Based on the facts as provided in the case study, the issue here is to what extent Niles is liable to damages to Fraiser legitimately?
In the given case study, a valid contract existed between Niles and Fraiser as all the elements of contract between them was successfully fulfilled. Proposal, acceptance, consideration and consent are some of the essential elements of a contract and the same was fulfilled by both the parties to the contract. A breach of contract takes place when one of the parties to the contract fails to meet or fulfil their contractual obligations. Failure to perform contractual obligations gives the other party the right to raise a cause of action (Cooper and Kirk 2021). The Australian contract law recognises, four types of breach of contract namely, material breach, actual breach, anticipatory breach and minor breach. In case of breach of contract, there are two types of remedies mostly available, damages and specific performance of contract. Damages means when the court analyses the damage caused due to breach of contract and orders the party who has breached the contract to pay a certain amount of money. In some cases, the court may order specific performance of the contract which means the party who has failed to perform the contract is ordered by the court to fulfil his contractual obligation (Knapp, Crystal and Prince 2019).
Compensatory damages are one of the most common type of damages that courts order to give in case a breach of contract takes place. Compensatory damages are given not as a punishment but to compensate so the plaintiff overcomes the loss suffered by him. Legally, it means the court puts the defendant in the same position as that of the plaintiff so that the monetary loss can be recovered.
The party who files for compensatory damages should prove that actual loss is suffered by the plaintiff due to non-fulfilment of the contractual obligation (Martín-Casals 2019).
Nonetheless, it becomes easier to understand and calculate the loss monetary in nature. It becomes easy for the court as well as for the plaintiff to calculate losses suffered by him and demand the same from the defendant. Sometimes, the consequences of breach of contract is not monetary in nature and the plaintiff might also undergo distress and anxiety due to breach of contract (Beale et al. 2019). The general rule of contract law states that damages resulting in distress, disappointment and depression will not be considered as breach unless the contract explicitly states one of the following:
In the case of Moore v. Scenic Tours Pty Ltd, the High Court clarified that injured personal feelings would not fall under the category of personal injury as explained under the Civil Liability Act. Moreover, the court also added that under section 16 of the Act, non-economic loss includes suffering or loss of some type of amenities resulting due to personal injury. The court, in this case, preferred staying to the traditional meaning of non-economic loss. Moreover, the court also confirmed in the Baltic shipping case damages resulting from a bad experience of holiday is different from non-economic loss due to personal injury. Likewise, in the case of Archibald v Powlett, the court of Appeal disallowed the damages awarded to Mrs Powlett for disappointment, distress and anxiety. The court of appeal while making its decision clearly stated that contracts allowing anxiety and depression as a breach of contract should come from direct guarantee of providing enjoyment or relaxation of some sort and where the damages are the source from some type of physical inconvenience due to the breach. Thus, the court of appeal rejected the damages awarded to Mrs. Powlett.
In the case study, Fraiser can legitimately claim for compensatory damages as far as his lost revenue of 1800 dollars, 200 dollars expense he gave to Niles as delivery fee and 10,000 dollars for missing out the lucrative opportunity is concerned. However, Fraiser cannot make a claim of 1000 dollars for stress and disappointment. The rulings of the above-mentioned case laws adopted by the High Court and Court of Appeal can be applied here as well. Firstly, personal feelings cannot be equated with personal injury and that no loss of actual amenities have taken place. Secondly, there has not been breach of contractual obligation guaranteeing relaxation or peace of any kind nor any physical disruption has taken place in the case of Niles and Fraiser. Thus, the compensatory damages as requested by Fraiser for stress and disappointment can be considered as illegitimate.
Conclusion:
Conclusively, it can be said that Fraiser can legitimately claim for compensatory damages as far as his lost revenue of 1800 dollars, 200 dollars expense he gave to Niles as delivery fee and 10,000 dollars for missing out the lucrative opportunity is concerned. However, Fraiser cannot make a claim of 1000 dollars for stress and disappointment by applying the rulings of the Courts taken in the above-mentioned case laws respectively.
