Business Law Assignment - Contractual vs Representation

Running Head: BUSINESS LAW ASSIGNMENT
BUSINESS LAW ASSIGNMENT
Name of the Student
Name of the University
Author Note

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BUSINESS LAW ASSIGNMENT
LAW Q1:
A contractual term is said to be a provision that is forming the fundamental structure
of a contract. On the other hand, representation can be true or false which is said to be a
statement of fact made by the make without being sure about it being true. A representation
that is said to be false though does not give rise to a tortuous obligation but amounts to a
tortuous action of misrepresentation.
It can be said that both term and representation give the right to remedy to the
aggrieved party but in case of terms of a contract the right of remedy automatically arises by
virtue of the codified obligation associated with the term. However, in case of representation,
the burden of proof lies on the aggrieved to prove that the breach causing party made the
statement fraudulently, negligently and without having adequate knowledge about the
trueness of the statement and such statement induces the aggrieved to act over the same. In
both, cases of term representation, the purpose of awarding damage are to put the aggrieved
in the same position where he or she would have been in the terms of the contract have been
properly executed by both of the parties. In the case of Hadley v. Baxendale, the court held
that, while recovering damages for breach of contractual terms an aggrieved party is liable to
recover damages which is reasonably foreseeable to both parties during the making of the
contract along with this the aggrieved party can claim consequential damages which may
have to arise due to any special scenario related to the contract as long as the existence of
those scenarios are within the knowledge of both the parties1. In case of representation, the
aggrieved party can claim damages beyond the foreseeability test and ask for all direct losses
happen to the claimant2.
1 Hadley v Baxendale (1854) 9 Ex 341
2 Star Polaris LLC v HHIC-PHIL INC [2016] EWHC 2941 (Comm)

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BUSINESS LAW ASSIGNMENT
LAW
In case of determining the obligation of a breach causing party, the court needs to
determine whether such an obligation arises out of any term or representation. The first
thumb rule for determining the same is to look for whether there exists any express written
provision regarding the breach in issue in the contract if so, then such written statement will
be considered as the term and any other oral statement will be the representation as stated
under the rule of 'Parol Evidence’. In the case of written provision, it will regard as the erm of
the contract. The next thing that needs to be determined is that the party making the statement
poses any requisite or extra skill regarding the concerned issue in that statement, then it is
going to be referred as a term3. On the other hand, if the representator has more knowledge
than the aggrieved, then it can be regarded as representation. The third thing that usually
determined by the court is the proximate relationship between the statement and the contract,
that is the depended on the statement made by statement maker which induces the aggrieved
to enter into the contract and without that statement, the contract would not exist4. In addition
to this, the significance of the advice of the representator must be communicated to him or
her either expressed or implied conduct. The fourth important factor is the time-lapse, that is,
after making the statement the contract has been immediately made, and then it would
amount to representation5.
Terms can further be classified under implied terms as envisaged in Section 16 of the
Sale of Goods Ordinance, conditions and warranties which depends upon the intention of the
parties at the time of making the contract6, and ‘innominate terms’ which is an intermediate
term between conditions and warranties which come into existence depending upon the
impact of the breach in such cases where conditions elaborated in the contract are
ambiguous7. However, the duty of the aggrieved party if check the trueness of the statement if
3 Oscar Chess v Williams [1957] 1 WLR 370
4 Bannerman v White (1861) 10 CBNS 844.
5 Heilbut, Symons and Co. v Buckleton [1913] AC 30.
6 Poussard v Spiers (1875) LR 1 QBD 410
7 Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1961] EWCA Civ 7

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BUSINESS LAW ASSIGNMENT
LAW
it is within his or her capability by as a prudent person and complying with the principle of
due diligence.
Q2:
Issue:
The issue, in this case, is whether Ken can claim damages from the Grand hotel for
causing loss and injury to him during his stay to the hotel or not.
Rule:
In this case, the contract rule of the presence of knowledge, fiduciary liability,
negligence, the duty of care has been discussed. Furthermore, common law duties such as
innkeepers duty and premises liability have also been discussed to determine Ken's liability to
get damages.
Analysis:
Ken is liable to get damages from the hotel room on the basis of various ground.
Firstly, the Grand hotel management did not inform Ken about the disclaimer of no liability
for lost goods and injury on the hotel's party for their guest. Therefore, Ken does not have any
actual and constructive knowledge regarding the existence of such terms of stay, nor he did
sign any declaration confirming his no objection to comply with the provision8. Furthermore,
the hotel authority did not communicate with him about such a clause associated with staying
in the hotel, which as a service provider it is their liability to disclose each material facts or at
least give Ken an opportunity to have knowledge about such facts9. Therefore, they have
failed to act in good faith and comply with the reasonable standards of fair dealing as
envisaged under the law of contract.
8 Callahan, D.J., Kramer, L.B., Hanback, L.T. and Bacon, S.L., 2017. 2017 Government Contract Law
Decisions of the Federal Circuit. Am. UL Rev., 67, p.1273.
9 Anns v Merton London Borough Council [1977] UKHL 4, [1978] AC 728