Contract Law: Remedies for Ellen against Friends and Car Park

This report provides a comprehensive analysis of a contract law case study involving Ellen and her interactions with friends and a car park owner. The report delves into the core principles of contract law, including offer and acceptance, consideration, and the intention to create legal relations. It examines the concept of breach of contract, outlining the conditions under which a breach occurs and the potential remedies available to the aggrieved party. The report explores various types of damages, such as loss of bargain and reliance loss, and the significance of exclusion clauses in limiting liability. The analysis applies these legal principles to Ellen's situation, assessing her rights to claim damages against her friends and the car park owner, taking into account the specifics of their agreements and any potential defenses. The report also highlights the importance of establishing a legally binding contract and the consequences of failing to fulfill contractual obligations, offering a detailed understanding of the legal framework governing contractual relationships.

RUNNING HEAD: CONTRACT LAW
Contract Law

CONTRACT LAW
Issue
The main issue in the given case study is what remedies Ellen has against her friends and
owner of car parking under Contract Law as well as have she has right to claim damages
against the owner of car park.
Rule
Singapore’s contract legislation follows that of common law nations where a contract is an
arrangement between two or more sides formed through an offer and an acceptance with legal
ability to exchange consideration to establish a legal duty between them (Phang & Yihan,
2012). A contract is said to be legal only if one party makes an offer and another party gives
its valid acceptance followed by lawful consideration (Lee, 2016). The parties have an
agreement once an offer has been approved. That is the foundation of an agreement, but it is
not enough to generate legal commitments in it. As a particular principle, a promise is not
binding as an agreement in common law unless it is endorsed by consideration. A contract is
fundamentally a contract between two or more parties, whose conditions influence their
corresponding law enforceable rights and obligations (Phang, 2012). It is objectively
ascertained from the facts whether the parties have reached consensus or meeting of minds
(Tan, 2010). The idea of offer and acceptance provides the basis for analyzing whether
consensus has been achieved in many, if not all, times (Roberston & Tilbury, 2016).
The conditions of a contract must be certain and unambiguous before it is formed (Chen-
Wishart et al., 2018). For ambiguity or incompleteness, a contract may be unenforceable even
though the parties have both offered and accepted it (Halsbury, 2012). If a term in the
contract is incomprehensible, the contract is uncertain (Neyers et al., 2009). The agreement is
incomplete if certain conditions do not occur to make the agreement incomprehensible
because of the non-existence of these conditions (Chen-Wishart, 2015).
One of the main essential components to create a contract is the capacity to contract (Chow ,
2014). The parties entering into the agreement must be of sound mind, major and shall not be
disqualified by law (Chen-Wishart, 2012). Under the common laws minor is considered as
incompetent to contract as stated in the case of Roberts v Gray. An agreement with minor is
treated as void ab initio i.e. void from the commencement. Generally, contracts against
minors cannot be enforced. However, where a minor has been provided with necessities i.e.
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products or facilities appropriate for the lives of the minor involved to maintain the facility.
Minor under common law may avoid legal liability. A minor is not bound under the common
laws to perform his part of the contract (Holmes, 2018).
The other element, which determines the existence of a contract, is the intention to create
legal connections (Bernstein, 2018). An agreement, even if supported by consideration,
cannot be implemented in the lack of contractual intention (Gearey et al., 2013). It is a
question determined by an objective evaluation of the appropriate facts whether the parties to
an arrangement meant to establish legally binding relationships between them (Llewellyn,
2016). To establish an enforceable contract, an aim to establish legal relationships is essential
(Laws, 2014). An objective evaluation of the appropriate facts is to determine this (Poole,
2014). It is generally assumed that in personal and social agreements, parties do not wish to
establish lawful relationships (Dimatteo & Hogg, 2016). In contrast, it is usually assumed that
parties plan to establish a legal relationship in business contracts (Burnham, 2011).
The intention obligation to establish lawful connections in contract law is directed at
searching out occasions that are not appropriate for court interference (Fisher, 2018). Not
every agreement results in a binding contract that can be implemented by the courts (Austen-
Baker, 2017). The case of Balfour v Balfour (1919) 2 KB 571, is a leading case based on
intention to establish lawful relation and social agreement. In this case, it was determined by
the court that when the contract is domestic in nature, there is a rebuttable presumption
against an intention to establish a lawfully enforceable contract. Furthermore, the court stated
that the intention to create a lawful connection is a significant component of an agreement
and there is no intention of establishing a lawful connection in this situation. As the offer
taken in this case is a social agreement, it may also be observed that it is not a valid offer.
