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The purpose of making this paper available is to illustrate what a problem question/ answer looks
like. The question/ answer hereunder is on a contractual dispute between John and Karen on the
exclusion of liabilities clauses (a topic that you should have been taught in business law course),
and the question asked you to advice John. The legal principles mentioned here are NOT
RELEVANT to your study in company law.
Problem question means that you had been given a set of facts and instructions (e.g. to advice
someone, comment on someones rights/ liabilities, whether the parties can establish a claim
against another etc). You have to follow the instructions, refer to relevant authorities (cases
and publications) and apply the principles in the given set of facts and offer a practical advice to
the parties. And you should not research on a hypothetical issue or discussion on purely
academic questions.
Coursework question
John had acquired six washing machines over the past 3 years from Goodharts for his
laundry business. On each occasion he has signed a yellow form which Kean, a salesman
John knew slightly, had put before him. John never read the terms on the form, though he
had a vague idea that they protected Goodharts pretty well. He was equally vague about
the many placards and notices displayed about the shop: Theyre mostly adverts, he told
a friend. Indeed, most were, but one was different. This, in 10 centimetre lettering,
announced that all leases and sales are subject to clause 10 of Goodharts contract (the
yellow form). In much smaller letters, clause 10 was written out on the wall. Clause 10
stated that Goodharts would not be liable for any defect, however caused.
In February, John decided to upgrade the equipment in his laundry and went to
Goodharts. He decided to buy fifty new washing machines of a heavy duty variety used by
commercial launderers, the total payments being in excess of $400,000. Kean couldnt find
a yellow form, but eventually found one green form. After a cursory check that it was a
Goodhart sales form he said: This seems OK and John signed it after Kean filled in the
The green form was an out of date one which contained no exclusion clause. It did,
however, contain a clause stating that this document does not contain or embody all the
terms of the contract and that other terms of the contract may be found in notices
displayed in the shop.
Within the first month two things happened: Firstly, a washable suit owned by a customer
was ruined due to a manufacturing fault in the agitator of one of the machines and John has
to reimburse the customer for the value of the suit; and, secondly, John was injured when
another machine became live as a result of Goodharts installation electrician connecting
the live wire to the earth terminal and vice-versa.
Advise John of his contractual rights to compensation.