Analyzing Breach of Contract & Negligence in Commercial Law

This case study delves into a contractual dispute between James and Lloyd Right Pty Ltd, focusing on breaches and misrepresentations within a service contract. The analysis covers express and implied terms, the parol evidence rule, and the standard of care required in service contracts. It examines potential remedies for James, including financial compensation for losses incurred due to Lloyd's failure to obtain council permission and misrepresentation regarding seating capacity. Furthermore, the study assesses the possibility of a suit for negligent misrepresentation based on incorrect information provided by Lloyd, referencing relevant case law and the Australian Consumer Law (ACL). Finally, it identifies additional legal risks Lloyd faces under the ACL for misleading or deceptive conduct, emphasizing James's right to claim compensation. Desklib offers this solved assignment and a wealth of study resources for students.

DA C M A A DFOUN TION OF O P NY N
C MM RC A AO E I L L W

a g eP | 1
SQUE TION 1
SSI: I UE
he issue focuses on determining the assistance fi nancial compensation which can be offered toT /
ames for violating the terms given in the contractJ ?
R R: ULE
he terms of a contract are categorised into two divisions which include e press andT x
implied he terms which are included by the parties to a contract are referred as e press. T x
terms he implied terms are not e pressed by the contracting parties instead they are. T x ; ,
included by the statute and the court Moreover these terms are categories into conditions. ,
and warranties he essential terms of a contract are referred to conditions and violation of. T ,
these terms give the party right to rescind the contract and demand compensation arranties. W
are non essential terms and violation of those terms gives the right to the party to demand-
damages n common law the parol evidence rule R prevents the parties from introducing. I , (PE )
evidence regarding prior negotiations or agreements which contradict vary or modify the,
written terms of the contract owever the court provided an e ception to this rule in. H , x Curtis v
Chemical Cleaning case in which the court provided that a party cannot rely on this rule if
the terms of the contract are misrepresented by the party Moreover in. , Costa raca td vV L
errigan eed Pest Control Pty tdB W & L case it was held that parties have rights and obligations,
under a service contract and the party who is providing the service must ensure that a
standard is maintained by him to avoid causing harm to another party or failing in giving the
e act services as promised n case contractual terms are violated the remedies availablex . I ,
for parties include specific performance injunction repudiation damages and rescission, , , , .
A A CA: PPLI TION
A service contract is formed between loyd Right ty td loyd and ames to design theL P L (L ) J
e terior and interior of the restaurant An e pressed term of the contract provides thatx . x
loyd has to take the permission of the local council regarding putting chairs outside footpathL .
Moreover the conversation which parties had regarding minimum seating capacity can be set,

a g eP | 2
aside based on R however loyd made misrepresentation while providing the informationPE , , L
regarding the minimum seating capacity in the restaurant and while purchasing talian designI
tables and chairs thus ames has the right to enforce the contractual terms as per e ception, , J x
of R given inPE Curtis v Chemical Cleaning case A standard of care was not maintained by.
loyd while discharging duties under the service contract and an e press term of the contractL , x
was violated as well based on which ames has the right to receive damagesJ (Costa racaV
td v errigan eed Pest Control Pty tdL B W & L he fi nancial compensation should be offered to). T
ames that includes payment for the loss of customers as per ames can also avoidJ 40 $30. J
paying to loyd for the services$15,000 L .
C C C S: ON LU ION
Conclusively fi nancial compensation should be given to ames for the loss suffered by him due, J
to loss of customers each day and ames has the right to deny the payment of40 , J $15,000.

a g eP | 3
SQUE TION 2
SSI: I UE
he issue focuses on determining the assistance fi nancial compensation which can be offered toT /
ames under a suit for negligent misrepresentationJ ?
R R: ULE
f a statement is made by a party which is false in order to encourage another party to formI
a contractual relationship then the fi rst party can be held liable for misrepresentation n case, . I
misrepresentation is present in a contract then such contract becomes voidable which gives,
the right to innocent party to set aside the contract or not egligent misrepresentation is. N
established if an inaccurate statement given by a party carelessly who has special skill or
knowledge hile establishing this element the parties are required to prove the tortuous. W ,
act of the party which caused due to negligence he innocent party must suffer an actual. T
injury or loss he court also evaluates additional elements while providing its judgement. T
which includes determining whether the party owed a duty of care and whether it was
violated due to negligence he court also determines whether the injury is reasonably. T
foreseeable and whether the parties had pro imity relationship n the case ofx . I haddoc vS k
Parramatta City Council, the council gave wrong information to the party which did not include
information regarding a future road widening project he party suffered substantial loss due to. T
the wrong information which was given negligently he court provided that the council owed. T
a duty which was violated due to carelessness he council was also in a position to know the. T
facts thus the claimant can recover damages based on negligent misrepresentation n the, , . I
ustralian Consumer aA L w AC provisions regarding given to protect the rights of( L),
customers Section of the act provides that the party has the right to terminate a service. 268
contract if a major term of the contract is violated by the party he remedies given under. T
the statute include terminate of contractual obligations and payment of compensation.
A A CA: PPLI TION

a g eP | 4
loyd provided wrong information to ames when he asked about the seating capacity in theL J
restaurant after putting the talian designed tables and chairs As discussed inI . haddoc vS k
Parramatta City Council case loyd was in the position to know the correct facts A duty was, L .
owed because parties were in pro imate relationship and the risk was foreseeable Due to thex .
carelessness of loyd the loss was suffered by ames thus a suit for negligentL , J , ,
misrepresentation can be fi led t was a major term of the contract as well because ames. I J
suffered a loss of customers who bring each day hus ames can claim remedy under40 $30 . T , J
section of AC by recovering compensation from loyd and terminate the contract to deny268 L L
the payment of $15,000.
C C C S: ON LU ION
Conclusively loyd has to pay fi nancial compensation to ames that include payment of for, L J $30
customers and ames can deny the payment of since the contract becomes40 , J $15,000
voidable due to negligent misrepresentation.

a g eP | 5
SQUE TION 3
SSI: I UE
hat are other legal risks which loyd might face in this caseW L ?
R R: ULE
Section of AC provides that parties should not make a statement regarding trade or18 L
commerce which is misleading or deceptive or likely to do so n case this section is violated by. I
the party then compensation can be demanded by customers under section, 236.
A A CA: PPLI TION
A false statement was given by loyd while providing information to ames regarding theL J
talian based tables and chairs herefore loyd faces the legal risks raised due to violation ofI . T , L
section of AC ames can demand fi nancial compensation for the loss under section18 L. J 236.
C C C S: ON LU ION
Conclusively loyd faces other legal risks under section based on which the fi nancial, L 236
compensation can be demanded by ames due to violation of section of ACJ 18 L.