In the case of Jones v Padavatton (1968) EWCA Civ 4, it was held by the court that in this
case, no binding contract existed. Although an agreement would have existed if it were not
linked to domestic parties, there was insufficient evidence against domestic agreements to
rebut the presumption. The court further stated that there is a belief that family agreements
are founded on shared confidence, family ties, and friendship, and that there is no intention of
establishing legally binding agreements that can be enforced in court. However this
presumption may be rebutted, but the absence of formality concerning the mother-to-daughter
contract firmly stated that there was no such intention.
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Once the legal contract is formed, parties become bound by the contract to perform their part
(Cartwright, 2016). If any party to the contract does not perform their part another party has
the right to treat the contract as repudiated or ask for specific performance (Poole, 2016).
However, where the other party suffers a loss then he is entitled to claim damages for breach
of contract (McKendrick, 2015). A breach of agreement occurs when a party without a legal
justification fails or refuses to execute what it owes under the agreement or fails to perform or
is unable to perform his part (Stone et al., 2011). In other words, it can be said that if both
parties perform their part as per the contract, under the law the contract is complete
(Rahnavard, 2013). If one or both of the parties to contract to fail to fulfill the agreement, the
law states that the contract has been breached (Saprai, 2019). In contract law, the main aim of
damages is to place the injured party in the situation in which they would have been if the
contract had been executed (DiMatteo et al., 2013).
In case of breach of contract, to claim damages the claimant needs to show two things, which
constitutes a breach of contract (Brownsword et al., 2017). Firstly, the defaulting party must
have failed to perform a contractual obligation. It must be shown by the claimant that the
defendant has failed to perform their part of the performance (Burrows, 2018). Secondly,
there must be no legitimate justification for the inability of the defaulting party. An excuse
relying on social or business factors that are not covered by a legal justification will not
absolve a defaulting party from breach of contract. Once these elements are proved, the
aggrieved party can claim for damages.
Damages under common law are legal remedies accessible for contract infringement.
Damages are a monetary award given to the innocent party. The main aim of compensation
under common law is to put the aggrieved party in the situation in which the contract would
have been executed. The main remedy for breach of contract is financial compensation, also
recognized in legal terms as damages. By default, any violation of agreement entitles the
innocent party to compensation resulting from the breach of contract.
In common law, there are distinct heads of harm under which a sum may be asserted to
represent distinct kinds of failure. These contain loss of bargain, loss of dependence,
frustration or discomfort, inconvenience, diminishing potential opportunities and liquidated
damages. In reliance loss, an aggrieved party can claim expenses incurred on reliance on the
contract. in the case of Anglia TV v Reed (1971) 3 All ER 690, the court held that while
damages usually try to put the parties in the situation in which they would have been if the
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agreement had been executed, the parties may choose to assert loss of dependence and
recover costs earned in the abortive transaction.
Whereas, inconvenience caused due to breach of contract party can claim damages for such
inconvenience. Where the plaintiff is physically inconvenient rather than angry or
disappointed that the accused has not fulfilled his contractual duty, the court may grant an
amount reflecting such inconvenience. In the case of Bailey v Bullock (1950) 2 All ER 1167,
the court determined that the plaintiff was allowed to claim a loss to reflect the inconvenience
caused to him from such breach. The court further stated that there is a difference between
pure irritation or frustration that the other party fails to fulfill its contractual obligation and
the real physical inconvenience and pain created by the infringement.
However, not every breach leads to liability. The defendant can exclude his liability or can
take the defense of the exclusion clause. The process of limiting or excluding or exempting
the party from the liability of the contract upon its being breached is what the term exclusion
of clause means. The order of exclusion clause can be passed to the party if it is found
binding or operating within a contract, then it needs to clarify certain points i.e. the clause
must be incorporated within the meaning of contract firstly, secondly the construction test
must be passed by the clause and lastly the clause must not be considered as unenforceable by
any law of the land or the statute.
Exclusion clauses can be attained by the parties in many different ways and in accord with
the wishes of the parties except in the case where they are restricted by any existing law of
the land. This point was made clear in the case of L’Estrande v Graucob (1943)2 KB 394. In
this case, it was seen that the plaintiff had purchased a machine of cigarettes for his café. The
claimant gad signed the contract for purchasing without even going through it. So the court
here determined that the exclusion clause will not be made avail for the accused.
In the case of Thornton v Shoe Lane Parking Ltd (1970) EWCA Civ 2, the court stated that
the clerk did not issue the ticket instead; it was generated by automatic machine. There is,
therefore, no opportunity to look at the conditions, dismiss them and get your money back.
