Business Law: Cases and Relevant Laws

This article discusses various cases and relevant laws related to business law, including contract law, implied warranty, and exclusion clause.

Running head: BUSINESS LAW
Business Law
Name of the Student
Name of the University
Author Note

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Problem 1
Issue: Whether a contract between family members is enforceable or not is the issue in the
present case.
Relevant law: Both in Balfour v Balfour and Cohen v Cohen, it was held that non-commercial
disputes include domestic, social or family disputes cases. Other principles of contract other than
intention, for example, estoppels cannot be established in cases of family relations. In Jones v
Padavatton, [1969] 2 All ER 616, it was held that relationships between family are based on trust
and affection and not with the intention to create legal relations. A different view was taken in
the case of Hole v Hole 2016 ABCA 34 where the Judge said that in cases of an intention to
create legal relations, a contract will exist.
Application: Applying the principles of Hole V Hole, the intention of Charlie and Ali was to
create a legal relation and therefore the agreement they entered into was legal as they had the
intention to create legal relations. In contract law, the most important thing to establish is
“intention” and in family context. The basic legal requirement to be bound by contract is
impeded in cases of contract law. Charlie and Ali, in the present case have used their solicitors to
enter into a written contract agreeing that Charlie will not open another flower shop. Therefore,
the valid elements of contract are present.
Conclusion: Charlie and Ali has entered into a written contract and had the intention to create
legal relations, therefore, there has been a breach of contract by Charlie.

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Problem 2
Issue: Whether the contract between Nick and the police department enforceable and had there
been a breach of contract.
Relevant Rule/Law: A police officer or a public servant has a duty of care to extend protection
to the general public. This does not entail a contract because a police has a duty to protect
people. In cases where consideration is involved, there comes the element of contractual
relations. Glasbrook v Glamorgan CC (1925), it was held that whenever consideration is given in
addition to a public officer discharging his duty, an agreement becomes enforceable and
therefore anything done in contravention to the terms of the agreement will deem it breach of
contract.
Application: In the present case, Nick is organizing a student party and has asked the police
sergeant to provide him with protection from “drug addicts” and outsiders. The police stated that
he will keep a patrol car but Nick stated that he wanted a car stationed outside throughout the
night and paid an amount of $1000 as consideration. Therefore, this can be termed as a valid
contract because Nick has paid an amount to make the contract enforceable. Therefore, the police
has a duty of care but when consideration is paid, it turns into an enforceable contract.
Conclusion: The agreement between Nick and the Police is an enforceable contract and Nick, by
not paying the money has breached the contract.

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Problem 3
ISSUE: Whether Helen can sue Mike for non-payment of debt.
Relevant Rule/Law: Part Payment of Debt cannot be considered a valid consideration for a
promise to release the debt in full. This was held in the case of Pinnel. Part payment of a debt is
no ground for not suing and cannot be considered a valid consideration. In the Pinnel Case, it
was held that though half an amount is paid, for the non-payment of the outstanding amount, the
defendant can be sued. The House of Lords in the case held that though the other aprty promised
to pay held, that was no ground to state that he will not be sued. The exceptions provided when
part payment can be accepted is when at the promisor’s request it is made with a chattel.
Application: An exception to the rule of part payment of debt is when the promisor accepts to
make part payment with the help of a chattel. In the present case, Mike owed Helen an amount of
$5000 which he has paid half. Subsequently, Helen asks Mike to bring $1000 as well as check
the steering of the BMW. Here, the chattel is the steering wheel of the BMW which Helen has
asked Mike to take care of. This is an exception to the rule laid down in the Pennel’s Case. The
chattel is an exception wherein part payment can be accepted at the request of the promisor.
Conclusion: Helen cannot sue Mike for breach of contract because Mike is protected by the
exception of chattel, which is the steering wheel of the BMW in this case.
Problem 4
Issue: Is Lizzie liable to pay the extra fine of $20 per day for failure to return the DVD on time?
Relevant Rule/Law: In the case of Spurling v Bradshaw Ltd., it was held that parties who try to
exempt themselves from any liability in cases of unsigned contract, should exercise judicious

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caution to ensure that unreasonable or unfair terms of the contract are made clear to any person
entering into any contract. The Court in the landmark judgment said that in cases of
“unreasonable” contract, the terms of the contract should be made very visible, preferable by
suing a red ink so that it draws the attention of the other party to the contract. The Court have
expressed their concern regarding the entry of unusual terms of the contract which should be
made very explicit and visible. The “red hand” rule came out for the first time in the case of
Spurling v Bradshaw [1956] 1 WLR 461. Whenever an unusual term is included which is not
normal in the course of the contract, it has to be made visible to the other party entering into the
contract.
Application: In the present case, Lizzie sees an advertisement on a DVD shop that gives out
details of the membership. Happy with the deal, she rents a DVD and pursuant to falling ill
returns the DVD after 8 days to which a fine of an exorbitant amount is charged. The normal fine
rate is way lower than that which the DVD shop is attracting and without any explicit mention of
the same.
Conclusion: The DVD shop did not mention the unusual terms of the contract explicitly and
therefore cannot claim any damages and cannot win a case of breach of contract.
Problem 5
Issue: Whether Tori can claim damages from the dry cleaner for the damage in her dress?
Relevant Rule Law: Exclusion clause is a clause in the contract that excludes a person’s
liability. This clause saves a party from any liabilities. This clause has to be very well
incorporated in the contract and signed by both the parties. If the other party signs a contract
containing exclusion clause, they cannot claim damages later on. This was held in the case of

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L’Estrange v Graucob [1934] 2 KB 394. It was held in the case that by signing the terms of the
contract, the party was bound by it.
Application: In the present case, Tori had given her dress to the dry cleaner wherein she had
signed an agreement where it was clearly stated that the dry cleaner will not be liable for any loss
accruing out the dry cleaning. Tori had not read the terms properly but had signed nonetheless.
Applying the rule as laid down by the above case, it can be said that the dry cleaners had very
well incorporated the exclusion clause in their contract.
Conclsuion: by signing the terms of the contract, Tori is bound by the terms abd therefore
cannot sue the dry cleaners for damage to her dress.
PROBLEM 6
Issue: Whether Sandra can sue Mr Smith for giving her wrong information about the quality of
the product she bought based on his opinion?
Relevant Rule: Section 19 of the Goods Act, 1958 talks about the implied warranty regarding
the quality or fitness of a product and gives situations when liability can be fixed. When the
buyer by necessary implication makes known to a person his requirements and also based his
buy on the skill and judgment on the expert, in that case, the seller, whether he is the
manufacturer or not is made liable. When any person exercises his skill and judgment to reach to
a conclusion regarding the quality of a product so much so that he influences the other party to
believe in his opinion, he becomes liable in case the product does not meet the requirement..

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Application: Expert opinion, skill and judgment are the keywords because the buyer depends on
those to buy the product. Sandra sought the expert opinion of Mr Smith and bought the copier
trusting him with his expertise.
Conclusion: There is an implied warranty of fitness attached to the copier therefore, when the
copier turned out to be of inferior quality it can be said that Mr Smith is liable to pay damages.
Sandra has rights to sue Mr Smith in the present case.

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Reference
Hole v Hole 2016 ABCA 34
Jones v Padavatton, [1969] 2 All ER 616
Pinnel’s Case 1602 5 Rep, 117
Spurling v Bradshaw [1956] 1 WLR 461