Exclusion Clause and Misrepresentation in Contract Law
Added on 2019-11-14
12 Pages2266 Words391 Views
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Running head: LAW ASSIGNMENTLaw AssignmentName of the StudentName of the UniversityAuthor Note
1LAW ASSIGNMENTTable of ContentsQuestion 1........................................................................................................................................2Issue.............................................................................................................................................2Rule..............................................................................................................................................2Application..................................................................................................................................3Conclusion...................................................................................................................................5Question 2........................................................................................................................................5Issue.............................................................................................................................................5Rule..............................................................................................................................................5Application..................................................................................................................................7Conclusion...................................................................................................................................8Reference.........................................................................................................................................9
2LAW ASSIGNMENTQuestion 1IssueIs Qantas Airlines Ltd (Qantas) entitled to claim compensation from Airbus Corporation Ltd(Airbus)Rule A contract becomes legally binding and enforceable in the court of law only if there is avalid offer and acceptance between the parties to the contract. The parties to the contract musthave legal intention to be bound by the contract. The parties to the contract must agree to the terms of the contract, the offeror has offeredto the offeree. Further, after the offeror and the offeree enters into a contract, they becomelegally bound by the contract irrespective of the fact that either the parties have not entered intosuch contract without perusing the terms stipulated in the same. Furthermore, the offereeaccepting the terms of the contract must not include any additional terms that were not present inthe original offer made by the offeror. If the offeree incorporates an additional contractual term, it shall amount to counter offerand shall not be considered as a valid acceptance because under such circumstances, thenoriginal offer shall cease to be in effect. the terms of an acceptance must match with the terms bemade by the offeror and in case, any additional terms is incorporated in the contract, the originalcontract shall not exist, as it would be considered as contractual offer. In L’Estrange v Graucob [1934] 2 KB 394, a party to the contract is entitled to limit itsliability by including an exclusion clause in the contract but the parties cannot restrict their legal
3LAW ASSIGNMENTliability. A contractual term incorporated by a party which is not usually expected to bestipulated in a contract, must be acknowledged to the other party. If the other party is notinformed about such contractual term, and it is detrimental to the other party, such terms shallnot be considered as valid. After the contract is confirmed, an additional term cannot beincorporated in the contract as was held in Olley v Marlborough Ltd [1949] 1 KB 5321.A condition is a term of contract, the violation of which entitles the aggrieved party toterminate the contract and claim damages from the breaching party. A warranty is a term, whichdoes not, entitles the aggrieved party to discharge himself from the contractual liability. Awarranty is not as significant as the other terms of the contract as they do not form the subjectmatter of the contract. However, if either party fails to fulfill the warranties incorporated in acontract, the aggrieved party shall be entitled to claim damages against the breaching party thecourt needs to apply the decision held in Hong Kong Fir Shipping Co Ltd v Kawasaki KisenKaisha Ltd [1962]2.The court held that the aggrieved person is granted damages by way of compensation.The court grants compensation that reinstates the parties to the position they were in, before theviolation of the contractual terms. The compensation includes any loss that the aggrieved partyhas sustained due to the infringement of the condition or warranty stipulated in the contract.ApplicationIn the given scenario, Qantas shall be said to have entered into a contract with Airbus ifthere is a valid offer and acceptance between them. Since both the parties have agreed on 545terms incorporated in the agreement, it implies that the parties have made a valid offer and there1[1949] 1 KB 5322 [1962] 2 QB 26
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