Business Law Study Material with Solved Assignments and Essays - Desklib

This study material provides answers to various Business Law questions, including issues related to part payment of consideration, discharge of a contract, agency law, and negligence. It also includes relevant rules and applications of landmark cases. The material is suitable for students studying Business Law and related courses in colleges and universities.

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

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Table of Contents
Answer A.........................................................................................................................................2
Answer B.........................................................................................................................................4
Answer C.........................................................................................................................................7
Answer D.........................................................................................................................................9
Bibliography..................................................................................................................................12
Appendices....................................................................................................................................13

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Answer A
Issue A
The issue indentified in relation to the provided facts is that whether the provisions in
relation to part payment of consideration and the exceptions to such provisions would make
Marron Liable to pay PC solutions another 100 and whether she is entitled to make any further
claim from the publisher.
Rule
The landmark case in relation to the rules of part payments of debts and consideration is
the Pinnel's Case (1602) 5 CoRep 117a. The primary ruling which had been made in this case
was that a “part consideration is not regarded as a good consideration” where a promise has
been made to settle the balance debt. In this case the defendant “Cole” owed the plaintiff
“Pinnel” £8.50. Eventually, the plaintiff in the full settlement of his debts accepted a payment of
£5.11 from the defendant. However, the plaintiff latter used the defendant for the remaining
amount owed by him. In this situation the court ruled that in itself, part consideration is not to be
considered as a consideration. In situation where the part payment has been made on the request
of the creditor on an earlier date, the early payment would be considered as a consideration. Thus
there would be a consideration in situation where part payment has been made on an earlier date,
there have been some goods involved instead of money or part payment has been made in a
different place (McKendrick 2014).

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The rule provided by the Pinnel case in spite of its harsh nature has been used by the
house of lords in the case of Foakes v Beer (1884) 9 App Cas 605. In this case the ruling that
part consideration is not a good consideration had been affirmed by the court.
However as stated in Hughes v Metropolitan Railway (1876-77) L.R. 2 App. Cas. 439
where anything else it provided with the part payment in from of consideration t would be
deemed that full consideration has been provided.
Another exception to this rule has been provided in the case of Wood v Robarts (1818).
In this case compensation agreements had been identified as exceptions to the rule of part
payment of consideration. In this case the plaintiff had accepted 0.50 for each pound as a full
settlement of debt when the defendant was in liquidation. The court held that this situation would
be a exception to the Pinnel case as the court held that making the defendant liable for the
remaining amount would be a fraud in relation to the other creditors (Poole 2016).
Application
In the given situation it has been provided that Marron had got into a contract with PC
solutions according to which she was to pay them $200 for repairing the computer in 24 hours.
However due to unforeseen circumstances she no longer required the computer within such time.
As a full and final payment of his debt the company accepted $100 along with a autograph. In
the given situation through the application of the Pinnel case it can be stated that part
consideration is not a good consideration. However through the application of the exception
provided in Hughes case as an additional autograph had been provided with the payment it
would be considered as a valid consideration.

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In the other situation with the publisher it is evident that Marron is getting into a
compensation agreement as the company is into liquidation and she has been asked to accept
0.20 pounds for each pound. Through the application of the Wood v Robarts case as this is a
compensation agreement Marron cannot make any further claim.
Conclusion
Marron does not have to pay anything more to PC solutions
Marron cannot make any further claim from the publishers
Answer B
Issue B
The issue which has been identified after going through the situation is that whether and
on what grounds the publishers can discharge the contract with Marron in relation to her writing
services, legally.
Rule
According to Cartwright (2016) a discharge of a contract signifies the way in which the
contract is brought to an end. There a few ways in which a contract can be legally discharged.
These ways are through
Performance- where the duties under the contract have been duly performed by the
parties the contract is said to be discharged (McDermott 2017).

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Agreement – this situation takes place where there is mutual agreement between the
parties to end the contract between them
Breach – the condition is invoked when any of the parties to the contract are not able to
comply with any or all of the obligations under the contract. In this situation the party who has
invoked the breach is liable to pay the other party damages suffered by them (Andrews 2015).
Frustration
A contract comes to an end automatically when frustration takes place. There are four
conditions which need to be satisfied to identify the element of frustration. These conditions are
as follows (MacQueen and Thomson 2016)
Firstly there has to be an event which is unforeseen in nature. This means that the event
must be such that it would not be expected by the parties in a reasonable manner that the event
would take place and thus no provisions in relation to the contract had been made for the event
(Smits 2017).
Secondly, any of the parties to the contract must not be at fault in relation to the
occurrence of the event. In the case of Maritime National Fish Ltd v Ocean Trawlers Ltd
[1935] UKPC 1 it had been held by the court that the event must not be a “self induced
impossibility”
Thirdly, the event must make the performance of the contract impossible. For instance
where any one party to the contract has died it comes impossible for the contract to take place
such as in the case of Taylor v Caldwell [1863] EWHC QB J1. However where a contract has

