Detailed Analysis of Contract Law: HEALTHY PLC and MEDIQUIP Ltd Deal

This report provides an in-depth analysis of a contract between HEALTHY PLC and MEDIQUIP Ltd, concerning the purchase and installation of MRI scanners. It begins by classifying the contract type and examining the bargaining positions of both parties, considering the £50 million deal. The report then delves into the contract clauses, specifically focusing on indemnity clauses, their various forms, and their implications for the parties involved. It further explores the concept of amendments within the contract, addressing the clauses and the risks associated with them. The analysis covers critical elements such as offer, acceptance, consideration, and the capacity to contract, alongside vitiating factors and remedies for breach of contract. Furthermore, it highlights the importance of understanding the clauses and potential risks, particularly for MEDIQUIP Ltd. The report also references relevant legal cases to support the analysis of bargaining power and contract formation, providing a comprehensive understanding of the contract's legal aspects.

Running head: ADVANCED CONTRACT LAW & NEGOTIATION
Advanced Contract Law & Negotiation
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction......................................................................................................................................2
1. Type of Contract..........................................................................................................................2
2. Bargaining Position....................................................................................................................4
3. The Contract Clauses...................................................................................................................6
4. Amendments................................................................................................................................9
5. Information and Clarification...................................................................................................11
Bibliography..................................................................................................................................13

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Introduction
The contract is an agreement, which formed between two or more than two parties. It is
formed when one party makes an offer and another party accepts the offer for performing the
contract. The contract is only enforceable when it has formed for enforceable by law and
establishes a legally binding. The contract only arises when both of the parties mutually agrees
with the terms of the agreement (Kötz, 2017). It should consist of five elements, which includes
offer and acceptance, consideration, capacity to the contract, intension to create a legal
agreement and certainty (McKendrick 2014).
According to the fact of the case, HEALTHY PLC and MEDIQUIP Ltd. wants to form
an agreement for buying MRI scanners and installing for the company. The contract is worth £50
million pounds. Therefore, for the formation of the contract, it must satisfy all the terms. It is
required to satisfy every important element, which will help to form a valid contract (O’Leary
2017).
1. Type of Contract
Under the contract law, it is necessary to follow some rules for the formation of a
contract. When a contract has formed for the employment or insurance or buying any house or
property it should follow all the important elements to make a legally binding. We are required
to follow every details of the agreement before we form the contract (Kötz, 2017). In some
special matters, for rent agreements, mortgages or loan agreement a contract is always necessary
for follow all the areas of law (O’Leary 2017). While the formation of law it is required to
establish a relationship between the parties. It is one the important area of law because multiple

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of parties can enter into a contract with mentioned related topics. In a contract, all included facts
must relate with the agreement and formed between two or multiple parties.
An English contract must include a wide area where it is necessary to follow up all the
requirements. Those are:
 The formation of Contract which includes offer, acceptance, intention and
consideration (Kötz, 2017)
 The capacity to the formation of the contract
 The contents which includes terms of the contract, exclusion and privities
 The vitiating factors where contract deals with misrepresentation, duress,
illegality and mistakes
 The discharge where a contract can faced according to the performance
agreement, breached and frustration
 For the discharge of the contract, remedies also applicable which includes
damages, injunction and performance (O’Leary 2017).
For the formation of the contract it is required that a party must offer and another party
will accept the offer. The parties must have intention to create a legally binding contract. There
should have a mutual consideration for the formation of the contract. According to the
performance in the contract, it helps to the parties to communicate with each other in the
agreement (Kötz, 2017).
The parties who are entering into the contract must have the capacity to understand all the
terms and importance of the agreement. The unsound mind person and minors have no capacity
to enter into the contract (O’Leary 2017).

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For the content of the contractual agreement must incorporated with definitive promises
where the mentioned terms of the agreements deals with between two or multiple parties should.
It must be a contract. There should an exclusion clause where it must restrict rights for the
parties. The privities of contract set the terms where the contract never confer with the rights for
impose the obligations (Dicey, 2017).
Under the vitiating factors, misrepresentation defines false facts or statement which
against of a valid contract. The duress or coercion occurs where any party involves with violent
activities between the parties. The illegal agreement is against of enforceable of law. Mistakes
define in the defense where the facts are found voidable (Kötz, 2017).
The discharge of contract has found due to the breach of contract and the frustration of
purpose where a defense can claim according to the enforcement of the contract (Poole, 2016).
When a contract is breached, remedies also claimed by the innocent parties. The damages
and compensation can claim from the aggrieved party (O’Leary 2017).
2. Bargaining Position
According to contract between the HEALTHY PLC and MEDIQUIP Ltd, one is seller
and another one is buyer. Therefore, they have fixed the amount already, which is worth £50
million pounds. Now according to the fact of the case study, both of the company has set an
agreement where MEDIQUIP Ltd will provide 10 MRI scanners to HEALTHY PLC in exchange
of £50 million (Dicey, 2017). According to the terms of the contract, both of the parties have
mutual consideration about the sell agreement of the medical equipments (McKendrick 2014).
Now according to terms of the formation of the contract it must follow the necessary areas,
which includes:

