Assessing the Validity of a Contract: A Case Study

The case involves a contractual agreement between Qantas Airlines and Airbus Company. The agreement was made after the acceptance of an offer by Qantas, but the Airbus company failed to inform Qantas about additional terms added later. As a result, Qantas suffered a monetary injury due to the video entertainment system provided not meeting its requirements. The case raises issues related to exclusion clauses, misrepresentation of facts, and vicarious liability. It highlights the importance of transparency in contractual agreements and the need for parties to accurately communicate changes to the agreement.

Running head: BUSINESS LAW
Exclusion Clause and Vicarious liability
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Answer to question 1
Issue
The main issue of the case is to decide the real position of the Qantas Airlines and
whether there is any breach of contract present in between the Airbus Corporation Limited or
not. The present case is based on the contract and certain professions are incorporated under
this case. It is a common rule that in a agreement of contract the parties are liable to follow all
the rules and regulations mentioned under the conditions department of contractual
agreement. If the party or any of the parties could not able to meet, the requirements properly
lovely pose against them and restrict them to do that thing. However, there are certain
exceptions to the rule. It wasn’t stated under the contract law that if the party or any of the
party could not able to see certain professions paragraphs and without seeing them accept the
same he will be get certain benefits under the exclusion clause. It has also been stated under
the law that the law of contract is based on the offer and acceptance. A person who won to
deliver a sell certain things makes an offer and the other party have to show their interest and
accept the offer matter. There are certain rules regarding the term acceptance. A person has
request to accept anything after understanding all the Essential elements of the offer.
However, if there is certain paragraphs mentioned under the contractual agreement and that
are written in such a way that the acceptor could not able to understand the inner meaning of
the condition or failed to go through the condition as well, law will provide certain excuse
under the exclusion clause to secure the interest of the party. In this case also the rule
regarding the exclusion clause will be imposed on the party.
Law
It is common under the law of contract that the base of contract could not make
without offer and acceptance. There are certain paragraphs mentioned that until the offer is

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accepted by the other party there will be no contract exist. There are certain provisions
mentioned under the law of acceptance that Such acceptance must be free consent and there
should not be any chance to coerce the person of Crave out the acceptance illegally. It has
been stated under the case law of Donoghue vs Stevenson that in case of any offer there
should be acceptance for each and once the offer is accepted the offer has to pay attention to
the acceptor. In Wakeling v Ripley1, it was held that a contract can be legally binding only
use there is a valid offer and acceptance to the offer.
It has been mentioned under the case law of Riches v Hogbrn2 it has been held that a
party who accept the offer made by the offer should accept the same in such a way or manner
that is created by the offer or that is encrypted in the mind of the offeror.
In the case of Grauco3 it has been held that once the person accept all the
requirements made by the offer he shall be restricted by Court to claim further. The reason
behind the same is that it is presumed when a person give he is ordered free consent over
such issue. It is stated under the law that when an offer has been made and the parties who
accept the same could not able to add certain extra benefits under the conditions of the offer.
If there is certain proof regarding the method that the acceptor has added extra provisions
under the contractual rules and if the offeror could not able to understand its meaning and
without the understanding he signed the contract then the transaction would not be considered
as a valid acceptance or a valid contract.
1 Causer v Browne (1952) VLR 1
2 Chapelton v Barry Urban District Council (1940) KB 532
3 Derry v. Peek (1889) 14 App Cas 33