The difference between supply of information and offer is very basic and depends mostly on the intention of the parties to the contract. While the offer allows one of the party to come into contract that is a legally binding contract, invitation to offer simply invites the other party to form negotiations so that the offer can be made by him (Markovits and Schwartz 2019). At a prima facie level, this may sound very difficult, but this is the very basic difference that one may notice as part of their daily lives. Therefore, it can be said most form of advertisements are not real offers and simply supply of information. However, in real life it is not always easy to understand the difference between supply of information and offer because of the difficulties and complications that exist in different situations. The aim of this part of the answer is to find out the situations whereby differentiating between offer and supply of information is difficult.
Offer means when one of the persons to the contract expresses willingness to the other party by making a proposal to him for entering into the contract. This is called an offer. When the other person to whom the offer is made, after agreement, is said to be part of a legally binding contract. On the other hand, supply of information means when one of the parties to contract has the intention to enter into the contract. For example, when we go to buy clothes and shoes from any shop, the display of price is simply supply of information and not an offer (Fitzpatrick et al. 2011). Whoever passes by the shop has the option of choosing to buy clothes or he may choose not to buy as well. The seller can form a contract with anyone from amongst the people whoever is interested in forming the contract. Counter offer is made against the invitation to offer and if the seller is good with the counter offer, then a final contract is formed between the parties.
In the case of online shopping as well, goods that are displayed in an online shopping platform is considered as invitation to treat (Fitzpatrick et al. 2011). A formal offer is made by the consumer and will be considered as binding only when the payment for the given item is done. Therefore, it can be said that advertisements are mostly invitation to treat as they do not have important information to make it a final offer. An offer is made by the buyer to the seller who has the intention to form a contract. Defining advertisements as invitation to offer also allows the seller to refuse to sell the items that have been priced wrongly in the display (Fitzpatrick et al. 2011).
Likewise, auctions are also considered as invitations to treat or supply of information. Every bid is considered as offers that are made by the seller to the buyer. The auctioneer in this case has the right to accept it or reject the same in behalf of the seller. As soon as the hammer falls, offer is accepted and a final contract is formed (Cooper and Kirk 2021).
It becomes very difficult to understand the difference between the two in certain situations. In such a scenario, one should understand that unless the other person has made a clear distinction to the other party a legal contract is not formed (Martín-Casals 2019). For instance, a final offer is not created unless it is properly registered and communicated that an offer will be made. Acceptance will be said to be completed only when the employee of the shop sells the item. This is one of the common scenarios where a person thinks that he is actually accepting the offer however it is simply a response to the supply of information. The original offer is not accepted unless payment is made for the item purchased. Moreover, to make it a legally binding contract, all the essential elements of the contract should also be fulfilled (Markovits and Schwartz 2019).
In most of the situations, a counteroffer is considered as the final offer and this should not be the case. For example, if the offeror makes a response to the invitation to offer and the offeree responds to the offer with some variation in it, then it should not be considered as final offer, rather it is a counteroffer that ends the original offer so made. Therefore, when making the difference between counteroffer and final offer, the role of acceptance can be very tricky. Therefore, in unilateral offer, acceptance can be done by way of conduct. Whereas, in bilateral offer, acceptance can be completed by way of formal expression. In case of postal rule, acceptance is completed from the moment when a letter of acceptance is posted. However, acceptance is not the only element to make a contract legally binding, all the other elements of the contract should be fulfilled to make a contract binding and legal in the eyes of law (Markovits and Schwartz 2019).
Conclusion:
Based on the discussion above, it can be said that identification of the difference between offer and supply of information can become very difficult unless the intention of both the parties is clear. Acceptance also plays a major role in making the difference clear or else most of the counteroffers will be deemed as final offer. Acceptance will be said to be completed only when the employee of the shop sells the item.
Reference:
Beale, H., Fauvarque-Cosson, B., Rutgers, J. and Vogenauer, S., 2019. Cases, materials and text on contract law. Bloomsbury Publishing.
Cooper, T. and Kirk, E., 2021. Contract Law. Routledge.
Fitzpatrick, J., Symes, C., Veljanovski, A. and Parker, D., 2011. Business and corporations law. LexisNexis Butterworths.
Knapp, C.L., Crystal, N.M. and Prince, H.G., 2019. Problems in Contract Law: cases and materials. Aspen Publishers.
Markovits, D. and Schwartz, A., 2019. Plural Values in Contract Law: Theory and Implementation. Theoretical Inquiries in Law, 20(2), pp.571-593.
Martín-Casals, M. ed., 2019. The borderlines of tort law: interactions with contract law. Intersentia.
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