TASK 1 (LOC 1:AC1, AC2,AC3, and AC4) EXPLAIN DIFFERENT TYPES OF BUSINESS AGREEMENTS AND BASIC ELEMENTS FOR A VALID CONTRACT A business agreement has many different types under its roof. They are all recognized by the law. They form contracts with every transaction and sale with the customers. DIFFERENT TYPES OF BUSINESS AGREEMENTS Another term for agreement is contract. As the definition is known that an agreement is when two or more individuals agree to do business together under certain terms. One party makes an offer to another and the other party accepts. Usually in law business agreements raise a presumption that there is an intention to create legal relations unlike domestic and social agreements. Therefore the law mostly presumes that there is an intention to create legal relations in the business agreements. There are different types of business contracts which includes express, implied, bilateral, unilateral and simple or formal. Express Contracts. This is a type of agreement where both parties express themselves; they use actual words in their agreement. This can be either written or oral. Whatever the parties involved decides to do; either to verbalize or to put their terms in writing they enter an express agreement. But it is usually advisable to reduce business agreements to writing so as to void future misunderstandings and to keep the parties honest about what they are obligated to do. But these kinds of contracts do not really have to follow any formalities as long as both partners have agreed on the terms whether it was done orally or written then the contract is valid. Implied Contracts This is different from express contract because it is formed not by the words of the parties but their actions. Both the parties agree to enter a contract when they the terms are clear to both parties. As long as both of them have agreed to enter the contract and the terms are clear to one another then it is clearly implied from the actions that they are under contract even without a word being spoken to each other. Example: Abel goes to the movie theatre where only one movie is showing. He puts down $10 at the cashier’s window. The cashier takes the money, gives him a ticket and returns $3 to him. Another


example is Jun walks into a newsstand and places a quarter and a dime on the counter, taking a copy of The New York Times from a rack to her right. In these two examples it shows that the parties have entered an implied contract. There was actually no words involved but the action took place which made them agree on the terms. Bilateral Contract. A bilateral contract is formed when the two parties exchange promise to perform some act in the future. This is also called two sided contract because it is an exchange of promise whereby both parties bind themselves to undertake some future action. Example of this contract includes; Jennifer offers to sell his phone to Jessica if he will pay her $100. Jessica accepts the offer. Another example is Fatma offers to sing at Hazim’s nightclub next Friday, Saturday, and Sunday if he will pay her $ 5,000 per night. He agrees. In these two examples both parties are obligating themselves to take some action in the future. As soon as both of them accept the offer then it is a valid contract. If for instances one party fails to meet the future demands then the other party then the other party has a right to sue him for the damages. Unilateral Contract. As was seen in the bilateral contract that both parties exchange promise to each other while in unilateral contract, one party makes the promise to the other party that can only be accepted by the other’s performance. This is different from bilateral where it comes about when one gives a promise but in unilateral it begins with the performance of the requested act. Example includes; Keri promises to pay $500 if Ashley will decorate Harriet house. Ashley goes over to Harriet’s house and begins decorating it. She has accepted Keri’s unilateral promise by undertaking the desired task. In this example it shows the offeree (the person to whom the offer is made) is not obligated to do anything but only the offeror is obligated to do some act. Simple Contract. A simple contract is any oral or written agreement that is not required to follow a specific form or to be signed, witnessed or sealed. Most of the contracts entered into by businesses and private individuals are simple contracts even though some may seem rather complex and go on for many pages. Formal contracts.


A formal contract is the opposite of simple contract because in this contract it needs to be written, witnessed, signed and sealed by the parties.

BASIC ELEMENTS FOR A VALID CONTRACT A contract is an agreement reached after sufficient consideration between two or more parties that is binding in law. A contract is considered valid or legal when both or more parties with capacity come under an agreement after involving valid consideration. A contract contains some elements and if these elements exist then the contract is considered valid while if one or more of these necessary elements happen to be missing then the contract is void or voidable. This means that the contract is basically not a true contract and it can be enforced. Briefly void contract or an agreement is actually not a contract at all. It can be enforced by law. An example of a contract being void is when a drug dealer and a buyer agree to do business together, when caught nobody has a case because the terms of a contract are illegal under the court of law. These parties performed an illegal act when doing this type of business. While voidable contract is valid, and one party of the contract is bound unless an entitled party (the party who has legal grounds to reject the contract) voids it. Example, depending on jurisdiction, a minor has a right to repudiate certain contract. Any contract involving a minor is considered voidable because a defect exists. The three basic components of a contract are offer, acceptance, and consideration. The following are seven elements that are able to determine whether or not the basic components are present and meet legal criteria for a valid contract: 1) Agreement 2) Consideration 3) Intention To Be legally Bound 4) Form 5) Capacity. 6) Genuineness of Consent 7)Legality


