logo

Business & Corporation Law- Case Study

   

Added on  2019-11-29

12 Pages2891 Words143 Views
Running Head: PART BASED 1Business & Corporation LawCase study based on aspects of contract law and negligence Assessment 3

PART BASED2Part AI: IssuesThe key issue in this case revolves around the liability of breach of contract of Airbus towards Qantas and the validity of the exclusion clause. R: RulesThe best manner of defining a contract is an agreement having legal validity where the parties made a promise to pay consideration and carry out the contractual obligation. There are two key ways of forming a contract, i.e., by orally stating the terms creating an oral contract and the written contracts are formed when the terms of the contract are written down and the parties of the contract sign this document (Mau, 2010 p. 5). When the parties wish to create a contract, they need to ensure that the contract formation requirements are met, which includes the presence of six different elements, and these are offer, acceptance, capacity, intent, clarity and consideration (Miller and Cross 2015, p. 257). Clarity is a key component as the terms of the contract are the base of the contract (Blum 2007, p. 2).In such cases where the terms set out under the contract are deliberately not undertaken by one of the parties to the contract, the contract is deemed to have been breached. And when such happens, the aggrieved party gets the option of initiating a legal action against the breachingparty. The available remedies for the breach of contract include the monetary remedies and the equitable remedies. The former one takes the form of monetary damages and the latter are in form of specific performance, injunction and rescission (McKendrick and Liu 2015, p. 431).

PART BASED3The liability for breach of contract and the other liabilities arising out of the contract can be limited or restricted through the exclusion clauses. These are such clauses by the use of which, the liability can be reduced or extinguished by the contracting parties. There are certain requirements for an exclusion clause to be considered as a legally valid one. The first and foremost one in this regard is that the exclusion clauses have to be inserted properly into the contracts. Secondly, there is a need for the exclusion clause to be conveyed to the other party andtheir attention has to be brought towards the same. As a best practice, this should be done even when the same is covered under a contract which is to be signed. Even though these clauses can limit the liability arising out of the contract, these clauses cannot restrict the same for the ones which are raised through the statutory or common law and also cannot go against them in a manner to make them invalid. Where any attempt is made through the exclusion clause to do so, it would automatically be deemed as invalid (Legal Services Commission, 2011).The exclusion clause is also not valid in such cases when it is inserted in the main contract after it had been formed and signed by the parties. The case of Olley v Marlborough Court Ltd (1949) 1 KB 532 helps in establishing the same. In this case the exclusion clause was created after the original contract had already been formed, which led to the invalidity of the clause (Stone and Devenney, 2017, p.206). Further, if the exclusion clause is referred at another place and is again not brought to the attention of the parties, it is deemed as invalid (Poole, 2016,p. 223). Another key point is that the exclusion clause would be given the validity when the sameis inside a contract, which is signed by the parties, even when they have not read the exclusion clause and the prime example of this is L'Estrange v Graucob [1934] 2 KB 394 (Gibson and Fraser, 2014, p. 501).

PART BASED4It is also a requirement that the exclusion clause is properly brought to the attention of theparty against which it is being inserted for the same to be valid. Thornton v Shoe Lane Parking Ltd (1971) 2 WLR 585 was a case where the exclusion clause was stated at the back of the parking ticket which the parties got at the time of entering the parking lot, as a receipt of the payment of the parking fare. As a receipt is not bound to contain the exclusion clause and the same was contained at the back side, in addition to not being brought to the attention of the parties, the exclusion clause was held as invalid (Stone and Devenney, 2017, p.206). The same incident took place in the case of Chapelton v Barry UDC (1940) 1 KB 532 (Poole, 2016, p. 223). A: Application of rulesThe facts of this case study make it very clear that a contract was formed between Airbus and Qantas on set terms. For the signing of the contract, the contract was sent in a big pile by Airbus with a new clause, where the exclusion clause was covered and through which, Airbus restricted its liability at the value of $300,000. This is the main point of the entire case study, i.e.,to test the validity of this clause.The given exclusion clause does not contradict, restrict or oppose any laws, which would fulfil this particular criteria, and give it legality on the basis of this criteria. Coming to the applicability of Thornton v Shoe Lane Parking Ltd, Qantas could not have reasonably foreseen that Airbus would include a new clause in the stash. Since this new clause was not brought to theattention of the parties, it would be deemed as invalid. Coming to the applicability of Chapelton v Barry UDC, again, the exclusion clause was not properly brought to Qantas’s attention making it invalid. Applying the case of Thompson v London Midland & Scottish Railway, mentioning theclause of a different document would not be deemed as having met and even if they sign the

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
The Applicability of Common Law or Statutory Law
|13
|3052
|47

Business Law Legal Analysis 2017
|13
|3450
|101

Business Law Legal Analysis Report
|10
|2583
|55

BLW17 Business Law Assignment: Doc
|15
|3783
|34

Commercial and Corporations Law Study Material with Solved Assignments
|7
|1986
|211

Business Laws Issues | Assignment
|10
|2041
|145