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In Chapelton v Bary Urban District Council4, it was held that there are certain
limitation regarding the contractual liability and there is a profession mentioned under the
contract law regarding the exclusion clause.
The main objective of the exclusion Clause is that is in a contractual agreement there
is certain provisions regarding the contract law that are not expected to be there under the
control agreement. It is to be understand that if any of the position has made or included or
added in the conditions of the contractual agreement it is the duty of the person who has
decided search terms brought into the mind of the other party. Is the same principle has not
been followed up properly the validity of the contract should not be possible. The relevant
case law regarding the exclusion clause can be Causer v Browne5.
There are certain profession mentioned under the contract law to determine the
legality of the legal effect of the contract. It has been mentioned under the act that after the
offer is made a person who accept the same, shall be made on the way where there is no
classes of coercion and undue influence or fraudulent way. It has also been stated that if the
additional term is not known to the parties to the contract or any of the parties to the contract
the towns will be excluded from the contractual agreement.
In Interphoto Picture Library v StillettoVisual Progrm6, it has been held that after
the contractual agreements and the terms of such agreement has been made no other
conditions should be added with the agreement. If such terms are added it is said violate the
principles of contractual law and hills make the contract void.
4 Dimmock v Hallett (1866) LR 2
5 Edgington v Fitzmaurice (1885) 29 Ch D 459
6 Interphoto Picture Library v Stiletto Visual Programmes Ltd (1988) 2 WLR 615

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The level of the contract law is very much civil in nature and therefore if any breach
has been made regarding the contract act or the conditions of the contractual agreement, the
aggrieved party has every right to claim damages from the liable party. In addition to the fact
of claiming damage the address party me also sick from the earliest party such compensation
then they had to face regarding the addition of the provision.
Application
In this present Case it is to be seen whether there is a valid offer and acceptance to the
matter and whether there is any extra positions added under the contractual agreement or not.
It is stated under the fact of the case that one Qantas made a contracting agreement for the
period of 545 days. The contract is made under this case for the delivery of certain goods. All
the necessary facts of the requirements made clear by the offer and the acceptor had agreed to
provide all the requirements and therefore and acceptance has been made regarding the same.
It is a common fact that once an offer is getting accepted the contract is formed as legally.
It is a fact that after the acceptance of the offer made by the Qantas Airlines, the
Airbus company has send a large number of documents and an additional conditions were
made by the Airbus company. The Airbus Company has failed to make the first party know
about the additional statements and therefore the case extract the profession of the exclusion
clause of the contractual law.
The requirements made by the Qantas Airlines that the Airbus company will provide
them a high quality video entertainment system that must be hold 36 channels and there
should be engine of good quality7. How was Earth after the contractual sub subject has been
prepared and the first party of the contract started to using it has come to the knowledge of
7 Appleman, John Alan, Jean Appleman, and Eric Mills Holmes. Contract Concerns: Reinsurance Contract
Formation, Validity, And Judicial Construction. Vol. 14. Appleman on Insurance Law and Practice, 2016.

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the party that the video system can hold 34 channels only and therefore the first party had to
face serious monetary injury regarding the same.
Conclusion
Therefore, it can be said that the Airbus company is liable under the exclusion clause
as it was failed to make the additional provision knowledgeable for the first party and as a
result of that the first party had to face severe business injury and therefore the Qantas
Airlines can claim damage from the Airbus company for the Loss.
Answer to Question 2
Issue
The main issue of this case is whether the Frank can make the contract valid regarding
the present scenario or not. The case is based on the vicarious liability where the main
objective is the principal is liable for the act of the agent. The subject matter of the case
attracts the principle of law of agency. Certain principles of miss representation of facts are
also attracted in this case.
Law
It is a common principle that if a contract is made based on certain false statement
Ben the law restrict the parties and invalidate the contract on the basis of misrepresentation of
fact.

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The case regarding the misrepresentation has been proved in Eddington v
Fitzmaurice8. The term miss representation of fact is differed from the puffery regarding the
nature and character. In case of puffery, certain self exaggeration has been made and they
have no legal significance as decided by the court in Dimmock v Hallet9. On the other hand
miss representation can be take place in the contract where the contract is made based on
false statement. Misrepresentation takes place well the other party to whom the
misrepresented facts are delivered accept the same with a believe that the outcome of the
facts will be beneficiary for him. A party that certain facts on Mr presented to them has
decided it in the case of Hill versus Rose that it is enough to establish the fact and they had
relied upon the misrepresented facts.
In Lockhart v Osman10 it was decided that a claim for misrepresentation can only be
made one the other party did not know about the true nature of the statement and the decision
to accept the or misrepresented fact is not affected by the prior knowledge regarding the facts.
The miss representation of fat helps the intending party to induce the other party in the
contract and cheat them by involving their names in the contractual agreement. However it is
to be bored in mind that Silence could not be taken as an acceptance to the representation of
fact.
In Derry v Peek11, it was held at fraudulent misrepresentation is made when the party
who accepts then is represented facts knew the outcome of the facts and after knowing the
8 Lockhart v Osman [1981] VR 57
9 Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8
10 Lockhart v Osman [1981] VR 57
11 Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8

