airport.
However, the two do not turn up on the appointed day to keep their promise and this makes Kathy to incur losses because she waits for the two for a long time until she decides to get her own means of travel to the airport. Failure by the two to turn up also makes her to miss her flight meaning that the ticket that the organisers had given her was rendered useless because of non performance of Mike and Laura. This means that Kathy had to use her money to get another ticket to fly to her home city. Failure by Mike and Laura to turn up to honour their promise is a breach of contract because they had bound themselves, though not in writing. They had assured Kathy that they would take her to the airport and this made Kathy to shelf her personal travel arrangement. Had mike and Laura turned up to take Laura to the airport, she would not have missed her flight and the return ticket that the organisers had given her would not have been rendered useless. On the other hand, had Mike and Laura not committed themselves to take Kathy to the airport, Kathy would have made her own travel arrangements and would have arrived at the airport early enough to catch her flight and even if she missed her flight in the absence of the promise made by the two, she would have had herself to blame.
The question that arises is whether Mike and Laura are legally liable and whether they are supposed to compensate Kathy for the losses she accrued and the inconveniences she got due to non performance of the two. The fact that Mike and Laura sent an apology letter confirms that the two were aware that their non performance had failed Kathy and they also knew that they had breached a contact and this means that the apology letter is legal evidence that Kathy can use against the two. The promise to take Kathy to the airport is an unwritten contract which is on the other and legally binding because the offer was made and accepted, then reneged upon. Mike and Laura may argue that they had offered to assist Kathy but failed to assist because of unforeseen circumstances but the problem is that they never informed her on time so that she could make alternative arrangements. A promise remains a valid contract unless the offering party communicates otherwise and had Mike and Laura communicated to Kathy that they were not in a position to honour the contract, they would have avoided the inconveniences that made her to miss her flight. My advice to Cathy is that she should use the apology letter against Mike and Laura to claim compensation for the damages and losses incurred due to non performance of the two. Most importantly, the two should be made to reimburse the money she spent on her second flight ticket after she missed her flight because mike and Laura failed to honour the promise.
Analysis of case 2
The second case involving Nonaka and Namiko is a bit complex because it involves two contradictory clauses of the contract law. The terms and conditions signed by the couple represents a contact between the hotel and the couple regarding their stay and signing the terms and conditions implies that the couple had agreed to be bound by the laid out conditions. One of the conditions that later came to haunt the couple is that the hotel will take utmost care of all the guests in the hotel but will not be held liable for the dissapearance or damage to the property belonging to the guests. This condition is contradictory because if something disappears, it means that the hotel management had not exercised the duty of care. The couple may have signed the contract expressed by the terms and conditions blindly because they were tired and secondly, they did not understand English fully but this is not an excuse because the couple did not inform the management in the first case that they did not understand English. Had they informed the management that they don’t understand English, the management would have cared top explained the contents of the contract to the couple. This does not however exonerate the management of the hotel from blame because the contract between them and the couple stipulates that the managements owes the couple a duty of care (Duncan, 2000). There is no way you can care for guests and not care for their belongings.
The terms and conditions may state that the hotel; is not liable for the disappearance of items but this condition is nullified by the duty of care expressed elsewhere in the same condition which implies that disappearance can only occur if the duty of care is neglected. The fact that an expensive camera belonging to the guests disappeared within the hotel premises means that the hotel had failed in providing care to the guests. The hotel may not be liable for the disappearance of the camera as per the terms and conditions but the hotel stands to be blamed for failing to provide care to their guests and their properly which led to the disappearance of the expensive gadget. Though the couple had got into the contract blindly, there are some loopholes in the contract that still favour their case against the hotel management. To start with, the couple according to the contract law are not recognised as reasonable parties to enter into a contract because of their tired state of mind and their inability to understand the language of the contract, but since the terms and conditions covering the issue at hand has two contradictory clauses, they can take advantage of this contradiction to claim compensation from the hotel management.
The hotel has offered to provide care to all its guests and there is no way you can delineate guests from their property which means that duty of care stipulated inn the contract extends to their property and the fact that an expensive camera disappeared from the hotel premises means that the hotel has failed to honour the contract between it and the couple. The hotel may not be responsible for the disappearance of the camera but is liable for the disappearance of the camera because it failed to exercise the duty of care stipulated in the contract between the hotel and the clients. My advice to the couple is that there is a legal loophole in the terms and conditions concerning the disappearance of their camera because this condition is self contradictory which means that the hotel management cannot escape liability. If the couple sues the hotel for the disappearance of the camera, the hotel may win because the terms and condition says that the hotel is not responsible for the disappearance of property but if the couple sues the hotel for not humouring the duty of care, stipulated in the contract, the couple is likely to get compensated for the lost gadget. Therefore, I would advise them to file a suit against the hotel for neglecting the duty of care stipulated in the contract.
References
Bush, C. (1995). Uniform business law: with business forms and illustrative cases. Chicago: The H. M. Rowe.
Cunningham, R.A. (1984). The Law of Property.Sydney: Heinemann.
Duncan, B. (2000). Consumer protection laws. London: Chandler House.
Estelle, M. (2000). Contract Law. Oxford: OUP.
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