AGREEMENT The agreement in a valid contract needs to have an offer in which there is an offeree and an offeror. An offer, according to Business Law, by Dennis Keenan and Sara Riches, is a proposal made on certain terms by the offeror together with a promise to be bound by the proposal if the offeree accepts the stated terms. We feel this definition is accurate as it means, in simpler terms-you make the offer, you’re prepared to be bound by the terms if someone accepts. Acceptance is one person’s compliances with the terms of an offer made by another. It is an agreement to receive something which has been offered. For example Peter offer to sell his watch to Paul for $50 and Paul accepts then this is considered as acceptance. In business dealings between merchants, a buyer demonstrates his or her acceptance of goods that are no exactly what he or she ordered from the seller by telling the seller that he or she will keep the goods even though they are not what was ordered. This is called acceptance. An acceptance may be conditional express or implied. Mutuality means that all parties to the contract are interested in its terms and intend an agreement to which they will be legally bound. For this to occur both parties must make sure they understand the agreement and they should not be any misunderstanding involved or else mutuality would not exist. Mutuality is also sometimes called “meeting of the minds” and is established when an offer has been made by an offeror and then accepted by the offeree. An offer is a communication that gives the listener the power to conclude the contract. The general rule is that it must be reasonable under the circumstances for the recipient to believe that the communication is an offer. If an offer spells terms such as quantity, quality, price then the court may find that an offer was made. Example if a merchant says to a customer “I will sell you a dozen high-grade widgets for $100 each to be delivered to your shop on Dec 31” then this can be labelled as an offer and not a statement like “I am thinking of selling some widgets.” An offer must be differentiated from an “invitation to treat.” Advertisements are considered invitation for offers. The making of an offer is the first of three steps in the traditional


process of forming a valid contract: an offer, an acceptance of the offer, and an exchange of consideration. An important thing to note is how the acceptance or revocation is communicated to the offeror and offeree. With today’s technology, things are getting more and more instant and communication can be made in a rapid and simple way through advanced cellular phones and wireless internet accessing gadgets. Despite all this, the court is adamant in stating that the contract will come into being whence acceptance is received and the person is notified. Should a person send a fax to communicate an acceptance, then the communication is made and the contract starts when it is sent no matter what time of day the other end reads it. This also depends. If the fax is sent outside of working hours, then it is communicated when working hours start back up. If it is through the mail, then acceptance is made when it is posted, following the postal rule. The postal rule states that the acceptance by post has been requested and is completed when the letter is posted. So, the same goes to text messages and emails. Communication is made when the person sends the text message, like when Hazim communicated his orders to Shikin who claimed that she did not receive the message because her area supposedly has bad reception (though June could access 3line there), Hazim has done his part.

CONSIDERATION Consideration is the act of doing something or promising to do something that a person is not legally required to do, or the promise to forbear from doing something that he or she has the legal right to do. An exchange of consideration must be included in any valid contract. Between the parties, something of real value must be exchanged whether it can be cash, tangible objects, and the performance of an act. Consideration should not be confused with a unilateral promise. A unilateral promise is a promise to do something without an exchange of consideration. Example If Rihanna tells Ciara that she will give her a ride to a club, Rihanna has made a promise. If on the other hand, Rihanna tells Ciara she will give her a ride to a club in exchange for parking money, consideration has been exchanged.


