Business Law Legal Analysis Report

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Business Law
Legal Analysis Report
27-Jan-18
(Student Details: )

Business Law
Question 1
Issue
Whether Zoe can sue Wizard for the breach of contract in this case, or whether the clause 8
proves to be successful?
Rule
A contract is a legally binding document which covers different terms. It is important to fulfil the
terms covered under the contract; otherwise a breach of contract takes place. One of such terms
is exclusion clause, which has the effect of restricting or limiting the liability of one part of the
contract, due to the reasons mentioned. However, exclusion clauses have to fulfil certain key
requirements, in order for them to serve their purpose. The first one in this regard is that the
exclusion clause has to be properly incorporated in the contract. It has to be carefully brought to
the contracting party, particularly the one which would be at the weaker side where this
exclusion clause was to become applicable (McKendrick and Liu, 2015)).
Where an unfair term is to be relied on by a party, there is a need for the party to give reasonable
notice for the same, in context that they brought the term to the attention of the other party.
Where the exclusion clause is not brought to the attention of party, it would not be valid
(Lambiris and Griffin, 2016). This was seen in Thornton v Shoe Lane Parking [1971] 2 WLR
585. In this case, upon entering the parking lot, the individual got a parking ticket, and the
exclusion clause was printed on the back of it. The court stated that this exclusion clause was
invalid as it had to be inserted prior to the contract was made, and here the contract was made
when the individual got the parking ticket (James, 2017).
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Business Law
Though, when such happens that the written contract covering the exclusion clause is signed by
the parties, the exclusion clause becomes bending, irrespective of the fact whether the party had
read this clause or not. This was established in L'Estrange v Graucob [1934] 2 KB 394, where
the court stated that in signing the order form, the claimant became liable for the terms covered
in the form, despite the claimant not having read the same (Gibson and Fraser, 2014).
Application
In the given case study, for contracting the services of Wizard, Zot approached them and for
rendering these services, an order form was created between the two. The contract which was
formed between the two provided Wizard to provide a number of stunning images which would
load swiftly. However, when the actual website came into functioning, the images loaded slowly.
This was a breach of promise made by Wizard and for which Zot can sue Wizard.
However, the order form covered clause 8. The wordings of this clause are such that they remove
the liability of Wizard for errors of programming. Here, Zot can state that the exclusion clause
was not brought to his attention in a proper manner as the order form covered the exclusion
clause. As per Thornton v Shoe Lane Parking, this exclusion clause was not brought to Zot’s
attention when the contract was formed. Though, this claim is likely to fail due to the precedent
given in L'Estrange v Graucob. The facts of this case study match this case, so the ruling of this
case would be applied here. Zot had signed the order form which covered the exclusion clause.
And based on the quoted case, this would result in the proper exclusion of order form, as upon
signing the contract, the terms become binding irrespective of the parties having read the same or
not. Clause 8 here would be relevant as the breach claimed by Zot was for programming error
only.
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