Business Law Assignment: Contract Law Issues and Analysis

This assignment provides a comprehensive analysis of several contract law issues. The first issue examines the enforceability of an exclusion clause in a written contract, concluding that the party is bound by the clause based on the principles established in L’Estrange v Graucob. The second issue addresses whether a contract can be discharged due to the promisee preventing performance, drawing upon Planche v Colburn to determine the right to discharge and seek compensation. The third issue evaluates misrepresentation, determining whether a party can sue for misrepresentation even without specifically asking about certain facts, referencing Smith v Land & House Property Corp. The final issue explores whether providing a charger with a laptop constitutes an implied term in a hire agreement, citing Hutton v Warren to establish the importance of customary practices. The assignment offers a detailed exploration of these legal concepts, providing a clear understanding of the application of contract law principles.

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Business Law Assignment

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Question 1
Issue
Whether Weitao is bound by the small note included in the contract in which the
replacement fee is imposed by Evelyn?
Rule
The exclusion clause is referred to a term which is included by a party into a contract in
order to exclude the liability which arises under the contract; these are also called unfair
terms. As per this clause, the party can eliminate its liability which is arising under a
contract. However, the general rule associated with the exclusion clause provides that the
party who wanted to include the exclusion clause in the contract must bring in to the
attention of the party. In Olley v Marlborough Court1 case, the claimant booked a hotel and
at the reception desk while signing the contract the exclusion clause was not brought into
the attention. After entering the room, a notice was written on the back of the door which
provides that the hotel will not be held liable in case any guest lost his belongings.
The coat of the claimant was stolen, and a suit was filed against the hotel. The court
provided that the exclusion clause must be brought into the attention of the party while the
contract is forming or before its formation, thus, the hotel cannot rely on the defense of the
exclusion clause2. However, the court rejected this rule while providing the judgement in
L’Estrange v Graucob3 case. In this case, a cigarette vending machine was purchased by the
claimant by signing a contract that did not work. The defendant rejected to change the
machine based on the exclusion clause. The court provided that in case of a written
agreement, the parties are not required to bring the exclusion clause into the attention of
the party.
Application
In the given case, Weitao signed a written contract with Evelyn in which the exclusion clause
was included based on which customers have to pay $1000 replacement fee. Since it was a
1 (1949) 1 K.B. 532
2 Chris Turner, Contract Law (Routledge, 2013) 89.
3 (1934) 2 KB 394

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written contract, Evelyn is not required to bring the contract into the attention to Weitao as
discussed in L’Estrange v Graucob. Thus, Weitao has to pay the replacement fee of $1000 to
Evelyn.
Conclusion
In conclusion, Weitao is bound by the small note due to which he has to pay the
replacement fee to Evelyn.

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Question 2
Issue
Whether the contract can be discharged by Warren since Evelyn is not letting him get the
benefit of the contract?
Rule
A contract binds the parties into a legal relationship based on which they can legally enforce
each other to comply with the contractual terms. However, the parties have the right to
discharge the contract and eliminate their contractual relationships. The discharge is based
on the circumstances in which the parties wanted to rescind the contract. After discharge of
the contract, each party removed from their obligations. The contract can be discharged
based on performance, frustration, agreement, and breach. In case of discharge by
performance, if the performance of the contract is prevented by the promise, then the
contract can be rescinded by the parties. In Planche v Colburn4 case, the claimant agreed to
write a book for the defendant and started working on the same. However, the defendant
cancelled the series of book and refused to pay the claimant. The court provided that since
the claimant was prevented from performance, he is entitled to recover damages5. Thus, a
party has the right to terminate a contract based on the fact that another party is not letting
his comply with the contractual terms and receiving the benefit from the contract.
Application
In the given case, Warren and Evelyn have entered into a contract to improve the layout and
décor of the store of Evelyn. Although Warren has tried many times, however, Evelyn is
preventing him from performing the contractual terms and receiving the benefit of the
contract. As disused in the judgement of Planche v Colburn case, Warren has the right to
discharge the contract based on performance prevented by the promisee, and he can claim
compensation from Evelyn as well since she failed to let Warren complete the performance
of the contract.
4 (1831) EWHC KB J56
5 Charlie Webb, Reason and restitution: a theory of unjust enrichment (Oxford University Press, 2016) 114.

