Analysis of Breach of Contracts: Hercules vs. Hydra Mechanics

This report analyzes a breach of contract scenario involving Hercules, Xena, and Hydra Mechanics (HM). The case begins with Xena offering to sell her property to Hercules at a price below market value, with a strict deadline for acceptance. Hercules's car requires repairs, which he entrusts to HM. HM's failure to complete the repairs within the agreed-upon timeframe prevents Hercules from meeting Xena's deadline, leading to a potential breach of contract. The report examines the formation of the contract between Hercules and Xena, considering the elements of offer, acceptance, and consideration. It explores the breach of contract by HM due to their failure to meet the repair deadline, and the remedies available to Hercules, including monetary damages. Furthermore, the report addresses the concept of an exemption clause, discussing its potential impact on HM's liability. The analysis incorporates relevant legal principles and case law to provide a comprehensive understanding of the contractual issues and potential outcomes.

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Running head: BREACH OF CONTRACTS
Breach of Contracts
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Running head: BREACH OF CONTRACTS
Table of Contents
Introduction………………………………………........................ 3
Contract between Hercules and Xena…………………………….. 3
Breach of contract by HM………………………………………… 5
Exemption Clause by HM………………………………………… 6
References…………………………………………………………. 7

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Running head: BREACH OF CONTRACTS
Breach of Contracts
Introduction
Hercules loses his house as a result of his absence because of his many quests. Xena
wishes to sell her property urgently below the market price and gives Hercules a proposal for the
sale which includes a $250,000 purchase price which is $50,000 lower than the market price. The
offer is open only until 2.00 p.m. of the following day and its acceptance can only be through the
exchanging of contracts at Xena’s property before the stipulated deadline.
Hercules is interested in Xena’s offer but the property is at a distance of 200 km away
and his car is faulty to enable him reach the property before the deadline as the only available
mode of transport is private transport. He therefore goes to Hydra Mechanics (HM) so that his
car can be repaired. HM advises him that the car needs new brakes and shock absorbers, a task
which can be completed the following day by 12.00. Hercules stresses his urgency and the need
for him to get to Xena the following day before 2.00 pm. The repairs were not yet completed at
the stipulated time. Instead, they were completed at 1.30 pm. On realizing that he would be
unable to exchange contracts on the agreed time with Xena, Hercules contacts Xena through a
phone call and verbally accepts the offer. Thereafter, Hercules is unable to contact Xena further
due to poor mobile reception at Xena ‘s residence. Xena ends up selling the property to
Hippolyta, the Amazons Queen, on the following day where after she goes to Asia for a trip.
Contract between Hercules and Xena
The interaction between Hercules and Xena and their phone conversation may be
considered to amount to a valid contract on various conditions (Kadian, 2003). The perception
that conversations cannot result to binding agreements is a misconception. If there is the

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existence of essential elements pertaining to a contract, then oral conversations, including phone
calls, may be considered as binding agreements. The court applies an objective test to determine
the existence of a valid contract (McCabe, 2017). There are important facts for parties to
consider when they negotiate or discuss the details regarding a proposed agreement. These
factors include whether there has been an offer and acceptance between the parties and whether
any consideration has been provided. This consideration can either be monetary or in the form of
services. The essential terms regarding the agreement should also be specifically certain and
clear as to whether a complete agreement has been formed (Tramways v. Luna Park, 1938). The
parties must also look into the essential terms of the agreement not yet covered or discussed or
any other essential terms whose negotiation is still in progress. The parties should also have the
capacity or authority to contract with each other. There should also exist the parties’ intention for
the creation of legal relations. Specific contractual words such as “subject to contract” should be
used to that effect.
A party to a contract may rely on the principle of equity if a promise was made despite
the contract not being binding. An estoppel may be granted in pre-contractual representations to
bind a party based on their conduct after the satisfaction of key elements which apply to an
equitable estoppel(Combe v. Combe, 1951). A party to the contract must create or encourage the
establishment of a legal relationship or grant an interest with relation to the contract.
There may have existed a contract between Hercules and Xena after their interaction and
conversation. This is because Xena made an offer to sell her property and it was accepted by
Hercules. However, despite her willingness to sell the property to Hercules at $250,000 a price
that was $50,000 lower than the market price, she had clearly stated to Hercules that the offer
would only be available until 2.00 pm of the following day. Therefore when Hercules’ car was