INTENTION TO BE LEGALLY BOUND Capacity happens when the parties involved have understood the terms of the contract. Usually adults have capacity because the tend to understand the terms of the agreement but minor, mentally incompetent and intoxicated people do not have capacity. A person is considered a minor when he is below 18 and when they enter a contract is considered voidable because they have a right to terminate or cancel the contract before reaching 18. The minors are considered incapable of understanding the terms because they are still underage while for mentally incompetent and intoxicated people they usually fail to understand the terms, and people like these do not have capacity. Many advertisements nowadays are mere puffs and do not show any intention to be legally bound such as: SALE 20 % OFF But if the advertisement states something similar to the one in the given scenario, then it would be considered as an offer with the intention to be legally bound. They have business/commercial agreements in which the intention is looked at by the law with a critical eye. It is automatically assumed that the parties intended to make a legally enforceable contract. But this can be removed through the addition of an express statement. They also have social and domestic agreements with the same social and domestic intentions. This is usually an involvement of friends and family members ina dispute. Someimtes, as in the case of Simpkins v Pays, there is a business backed intention which had three relatives entering a running competition as one entitiy so the prize money was shared in thirds. FORM Form means any formalities that come attached to the contract especially if it involves sales of goods by either party. This is usually to comply with government requirements and regulations. CAPACITY Capacity happens when the parties involved have understood the terms of the contract. Usually adults have capacity because the tend to understand the terms of the agreement


but minor, mentally incompetent and intoxicated people do not have capacity. A person is considered a minor when he is below 18 and when they enter a contract is considered voidable because they have a right to terminate or cancel the contract before reaching 18. The minors are considered incapable of understanding the terms because they are still underage while for mentally incompetent and intoxicated people they usually fail to understand the terms, and people like these do not have capacity. A special case which has minors entering a legally binding contract recognized by the government is a student loan or scholarship like the one MARA currently has with hundreds of students across the country. GENUINENESS OF CONSENT The genuineness of consent means that neither party is forced into entering the contract and are doing on their own free thinking. For example, if Fatma threatened to kill June’s hamster should she not sign the contract, then June is not entering the contract out of free will. Both have to be willing. LEGALITY The contract has to be legal. Such is the case with Fisher v Bell, in which the object being sold was an illegal object. The same can be said with Partridge v Crittenden in which illegal birds were being caught in the transactions.


TASK 2 (LOC 1:AC1, AC2,AC3, and AC4) ADVISE CLIVE AS TO WHETHER THERE IS A VALID CONTRACT WITH DATA LTD. In order to advise Clive, we are to look at the facts of the scenario. Data Ltd. Had advertised outside their showroom for a Grand Sale. The advertisement stated that laser printers would be sold for RM50 each to the first ten customers to walk into the showroom on Tuesday morning. The advertisement was put out on Monday. Clive, an accountant, had waited outside all night so he could be the first one in but on that Tuesday morning, the manager of Data Ltd. Came out to inform him that the sale was cancelled, meaning that Clive could not get the printer for the RM50 price.


An offer is a legal agreement between Clive and Data Ltd. An offer is basically some sort of clear statement of the terms of which one party, in this case, Data Ltd. Is prepared to do business with another party, which would be Clive. There are two types of offers, but the one that Data Ltd. supposedly (this will be reviewed later) made is to be considered as a unilateral offer which is common for advertisements to carry out. A unilateral offer is defined here as a promise made in return for the completion of a particular task and in this scenario, the promise would be the RM50 laser printer price tag for the first ten customers to walk into the showroom on Tuesday morning, which in essence is the act in question. A legally binding offer would include clearly stated terms. An important part of a would be contract between Clive and data ltd. would be the agreement. Such as the case of Guthing v Lynn in which the defendant had promised to pay the plaintiff that he would pay an extra 5 pounds if the horse turned out to be lucky for him. The court held that this was too vague to be enforceable. In the scenario though, you have the advertisement which clearly states what it’s offering and it clearly states what task has to be completed by the offeree in order to obtain the reward. Another aspect of what a contract is, is the intention to do business. Here, you could say that Data Ltd. Was definitely willing to do business, thus separating it from what advertisers like to haze up with an invitation to treat. When a statement advertising goods or services does not necessarily communicate a willingness to enter a legally binding contract, then this statement is merely inviting a customer to make an offer. It is therefore, an invitation to treat. Liken this to Fisher v Bell of 1961, when a knife was displayed for a specific price, but as it turns out, the price was merely a mislead. The court held that in this case, the customer is making offers by showing that they are prepared to do business at the price shown and the contract is made when they bring the goods to the counter. The vendor or seller then gets to decide to accept or decline the offer. In this case, the advertisement is being deemed an offer, instead of an invitation to treat. A case which saw the court upending the defendant in favour of the plaintiff because an attempt at disguising an offer as an invitation to treat failed can be reviewed through Carlill v Carbolic Smoke Ball. In this case, the defendant had put out an advertisement offering anyone who used the Carbollic Smoke Ball and contracted influenza after using it for two weeks, twice daily. The plaintiff had used the Smoke Ball and had contracted


