Understanding of the law relating to transnational contractual terms

Understanding of the
law relating to trans-
national contractual
terms
Word Count： 2933

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. The type of contract at hand, with a description of how it is regulated under English Law...3
2. Healthy Plc’s bargaining position and whether the contract is equitable or favours one of
the parties....................................................................................................................................5
3. The key contract clauses that the board of Healthy Plc. should focus on and the associated
risks in respect of each of these clauses......................................................................................6
4. Any suggested amendments you would recommend for each of the key clauses in order to
achieve a more favourable position for Healthy Plc...................................................................7
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
The contract law is one of the most central subjects which forms law of England and
Wales. It mainly focuses on rules for the binding contracts and other types of contract which can
be created in order to have legality and binding effect under the legislation. A contract is referred
to as the agreement which gives rise to the obligation that can be recognised or enforced by the
law. The main essential element of the contract is an agreement which can be formed by an offer
and acceptance between the parties. It is essential to signify the acceptance in order to get legally
bound by terms of the contract. This law is designed to protect the aggrieved party from the
breach of contract by offering various remedies under the statute1. This report is based on the
case study which deals with the type of contract and how it is regulated under law, the bargaining
position of party, key clauses of contract and risk associated with each and lastly the suggested
amendments in key clauses so that favourable position can be achieved by company.
MAIN BODY
Case scenario
Healthy Plc, a public company owns 50 clinics in UK which provides medical service to
public including diagnostic test like CT scan, Blood test and MRIs. It already contains the MRI
scanners but it wants to replace it with latest state of art MRI scanner so that it can stay ahead of
its competitors. Mediquip Ltd is medium sized company which deals in supply of the medical
equipment and its maintenance service. It mainly manufactures the equipment but uses sub-
contractors in order to produce some parts of MRI scanner. It sells it at 30% less price as it gains
sufficient profits through maintenance service which it offers for minimum 2 years.
Healthy Plc needs to enter into contract with Mediquip Ltd for 10 MRI scanners and the
latter shall be responsible for its delivery and installation. The consideration is 50 million
pounds. Mediquip Ltd is very keen to enter into contract as it is a high value contract and it
wants to promote its business by publicising the constancy by using the logo of Healthy Plc.
1. The type of contract at hand, with a description of how it is regulated under English Law.
A contract, in simple language is the promise which is enforceable under the law. It is the
agreement between two or more parties whereby both mutually gives the assent to enforce the
1 Whittaker S, 'The Optional Instrument Of European Contract Law And Freedom Of
Contract' (2018) 7 European Review of Contract Law

law. It consists of the offer which is made by one party and the offer is accepted by the other
party. There is a consideration involved in the contract and the parties must have intention to
create the legal relations. In context to present case scenario, the parties are engaged in the
commercial contract. It is defined as the agreement which is made between two or more parties
on the commercial issue2. It is mainly the agreement to supply the goods or services.
When an agreement is made in which the seller promises for supplying the specified
goods which the buyer requires within the specified time and at the fixed price. The buyers agree
for the purchase of goods exclusively from seller. In relation to current contract, the Healthy Plc
is the buyer who have made an offer to Mediquip Ltd for the purchase of 10 MRI scanners and
the supplier have accepted the offer. The amount of consideration fixed between the parties is 50
million Pounds. And as it is a commercial contract, the parties have intention to create the legal
relations. In the case of Balfour v. Balfour3, the court ruled that where there is a commercial
contract, the court takes the presumption that the parties have intended to create the legal
relations and in case of social contract, the presumption is raised that there is no intention to
create the legal relations.
The English contract law is the body of law which regulates the contracts in England and
Wales. It contains the body of rules which governs the parties to oblige with the terms of contract
so that no breach can take place. In case any party breaches the terms and conditions of the
contract, the law provides for specific remedies which is awarded to the aggrieved party in order
to place it in the same position if the contract was performed or in the position if the contract was
not performed. The remedies under the English contract law includes the damages which is the
award of money in order to compensate the innocent party. Second is specific performance of
contract where the court orders to perform the contractual obligation4, third is injunction which
is an equitable remedy which involves restraining or ordering the party to do something. Another
remedy available is recession where the court seeks to place the parties to their pre contractual
position and fifthly repudiation which involves ending the contract and many other. In the
2 'Specific Performance Of Contract: Contract Unenforcible' (2017) 16 Michigan Law
Review
3 [1919] 2 KB 571
4 Braci A, 'Contract Law: An Introduction To The English Law Of Contract For The Civil
Lawyer' (2019) 26 King's Law Journal