Whether oral assurance of Kalpana is regarded as a term of the contract?
A contract enforces its terms over the parties, and they are legally obligated to comply with such terms. Each party can legally enforce each other to perform the term of the contract. Both written and oral contracts are legally enforceable by the law as long as the parties full the essential elements of a contract. It is necessary that a valid offer and acceptance is present in a contract because it is one of the essential elements of the contract. A valid consideration which has a value in the eyes of the law is another key element of the contract; non-presence of consideration or invalid consideration makes a contract void (Thomas v Thomas). It is also necessary that the parties to a contract have mutual intention to construct the contract and bound themselves by its terms (Messent and Glass, 2017). The competence of parties is another key element of a contract because not everyone can create a contractual relationship.
A minor, insolvent person or the individual who has an unsound mind cannot construct a contractual relationship with another party. Statements made by parties during the course of negotiations of the contract could amount to a representation to a contractual term. The statements made by any of the parties to a contract before entering into a contract are called pre-contractual statements. These statements can be classified into three categories which include mere puff, representations and terms. Classification of the pre-contractual statements is necessary because it influences the remedies in different cases. Mere puff is also called sales talks which are not intended to be taken seriously by the parties to the contract. For example, if a car salesman stated that a car is a “total bargain” for the party, then the customer cannot expect to take the statement seriously (McNaughton, 2012). Another form of pre-contractual statement is the representation which is referred to a factual statement which is said by a party in order to induce another party to create a contractual relationship (Oscar Chess v Williams).
The representations are not a part of the contract because these statements are said by the party to create a legal relationship. The parties which rely on the representations cannot claim for the breach of contract in case they turn out to be false because they are not a part of the contract. Furthermore, if a pre-contractual statement is considered as a term of the contract then the parties to a contract have the right to claim for damages. In order to constitute a pre-contractual statement as a term of the contract, it is necessary that the parties must have intended the term to be promissory in nature. It is linked with the element of intention in the contract which means the statement must have an intention of the parties to form a legal relationship (Bannerman v White) (Tillson, 2014). The court determines the statement based on the principle of objectivity which provides what a reasonable person would have done in such situation.
In order to impress visitors from Savitribai Phule Pune University, Rafia wanted to organise a performance of Indian classical dance. She saw the advertisement of Kalpana and contracted her to hire her for the performance. She mentioned to her the purpose of the event and asked her whether she knows Indian classical dance. Kalpana replied positively by saying that she does the most beautiful Indian dance. It was not a sales puff because Rafia entered into the contract based on such statement and based on the objectivity test, Kalpana made the statement in order to form a legal relationship with Rafia. Moreover, the parties to the contract fulfilled each essential element of the contract. Rafia gave an offer for the contract to Kalpana, and she gave her acceptance. The consideration was present and valid, and both the parties are competent to create a legal relationship. Both the parties also had the intention to create a legal relationship between each other. Rafia gave the offer for the contract after the oral assurance of Kalpana. Based on her assurance, Rafia entered into a contract with Kalpana, therefore, the oral assurance is considered as a term of the contract. A contract can be written or oral, and an oral contract has been constructed between Rafia and Kalpana based on the assurance given by Kalpana which is a pre-contractual statement which is considered as a term of the contract.
Conclusion
To conclude, a contract can be formed in both written and oral format, and in this case, each party fulfilled the elements of the contract. Rafia constructed the contract based on the oral assurance of Kalpana which is considered as a pre-contractual statement, and it is considered as a term of the contract since the parties entered into the contract based on such assurance.
Whether the oral assurance is considered as a condition or warranty in the contract?
The terms of a contract are referred to legal obligations of parties which are necessary to be performed by each party in order to discharge their legal obligations. The breach of a term gave rise to legal consequences and parties can be held liable for not discharging their legal obligations. The terms can be categorised into two key sections which include a condition and warranty. The difference between each of these terms is necessary because it affects the remedies which are available for an aggrieved party. Warranties are referred to contractual terms which are less significant. A breach of warranty cannot give the right to the aggrieved party to terminate the contract and discharge himself from the contractual obligations (Chen-Wishart, 2012). However, the breach of a warranty give the aggrieved party right to recover damages from another party for the loss suffered by him. Whether a term is considered as a condition or warranty in a contract is depends upon the fact that how essential the term is to the essence of the contract.
