Business Law Assignment: Analysis of Contractual Terms and Breach

This document provides a detailed analysis of a business law assignment concerning a contract for an office chair. The assignment addresses several key issues, including whether a statement about the chair's quality constitutes puffery or a contractual term, whether a claim about the chair's back support is part of the contract, and under which term of the contract the back support claim falls. The analysis applies relevant legal principles, such as those established in the cases of Carlill v Carbolic Smoke Ball Company, Esso Petroleum v Mardon, and L'Estrange v Graucob. The assignment also examines the impact of an exclusion clause on the buyer's ability to sue for breach of contract, concluding that the exclusion clause would not prevent the buyer from pursuing legal action because the seller breached a condition of the contract, not a mere warranty. The document provides a comprehensive understanding of contract law principles related to misrepresentation, breach of contract, and exclusion clauses.

Running head: BUSINESS LAWS
Business Laws
Name of the student
Name of the university
Author note

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BUSINESS LAWS
1.
Issue
To confirm if the office chair named OFFICE PRO X9 is by information the most
amazing chair for the contract is provided in the said contract or is it not.
Rule
An act of Puffery when compared to a contractual terms cannot be considered the same
what so ever. Puffery is something that cannot be considered legal in accordance to the law, but,
the contract is fixed and legally binding, tying two or more parties together. It was stated in REA
Group Limited v Fairfax Media Limited1 case, where it was judged that the term puffery
refers to the exaggerations prompted by dealers to highlight their product’s most significant
features. So, it is considered that reason cannot dominate vaguely fashioned phrases.
The case of Carlill v Carbolic Smoke Ball Company2 made it very clear when the defendant of
the cause interpreted their actions to be mere puffs, but, the judges had other reasons to think not.
It was judged by law that when an act of puffery is convincing enough to overpower a reasonable
person into signing a contract, then, it can be considered a contractual term.
In application to certain principles appointed in a carbolic case, we can determine whether a
clause is a puff or not, in Australia. The subject matter too plays its crucial rule in the
identification procedure. As learned before, if a puff is inducing enough to lead into the
formation of a potential contract, it will be considered as a contractual term.
Application
1 [2017] FCA 91
2 [1892] EWCA Civ 1

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BUSINESS LAWS
As said in the situation given to us, taking into consideration the laws of ‘Puff’ and
‘Misrepresentation’, it is seen that Samantha mentioned nothing more that the appliance named
OFFICE PRO X9 is supposed to be the best for sale in market and stated of its supposed amazing
nature. It clear by her words that he opinion of the chair being amazing for of her own, it is not at
all necessary that something which is amazing to one has to make the same appeal to the others
and hence can be considered a puff. The word “I think”, clearly point to the fact that the thought
of the chair being amazing was her personal opinion and not a legitimate fact.
Hence, we can say that Samantha’s statement on the chair is clearly not in the contractual terms,
but, nevertheless, they seem to have clearly motivated and Peter into purchasing the appliance.
Hence, this factor alone transforms Samantha’s comment into misrepresentation and changes the
puff into a contractual term.
Conclusion
Hence, it can be concluded that both the statements of Samantha about OFFICE PRO
9X being the best in the market and being amazing are clearly not a part of the said contract but
since it induced Peter into purchasing the product, it turns into misrepresentation and hence, a
contractual term.
2.
Issue
Can the statement of ‘OFFICE PRO 9X having comfortable back supporting
technology that would help Mr. Peter to get his work done in extreme comfort for the whole day,
be in the terms of the said contract?

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BUSINESS LAWS
Rule
It is seen that as per the contract laws, it is not the subject intention that attracts the
parties into binding themselves in a contract, but, the objective purpose that does it, as seen in the
Esso Petroleum v Mardon3 case. It can be easily determined whether a person with proper
reasoning will enter a contract based on the representations or not by a simple objective test.
It has been mentioned already, in the Carbolic Smoke ball case that when a puff is convincing
enough to overpower a reasonable person into signing a contract, then it can be rightfully taken
as a contractual term.
The Harling v Eddy4 case made it clear that if the buyer does not have knowledge of a certain
product feature that was not shown to him before the agreement of a contract, then those features
too fall under the contractual terms. However, in the above instance, the buyer seemed to have
all the idea about the said subject matter.
Application
The facts involved in the current case is that the appliance OFFICE PRO 9X must
provide comfortable back support to the buyer, Mr. Peter, such that he can, in all comforts sit and
do his job all day. It was the main reason as to why Peter got this chair in the first place and
made sure to clarify all his basic needs that he would want out of the appliance. In addition to
that, he stated his reasons of purchasing a chair with the lower back support quite clearly and
wished to enjoy the benefits of having the best lower back comfort. Hence, here, it can be stated
that those were the terms of the contract.
3 [1976] QB 801
4 [1951] 2 KB 739