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become difficult or expensive to perform cannot satisfy the condition as provided in Contrast
Cornish v Kanematsu.
Finally where the purpose or object of the contract has been destroyed the contract is
deemed to come to an end by the doctrine of frustration as provided in the case of Krell v Henry
[1903] 2 KB 740.
Application
In the given situation it has been provided that the publishers want to discharge the
contract as the company has got into liquidation. They do not want Marron to work for them
anymore. Thus it can be provided that the contract has not been discharged by performance as
the obligation under it have not be fulfilled. In addition the contract has not been discharged
through an agreement. Thus there either has been a breach or a frustration.
In the given situation to provide that frustration has taken place the four elements of
frustrations have to be applied. Firstly it can be stated that the liquidation of the company was
unforeseen when the contract was entered upon by the parties. They would have not reasonably
expected the liquidation of the company. In addition there was no fault of either party in relation
to the liquidation. Further the liquidation has made the performance of the contract impossible.
Finally the purpose of the contract has been defeated due to the liquidation of the publisher
company.
Thus it can be stated that the contract can be discharged through frustration by the
publisher company and it is not a breach of contract
Conclusion

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The contract has been discharged duly through the doctrine of frustration
Answer C
Issue C
The issue which has been identified in relation to the provided facts is that through the
application of the provisions of Agency law whether authority was present in the part of the
repair technician to release the computer. The issue is also to identify any breach of duty
committed by the technician.
Rules
As stated by O'Sullivan and Hilliard (2016) “a principal is liable for all acts of his agent
who has been provided with an actual or apparent authority during the course of employment in
relation to the third party. Any contract which has been entered into by the agent with a third
party with respect to actual or apparent authority is binding on the principal.
In the landmark case of Freeman & Lockyer v Buckhurst Park Properties (Mangal)
Ltd [1964] 2 QB 480 it had been ruled by the court that even in situation where the agent does
not gave a actual authority his acts would be binding in the principal in situations where the third
party had relied on the authority to enter into a contract with the agent.
On the other hand where the third party has the knowledge that the agent does not have
any authority provided by the principle and with this knowledge enters into a contract with the
agent they cannot make a claim in relation to apparent authority as per the case of Quinn v CC

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Automotive Group Ltd t/a Carcraft [2010] EWCA Civ 1412 and Criterion Properties plc v
Stratford UK Properties LLC [2004] UKHL 28
In addition were the third party has not made any reasonable inquiry in relation to the
presence of the authority the court will deny the claim of the party as done in the case of Acute
Property Developments Ltd v Apostolou [2013] EWHC 200 (Ch).
Employees have a fiduciary obligation towards the employer which means that there
must be a notion of mutual trust and confidence between them. The actions of the employees can
directly affect the employer. Thus the employees have a duty that they will not be exercising any
actions which have not been authorized by the employer. Where the employee has acted beyond
the authority provided by the employer the employee has the liability of compensating any loss
which has been incurred by the employer due to his actions (Morgan 2015).
Application
In the given situation it has been provided that Marron has got his computer released
from a repair technician who worked at PC computers. In the given situation any action which is
done by the repair technician is binding on the employer done in the course of employment as
per the case of Freeman & Lockyer. In addition according to the principles of the Criterion
Properties plc case where the third party has relied on the authority of the agent to get into the
contract the contract is binding on the principle. Here there has been a valid contract between
Marron and the technician where the computer was released for a consideration of an autograph
and £100. The contract has been entered by relying on the fact that as the technician is the agent

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of PC computers he has the authority to release the computer. Thus according to the principals of
agency the contract is binding on PC computers.
However PC Computers can make a claim from the technician as he has misused this
position and breached his fiduciary duties as an employer. He had a duty that he will not be
exercising any actions which have not been authorized by the employer which he did in the case.
Conclusion
The contract between Marron and the agent is binding on the employer PC computers.
The employee has violated fiduciary obligations owed to PC Computers.
Answer D
Issue D
The issue which has been identified in relation to the situation is that whether there has
been negligence on the part of PC Computers or not. The issue is also to determine the
applicability of the exclusion clause.
Rule
The concept of negligence had originated through the ruling made in the landmark case
of Donoghue v Stevenson 1932 AC 562. The case provided the three basic elements of
negligence which are Duty of care, Breach of duty of care and causation. These principles had
been applied in Ireland various cases such as the case of Glencar Exploration Ltd, v Mayo
County Council [2002] ILRM 481.