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 The formation of Contract which includes offer, acceptance, intention and
consideration
 The capacity to the formation of the contract
 The contents which includes terms of the contract, exclusion and privities
 The vitiating factors where contract deals with misrepresentation, duress,
illegality and mistakes (Kötz, 2017)
 The discharge where a contract can faced according to the performance
agreement, breached and frustration (Dicey, 2017)
 For the discharge of the contract, remedies also applicable which includes
damages, injunction and performance (Poole, 2016).
For the formation of any contract, the inequity of bargaining power is important where
one party bargain in the agreement for a better alternative. When a bargaining occurs in an
agreement, one party will get more power to choose for the deal and makes the terms (O’Leary
2017). For the inequality of bargaining power, it provides freedom of contract (Kötz, 2017).
When the contract is not found to be unequal then the bargaining power provides a justification.
According to the implication of the important element, this is enforceable under the law.
Schroeder Music Publishing Co Ltd v Macaulay [1974] is one of the famous case where the
inequity of bargaining power has adopted by a party for entering in to a legally enforceable
contract for buying some goods. Attorney General of Canada v Nav Canada (2008) is another
famous case of contract where an agreement has formed between the tenant and landlord. In this

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case, the disparity of bargaining power and financial resources has established between them for
adjudicate the disputes (McKendrick 2014).
Therefore as per the above discussion, it can be stated that the contract is completely
equitable in favors of MEDIQUIP Ltd because the agreement, which has formed between both of
them as per their mutual consideration (Poole, 2016). They both also stated the amount of the
agreement, which will cost in exchange for MRI Scanners with HEALTHY PLC. The position of
the equity of bargaining power is not applicable for one party in this agreement (Kötz, 2017).
The agreement between HEALTHY PLC and MEDIQUIP Ltd, which has formed has no place to
bargaining powers in the equitable or favors one of the parties (Dicey, 2017).
3. The Contract Clauses
A sell agreement has formed between HEALTHY PLC and MEDIQUIP Ltd where one
party will buy 10 MRI scanners from another party in exchange of £50 million pounds. Now
while the formation of the contract they have formed a goods and services supply agreement
where they have included several clauses according to their mutual concern. However, after the
formation of the contract, MEDIQUIP Ltd must focus on every clause because sometimes it
could be associated with risk factors (O’Leary 2017).
When a contract is formed, it only focuses on the indemnity clauses, which are added
with the associated risk factors for the negligence acts. While the interpretation of the indemnity
clause it arrange for the contract with complexities and helps to operate by the parties through
the commercial arrangements (McKendrick 2014). The indemnity clauses could define in various
forms, which are:

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 Bare indemnities: It defines the risk factors about the liabilities or any damages, which
cause due to some specific reasons without any specific limitations (Poole 2016).
 Reverse or Reflective Indemnities: It defines the losses against the act or omissions
which caused by the negligence of the aggrieved arty.
 Third party Indemnities: It defines the liabilities where a party who is also involved in
such situation involves the loss with the claim.
 Proportionate or Limited Indemnities: It defines the losses where the third party failed
to satisfy the terms of the financial obligation where other party also holds the liabilities
for such act or omission as guarantor (Kötz, 2017).
 Party Indemnities: It defines the indemnities, which caused due to the breach of any
terms and causes damages to the innocent parties.
 Financing Indemnities: It has defines the financial losses or damages where the parties
faced financial obligation due to the breach of contract (O’Leary 2017).
The indemnity clauses restrict the rights for the both parties in the agreement. Under this
clause, the court also set the limits act the time of the act for the act of breach of the terms
(Dicey, 2017). Now the there are several differences between the business and contract of
business and the common contract rules will be applicable in these terms. Sometimes a lot of
explicitly has found where the indemnity clause has found while the formation of the contract
and cause great risks for us (Kötz, 2017). The actual clauses for the indemnity clauses found in
different ways. The Actual exclusion clause, which defines the breach of contract that cause due
to excludes liability for the breach the terms of contract. The limitation of clause which defines
as a claim for any breach of the terms in the agreement and time limitation set the clauses where
the commenced of the action of breach occur for a certain time (McKendrick 2014).