the flu after using it exactly as directed. In this case, the defendants, who were actually the vendors and proprietors of a poorly named medicine called The Carbolic Smoke Ball, and they proposed that anyone who used the medicine three times daily for a span of two weeks and contracted the flu or any sort of fever within three days of using the medicine would be qualified to obtain a sum of 100 pounds. The defendant had deposited 1000 pounds into Alliance Bank on Regent, displaying and proving their sincerity in following up on the promises that they had made to whomever uses their Carbolic Smoke Ball. In the essence of the time back then which was 1891, the epidemic flu was common and the ways in which the flu could be prevented were far and few in between, and using the Carbolic Snoke Ball could not determine whether or not you were contracting the disease from the medicine you were using or from another person who had the flu before. The female plaintiff, Carlill, had used the smoke ball from November 20, 1891 until January 17,1982 when she had contracted influenza. Acting on advise, she had proceeded to claim the 100 pounds, but the lawyers for the defendants, QC and Terrell argued that the advertisement was too basic to argue on whether or not there was an offer in play or it was actually, an invitation to treat. We look at the advertisement as an offer because we liken it to Data Ltd. extended the hand to Clive. Here, Clive is facing an offer because he has the decision to refuse or accept to enter the unilateral contract. Here, we say that the agreement comes when Clive and data ltd. accept. One cannot mistake it for an invitation to treat mainly because of the fact that so many advertisements depend on trade puffs being vague and ambiguous. In this case, the advertisement clearly stated: CLEARANCE SALE: SERIES 3 LASER PRINTERS. SPECIAL PRICE RM50 EACH TO THE FIRST TEN CUSTOMERS IN THE SHOWROMM ON TUESDAY MORNING It is very specific, and the RM50 for the laser printer statement proves data Ltd’s intention to be legally bound. The intention to be legally bound cements the advertisement posted by the company which had posted it only one day before the actual sale, as an offer, not an invitation to treat.


Now here is where it gets tricky. If Data Ltd is the offeror, then the one who has the right to accept or reject is Clive and under the law of court, there are rules of acceptance. Of course, the usual things are checked in such as the acceptance must be unconditional. There are no new conditions to be considered a counter offer or any further request for information. The thing is, the acceptance must be communicated to the offeror. Acceptance does not happen unless the offeree communicates it to the offeror. In a unilateral contract, the performance of the stipulated act is to be construed as an acceptance. If someone has started to perform the offer, the offer cannot be revoked. We can liken the scenario to the case of Errington v Errington. In this case, the father had bought a house for his son and daughter in law to live in. It was under the father’s name. He promised to transfer the house to their name once the mortgage was paid with each monthly instalments. He attempted to revoke the offer he had made when the son and daughter in law were almost finished paying for the house, but the court held that the offer could not be revoked. Here, we liken Clive to the son and daughter in law. He ad been waiting outside in the showroom all night in order to be the first customer into the showroom. He is already waiting out all night. He is communicating acceptance to the company because he is in the act of waiting outside and being ready to be one of the first ten customers to walk into the showroom. It is known that an offer may be revoked before acceptance but for this scenario, the acceptance has been communicated as Clive is there before the manager came to open up. There was a period given by data Ld as to how long the offer would stand, and that would be until the tenth customer walked into the showroom on Tuesday morning. Liken this to the case of Dickinson v Dodds in which Dodds had offered to sell property to Dickinson. The offer was left open until 9 am, Friday. Come Thursday morning, he heard that Dodds had sold the property to somebody else. But Dodds had already written a letter which reached Dickinson by 7 am on that Friday. The court held that since it was communicated, it was acceptable-the revocation, we mean. In this case, the first customer hadn’t even walked in yet, but the manager had cancelled the sale when it was too late. Clive was in the act of accepting. The sale advertisement had been put up just one day before the sale, and the point of the Dickinson v Dodds case is that should there be a revocation, then there should be reasonable steps to communicate it. If your