The condition is referred to a major or fundamental term of the contract which goes to its roots. The breach of a condition fails the purpose for which the contract is formed, and it renders the performance of rest of the contract. The court uses a test for identifying whether a term is a condition or warranty which was given in a leading case (Tramways Advertising Pty Ltd v Luna Park (N.S.W) Ltd). In this case, Luna Park entered into an agreement with advertisement company, Tramways, which agreed that the advertisement would be displayed for at least 8 hours per data on the specific times provided by the company. Tramways did not follow the contract exactly, and Luna went to the court for filing a suit for breach of contract. Luna argued that Tramways breached the contract because it clearly stated that “we guarantee” that her advertisement would be shown for 8 hours (Carter, 2013). The court gave the judgement in favour of Luna Park by stating that she is entitled to terminate the contract because the term was an essential part of the contract.
It was held that Luna would not have entered into the contract ‘but for’ that promise, she signed the contract. Furthermore, it was held that the words ‘we guarantee’ focuses on the importance of the clause for the contract based on which the term was considered as a condition of the contract. In case of a breach of warranty, the parties are not entitled to claim for a termination of the contract (Associated Newspapers Ltd v Bancks) (Rollnik, 2009). It was held by the court that warranties are non-essential or side terms of a contract and innocent party cannot terminate his/her legal obligations in case of breach of a warranty.
In the present scenario, Rafia met Kalpana to hire her for organising of an Indian classical dance show. The main purpose of Rafia for organising the event was to impress visitors from Indian University. She wanted to impress them because it increases the chances of a potential contract between USC and Savitribai Phule Pune University. Rafia met with Kalpana and told her why she was organising the event. She told her that the main purpose of organising of the event was to impress Indian visitors by organising of an Indian classical dance show. She also told her that if they enter into a contract, then she will advertise the Indian classical dance event and sell tickets to make a profit. Kalpana knows the purpose of Rafia for organising the event after which she gave her oral assurance to Rafia. The organising of an Indian classical event and selling of tickets to make a profit was the root of the contract based on which it was formed. Hence, the oral assurance of Kalpana is considered as a condition of the contract.
Conclusion
To conclude, the contract between Rafia and Kalpana was formed because Rafia wanted to organise an Indian classical dance event and sell tickets, therefore, the oral assurance of Kalpana is considered as a condition of the contract.
Which remedy is suitable for USC against Kalpana?
The parties to a contract have legal obligations which are necessary to be discharged by them and noncompliance of them resulted in a breach of the contract. In case of a breach of contract, the innocent party can claim for remedies which are given based on the discretion of the court as per the circumstances of the case. The award of damages is more common remedy than compared to others. It is compensatory in nature, and they are not awarded to punish the actions of the defendant. The purpose of issuing of damages is to compensate the plaintiff for the loss suffered by him. In legal terms, it can be said that the objective of damages is to place the plaintiff in the same situation if the defendant had performed the contract, so far as money can do so (Chen-Wishart, 2012). In order to claim damages from the defendant, it is necessary that the party claiming the breach of the contract must prove that losses are suffered by him as a result of breach of the contract (The Monarch Steamship v Karlshamns Oljefabrika). The court does not issue a reward for damages in case the losses do not occur as a direct consequence of the breach of the contract. Other remedies include liquidated damages which is available in case the parties of a contract have entered a clause which requires the parties to pay a particular sum of money in case any party breached the terms of the contract (Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd) (Zeller, 2011).