Shoe lane effectively made the made offer by having the machine posted with the amount and
this offer is approved as soon as the driver puts the cash into the device. This contract cannot
be subject to terms submitted after this moment. It was not noticeable to write on the ticket
saying that it was subject to the conditions until after the agreement was established, so the
agreement is not subject to the circumstances. The ticket is just a receipt that shows the
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agreement was created. Also, Shoe Lane did not do what was fairly enough to notify
Thornton of the conditions- a driver would have to wander around the parking garage to find
them, which is more than a reasonable customer could ask.
As in the case of Olley v Marlborough Court Hotel (1949) 1 KB 532, the court held that
contract cannot be concluded merely on the representation made by the one-party it is made
after the agreement was made. If the representation made at the time of contract then only it
can be binding. In this case, the court considered the decision in Parker v South Eastern
Railway (1877) 2 CPD 416. In this case, the court held that a person could not avoid a
contractual term by not reading the agreement, but that a party wishing to depend on an
exclusion clause must take appropriate steps to carry it to the consumer’s knowledge.
Application
As per the given case study, Ellen offered her friends to visit the shopping centre to which her
friend had agreed to and in return Felix offered to pay the petrol expenses and Oscar offered
to pay parking charges. Thus, in accordance with the requirements of the contract, prima
facie an agreement is formed between these friends, as there was offer, acceptance followed
by consideration. However, this agreement lacks the binding effect, as they did not intend to
enter into lawful contract. As per the conditions of contract, the agreement made between
these three friends was not certain as well as it was ambiguous, as the parties did not
mentioned the amount which was to be contributed among them. Thus the conditions of the
contract was not fulfilled although it contains the elements of offer and acceptance followed
by consideration still such agreement was not enforceable.
In the given case study, three friends agreed to visit a shopping center. As decided between
three friends, Felix would contribute some money to pay for the petrol and Oscar one of the
friends offered to pay car park charges. Ellen the other friend in return agreed to drive the car
to the shopping center. As there was an offer made by Ellen to visit the shopping center,
which was accepted by both friends. In return, both agreed to pay parking and petrol charges.
It prima facie requisites to constitute valid agreement is fulfilled by three friends.
As per the essential features of the contract, i.e. capacity to contract Oscar was minor among
the other friend. He agreed to pay car park charges due to their friendship. As Oscar is minor,
a contract cannot be enforced against him. While offering to pay the car park charges Oscar
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did not know the legal implication of such offering. Since the contract made with the minor is
void ab initio Ellen cannot force Oscar to pay the car park charges as agreed between them.
As per another element of a contract that is an intention to create a legal connection, three
friends agreed to visit the shopping mall. At that, time they did not intend to enter into a
binding contract. Even there was a consideration but it cannot be implemented into a contract
as it lacks the element of contractual intention. The agreements made between friends are
termed as social or domestic agreements, which are not enforceable by law. Ellen, Oscar, and
Felix did not plan to establish a legal relationship. Thus social agreements are not enforceable
by law, therefore, parties are not bound by such agreement. As there was no valid contract,
Felix and Oscar are not bound to pay the car park charges or petrol price.
As applying the case of Balfour v Balfour, it was a domestic agreement between the friends
and there is a presumption against an intention to establish a lawfully enforceable contract.
As to establish a valid contract, a legal relationship is a significant factor of an agreement and
there is no intention of establishing a lawful connection in the given case study. As Ellen
gave the offer to visit the shopping mall she did not intend to enter into a valid agreement
with her friends. Whereas offering taken in the given case study is a social agreement, it may
also be observed that it is not a valid offer.
As applying the case of Jones v Padavatton, in the given situation no binding contract existed
between these three friends as it lacks contractual intention. The agreement made between
Ellen, Felix, Oscar was based on shared confidence, friendship, and thus there was no
intention of establishing legally binding agreements that can be enforced in the court. The
presumption related to legal binding effect can be rebutted but in the given case study, the
absence of formality concerning the friend-to-friend contract firmly stated that there was no
such intention on the part of all friends. Thus, there was no contract between the friends Ellen
cannot force Felix and Oscar to contribute to damages or bear the loss with her.
Whereas in the given situation, Ellen, Felix, and Oscar went to a shopping mall and while
parking their car Ellen obtained a car park ticket and paid the price. It constituted a valid
contract between Ellen and the shopping center car park as there all the elements of a valid
contract. The contract entered into between these two have a legally binding effect. Both
parties are bound to perform their contract, as non-performance shall be treated as a breach of
contract.
