The Contract (Rights of 3rd Parties) Act 1999 has eased many of the problems presented by the doctrine of privity of contract, but has not entirely removed them.
The Contract (Rights of 3rd Parties) Act 1999 has eased many of the problems presented by the doctrine of privity of contract, but has not entirely removed them. Discuss. There are four basic questions regarding privity in contractual situations; . Can a person enforce a term of a contract to which they are not a party? 2. Can a person rely on a defence bases on terms in a contract to which they are not a party? 3. Can a contracting party rely on defences contained in their contract in order to answer claims brought by a person who is not a party to the contract? 4. Can a contracting party enforce terms against a person who is not a party to the contract? Privity was originally fiercely protected by Tweedle v Atkinson (1861) which refused rights of third parties within a contract. Dunlop..v Selfridge... [1915], reviewed the position and ruled out third party rights on the basis that the third party had not shown any consideration. And so at common law all of the questions above are answered in the negative. The consequence of answering questions 1 and 2 affirmatively would be to allow third parties benefits under contracts that they had insufficient interest, or provided insufficient consideration in to become a contracting party. To answer questions 3 and 4 affirmatively would be to burden a 3rd party under the same conditions. Section 1 of the act provides rights for
Exemption clauses.
This case involves exemption clauses. An exemption clause is a term in a contract which seeks to enable one party to escape liability. Nothing is wrong with such clauses made between equals, but they are imposed on a weaker party by a stronger party. Exemption clauses are a common feature of contracts today and may take a number of different forms. The most frequently encountered types of exemption clauses are those which seek to exclude liability for breach of contract or for negligence or which seek to limit liability to a specified sum. Parliament decided to control unfair exemption clauses and now the majority of them are covered by the Unfair Contract Terms Act 1977 and supplemented by the Unfair Terms in Consumer Contracts Regulations 1999. If an exemption clause is upheld the common law insisted that everything reasonable must be done by the proponent to bring the clause to the attention of the other party. An exemption clause assumed the existence of a contract and that the defendant has some liabilities even though the clause exempts him from them. The courts (Court of Appeal) does not like exclusion clauses because they go against the basis of a contract because there should be an assumption of rights and duties on both sides. There are three things that must be proved in a clause. These include:- . A term of Contract 2. It covered damages 3. There is no
Explain the meaning and significance of the provision in Section 11 Sub-section 4 that deals with a contract term seeking to restrict financial liability to a specific sum. How useful are the guidelines for applying the reasonableness test in Schedule 2?
The reasonableness test outlined in Section 11 of Unfair Contract Terms Act 1977 exists to explain that the terms outlined in a contract should be fair and sensible given the criteria it sets our for reasonability in relationship to the circumstances under which the contract was signed and agreed to; however, it makes it possible that relevant liabilities are left under the judge’s discretion. In Section 11 Sub-section 4, the reasonableness test also puts into consideration whether a specified monetary settlement would be justified, and places a limit for such a settlement. In Sub-section 4, the limiting of a monetary settlement is justified as it falls into what is reasonable. Defining a ceiling in such matters limits the exploitation of such parties from asking for unreasonable or exaggerated sums of money as a liability. Schedule 2 serves to further explain the significance of the reasonableness test by offering a criteria under which the reasonableness test can be applied, such as: . 1. The strength of each party when bargaining, will one of the parties have the upper hand resulting in an unfair advantage?[1] 2. 2. Did the customer have “no other options” before signing the contract or coerced into such an agreement?[2] 3. 3. Was the customer clearly aware of the terms he or she was abiding to?[3] 4. 4.Was compliance practical? Were there
"Everyday Use" by Alice Walker and "A&P" by John Updike, both exhibit a comparable problem concerning acceptance.
