Issue: Whether contract exists between Lame Duck restaurant and Marie?
Law: The first and most important element of valid contract is agreement which includes offer and acceptance, and it also involves meeting of the minds or consensus between the parties entered into contract.
Offer- for the purpose of constituting offer there is no particular form, and it is considered as communication under which one party promise to do something or not does something if other party to whom such offer is gives to does something or refrains from doing something. Offer can be made to the world at large. This can be understood through case law Carlill v Carbolic Smoke Ball Co, Court of Appeal [1893] 1 QB 256; [1892] EWCA Civ 1.
Acceptance- Acceptance is considered as unequivocal statement by the person to whom offer is directed for the purpose agreeing the offer.
Consideration- consideration is considered as price which is asked by the promisor in exchange of their promise. In other words, it is price for promise.
Intention to create legal relations- when parties entered into contract it is necessary that they intended to create legal relations. Presence of consideration is considered as valid proof that parties intend to create legal relations.
Application- in the present case, Marie accepts the offer made by Lame Duck restaurant given by way of Quotation. In this case, all the essential elements of valid contract are present and both the parties intended to create legal relations.
Therefore, there is valid contract exists between the parties.
Issue- Whether contract between Lame duck restaurant and Marie is affected by Mistake?
Law- mistake is considered as complex area of contract law. Generally, parties cannot rescind or rectify the contract on the ground of being mistaken at some aspect of contract. no matter even that mistake is fundamental in nature.
Unilateral mistake is occurred when only one party at the contract is being mistaken about any element of the contract, but other party is not. Usually, common law does not provide any remedy for unilateral mistake. Equity provides remedy for unilateral mistake, but condition is applicable that other party who is not mistaken must conduct some improper action. In other words, unmistaken party must engaged in some improper conduct such as, it prevents the other party to be aware of the mistake. If any misleading conduct is involved on the part of unmistaken party, then equity provides superior remedies. In normal cases in which actionable mistakes exists equity provides remedy of rescission or rectification.
Application- in the present case, Lame Duck restaurant send wrong quotation to the Marie which was accepted by the Marie. In this case, Lame duck entered into contract on the basis of unilateral mistake. In this Lame Duck is mistaken to the fundamental term of the nature.
In some cases party is taken at fundamental terms of the contract such as price or subject matter. It was decided in case Smith v Hughes, that contract exists because both the parties intended to buy or sell the oats but the consensus on the age of parties was not match. This case does not provide proper result. This topic was also decided in case Taylor v Johnson, Court held any party who enter into contract on the basis of unilateral mistake has power to rescind the contract under equity if other party acted in unconscionable way.
Lame duck cannot rescind or rectify the contract under equity because Marie does not engage in any conduct which is of improper nature.
Issue- Remedies available to Marie if Lame Duck refuses to perform its contractual obligation under the contract?
Law- Contract can be terminated by the non-breaching party, if other party breaches the contract. The non-breaching party terminates the contract if following grounds are present:
Following common law remedies are available for breach of contract:
Application- In the present case, Marie can apply for damages or specific performance if Lame duck refuses to perform its obligation under the contract.
Issue- Whether tort of negligence was present in this case?
Law- when one person owns duty of care towards another person, then negligence is considered when one person does or fails to do something which cause injury or loss to the other person. Following elements are considered by court for the purpose of determine whether negligence is occurred or not:
Application- in the present case, all the essential elements of tort of negligence are satisfied, and these elements are stated below:
Therefore, all essential elements of negligence are present in this case, which means tort of negligence occurred. It was decided in case Donoghue v Stevenson 1932 AC 562, Court held that Mr. Stevenson was liable towards Ms. Donoghue under tort of negligence because all essential elements were present in this case.
Issue- whether Johnny is liable for the negligence of his gardener?
Law- vicarious liability occurred when person bears the liability of the negligent actions conduct by any other person. This liability usually occurs on the employer for the negligent act of their employees, and in maximum cases employer is held liable for the negligent act of its employees.
In other words, vicarious liability is the imposition of the liability on the party who does not commit any tort, but it has some responsibility of the tortfeasor. This can be understood through example; employer is liable for the acts of its employees. This liability occurred if these essential elements are present:
Application- in the present case, Johnny is the employer of the gardener and he is vicariously liable for the tortious acts off gardener. This is decided by Court in case Hollis v Vabu (2001) 207 CLR 21. In this case, Court stated that employer is vicariously liable for any tort committed by its employee in the course of employment, but it must be noted that this principle is not applicable in the case of independent contractor.
Essential elements of vicarious liability are present in this case:
Issue- whether Johnny is liable to pay only medical expenses or money lost by cancelling holiday or both?
Law- if any person suffered loss or injury because of negligence of another person, then such person has right to claim damages under law. It must be noted that, only those damages is compensate which are actually occurred. Plaintiff suffered injuries or loss can claim for two types of damages:
Special damages- these damages are generally considered as out of pocket expenses, and it includes medical expenses such as ambulance fees, loss of earnings, and other similar expenses. Because of the different nature of these damages, these damages can be easily quantifiable.
General damages- these types of damages generally includes matters related to loss of earning capacity in future, pain and suffering, and loss of life enjoyment. It is not possible to calculate these damages as per mathematical calculation because of their very nature. For the purpose of assessing these damages, court consider individual aspects of these damages and also assess the suitable amount of money which is of fair and equitable nature to both the parties.
Application- in the present case, Johnny is liable to pay both the damages that is special damages and general damages. Plaintiff has right to claim following damages:
ACL, Agreement, < https://www.australiancontractlaw.com/law/formation-agreement.html>, Accessed on 16th September 2017.
ACL, Mistake, < https://www.australiancontractlaw.com/law/avoidance-mistake.html>, accessed on 16th September 2017.
ACL, Remedies, < https://www.australiancontractlaw.com/law/remedies.html>, Accessed on 16th September 2017.
Law Vision, The Law of Torts, < https://www.lawvision.com.au/uploads/PDFs/Tort%20Law%20.pdf>, Accessed on 16th September 2017.
Uni Study Guides, Vicarious liability, < https://www.unistudyguides.com/wiki/Vicarious_liability>, Accessed on 16th September 2017.
Lawhand book 2017, Negligence, liability and damages, < https://www.lawhandbook.org.au/10_01_01_negligence_liability_and_damages/>, Accessed on 16th September 2017.
Donoghue v Stevenson 1932 AC 562.
Carlill v Carbolic Smoke Ball Co, Court of Appeal [1893] 1 QB 256; [1892] EWCA Civ 1.
Smith v Hughes, Court of Queen’s Bench [1871] LR 6 QB 597.
Taylor v Johnson (1983) 151 CLR 422.
Hollis v Vabu (2001) 207 CLR 21.
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