medium for making an offer is a commercial on radio, then it should be communicated through radio as well should there be a revocation. In this case, the offer was made through an advertisement in the showroom, so it should be that a revocation would be made through the same notices and advertisements as well. Since the advertisement s weren’t there when Clive was there, waiting out all night, then it isn’t communicated and the revocation should not be recognized. Instead, the manager himself informed Clive, a different medium and method than the one used to communicate the offer. In the contract that we feel exists between Clive and Data ltd, the consideration is there, in that one party promises and understands that an act must be done for a return . In this case, Clive enters the showroom as one of the first ten customers and purchases a laser printer and Data ltd. sells it for RM50 as offered. The intention to be legally bound is definitely there for Clive and though the manager may want to cancel it, the original offer had a concrete intention to be bound, not being just a puff. The advertisement had an intention to create a legal relationship because of the words “…RM50 each to the first ten customers to walk into the showroom on Tuesday morning”. If it had stated simply that there was a sale, then that would be a mere puff and is not intended to be formed as the basis of a binding contract. This can be viewed through Carlill v carbolic Smoke Ball again in which the money deposited by the defendant was considered as strong evidence that the defendant had every intention of being legally bound. The next thing is form. With form, there are formalities to follow. Data ltd and Clive would be forming a contract for the sale of something, so under the Law of Property Act 1989, there needs to be some sort of written agreement. This would surface when Clive has paid for the printer, but the contract that binds them both already exists in non-written form because of the advertisement as an offer and the act of waiting outside and being the first before everybody else to enter the showroom as the acceptance. Capacity requires both parties to be able to comprehend the terms and conditions of the contract. This usually means that minors can’t enter a contract. We are assuming that since he’s an accountant, Clive is capable of entering the contract and that the other party is legally able to do so as well. The genuineness of consent is there since nobody is forcing either party to enter the contract. They are both entering on their own free thinking.


Data Ltd. is not offering anything illegal such as the case with Partridge v Crittenden or Fisher v Bell. Clive is also not doing anything illegal as part of the condition. So this should be considered as a legal contract that would be recognized by the law of court. Assuming that it is an invitation to treat, then an offer would be made by Clive in which he’d make the offer to Data Ltd stating that he’d buy the printers for the price of RM50 if he was one of the first ten customers to enter the showroom on that Tuesday morning. The acceptance would then hang on data Ltd’s decision whether they’d take it or not and sell Clive the laser printers for RM50 should he be one of the first ten customers. Then the cancellation is just a rejection of an offer, and thus, the manager and his company would not be responsible for selling the printer to Clive for RM50 and continuing on with the sale as originally intended. In conclusion, we would have to tell Clive that he deserves the printer for RM50 because he and Data Ltd. have fulfilled all the elements of a valid contract and we would inform Data Ltd. that they have failed to revoke before acceptance and that their advertisement is in fact an offer to commit to a unilateral contract, thus meaning that they can’t cancel during the act of acceptance, they way the manager had attempted to do when he arrived to open up and tell Clive that the sale had been cancelled.

TASK 3 (LOC 2:AC1) ANALYZE THE IMPORTANCE BETWEEN CONDITION AND WARRANTY If you want to determine the terms of a contract, you need to understand what’s being said and what’s being written by yourself and the other party. Contractual terms can come under either a condition or a warranty, both important and both distinct in their own way. Conditions and warranties are expressed terms. What are express terms, you may ask? Express terms are basically the details in a contract which had been specifically agreed upon between the parties involved in the contract. It can be contained in a document or verbal, or it can be a mixture of both. CONDITION Conditions are a very important part of contractual terms. If you breach the condition, then you’re breaching the contract and if you’re breaching the contract the other party can take an action and sue you. The other party can still go on with the contract and


