This legal essay will discuss the elements of a contract and how a breach of contract takes place. In addition to this, the issues like exclusion clause and postal rules would also be elucidated. A discussion will also be carried on regarding the elements of negligence. To analyze the given case study, the common law of tort of negligence and contract law would be applied to the given scenario, along with the application of the established case laws. This analysis would help in reaching the conclusion that the damages can be successfully pursued by Joseph and Clara against Marshall for his negligence. The conclusion would also reveal the legal action for the breach of contract which can be initiated against Joseph and Clara by Marshall, but not by Edward.
A contract is an exchange of promise, where for a consideration, one party promises to do something for the other party. A contract can be drawn in two manners; it could be an oral contract, in which the terms discussed regarding the contract are exchanged through oral dialogue; or it could be a written contract where the terms discussed regarding the points under the contract are stated over a document and is then signed by all the contracting parties.
To formulate any contract, the first essential is to have an offer. However, it is essential that an offer is differentiated from an invitation to treat. An invitation to treat is showing or interest, or showing the willingness to enter the stage of negotiation. The advertisements in the newspaper are considered as an invitation to treat. A leading case in this regard is the case of Partridge v Crittenden, where it was not required for the individual to go through with the sale. Though, if it can be established that a unilateral offer has been made, as was done in the case of Carlill v Carbolic Smoke Ball Company, it is deemed as an offer.
The advertisement given in the local newspaper by Joseph was an invitation to treat, as it invited quotes for forming a contract. Hence, due to this advertisement, it was not necessary for Joseph to accept either Marshall or Edward’s reply. The offer in this case was the reply sent by Marshall on 8 February 2017, and that of Edward sent on 12 February 2017. Both these replies were a response to the invitation to treat published in the newspaper and hence, an offer.
The next element in a contract formation is an acceptance. The offer, when made, has to be accepted as it is and any changes to such an offer, would be deemed as a counter offer, as has been famously established in the case law of Hyde v. Wrench. A famous mode of communicating the acceptance is through post. In order to give an acceptance to any offer, the same could be posted and the date of such postage is deemed to be the date of acceptance. The receiving of such communication remains irrelevant. The date of posting acceptance was taken as the date of postage in Adams v. Lindsell and due to this, the contract was enforceable. This is because the postal office is considered to be the implied agent of the party posting and the receipt of posting office is taken as the receipt of acceptance by the other party.
When any letter is emailed, or sent through any other electronic means, when the same has been stated as the mode of acceptance, the postal rules apply to such situations. So, for an electronic communication in form of offer or acceptance, would be deemed to have been sent on the date of sending the email. The rationale behind this rule is the “meeting of minds”. Hence, the digital equivalent of postal system is the electronic mail. In the given scenario, the offer was sent through the email, and as per postal rules the date of email would be the date of offer. The offer of Marshall was then accepted by Joseph on 13 February 2017 and the offer of Edward was never accepted.
The next essential is of consideration, which was contained in the offer of both the parties. There was a clarity regarding the terms of the contract, as the offer was clear. The parties had the contractual capacity and the intention to form legal relations, as there is nothing to suggest otherwise. Hence, a valid contract was formed between Joseph and Marshall, but as the acceptance was not made with Edward, no contract was formed in this case.
An exclusion clause is a term in the contract, as a result of which, the rights and liabilities of a contracting party can be restricted or limited. An exclusion clause, for being valid, has to be properly incorporated in the contract. Also, an exclusion clause cannot be contradictory to a law or its applicability. Moreover, this clause has to be inserted at the time of formulation of the contract and a later incorporation is held to be invalid. It is irrespective if the plaintiff has read the exclusion clause or not, as was seen in the case of L’Estrange v Graucob. However, when such a term is not in a contract, it has to be brought to the attention of the other party. In Chapelton v Barry UDC, as the exclusion clause was contained at the backside of the ticket, and it was also not brought to the party’s notice, the exclusion clause was taken to be invalid. In the given scenario, the quoted form contained the exclusion clause. This was not a contractual term but a term contained elsewhere so, L’Estrange v Graucob is not applicable in this case. Since this exclusion clause was not brought to the notice of Joseph, it would not be binding on him, as per the verdict given in the case of Chapelton v Barry UDC.
When any party, fails to fulfill a term of the contract, it is deemed as breach of contract and the aggrieved party can claim both equitable and monetary damages. In the given scenario, Joseph and Marshall and by stopping Marshall from continuing to do his work, Joseph breached the term of his contract. And hence, the damages can be claimed by Marshall. Though, since a contract was not formed between Edward and Marshall, a breach of contract cannot be claimed.
A contract was formed between Edward and Joseph only after the whole incident with Marshall had taken place. In this offer, the email was referred to, but the term of contract was slightly changed as per which the work had to be done once the floor was structurally sound. This would be deemed as a counter offer as per Hyde v. Wrench. This contract was never breached so a case for the breach of contract cannot be raised by Edwards.
Negligence is considered as a tort in Australia. When an individual fails to fulfill their duty of care, which is owed by them to certain other individual, and there is a failure in accomplishing this duty, and the other party is harmed or injured, then the tort of negligence occurs. An established case in the case of negligence is the case of Donoghue v Stevenson, where due to the failing in ensuring that the bottles were safe, and a snail was found inside the bottle manufactured by Stevenson, Donoghue fell sick. And so, Stevenson was held guilty of negligence and had to compensate Donoghue.
In order to establish negligence, a duty of care had to be present, along with the breach of this duty and the result of it has to be some significant damage with causation and foreseeability. In this case, Marshall negligently left open the door which resulted in the flooding and which eventually led to the collapse of the floor. There was a duty of owed by Marshall that he carried his work properly, which he breached by leaving the door open and the loss was caused. So, a clear case of negligence is present in this case and so, Marshal would have to compensate Joseph for his losses.
The above analysis helped in establishing the requirement for establishing a case under contract law and negligence. With the help of the common law rules, along with established case laws, the case of breach of contract was successfully established for Marshall, though the same could not be established for Edward. Hence, Joseph and Clara would be liable for a breach of contract and would be liable to provide Marshall with requisite remedies. As there was no breach of contract with Edward, there is no legal liability for this contract. However, a case of negligence can be established by Joseph and Clara against Marshall and the exclusion clause would not help Marshall in any way.
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