Business Law Assignment on Contract Law and Related Concepts

This assignment solution addresses several key issues in business law. Question 1 examines Weitao's obligation to pay a replacement fee, analyzing the validity of an exclusion clause within a contract, referencing cases like Olley v Marlborough Court and L’Estrange v F Graucob Ltd. Question 2 explores Warren's right to discharge a contract due to Evelyn's denial of performance, referencing Planche v Colburn. Question 3 investigates whether Ambreena can sue Evelyn for misrepresentation based on a false statement made during contract negotiation, with reference to Bisset v Wilkinson and Smith v Land & House Property Corp. Finally, Question 4 assesses whether including a charger is an implied term of the contract, applying the principles from BP Refinery (Westernport) Pty Ltd v Hastings Shire Council.

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Introduction to Law and Ethics

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Question 1
Issue
Whether Weitao is legally obligated to pay the replacement fee as per the term included in
the contract signed by him?
Rule
The parties to a contract have the ability to eliminate their liability by including exclusion
clause in the contract. In case the terms of a contract are violated by its parties, then the
innocent party has the right to enforce the breaching party. However, by accepting an
exclusion clause, such right is destroyed by the party. The court provided in Olley v
Marlborough Court1 case that the party who wanted to eliminate his/her contractual liability
by including the exclusion clause has to bring it to the attention of another party. The court
also provided that it must be brought into the attention the party before the contractual
relationship is constructed or while it is being formed. However, the court established an
exception to this rule in the case of L’Estrange v F Graucob Ltd2. In this case, the court
provided that even if a written contract is formed between the parties in which the
exclusion clause is included by one party, then it is not necessary that such clause is brought
into the attention of another party3. The aggrieved party cannot provide that the term was
not brought to his/her attention in case a written contract has formed between the parties.
Application
A contractual relationship has been constituted between Evelyn and Weitao regarding the
purchase of the projector. One of the terms of such term was exclusion which was included
by Evelyn in order to eliminate her liability to pay for the replacement fee in case the
products are damaged by the parties. This clause was not brought into the attention of
Weitao, however, it was not necessary to be brought into the attention as it was a written
contract based on which it is valid as per the judgement of L’Estrange v F Graucob Ltd case.
1 [1949] 1 KB 532
2 [1934] 2 KB 394
3 Michael Lambiris and Laura Griffin, First Principles of Business Law (Oxford University Press, 2017) 117.

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Conclusion
To conclude, Weitao is legally obligated to pay the replacement fee to Evelyn as per the
contract signed by him.

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Question 2
Issue
Whether the contract can be discharged by Warren?
Rule
The parties to a contract have the right to get the benefit of the contract. The legal
obligations of the parties can be terminated in case the contract is discharged. There are
different ways in which the contracting parties have the right to discharge a contract which
includes breach, performance, frustration, and agreement. In case the parties to a contract
comply with the terms of the contract, then they can discharge the contract based on
performance. However, if the performance is denied by a party, then the other party has
the right to discharge the contract based on the performance prevented by the party. In
Planche v Colburn4 case, the court applied this principle. In this case, the claimant was hired
to write books, however, he was denied performance by the defendant because the book
series was cancelled. The defendant also denied paying for the work which was done by the
claimant5. The court provided that the contract is discharged and the party has the right to
recover compensation.
Application
Warren wanted to start the work and fulfils his contractual obligations; however, Evelyn
denies him. Since Warren is not able to fulfil his contractual obligations due to denying of
performance by Evelyn, he has the right to discharge the contract. Warren can discharge the
contract with Evelyn and terminate all the legal obligations which he owes. Moreover, he
can demand compensation from Evelyn since she denied him to comply with the terms of
the contract.
Conclusion
The contract can be discharged by Warren based on denying the performance by Evelyn.
4 (1831) EWHC KB J55
5 Charlie Webb, Reason and restitution: a theory of unjust enrichment (Oxford University Press, 2016) 114.

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Question 3
Issue
Whether a suit for misrepresentation can be filed against Evelyn by Ambreena?
Rule
A party who used a false statement to encourage a party to sign a contract due to the party
suffered a loss can be held liable under a suit for misrepresentation. When the parties of a
contract are negotiating its terms, then an untrue statement made by a party is considered
as misrepresentation after which the contract becomes voidable. The person who is making
a personal opinion cannot be held liable for misrepresentation if such statement turns out
to be false as given by the court in Bisset v Wilkinson6 case. However, if such party is in the
position to know the correct information, then such party will be held liable for
misrepresentation. In Smith v Land & House Property Corp7 case, the seller made a false
claim regarding the tenant to sell the house, however, later provided that it was his
personal opinion8. The court rejected the claim based on the fact that he was in the position
to know the facts.
Application
During the negotiation stage of the contract, Evelyn made a false statement regarding the
tablet based on which Ambreena purchased it. Evelyn can provide that it was her personal
opinion that the storage is enough for application. However, she is the store owner due to
which she is in the position to know the correct information about the tablet.
Conclusion
Thus, it can be concluded that a suit for misrepresentation can be filed against Evelyn since
she made a wrong statement regarding the tablet to sell it to Ambreena.
6 [1927] AC 177
7 (1884) 28 Ch D 7
8 Howard Johnson and Jo Reddy, Q&A Commercial Law 2013-2014 (Routledge, 2013) 34.

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Question 4
Issue
Whether including the charger is considered as an implied term of the contract?
Rule
The terms which are included in a contract are categorised into two parts which include
express and implied terms. The terms which are added in the contract by the parties
themselves are referred as express terms. The implied terms are imposed by the court and
the statute. These terms are included based on facts, custom or law. BP Refinery
(Westernport) Pty Ltd v Hastings Shire Council9 is a relevant case in order to understand this
point. In this case, the court provided various elements which are necessary to be present in
order to consider a term as implied. The terms must be reasonable, and it must not oppose
the express terms of the contract10. It must be obvious that it goes without saying and it
must be clearly expressed. Lastly, it must give efficacy to the contract.
Application
In order to consider that including the laptop with the charger is the implied term of the
contract, it is necessary that all the elements given in BP Refinery (Westernport) Pty Ltd v
Hastings Shire Council case are fulfilled. Firstly, it is reasonable to include the charger since
without it the laptop cannot work and it did not contradict any of the express terms.
Including the charger is an obvious term since it is customary to give the charger with the
laptop and it is clearly expressed. It also gives efficacy to the contract.
Conclusion
Therefore, giving the charger is an implied term since it complies with all the elements of an
implied term.
9 (1977) 180 CLR 266
10 Michael Lambiris and Laura Griffin, First Principles of Business Law (Oxford University Press, 2017) 122.