Rachel Ince Mrs. Hudler English 1302-14 3 March 2003 Acceptance shown in "Everyday Use" and "A&P" "Everyday Use" by Alice Walker and "A&P" by John Updike, both exhibit a comparable problem concerning acceptance. Acceptance is a universal idea experienced in everyday life and in many social situations. For instance, when two or more people come together, ideas and opinions can clash and acceptance can become a problem. The situations presented in these stories portray the idea of acceptance while revealing an aspect of the human condition. To begin, in Alice Walker's story "Everyday Use", acceptance is a problem between Dee and her mother. The mother first describes a dream of hers in which she and Dee are reunited on a TV show. She describes a situation in which Dee would want the mother's appearance to be different. For example, the mother states: "I am the way my daughter would want me to be: a hundred pounds lighter, my skin like an uncooked barley pancake" (89). Therefore, the mother feels as though Dee does not accept her the way she is. Another example takes place when Dee demonstrates her dislike for their home. The mother talks about the new house, she declares, "no doubt when Dee sees it she will want to tear it down" (90). Not only does Dee disrespect the way her mother looks, she disregards her way of life and home. As Dee escapes to college to find a
consumer law
Consumer Law . A contract is an agreement between two or more people which creates an obligation to do or not do something. The agreement creates a legal relationship of rights and duties. There are three elements necessary to create a contract: offer and acceptance, consideration and intention to create legal relations. One person makes an offer, the second person must accept the offer and there must be consideration exchanged. For a contract to be legally binding not only do the people to the contract have to get something in return but they must also give something in exchange e.g. selling a car and receiving money. Implied terms are incorporated into the contract and the parties are not aware of their existence. These terms are that the goods are satisfactory quality, fit for the purpose and as described (sale of goods act 1979). Problems only arise when these terms are broken. Theses terms are implied to the intension of the parties by statute, custom or common law. In the case of Julie she has made an offer by conduct to buy the shirt from the shop. There has become a legal binding agreement with her and the shop. She has taken consideration by giving money in exchange for the shirt and also intension to create legal relations. As to this purchase there is a contract between Julie and the shop. This situation is similar to case Carlill v Carbolic Smoke Ball Co 1893
Recent changes have made the doctrine of consideration obsolete. Discuss.
Contract Law: Assignment #2 Rakesh Gangwani Q.43 p.8 (2000) DIL0306016 (sect H) "Recent changes have made the doctrine of consideration obsolete." Discuss. Note: Check for EU law updates... Consideration has travelled a long and treacherous path since Justice Lush's benefit/detriment definition in Currie v Misa. The doctrine has undergone rigorous changes over the years and today is defined by most as "the price that one pays for the promise of the other" as stated by Lord Dunnadin in Dunlop Pneumatic Tyre v Sefridge; later reaffirmed in Chappel v Nestle. Despite the various consensuses on the matter however, the true definition, and often, the very necessity of the doctrine still is and almost always has been in continued contention. It is for this reason that consideration has gathered a considerable amount of criticism of from judges and scholars alike over the years. One of the most notable of these critics was Professor Atiya who suggested that judges merely applied consideration on a subjective basis where they felt it is right to do so for whatever reason; a view that was heavily scorned upon by Professor Treitel who stood firmly behind the benefit/detriment definition which he professed to have a certain flexibility about it which allowed judges to expand or contract the doctrine's scope accordingly in order to affirm or repudiate a contract
Advise the liquidator of Train Limited as to the order of payment of the company's creditors and whether the assets available to the ordinary creditors, can be increased.