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Conclusion
In conclusion, Warren has the right to discharge the contract based on performance
prevented by the promisee, and he can claim compensation from Evelyn as well.

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Question 3
Issue
Whether Ambreena can file a suit for misrepresentation against Evelyn even when she did
not specifically ask to know about the storage of the tablet?
Rule
A misrepresentation is referred to the false statement made by a party in order to induce
another party to sign a contract. While negotiating in a contract, the statements which are
false are considered as misrepresentation. The party who entered into a contract based on
misrepresentation has the right to terminate the contract or comply with its terms since it
becomes voidable. In Smith v Land & House Property Corp6 case, a statement was made by
the seller regarding the tenant to another party that the tenant is ‘most desirable’.
However, this statement turned out to be false because the tenant was in the arrear of the
rent, and he was about to become bankrupt. The seller argued in the court that it was his
personal opinion which cannot be considered as misrepresentation. The court provided that
the seller was in the position to know the facts based on which it will be considered as
misrepresentation7. Thus, if a party is operating in the position to know the facts of the case,
then the false statements made by such party can be considered as misrepresentation.
Application
In the given case, the statements made by Evelyn regarding the tablet were false, and they
were said by Evelyn to induce Ambreena into signing a contract. Evelyn can argue that the
statements were her personal opinions. However, as discussed in Smith v Land & House
Property Corp case, Evelyn was in the position to know the true facts since he was the
owner of the shop. Thus, the statements made by her are considered as misrepresentation
based on which the contract becomes voidable, and Ambreena has the right to terminate
the contract and demand compensation.
6 (1884) 28 Ch D 7
7 Daniel Rahnavard, Course Notes: Contract Law (Routledge, 2013).

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Conclusion
In conclusion, Ambreena has the right to file a suit for misrepresentation against Evelyn to
terminate the contract and demand compensation.

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Question 4
Issue
Whether providing the charger with the laptop is considered as an implied term in Jake’s
hire agreement?
Rule
The contents involved in a contract are known as terms of the contract which parties have
to comply in order to discharge their contractual obligations. The terms of the contract are
divided into two parts which include express and implied. Express terms are entered into a
contract based on the agreement between parties, whereas, implied terms are included by
the courts or statute. In common law, the court considered a term as implied in case the
term is implied through the fact, law or custom. In case a particular term in the contract is
prevalent in a trade, the court can imply the term of the same type in that trade. In Hutton v
Warren8 case, the claimant was a farmer who was working in the fields of the defendant to
ensure the crop of corn and barley would grow. A bill was submitted by the claimant for the
work and cost of seed which was customary in farming tenancies, however, the defendant
rejected the payment. The court provided that it is an implied term to provide the work and
expenses which are undertaken by the party while growing the crops9. Thus, the court
evaluates other contracts to understand whether the term is considered as a common
practice in the particular type of contracts.
Application
In the given case, Jake entered into a contract with Evelyn to purchase a laptop. Later, he
found out that charge cable is not included by Evelyn. Evelyn rejected to give the charger
cable and demand extra money from Jake. As discussed in Hutton v Warren case, the
implied term of a contract is decided based on the customs. It is customary to give charge
along with a laptop since the laptop cannot work without charging. Thus, it is an implied
term of the contract based on which Evelyn should give the charger to Jake.
8 (1836) EWHC Exch J61
9 Carron Ann Russell, Opinion Writing in Contract Law (Routledge, 2012) 41.

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Conclusion
In conclusion, providing the charger with the laptop is customary while purchasing a laptop,
therefore, it is an implied term in Jake’s hire agreement based on which Evelyn has to give
the charge to Jake for free.