Analyzing Contractual Terms: Case Study of Max and Sophia

The essay delves into the principles of horizontal direct effect, which allows individuals to enforce EU law rights against other individuals or entities, as seen in Foster v British Gas plc. It also explores the concept of horizontal indirect effect through Von Colson and Kamann v Land Nordrhein-Westfalen, where domestic courts are required to interpret national laws in light of EU directives even when applied between private parties. Additionally, the essay analyzes a contract breach case using conditions and warranties, drawing from Poussard v Spiers for understanding conditions and Bettini v Gye for warranties. It concludes that Max's statement constitutes a condition of the contract, entitling Sophia to rescind it and claim damages.

Running head: LEGAL PROBLEM SOLVING
Legal Problem Solving
Name of the student
Name of the university
Author note

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LEGAL PROBLEM SOLVING
Case study 1
1.
The vertical direct effect is related to the relationship between national laws and EU laws,
particularly the obligation of the state to ensure its compatibility and observance of EU laws. The
effect enables the citizens to put their reliance on the EU laws while they initiate any action
against any public body or state. In the case of Foster v. British Gas plc (Case C-188/89) [1990]
(ECR I-3313) the court defined Vertical effect as "emanation of the state".
A horizontal direct effect is related to the relationship between individuals which also includes
incorporated companies. If a particular provision in relation to a EU law is Horizontally directly
effective, the individuals would be able to put their reliance on such laws in actions which have
been brought against each other. Usually directives do not have the capacity of being
Horizontally directly effective. However certain sections of legislations and regulations can be
enforced directly horizontally.
2.
Indirect horizontal effect
According the principles of indirect horizontal effect of EU law, the national courts operating for
the Member States of the EU have to give meaning to their national law in the light of the
provisions provided by the EU law. There is a difference between the principles of direct and
indirect effect of EU laws according to which EU laws can be revoked in certain situations. The
indirect effects result out of the situation when the member state imposes a directive and where
such directive is not applicable as the par against whom the directive is imposed fails to meet

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criteria for direct effect or is a private entity. In the case of Von Colson and Kamann v Land
Nordrhein-Westfalen Case 14/83 [1984] ECR 1891 it is the duty of courts to give meanings to
provisions in accordance to the directives "in so far as it is given discretion to do so under
national law".
3.
In the given situation both Varden and Nadir have the right rely upon the use of explosive
directives which have been passed by the EU. This is because according to the principles of
vertical and horizontal direct effect it is the right of any individual to rely on a directive which
have been passed by the EU in relation to a claim with the government and any other person
which may also be a company respectively. In the given situation the directives states that any
person who is below the age of 25 cannot work with explosives unless under direct supervisions.
In the case Nadir is the employee of the state as he is working for defense so he can rely on
direct vertical effect whereas Varden who is working for a private company can rely on the
provisions of direct horizontal effect.
4.
In the given situation both Varden and Nadir have the right rely upon the Training Regulations
2014 which have been passed by the UK government. According the principles of indirect
horizontal effect of EU law, the national courts operating for the Member States of the EU have
to give meaning to their national law in the light of the provisions provided by the EU law.
Therefore in the given situation the government has passed laws which are a little different from
the directors of the EU. Thus according to the principles of indirect horizontal effect the
regulations have to be interpreted in accordance to the provisions of the directives. Nadir and

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Varden can therefore claim that direct supervision is mandatorily required under the provisions
of the regulations as well. In case the regulations are interpreted in light of the directives than
Nadir and Varden would be entitled to make a claim.

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Case study 2
Issue
1. Whether the statement made by Max was a representation or a term of the contract
2. Whether Sophia can bring any claim against Max as well as any remedy
Rule
There are four ways in which a contractual term may be differentiated from a mere
representation made by a party
1. The parole evidence rule
According to the principles of the parole evidence rule when a contract has been documented by
the parties any term which have not been incorporated into the written contract but were
discussed prior to the documentation would not be considered as a part of a contract. Thus if a
statement was not included in the written contract it would be a representation and not a
contractual term.
2. Relative expertise
Where the person making the representation has a greater knowledge in relation to the statement
made by him or her, statement is more likely to be treated as a contractual term by the court. On
the other had where the person to whom the representation was made hade greater knowledge in
relation to the statement it would likely be considered as a representation. The concept had been
discussed in the case of Oscar Chess v Williams [1957] 1 WLR 370 as well as Dick Bentley v
Harold Smith Motors [1965] 1 WLR 623.

