Can the issued contract that is between Scenic and Vincenzo Franco made invalid in view of the various regulations of contract law?
Three elements that are considered essential for the formation of a contractual agreement are intention, offer & acceptance, and consideration. Such agreements can be verified by factoring in things like capacity, legality and lastly, genuine consent – undue influence, duress, unconscionability, mistake and misinterpretation.
The element that is always present in any agreements made commercially is Interest, as stated in Merritt v Merritt case.
AGC (Advances) Ltd v McWhirter case cleared the definition of Offer as words of declaration made to a person by another. Such words of declaration are tied in legal bounds and cannot be broken in any way.
Thomas v Thomas case clarified the meaning of consideration as a thing that surely holds some sort of value. In order to forge a valid contract, such considerations (even when insufficient) have to be given.
A legal consent that is given to the offering party by the offered party is rightfully called an acceptance. Such a declaration solidifies the contracts and tied it with legal bounds; as defined in Administration of PNG v Leahy case.
Consent of the party that has been offered the contract must be established by their own free will and must be genuine. Such consents must not be a result of unconscionability, duress, misrepresentation, undue influence and mistake.
In the case of a contractual breach, the cost of damage and other penalties for violation of rights can easily be taken by the party who suffered the damage. The Addis v Gramophone case has given a clearer picture on this context stating that when a contractual agreement is breached, damages and penalties are instituted such that the position and welfare of the affected party are strongly reestablished; even in cases of injunction, recession and specific performance.
The Cutter and Powell case have introduced us to the several ways that would help bring a contract to a closure. Some of these methods are mutual consent, breach, frustration, discharge and performance.
For a person to enter into a contract, he/she must be legally capable of such a feat. Minors and people with an unsound mind cannot legally be the recipients who can participate and form an agreement. The subject of contract formation must also be legal in order for it to be enforced.
From the situation that is given to us, it is understood that all the situations that would help make up a contract are satisfied by the parties. The offer for a $350 hotel room was kept for consideration by Scenic and the acceptance by the client, Franco. Franco had accepted the offer even though this particular one is especially expensive though it was inclusive of all taxes and services. Being a commercial agreement, it’s strengthened by Merritt v Merritt, for $350/night.
Further elements of legality of the contract are satisfied when considering the facts that both the parties are of sound mental health and aren’t minors and the motive is legal by all means.
The managers as Scenic knew from the very start that Franco is not very proficient in the English language and whether or not he had understood the managers and their terms of the contract are unknown. Such an act is clearly unconscionable, weakening the legitimacy of the contract. Franco can, by all means, declare it void.
It is given that on entering his hotel room, Franco discovered that unlike the promises made to him by the managers in their contract, the room lacked a panoramic view and balcony. It can be claimed by Scenic that such terms were not there in the contract to begin with but in this situation, such a claim is impossible considering the amount of time, discussion, expertise and trust that was put into the contract’s formation. Franco can, by all means, declare a breach of contract and end it.
As in the Addis v Gramophone case, Franco has the right to claim penalties and damages for the contractual breach. He has the right to break the contract and demand a refund.
Conclusion
Scenic and Vencenzo Franco’s contractual agreement can be declared invalid when taking the laws of contract into consideration.
The level of representation shown in contractual terms and agreements can be verified by when examining the situation with numerous tests. Such tests include, time passes after the negotiation, parties and their expertise, the Parole and evidence rule, and the terms and their significance.
The amount of time given or spent after a contractual negotiation is done can rightfully be considered either a representation or in lesser cases, a simple term as declared in Routledge v Mckay case.
In cases when a party involved in a contractual agreement has made the importance of a particular statement clearly; such a statement will then be considered a term and not simply a representation as in the Ecay v Godfrey case.
In a contract which is documented, any unrecorded statement can always be considered a mere representation, as said in the Parole Evidence Rule.
Warranties and Conditions are the two distinctive types in which we can largely categorize terms of a contract. Conditions are said to be the most important of all contractual terms. When terms of a contract are breached, then the party that has suffered has the right to demand compensation or even end the contract as defined in Poussard v Spiers case. Whereas, the statements that have not been a basis for the creation of the said contract but are considered a part anyway are called warranties. As stated in the Bettini v Gye case, breach of warranties will entitle the aggrieved to compensation, but the aggrieved will not be able to end the contract or call of a breach.
As stated in Dick Bentley v Harold Smith Motors, if the making a statement is more knowledgeable about it, the statement will automatically become a term.
A newer contract formed to support the original one is termed as a collateral contract, such a contract may be used by parties in the form of a consideration for the original one. If desired, the terms and conditions specified in the collateral contract can always be enforced.
Since the managers of Scenic had more knowledge regarding the placement and arrangement of rooms and including the amount of discussion, expertise and time that was put into formation of the contract, the availability of a panoramic view and a proper balcony can and will be considered as a contractual term when it comes to Scenic’s contract with Franco. Managers of Scenic understood the fact that the only reason why Franco agreed to hold such an elaborate expense for a hotel room was due to his desire of a panoramic view along with a private balcony and hence, just after the completion of the negotiation, the room booking was formally done.