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not repaired by Hydra Mechanics within the stated timeline and Hercules was unable to make it
to Xena’s place on the agreed time, Xena did not have any obligation to Hercules. She had
clearly stated that if Hercules needed to buy the property, then he had to make it to her property
the following day, a condition that Hercules failed to fulfill after he was also failed by Hydra
Mechanics.
Breach of Contract by HM
Breach of contract may occur where one party to a contract goes against the terms of the
contract or agreement (Hamblen, 2018). The basic remedies for breaching a contract include
restitution, money damages, specific performance, reformation and rescission (US Legal
Support, 2016). Money damages are awarded to a party as compensation because of financial
losses because of the breach of contract. The injured party can be awarded the bargain they
initially entered, or the net profit that would have accumulated were it not for the breach.
In case of a total breach, the injured party may recover damages amounting to the equal
value or sum that would have been received if the contract had been fulfilled by the other party,
lost profits included. If the breach is partial, the injured party may seek damages equal to the
amount required to hire someone else to complete performing the contract. If the completion cost
is prohibitive and the remaining portion of the unperformed contract is small, the courts normally
award damages in amounts equaling to the different value of the performed part of the contract
and the total value as per the contract (Tipton, 2016).
Hercules had an agreement with Hydra Mechanics (HM) where HM were supposed to
finish fixing his car problems by 12.00 pm the following day to enable him to travel in it to
Xena’s property so as to enable him complete the contract of purchasing Xena’s property by 2.00

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pm. Hercules had in fact emphasized on the issue of the timeline for the repairs to HM. When
HM was unable to complete the repairs within the agreed time, this amounted to a breach of their
contract. Hercules was therefore entitled to monetary damages as a result of failing to purchase
Xena’s property at an offer which was $50,000 below the market price. Even if Hercules
managed to get an offer for the purchase of another property, HM is obligated to compensate
Hercules because Xena’s offer was lower than the market price and such an offer would not be
readily available elsewhere. HM may also have the responsibility of ensuring that Hercules gets
another available offer of purchasing another property. HM should also consider the fact that
Hercules had lost his initial property because he had been away for his quests.
Exemption Clause by HM
An exclusion clause is used for the elimination of any responsibility of a party if a breach
to a contract has occurred (Concord Editorial, 2018). Such exclusion may be a partial or full
exclusion though a party will receive protection from any responsibility related to a particular
event. The inclusion of exemption clauses in contracts may significantly benefit a party as they
eliminate all liability. However, the enforcement of exemption clauses proves to be difficult. The
clauses can be easily overturned if they are not written correctly and reasonable. To ensure
clarity of the clauses, an organization should make templates of the exclusion clauses.
If HM had a large exclusionary clause at its entrance indicating that HM would not be
liable for any losses by the customers in case there is a breach of contract by HM in the process
of repairing vehicles, then it would be difficult for Hercules to seek for compensation from HM.
This is because HM had clearly indicated lack of liability in case of any breach and Hercules
should have considered such an exemption clause before making the decision to leave his car to
HM for repairs.

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References
Combe v. Combe (1951)
Concord Editorial (2018). Types of exemption clauses found in a contract Retrieved from
https://www.concordnow.com/blog/types-exemption-clauses-found-contract/
Hamblen, K (2018). What is a breach of contract? Legal Match. Retrieved from
https://www.legalmatch.com/law-library/article/breach-of-contract.html.
Kadian, K (2003). Valid. Void, voidable, and unenforceable contracts. Retrieved from
https://study.com/academy/lesson/valid-void-voidable-and-unenforceable-contracts.html.
McCabe, C (2017). When does a conversation become a contract? Retrieved from
https://www.lexology.com/library/detail.aspx?g=3a3cfa80-4696-415b-b08a-
f46857ed7af7.
Tipton, S (2016). Types of damages available for breach of contract. Legal Match. Retrieved
from https://www.legalmatch.com/law-library/article/types-of-damages-available-for-
breach-of-contract.html.
Tramways Advertising Pty Limited v Luna Park Pty Limited (1938) 38 SR632.

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US Legal Support (2016) Retrieved from https://contracts.uslegal.com/breach-of-contract-
remedies/.