Company Law Problem Question 1 Train Limited has been in financial difficulties for the past twelve months. Paul and James, the two directors of Train Limited, have been aware of the difficulties for some time, but have been trying to trade through them. However, in the last two months, things have got significantly worse. Last month, James's brother Adrian was persuaded to lend the company £5,000. Two weeks ago, the loan was repaid from money received by the company from a completed contract. Three weeks ago, James and Paul each bought their company car from the company. Each car was worth around £12,000. James and Paul each paid £2,000 respectively for their car. Six months ago, Big Bank plc lent the company £4,000. The loan was originally unsecured, but three months ago, the Bank insisted on being given a floating charge over all the company's assets, which the company granted. The charge was duly registered. Train Limited has now gone into insolvent liquidation. Advise the liquidator of Train Limited as to the order of payment of the company's creditors and whether the assets available to the ordinary creditors, can be increased. The order of payment of the company's creditors is as follows: The liquidator will meet the expenses of the liquidation and his/her own fees before paying the preferential creditors, such as the Inland Revenue and Customs &
Company Law
Company Law (b) From 1991 onwards nothing in a company's memorandum could affect the capacity of a company to enter into a transaction, following the new section 35, and further that no one has constructive notice of any entry on the company register, e.g. of the memorandum and articles, by virtue of section 711A. In addition, new section 53A removes any constitutional limitations on the powers of the directors and others to act on behalf of the company so far as bona fide third parties are concerned, whilst preserving the existing internal rights of members to control the directors if they do not act contrary to the company's constitution. Where there are two (or more) persons dealing with a company, one of whom is a director and the other is neither a director nor connected with one, and where that second person is dealing in good faith then, he may continue to rely on the protection given by Section 35A, although the Director will be subject to Section 322A. To avoid the difficult situation of a transaction which is valid for one person under Section 35A but voidable against another (the director) under section 322A, either the third party or the company may apply to the court to settle the matter. The court may then affirm the transaction as a whole, set it aside on just terms or sever it: Section 322A(6)(7). If the outsider is dealing with the company in good faith,
Incorporating Terms Into Oral Contracts.
INCORPORATING TERMS INTO ORAL CONTRACTS Terms of a contract must be both obvious and apparent to both parties to be incorporated into the contract. A term will usually be considered to be incorporated into a contract if ; * The affected party knew of the clause * Reasonable steps have been taken to bring the term to his notice Courts look at the degree of notice when deciding if a party had reasonable notice of a term. The Degree of Notice Courts focus on whether the parties found it obvious that a term was intended to form part of a contract, if, however, it was not particularly obvious that a statement is part of a contract then nothing will be held. One case example is Chapelton v Barry UDC - In this case a receipt for the hire of a deckchair had printing on the back. It was held not to be the type of document that would be regarded as of contractual importance, and the words on it were therefore not incorporated as terms. Previous Dealings Courts try to take a reasonable point of view, whilst trying to protect the consumer at the same time. However this does not mean that the courts will always favour the consumer, they may rule that sufficient notice had been given to the other party. An example of previous ; Hollier v Rambler Motors (AMC) Ltd - In this case the claimant left his car at the defendants garage for a service, the car was destroyed by a fire.
Explain the importance of George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd in the development of contract law. How does Section 55 relate to Schedule 2 of the Unfair Contract Terms Act?
The matter highlighted in the case of George Mitchell (Chesterhall) Ltd v Finney Lock Seeds, in which Finney Lock Seeds sold George Mitchell (Chesterhall) Ltd the wrong kind of seeds than had been mutually agreed upon, resulting in a bad crop and long-term losses for the plaintiff. The case is a dispute as to whether the defendant was liable to refund the cost of the seeds or if the defendant was liable for compensating the cost of the seeds and furthermore the compensation for the losses incurred by the plaintiff as a result.[1] Refunding only the cost of the seeds is a common law issue, while further compensation is a statutory issue. Section 55 of the Sale of Goods Act 1979 states that if liability should arise under the contract of sale of goods it may be cancelled out or varied by agreement but the preceding provision has effects subject to the following provisions: “In the case of a contract for the sale of goods, any term of that or any other contract [could be interpreted as any contracts that are not for the sale of goods] is void in the case of a consumer sale and is, in any other case, not enforceable to the extent that it is shown that it would not be fair and reasonable to allow reliance on the term.”[2] Subsection 5 of Section 55, almost identically mirrors schedule 2 of the UCTA 1977 as we saw last week, and begs of the judges to answer the same questions