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facts they have not made any prudent decision or steps and sign the contract civil agreement
based on the misrepresented facts. It is to be decided by the court that in case of fraudulent
misrepresentation the party cannot claim any damage for their loss.
The second problem regarding the case is based on the principle of agency. Certain
exception present under the law of contract regarding the liability of the principal for the acts
of the agent. The principal is known as the Vicarious liability. The case was established in the
Pioneer Mortgage v Colombus Capital Pty Ltd12.
Application
The case is divided into two parts- at the first part, Gemma is a sales person and
attempt to sell the dishware to one of her relative. The price that were fixed for the same
$350. However, she had misrepresented the fact to the owner of the shop and told him that
customer does not agree to pay more than $300. Believe the fact, Frank, the owner, agreed to
sell the dishwasher at a price of $300. Later on, however, he came to know that there are
customers who will pay $350 for the dishwasher. Therefore, in this case, Gemma
misrepresented Frank and he can claim damage from her.
In the second case, Bob was an employee under Frank and during his work, Bob had
done something wrong and Frank suspended him for the same. after fired from the job, Bob
sold 10 washing machine to Angela. Angela paid the money through online and then Bob fled
away. When Angela asked for the machine, Frank told that Bob do not work there anymore.
12 Bourgeon, Jean-Marc, and Pierre Picard. "Fraudulent claims and nitpicky insurers." The American Economic
Review 104.9 (2014): 2900-2917.

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Conclusion:
It either is to be stated that the principle of vicarious liability will apply here and
Frank has to pay Angela the money or has to hand over the machine. Frank is bounded by the
contract made between Bob and Angela.

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Reference:
Appleman, John Alan, Jean Appleman, and Eric Mills Holmes. Contract Concerns:
Reinsurance Contract Formation, Validity, And Judicial Construction. Vol. 14. Appleman on
Insurance Law and Practice, 2016.
Bourgeon, Jean-Marc, and Pierre Picard. "Fraudulent claims and nitpicky insurers." The
American Economic Review 104.9 (2014): 2900-2917.
Causer v Browne (1952) VLR 1
Chapelton v Barry Urban District Council (1940) KB 532
Derry v. Peek (1889) 14 App Cas 33
Dimmock v Hallett (1866) LR 2
Edgington v Fitzmaurice (1885) 29 Ch D 459.
Gergen, Mark P. "Negligent misrepresentation as contract." (2013).
Hill v Rose [1990] VR 129
Interphoto Picture Library v Stiletto Visual Programmes Ltd (1988) 2 WLR 615
L’Estange v Graucob (1923) 2KB 394
Lockhart v Osman [1981] VR 57
Murphy, Sharon M. "Sudden and Accidental Exception to the Pollution Exclusion Clause in
Comprehensive General Liability Insurance Policies: The Gordian Knot of Environmental
Liability, The." Vand. L. Rev. 45 (1992): 161.
Riches v Hogben [1986] 1 Qd R 315

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Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8
Tarr, Julie-Anne. "Insurance contract disclosure–an uncertain balance." Insurance Law
Journal 26.2 (2015): 109-121.
Thornton v Shoe Lane Parking Ltd (1971) 2 QB 163
Wakeling v Ripley (1951) 51 SR (NSW) 183
Watteau v Fenwick [1983] 1 QB 346
Young, Derek, et al. "A framework for incorporating insurance in critical infrastructure cyber
risk strategies." International Journal of Critical Infrastructure Protection 14 (2016): 43-57.