recover the damages later. If Fatma were to go to work and they told her that she would need to pay for the uniforms herself, otherwise, she can’t work there, then that is a breach of contract. Fatma can still continue on working there, but claim for the damages later. This is common practise. WARRANTY Warranties are less important than the conditions as it does not go to the foundation of the contract. The breach of warranties, while still considered serious, does not give the person the right to break the contract, but still allows for the victim to claim damages. If we were to look at the differing degrees of importance between a condition and a warranty, we can take a look at these two examples CASE ONE Britney Spears was signed on to a contract in which she was obligated to perform on the first night of her Circus album tour to promote a perfume brand, Circus. Because she was tending to her sick child, she was not able to perform on the first night despite the tickets being sold out. The obligation to perform on the first night was a condition of the contract. Concert organizers and the endorsed brand paying for the performance have the right to repudiate or take back the contract from Britney Spears as well as bring an action against her in court. CASE TWO Taylor Swift was scheduled to appear in a season of showcases and acoustic live performances. She was supposed to be at the arena in Dallas, Texas, at least five days before the showcases started to rehearse, but due to her sick horse which she was forced to attend to in Anchorage, Alaska, she arrived two days late. The concert organizers do not have the right to repudiate, but they can still claim for damages later. The two cases show the two varying degrees of terms of the contract. In the first case, Britney Spears had breached a condition and in case two, Taylor Swift had breached a warranty. Britney Spears faces worse consequences for failing to commit to a major term of her contract with the concert organizers whereas Taylor swift faces less dire consequences as she still performed the major portion of the contract. According to the Sales Of Goods Act 1979, a condition is “the breach of which may give rise to treat the contract as repudiated” while a warranty is “the breach of which may give rise to a


claim for damages but not a right to reject the goods and treat the contract as repudiated.” So, in conclusion, the condition in a contract is a more crucial part. If we were to use a metaphor, we’d compare the condition to the heart, a very crucial organ, but the warranty would be akin to a lock of hair. The condition, in short, is far more important part of the contract than the warranty, although both should be examined with care in any contract or agreements being made by two parties.

TASK 4 (LOC 2:AC 2 & AC 3) ADVISE JIMAS TO THE VALIDITY OF THE EXCLUSION CLAUSE AND ANY CLAIM AGAINST MAYFAIR PARKING An exclusion, by definition is statement that basically acts as a filter for any actions people might want to take against the company. In an exclusion clause, the company will state the things that they claim to not be liable for. An exclusion clause can also be termed as an exemption clause which a company attempts to attach as part of the contract. It is supposed to be protecting the company whenever a wrongful action caused by negligence occurs when carrying out contractual obligations. An example of when a company uses these clauses as a guardian when carrying out their business activities would be when June purchases rolls of film to develop but the company fails to develop them or worse, damages them, the company might have an exclusion clause that states that they are only liable for the cost of the film but no for the photos even if they are worth thousands of dollars or ringgit. Following the facts of the scenario given, we can see that MayFair Parking have put up an exclusion clause in the form of a notice at the entrance of the car park. If we were to look at the avlidity of the exclusion clause, we would have to look at the incorporation of


the clause. The incorporation of the exclusion clause can be done in three waysdocument signed, the requirement of notice, and previous dealings. In this scenario, what we don’t have here is an actual signed document that states Jim understood the terms and exclusion clauses of the contract. The scenario given in the brief doesn’t state whether he received the parking lot ticket or not, but it should be assumed that there is, since most parking lots that require for you to pay have. Even so, there would not be a signature. It is also not very practical to have signatures for the parking lot tickets. The requirement of notice requires for the company to notify and inform the customer before or at the time of acceptance of the contract. In this case, the company is Mayfair parking and the customer is Jim. Mayfair parking had already put up an exclusion clause in the form of a notice at the entrance. The matter in question is whether or not Jim was given proper notification or not. The clause posted at the entrance of the parking lot is a reasonable location to place a clause notification because any reasonable man would look at it before entrance. In the case of Chapelton v Barry Urban District council in which Chapelton had rented out two deck chairs and received the receipt which stated the exclusion clause terms on the back of the ticket, but the court had held that it was not a suitable place to put an exclusion clause as any reasonable man would not think that the receipt would hold an exclusion clause. In fact, Chapelton being deemed as a reasonable man just put it in his pocket without reading it. The clause for the scenario however, is in a reasonable location. Is the exclusion clause a part of the contract between Jim and Mayfair Parking? Whether the court would hold this as a yes or not depends on whether Jim was informed or not. Comparing it to the case of Olley v Marlborough Court Ltd. the notice given in that case was not sufficient to be considered as part of the contract terms. So what basically happened here was that Mr and Mrs Olley had booked a room in a hotel for a week. There was this notice in the bedroom which stated: THE PROPRIETORS WILL NOT HOLD THEMSELVES RESPONSIBLE FOR ARTICLES LOST OR STOLEN UNLESS HANDED TO THE MANAGERS FOR SAFE CUSTODY