The sum payment by the party in case of liquidated damages is not constituted as a ‘penalty’. The aggrieved party has the right to demand liquidated damages rather than unliquidated damages in the case of breach of contract. Furthermore, the innocent party of a contract can demand equitable remedies in case of a breach of a contract which includes specific performance and injunction. Specific performance is referred to an order of the court in which it directs the parties to a contract to perform the contract are a way which is provided by the court (Nutbrown v Thornton). The order for specific performance is only given by the court when the money is not an equitable remedy for the breach of the contract. This remedy is given based on the discretion of the court. In case of the injunctions, the court orders the party of a contract to do or not do something which might result in a breach of the contract (Stone and Devenney, 2017). The court orders the party to not persist with the contractual breach by issuing an injunction.
Both the equitable remedies are given based on the discretion of the court which means that the court is not obligated to issue these awards in case of a breach occurs. Furthermore, in case of a breach of a condition of the contract, the innocent party has the right to demand the repudiation of the contract. In case of repudiation, the legal obligations of a party are terminated by the court. After the award of repudiation of the contract, the parties are free from their contractual terms. This remedy is issued based on the discretion of the court which means the court is not obligated to issue this remedy in case a breach occurs (Slapper and Kelly, 2009). Moreover, the repudiation of the contract is only available in the case whether the party has breached the condition of a contract. In case of a breach of a warranty, the party cannot demand the termination of the contract because this remedy is only available in case of breach of the condition of a contract (Bettini v Gye).
The main purpose of Rafia was to organise the event to impress visitors from Savitribai Phule Pune University and sell tickets, both of these objectives were failed to achieve because of the breach of contract by Kalpana. These terms were the roots based on which the contract was formed between Rafia and Kalpana, therefore, the oral assurance of Kalpana was a condition which she breached based on USC can repudiate the contract. Rafia can claim for termination of the contract in order to free USC from every contractual term. Furthermore, USC faces losses due to a breach of the condition by Kalpana. USC had to refund the money of tickets because Kalpana did a Bollywood dance rather than Indian classical dance. The event was also advertised by USC due to which it suffered substantial monetary losses. Additionally, the purpose of the contract was to impress Indian visitors from Savitribai Phule Pune University to increase the chance of a potential contract between the two universities which would have been beneficial for USC. However, due to a breach of the condition by Kalpana, the contract was cancelled by Savitribai Phule Pune University. Therefore, Rafia can claim for repudiation of the contract and damages from Kalpana for the loss suffered by USC.
Conclusion
To conclude, repudiation and damages are suitable remedies for USC in this scenario.
References
Associated Newspapers Ltd v Bancks (1951) 83 CLR 322
Bannerman v White (1861) 10 CBNS 844
Bettini v Gye (1876) QBD 183
Carter, J.W. (2013) The implications of contractual terms: Problems with Belize Telecom. Commercial Law Quarterly: The Journal of the Commercial Law Association of Australia, 27(3), p.4.
Chen-Wishart, M. (2012) Contract law. England: Oxford University Press.
Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd (1915) AC 79
McNaughton, A. (2012) The law of contract, basic principles and cases-Is contract law effective in protecting the rights of individuals?. Legaldate, 24(2), p.6.
Messent, A. and Glass, D. (2017) CMR: contracts for the international carriage of goods by road. Abingdon-on-Thames: Informa Law from Routledge.
Nutbrown v Thornton (1805) 10 Ves 159
Oscar Chess v Williams (1957) 1 WLR 370
Rollnik, A. (2009) Termination for Breach of Contract. Commercial Law Quarterly: The Journal of the Commercial Law Association of Australia, 23(1), p.3.
Slapper, G. and Kelly, D. (2009) English law. Abingdon-on-Thames: Routledge.
Stone, R. and Devenney, J. (2017) The modern law of contract. Abingdon-on-Thames: Routledge.
The Monarch Steamship v Karlshamns Oljefabrik (1949) AC 196
Thomas v Thomas (1842) 2 QB 851
Tillson, J. (2014) Law Express: Consumer and Commercial Law 3rd edn. London: Pearson UK.
Tramways Advertising Pty Ltd v Luna Park (N.S.W) Ltd (1938) (SR) (NSW) 632
Zeller, B. (2011) Penalty Clauses: Are They Governed by the CISG. Pace Int’l L. Rev., 23, p.1.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download