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BUSINESS LAWS
Conclusion
The points stated that OFFICE PRO 9X would provide the best support for the lower
back and would help Peter do his job, sitting on it comfortably, all day can be safely stated as the
in the contractual terms.
3.
Issue
Which term of the contract does the part that states the ‘OFFICE PRO9X provides
comfortable black supporting technology that will let the buyer, Mr. Peter sit and do his work
comfortably all day’ fall under?
Rule
The case of Poussard v Spiers5 is also said to be a landmark case. It can be understood
by this case that the words of a contract are absolute and a breach is unacceptable as a condition
is one of the prime terms of contract which is based on the primary subject matter. A breach
would empower the adjoining party to severe the said contract then and there and claim any
damages resulting from it.
A breach in warranty though does not empower the adjoining party severe a contract then and
there, but, they surely can claim any damages resulting from it, such was seen in the case of
Bettini v Gye6.
5 [1] (1876) 1 QBD 410
6 1876 QBD 183

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BUSINESS LAWS
It is also seen in cases that the causing factor of a breach is discussed instead of the warranties
and conditions involved in the contract, such as in the case of Hong Kong Fir Shipping v
Kawasaki Kisen Kaisha7.
Application
According to the Common Law system, that contract law states that the said contract
can be put into three distinct categories:
1. Conditions
2. Intermediaries
3. Warranties.
In the above case, the terms holding the contract seem very important, as in the enjoyment or
sheer frustration experienced by the parties when breaching or maintaining the contractual terms.
If in case it is seen that the terms of the contract are violated by a said party, the other party can
decline the whole contract as per the frustrations that were caused by the actions of the other
party in the fulfillment of the contract.
Hence, it can be said that the term provided that the appliance would give a comfortable
support to the lower back, to the buyer and help him work comfortably for longer hours is
conditional. Hence, it can be said that Forever Furnitures have done a breach.
Conclusion
Hence, the non existence of the quality desired by Peter while purchasing the chair in
all ways defeats the purpose of buying it in the first place since the conditions so mentioned
directly affected the enjoyment and satisfaction of the buyer.
7 [1962] 2 QB 26

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BUSINESS LAWS
4.
Issue
To see whether Peter can be prevented from filing a lawsuit against Forever Furnitures
based on the clause of exclusion, number 10 as per the breach in the contract of OFFICE PRO
9X providing comfortable back support for working comfortably for the whole day.
Rule
It can be stated that if a party is unaware about any facts related to a said product and
there is not scene of any related fraudulent misrepresentation whatsoever then those terms too are
supposed stay binding for all the parties involved, as seen in the said case of L'Estrange V
Graucob8.
It is also a known fact that an exclusion clause is addable with the signatures of the said members
involved in the contract as mentioned in the case of Curtis V Chemical Cleaning Co9.
It was stated by the court of law in the Baldry V Marshall10 case that any trouble or vagueness
seen in any exclusion clauses will be held against the party that formed them.
Application
In the above case, it was seen by Peter that in contradiction to what was told to him, the
chair sis not provide any comfort for the lower back nor did it help him work all day in all
amenity and cheerfulness.
8 [1934] 2 KB 394
9 [1951] 1 KB 805
10 [1925] 1 KB 260

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BUSINESS LAWS
As stated very clearly in L’Estrange’s case, it can be said that Peter has to agree to the terms of
the contract as even if he wasn’t aware of the unstated facts, they were still in the contract and he
signed anyway. It is also seen in Curtis’s case that an exclusion clause is addable with the
signature of the said party, though in this case, it seems quite valid.
However, there is a significant difference between the breach of a condition and the breach of a
mere warranty which is a part of the contract. Hence, even if the seller refuses to take as a
condition and turn it into a warranty, it won’t be valid as stated in Baldry’s case. Hence, since the
seller had broken a condition, they cannot use the exclusion clause for their defense.
Conclusion
Peter’s rights will not be restricted by the exclusion clause.