A stranger had gained access to the hotel room and had stolen Mrs. Olley’s furs. The clourt held that the defendants were liable . This was because Olley only saw the notice after the contract had concluded, which was when he entered the hotel room after payment had been made. This meant that the exclusion clause could not protect the defendant. This means that it had not been incorporated into the contract. Now, we liken the case to the scenario. We have Jim in Olley’s position. He had made payment to have his car parked in safe place where it wouldn’t be damaged. Olley had made payment for the hotel room where she could keep her things. The exclusion clause had been brought to Olley’s attention after payment. This is the same case with Jim. It is up to the company in question (for the Olley case, it is the Marlborough Hotel and for the scenario, it is Mayfair parking) to ensure that the customer has been informed of the exclusion if there is any. It is their responsibility, regardless of whether the customer is aware or not. Not all customers are going to check every single detail when it is a simple transaction or activity like buying groceries or paying for parking. It is up to the organization or company to bring it to the customer’s attention. This means, that if the overgrown bush is part of Mayfair parking’s property, then it is THEIR responsibility to to make sure that THEY maintain their own property, especially if it is hindering something as important as an exclusion clause. If they fail to do that, then they are liable for the damages obtained by Jim’s vehicle while being parked on their property as part of the contract Jim made when he paid without being informed of the clause all because of Mayfair parking leaving the exclusion clause covered by overgrown shrubs. Now, assuming that the overgrown shrubs is on someone else’s property, then Mayfair parking has the right to sue and bring an action against whoever owns the land which has the shrubs. This would mean that Jim is bringing an action to the wrong party as it is not Mayfair’s fault he wasn’t informed of the exclusion clause. Another part of the incorporation would be previous dealings, but that is not relevant to the scenario as it doesn’t state whether or not Jim has parked with Mayfair parking before. The construction of the clause is also very important portion of all of this exclusion clause business. But it comes after incorporation and since we argued that the exclusion clause was not incorporated properly into the contract b etween Jim and Mayfair parking, this isn’t to follow suit. Regardless, we will assume that it was incorporated properly.


We take a look at the Contra Proferentem Rule or as we like to shorten it as CPR. Under this rule, reliance on an exclusion clause which is ambiguous and too general is to be regarded and interpreted as narrowly as possible against the party. This is especially important if the exclusion clause is trying to avoid an action against negligence. Then we take a look at the exclusion clause set up by Mayfair parking: CARS PARKED ENTIRELY AT OWNER’S RISK The important word here is the word ‘entirely’. Is it ambiguous? Entirely means in every way possible or completely, according to Oxford. So here, we have Mayfair Parking claiming that they not responsible any and every risks or mishaps occurring to the car. It is not specific, for one thing, what things they cover. Are they saying they won’t be responsible for thefts or damages? Another point to be made is that they are providing parking space because customers want a safe place to park, so since it is a condition or express terms that Jim is relying on when he parks the car there, it should be noted that the exclusion clause doesn’t stand. The exclusion clause can be viewed through a fundamental breach point of view. If Mayfair parking is supposed to guard the cars, then why is it damaged. The scenario doesn’t state HOW the car was damaged. Was it by another human or a natural occurrence? If Jim had insurance, surely he would not bring an action against Mayfair parking if insurance was not willing to cover the damage expenses. Then the damage would be something caused by something natural, like maybe a tree branch falling on it. In the case of Photo Production Ltd v Securicor Transport Ltd, the security guard or patrol guard who was stationed at the claimant’s factory had accidentally lit a fire which became uncontrollable and resulted in the whole factory being destroyed to an amounted 615,000 pounds. Securicor depended on the exclusion clause to protect them from liabilities avoiding claiming that the patrol guard had been negligent. It was held that even though the breach of contract had occurred, the exclusion clause was clear enough to protect them. Assuming that the exclusion clause had been incorporated properly into the contract and Jim had been informed, and then of course Mayfair parking would not be liable for anything since their exclusion clause is very clear that they won’t be responsible for any damages to the vehicles.


So in conclusion, we would argue that the incorporation of the contract was not executed in the proper manner by Mayfair parking and that if the overgrown shrub was their responsibility, then maintaining and trimming the shrubs is also their responsibility. Because of this, Jim has the right to claim for damages against Mayfair parking who failed to communicate the exclusion clause to him before he had entered the contract and paid 3 dollars for the parking ticket.

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