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In the given case study, there was a valid contract between Ellen and the shopping center car
park. Ellen paid for the car park charges initially. After shopping for hours, Ellen along with
her friends returned to the car park. Ellen fell at the entrance, as there was an oil spill. She
was badly injured and was barely able to walk due to which delayed was caused to pay the
car park ticket, which meant that the car was wheel clamped because it was parked for three
hours and ten minutes. Later on, she was informed that her car would be released on the
payment of a fee of SGD 1500. Ellen was delayed due to the accident. There was a breach of
contract on the part of the other party. The car park was under a contract with Ellen to let her
car park there for hours but without any justification, they clamped the car of Ellen which
resulted in a breach of contract.
As applying the requirements to establish a breach of contract, the car park center failed to
perform their contractual obligation and secondly, they failed to perform their part of the
performance. Ellen can prove that there was a breach of contract. Once it is shown on the part
of Ellen that there was a breach of a contract she can claim for damages. As per the contract
law, Ellen can claim damages for contractual infringement. Ellen can claim for monetary
compensation for the loss caused to her. Car park owner violated the contract, which entitles
the Ellen to claim for damages. The breach of contract by the owner of the car park facilities
resulted in discomfort and inconvenience to Ellen.
As applying the case of Angila TV v Reed, a possible case for claiming damages can be filed
by Ellen to put her in the position in which she would have been if the agreement had been
executed. Ellen may choose to assert loss of dependence and recover loss caused to her.
Whereas Ellen can also claim for damages as such act of the owner of the car park caused
inconvenience to Ellen. She slipped at the entrance of the car park area, which resulted in
injuries to her. She can successfully claim damages under damages caused by inconvenience
as she slipped at the entrance to the car park, which resulted in physical inconvenience to her.
As applying the case of Bailey v Bullock, Ellen is entitled to file a suit for loss to reflect the
inconvenience caused to her from such breach and for the medical expenses, she incurred due
to such breach.
Moreover, Ellen discovered a scrape in her car, which was caused due to negligence on the
part of the security guard employed by the car park when he was doing his check. As there
was a lawful contract between the Ellen and car park, it was the duty of the owner of the car
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park facility to take care of the car. All these instances show that there was a breach of
contract by the owner of the car park.
However, in the given scenario the defendant can rely on the exclusion clause. As there was
a notice at the automatic barrier stating that maximum stay is 3 hours, no return within 1
hour. Vehicles parked in the car park for longer than 3 hours will be wheel clamped. Kindly
note that the release fee is SGD 1500.
As applying the case of L’Estrande v Graucob, Ellen did not read the instructions mentioned
at the barrier. Thus in the given case study, the defendant shall not be made avail of an
exclusion clause. The main requirement to establish a defense of the exclusion clause is not
fulfilled in the given case study because Ellen was unable to read the terms and conditions as
it was raining heavily. Therefore, the defendant cannot take the defense of the exclusion
clause.
As applying the case of Thornton v Shoe Lane Parking Ltd, the ticket was generated by the
automatic machine it was given by the clerk. Thus, Ellen had no opportunity to look at the
conditions reject the ticket and get her money back. Although there was a valid contract
between Ellen and the car park as the car park effectively made the offer by having the
machine posted with the amount and this offer was accepted by the Ellen. But Ellen was
unaware of the terms when she obtained the ticket, thus the exclusion clause does not come
into existence as it must come into the knowledge of the other party. Thus this contract
cannot be subject to the terms submitted after this moment. In the given case study ticket was
just a receipt that shows the agreement was created. Also, Car park did not do what was fairly
enough to notify Ellen of the conditions- a driver would have to wander around the parking
area to find them, which is more than a rational customer could ask.
As applying the case of Olley v Marlborough Court Hotel, an exclusion clause is not
concluded between Ellen and the car park merely on the representation made by the car park
because it is made after the agreement was made. Representation was not made at the time of
obtaining the ticket thus the exclusion clause does not into existence.
As applying the case of Parker v South Eastern Railway, Ellen although she cannot avoid a
contractual term by not reading the agreement the owner of the car park cannot depend on the
exclusion clause as he did not take appropriate steps to carry it to Ellen's knowledge.
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Conclusion
From the above, it can be concluded that as minor is incompetent to contract Oscar is not
bound to pay the parking charges. Whereas, there was a domestic agreement between these
three friends Ellen cannot force Felix and Oscar to pay the car park charges and petrol
expenses. However, there was a legal contract between Ellen and the car park and due to
negligence of the security guard of the car park, there were scrapes in Ellen's car as well as
she slipped due to oil spill which resulted in physical injuries. This amounted to breach of
contract. Thus under common law, Ellen is entitled to claim damages from the car park for
the physical loss, medical expenses which she incurred due to such breach and loss to her car
due to negligence of security guard.
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