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LEGAL PROBLEM SOLVING
3. The importance of the reliance and statement
In situation where an indication is made by the person to who the representation is made to the
representor about the significance and importance of the statement than such statement would be
regarded as a term of the contract. in the case of Bannerman v White (1861) 10 CBNS 844 the
plaintiff had provided the defendant that he wants to purchase hops which are not treated with
Sulphur as he wanted to manufacture beer. An assurance was provided by the defendant that
Sulphur has not been used to treat the Hops but in fact it was. The court held that the treatment of
hops with Sulphar was a term of the contract and not representation.
4. Timing
Whether a statement made by the representor is a representation or a term of the contract is also
derived by the time period which has elapsed between the time when the statement was made
and when the contract was entered upon. The concept had been discussed by the case of
Routledge v Mckay [1954] 1 WLR 615.
A term of a contract can be classified into conditions and warranties.
A condition is a contractual term which forms the basis on which the contract is entered into. It is
treated as the most important terms of the contract. The provisions in relation to a condition had
been discussed in the case of Poussard v Spiers (1876) 1 QBD 410. In this case the court ruled
that where one party to the contract violates the fundamental condition of the contract the other
party would be entitled to a right of recession. This means that the party can rescind the contract
and be entitled to any damages incurred by such party.

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A warranty is also a term of a contract. However it significance in relation to a contract is less
than that of a condition. A warranty is not a fundamental basis of a contract. Thus when a
warranty has been violated the party is only entitled to damages and not the right to recession as
stated in the matter of Bettini v Gye 1876 QBD 183.
Application
In the given situation in order to find out whether Max’s statement comprises of a representation
or a term of the contract the above discussed 4 rules have to be applied. Firstly the parole
evidence rule is not applicable in the given situation as there is no written contract between the
parties. Secondly Max and Sophia both were site managers and thus are expected to have same
level of knowledge in relation to the fence. Therefore where there is no greater knowledge
possessed by either parties provisions of relative expertise cannot be applicable. Thirdly, in the
given situation Sophia has clearly mentioned Max about the reason why she needs the fence so
the importance of the statement has been conveyed to Max. Therefore according to the above
discussed provisions the statement made by Max would be considered as a term of the contract.
Finally the contract was entered upon only within 3 weeks since the terms were discussed
therefore much time has not elapsed and the statement would be considered as a term of the
contract.
According to the principles of Poussard v Spiers the term which Max had represented to Sophia
would be considered as a condition of the contract because of its significance. Sophia would not
have entered upon into the contract if the fence was not durable as it would have been useless for
her. Therefore in the given situation as a condition has been violated by Max, Sophia can make a
claim for the breach of contract. as the breach is related to a condition the remedy which can be

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availed by Sophia includes recession or repudiation of the contract along with damages. The
damages are provided to restore the position which she would have been in if the contract did not
take place.
Conclusion
The statement made by Max was a term of a contract and Sophia is entitled to make a claim for
the breach of contract and rescind the contract.

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References
Bannerman v White (1861) 10 CBNS 844
Bettini v Gye 1876 QBD 183
Dick Bentley v Harold Smith Motors [1965] 1 WLR 623
Foster v. British Gas plc (Case C-188/89) [1990] (ECR I-3313)
Oscar Chess v Williams [1957] 1 WLR 370
Poussard v Spiers (1876) 1 QBD 410
Routledge v Mckay [1954] 1 WLR 615.
Von Colson and Kamann v Land Nordrhein-Westfalen Case 14/83 [1984] ECR 1891

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Bibliography
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McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK),
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Timmermans, Christiaan. "Horizontal Direct/Indirect Effect or Direct/Indirect Horizontal Effect:
What’s in a Name?." European Review of Private Law 24, no. 3 (2016): 673-685.