Contract Law - Case Study Of Airbus Corporation Ltd | Breach Of Terms
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Added on 2020-02-18
Contract Law - Case Study Of Airbus Corporation Ltd | Breach Of Terms
Added on 2020-02-18
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Running head: CONTRACT LAWCONTRACT LAWName of the Student:Name of the University:Author Note
1CONTRACT LAWAnswer 1:Issue:In the case law that is provided the issue is whether Airbus Corporation Ltd is inbreach of the terms of the contract by providing the wrong software in the entertainmentsystem by providing only 34 channels while the contract specifically specifies for 36channels?Law:The basic elements of a contract consist of offer, acceptance (DeMott, 2014). Theoffer should have been made for a consideration and then the obligations of both the partiesare decided. The parties should also be competent to contract and they should also have thecapacity. These are few of the basic elements which need to be kept in mind while forming avalid contract. Another important thing that should be kept in mind while forming a contractis that any goods which a seller is willing to sell should match the description which is madein the contract. A buyer has every right to get only that product and also to pay for thatproduct.Another important principle which needs to be kept in mind while forming a contractis that once the terms of the contract have been decided if any change needs to beincorporated or any new document needs to be included whether it be from the buyers side orfrom the sellers side then the new document needs to be accepted by both the parties (Fisk &Barry, 2012). If one of the parties is against this incorporation of the new document then in
2CONTRACT LAWthat case the contract is voidable on the choice of that party. If both the parties agree to theincorporation of the new document or term to the contract then the contract remains valid.Some of the basic things to be remembered while entering into a contract are theterms of the contract. The terms of the contract which the parties agree to form the vital partand if any of the parties fail to honor the terms then the contract becomes voidable at thechoice of the other party. Compensation can also be claimed by the party who faced the losswhether it be the buyer or the seller in the form of damages or other forms as decided by theparties themselves or by the court.Goods description as mentioned above also is an important part while forming acontract. This basic rule was put down in the case of Manbre Saccharine Co. Ltd v. CornProducts Co. Ltd. The case dealt with selling of starch in 280lb bags. The contract hadspecified that the goods will be delivered to the buyer in the proper packaging but the goodswere unfortunately shipped partly in 280lb bags and the rest in 140lb bags which was againstthe terms agreed between the buyer and seller. The seller was of the view that packaging doesnot form an essential element when it comes to description of goods and also that thiscondition was not vital for the agreement. The court on the other hand was of the view thatthe seller could not escape this liability by saying that packaging was not an essential part ofthe agreement and that it did not form an important part when it came to description of goods.The court was also of the view that the seller was in breach of their duties by providing goodsin packages which were contrary to the description of goods mentioned in the contract.Thus from the case mentioned above it can be inferred that description of the goodswhether it be in the form of packaging or any other form should be maintained by the seller(Smith & Lee, 2014). Any provision regarding how the contract needs to be performedshould be followed. Another case which can be referred to in this matter is that of Benabu &
3CONTRACT LAWCo. v. Produce Brokers Co. Ltd. This case deals with the sale of beans in bags arriving by asteamship. The dispute arose when the steamship arrived much earlier which was before thecontractual date and dropped off the goods which was not known either to the buyer or seller.The buyer after getting the knowledge accepted the necessary document but refused to takethe goods as they had not arrived on the appropriate date as mentioned in the contract. Thecourt was also of the view that the buyer had acted within their rights by rejecting the goodsand that they could claim the price which had been paid.Application:In the present case Qantas Airlines Ltd had formed a contract with AirbusCorporation Ltd for building up of a new airplane. The contract had a total of 545 terms outof which number 455 stated that the airplane should have an in-flight video system whichshould be able to show 36 channels of entertainment to the passengers. These were thespecific terms of the contract. During the delivery of the aircraft it was seen that the softwarewhich had been provided for the entertainment only consisted of 34 channels and not 36 asthe terms of the contract mentioned. This would be treated as a breach of contract on the partof Airbus Corporation Ltd. The terms of the contract specifically asked for 36 channels ofentertainment and by providing only 34 channels not only has the description of the goodsnot been met but the terms have also not been honored by Airbus Corporation. Thus thebuyers Qantas Airlines Ltd can sue for damages.Another important factor which needs to be mentioned in the present case is that afterthe terms of the contract had been decided by the parties and also signed, Airbus Corporationwhile sending a large package of documents which also included the contract sent a newdocument named Limitation of Liability which stated that the liability of the companytowards Qantas for any breach of contract would amount to $ 300000. The thing which needs
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