But, when it comes to the situation in hand, no such collateral contractual term is actually noticed. Hence, with our study of the various warranties and conditions, the mere factor of having a panoramic view along with a balcony can legally be declared a contractual condition. The reason for it is simply the importance and necessity of those factors for Franco, who would surely have not initiated such an extravagant deal if not for those factors. Since, now that it is established that the factor troubling Franco is essentially a condition, he can, by all means, demand a claim against it.
Conclusion
2. Australian Competition and Consumer Act 2001(Cth) includes several laws in its books and one of them is Australian Consumer Law. A consumer by 3rd Section of this law is stated to be an individual who purchases household as well as domestic goods and goods for personal recreation under the marginal price of $40000 . Hence, such an individual, who has met the above condition, is under the staunch protection and care of the Consumer Law. In the case presented to us, Franco being an individual who has met the above criteria and having purchased a suitable amount of household and domestic material below a price tag of $40000 is also under the protection of ACL that provide such distinctively applicable consumer guarantees in both goods and in services. The laws for goods and services are in the sections 51-59 and 60-63 respectively. In such laws, it’s clear that even in cases with guarantees, the laws presented to us by the court and its legal verdicts stand strong. S 64 in ACL has made it very clear that a contractual document cannot leave out or excluded even when exclusion clauses are in use.
Franco is seen to have to have formulated a service contract with Scenic, and as a consumer, he is by all means entitled to all ACL guarantees. The importance of a purpose in such contractual agreements is also solidified in the S 61. The managerial staff knew that the sole reason for Franco investing a huge amount of money on the hotel room was to experience a panoramic view and have a private balcony and the unavailability of such a service in the hotel was known to the staff, and yet this led to the formation of a false contract. Breach of Section 61 is clear in this example.
Section 64 further solidifies the presence of a consumer by giving them the right to demand repair and replacement charges if a breach in consumer rights or simple contractual rights is noticed. Franco’s demand for a refund has to be heard and executed by the hotel staff for they have failed to comply with consumer guarantees.
Franco can, by all means, resort to a certain few features that are handed to him by the various consumer laws, fortifying his presence and rights over duties and compensations that rightfully belong to him and affect him in far greater ways than just a loss of money. Several acts in the Australian Consumers Law have successfully helped the consumers establish their dominance towards things that they have their right over and not be overpowered or overwhelmed by the forces in the marked or by suppliers and sellers looking out to make a profit by disregarding guarantees and laws. Section 267 of the Australian Commercial Laws have given the consumer the right to take legal action against the supplier of goods and services in cases where they have failed to keep contractual terms or have misrepresented details that are essential for the consumer to know and to understand. In one of the many provisions of section 268 of the Australian Commercial Law, it is clearly stated that breach of a guarantee is a fatal error when seen in cases where services are not given or provided to the consumers as they were guaranteed to be provided. Hence, the mere factor that Franco was provided with an undesired grey wall view instead of a panoramic view which was promised to him by the hotel authorities is a major failure by Scenic and its managerial staff. The unavailability of a balcony holds similar significance when it comes to the strength of this particular law. Franco posses the right to forfeit and terminate his contractual agreement as per Section 289 of ACL with Scenic after an analysis of the several breaches of contractual terms and their sheer disregard of several consumer guarantees, hence their ignorance towards law. Franco has the right to demand compensation for it.
Addis v Gramophone [1909] AC 488
Administration of PNG v Leahy (1961) 105 CLR 6
AGC (Advances) Ltd v McWhirter (1977) 1 BLR 9454
Australian Competition and Consumer Act 2001 (Cth)
Bettini v Gye 1876 QBD 183
Cutter v Powell [1795] EWHC KB J13.
Dick Bentley v Harold Smith Motors [1965] 1 WLR 623
Ecay v Godfrey [1947] 80 Lloyds Rep 286
Edwards, Alexander H. “Leading cases in contract law.” (2017) Bar News: The Journal of the NSW Bar Association Summer 61.
Eisenberg, Melvin A. Foundational Principles of Contract Law. (Oxford University Press, 2018).
Knapp, Charles L., Nathan M. Crystal, and Harry G. Prince. Problems in Contract Law: cases and materials. (Wolters Kluwer Law & Business, 2016).
McKendrick, Ewan, and Qiao Liu. Contract Law: Australian Edition. (Macmillan International Higher Education, 2015)
McKendrick, Ewan. Contract law: text, cases, and materials. (Oxford University Press (UK), 2014.)
Merritt v Merritt [1970] EWCA Civ 6.
Poole, Jill. Textbook on contract law. (Oxford University Press, 2016).
Poussard v Spiers (1876) 1 QBD 410
Routledge v Mckay [1954] 1 WLR 615
Smith, Joshuab. “Contract law in Australia” (2018) Ethos: Official Publication of the Law Society of the Australian Capital Territory 248: 60.
Thomas v Thomas (1842) 2 QB 851
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