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Whether the duty of care exists, can be analyzed by applying the proximity test or the
Caparo test used in the Caparo Industries pIc v Dickman [1990] 2 AC 605 case. The case is
not applicable where there is only economic loss but can be applied where the loss is because of
a damage to property. The breach of duty of care is analyzed by the application of the objective
test or the reasonability test as per Vaughan v Menlove (1837) 3 Bing. N.C. 467 by analyzing
the action of a reasonable person in place of the wrongdoer. Causation is determined by the
application of the “But For” test as per Barnett v Chelsea & Kensington Hospital [1969] 1 QB
428 where if the injury is cases as a effect of the breach of duty only then negligence can be
established (Austria et al. 2016).
According to the case of L'estrange v Graucob (1934) where a contract has been signed
by the parties it is deemed that the parties have accepted all the terms of the contract even if they
have not read the terms stated in the contract.
An exclusion clause is incorporated by the parties to the contract to limit the liability
which may arise out of the contract. The clause if incorporated properly into a contract makes the
party immune to the particular liability.
However as per the case of Thornton v Shoe Lane Parking (1971) exclusion clause in
order to be valid has to be incorporated appropriately into the contract. This means that the other
party has to be made aware of any clause which has been incorporated into the contract to the
detriment of the party (Fulbrook 2017).
Application

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It has been provided through the facts of the study that the hard drive of Marron’s
computer has been completely wiped out by PC computers. Whether there has been negligence
on their part or not will be assessed by the application of the elements of negligence in the
situation. Firstly the duty of care needs to be analyzed. It can be stated by the application of the
proximity test that there was a duty of care owed by PC computers to Marron in relation to the
safety of data. In addition where the objective test is applied it can be stated that a reasonable
person must have ensured that the data which was very important to Marron is not deleted from
the computer. Thus while not been able to do so PC Computers have violated the duty of care. In
addition where there had been no loss of data Marron would not have been subjected to any
financial losses. Thus there is negligence in the situation on the part of PC Computers.
In addition it has been provided that there was a exclusion clause which was present in
the contract through which PC Computers could not be held liable for the loss of data. As per
L'estrange case where a contract has been signed between the parties they are bound by the terms
of the contract whether they have read it or not. However where the exclusion clause has not
been added properly it cannot be binding. In the situation the clause was not adequately notified
to Marron by PC Computers. Thus in this situation the clause cannot be held as appropriately
incorporated and PC Computers are liable to pay compensation to Marron.
Conclusion
There is negligence on the part of PC Computers and the exclusion clause cannot be used
to limit their liability as it has not been incorporated in a proper manner.

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Bibliography
Andrews, N., 2015. Contract law. Cambridge University Press.
Austria, I.I., Bulgaria, I.V., Denmark, V.I., England, V.I.I., Estonia, W.V., Finland, I.X., France,
X., Germany, X.I., Ireland, X.I.V., Latvia, X.V.I. and Lithuania, X.V.I.I., 2016. European Tort
Law Yearbook. Issues, 5(1).
Cartwright, J., 2016. Contract law: An introduction to the English law of contract for the civil
lawyer. Bloomsbury Publishing.
Fulbrook, J., 2017. Outdoor activities, negligence and the law. Routledge.
MacQueen, H. and Thomson, J., 2016. Contract law in Scotland. Bloomsbury Publishing.
McDermott, P.A., 2017. Contract law. Bloomsbury Publishing.
McKendrick, E., 2014. Contract law: text, cases, and materials. Oxford University Press (UK).
Morgan, J., 2015. Great debates in contract law. Palgrave Macmillan.
O'Sullivan, J. and Hilliard, J., 2016. The law of contract. Oxford University Press.
Poole, J., 2016. Textbook on contract law. Oxford University Press.
Smits, J.M. ed., 2017. Contract law: a comparative introduction. Edward Elgar Publishing.

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Appendices
List of Cases
Pinnel's Case (1602) 5 CoRep 117a
Foakes v Beer (1884) 9 App Cas 605
Hughes v Metropolitan Railway (1876-77) L.R. 2 App. Cas. 439
Wood v Robarts (1818).
Maritime National Fish Ltd v Ocean Trawlers Ltd [1935] UKPC 1
Taylor v Caldwell [1863] EWHC QB J1
Krell v Henry [1903] 2 KB 740
Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 4804
Quinn v CC Automotive Group Ltd t/a Carcraft [2010] EWCA Civ 1412
Criterion Properties plc v Stratford UK Properties LLC [2004] UKHL 28
Acute Property Developments Ltd v Apostolou [2013] EWHC 200 (Ch).
Donoghue v Stevenson 1932 AC 562
Glencar Exploration Ltd, v Mayo County Council [2002] ILRM 481
Caparo Industries pIc v Dickman [1990] 2 AC 605
Vaughan v Menlove (1837) 3 Bing. N.C. 467

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Barnett v Chelsea & Kensington Hospital [1969] 1 QB 428
L'estrange v Graucob (1934)
Thornton v Shoe Lane Parking (1971)