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For the formation of a contract both HEALTHY PLC and MEDIQUIP Ltd has mentioned
about the indemnification clause in the agreement. In this contract, they have mentioned about
the remedies, which will be available for the customers and the supplier of the equipments. The
contract must agree with the terms irrevocably and unconditionally (Dicey, 2017). The supplier
is bound to compensate the customers if they have faced any losses due to the use of the
equipments. The indemnity clause will only apply when the breach of cause occur due to
damages, losses, costs and expenses and it includes the economic loss or loss of profits. The loss
must occur due to the act of omission by the aggrieved party (McKendrick 2014).
The liability of the utility of indemnity clause only enforceable if there is a breach of
contract. It sets a limitation according to the time limits which is at least for 6 years after the
commencing the date of breach of the contract (O’Leary 2017). The party who is liable for the
indemnify clause then the risks of the anticipating liabilities will lie down for the anticipated
liabilities and it helps to consider the breach of contract and negligence according to the existing
common rights under the law (Poole, 2016). The confine of the effect of the indemnify clause
will be helps to rise the damages only for the breach of contract by one of the party and the
damages always be compensate for the innocent parties (Kötz, 2017). The compensation always
consider as a liquidate damages where it provides the rights of the payment, suspension or
termination to the innocent parties.
Therefore, it is necessary for MEDIQUIP Ltd must focus on such negligence activities if it
occurs due to the negligence act by the HEALTHY PLC then the contract will be breached for
and it will become void (McKendrick 2014).

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4. Amendments
All of the contract clauses, which are, mentioned in the agreement between the HEALTHY
PLC and MEDIQUIP Ltd, have set the ‘Goods and Services Supply Agreement’ (Poole, 2016).
In the clause 1, it has described about the definition and interpretation about the contract,
which includes account manager, APL, business day, confidential information, contract, expiry
date, goods, group, IPRs, order, price, senior manager, services, service credits, services levels
and start date (Dicey, 2017). Now in this clause the brief description about every detail is
required to mention because it will help to understand the importance of the clause (O’Leary
2017).
According to the clause 2, it describe about the ordering, delivery and acceptance of the
good (McKendrick 2014). Now the described clause provides a brief description about the
process of ordering the goods, capability of the goods and other terms of negotiation process
regarding the delivery of the goods mentioned in this clause. While the delivery of the goods it is
also required to provide the information about the details of the goods and how it will deliver the
goods to the buyer. The details about the packing is also required while delivery of the goods.
Under this clause, the condition of the goods must be same as the time of packaging (Kötz,
2017).
Under the clause 3, it sets the price and payment process of the goods. The price of the
goods, packaging, and delivery charges along with the amount of GST must included. The VAT
and GST of the goods must provide with separate list along with the agreement. The price
amount must mention clearly in the price list (Poole, 2016). The extra interest amount and other
convenience should attach with the VAT and GST amount. If any disputes arise at the time of

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delivery of the goods, then the consequences for such acts must mentioned in the part of the
agreement. All of the terms must mention according to the legislations of UK (Dicey, 2017).
In the clause 4, the quality and description of the goods has provided. Under this clause,
it mentioned about the warranties and guarantees about the goods where it must provide the
equal quality of goods which sample has provided (McKendrick 2014).
The clause 5 has described about the inspection and testing of the goods where the
delivered goods must compliance with the Specification before dispatch (Dicey, 2017).
The clause 6 has describes about the title risk which is applicable only for the purchases
and the buyer will only looks about the disputes about the goods after the delivery of goods. The
limits and risks of the delivered goods also need to mention in such matters (O’Leary 2017).
The Clause 7 stated the provision of services, which is important in the provided service
where the supplier shall perform the Services using appropriately qualified and trained personnel
(McKendrick 2014).
The clause 8 has included the terms of account management and reporting where the
obligation and disputes resolution has motioned in this part. For the negotiation of the business
terms, it is necessary to include the details about the seller and purchaser.
The clause 9 has described the liability of the goods. The goods will be the liability for
the seller until and unless it is delivered to the purchases. For any losses or damages of the goods
of both the seller and purchaser will be liable (O’Leary 2017). If the customer faced any issues
with the equipments then the liabilities will be applicable for both of them. Without prejudice to
any other rights and remedies the Customer may have pursuant to this Contract or at law, the

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Supplier acknowledges that this Contract is for the benefit of the Customer and the Customer
Group (Poole, 2016). The Supplier agrees that if it fails to meet its obligations pursuant to this
Contract then the Customer or any member of the Customer Group may suffer losses. Any losses
suffered by any member of the Customer Group pursuant to this Contract or the subject matter of
it shall be recoverable by the Customer as if the loss had been suffered by the Customer itself
and the Customer shall recover such losses on such member of the Customer Group's behalf
(McKendrick 2014).
The Clause 10 described the clauses of indemnification and insurance where the terms of
breach of contract will depends on the contract.
The clause 11 describes the confidentiality and publicity of the sale agreement. The terms
of the contract must not disclose publicly which affect the business (O’Leary 2017).
The clause 12 stated the assignment, novation and sub-contracting where the replacement
of the terms must perform according to the contract (McKendrick 2014).
The clause 13 described the process of duration, termination and consequences of exit
from the contract. It is one of the important parts under the sale agreement (Poole, 2016).
The clause 14 has mentioned about the miscellaneous legal provision other than the
contract terms (Dicey, 2017).
5. Information and Clarification
According to the contract between HEALTHY PLC and MEDIQUIP Ltd the contract has
specifies about several terms, which are related with the goods and services supply agreement.
The must focus on the negotiation term where the supply of the agreement should not form any