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Introduction to Business Law

Question Number 1
The available facts state that Betty spotted a car advertisement that she liked and intended to buy. The advertisement offered details describing the model of the Car and the price. The advertisement was done by Barry’s Car Sales. Legally speaking, the advertisement by Barry Sales in the Newspapers was an invitation to a treat and not an offer. In distinguishing an invitation to a treat and an offer, reference will be made to the facts stated. An offer is defined as a promise contingent to an act whereby the assent has an effect of terminating the offer and creating a contract. The definition of an offer is easy. However, identification of whether an offer exists in a certain scenario is a hard task. Every ascertainment of an existence of an officer is dictated by the facts at hand. In addition, an invitation to a treat refers to a call for negotiations. This is distinguished from an offer in the case of Carlill v. Carbolic Smoke Ball Company (1893) A.C 1 (Meiners, Ringleb& Edwards, 2008).
Unlike the situation in an offer whereby the assent terminates the bargain, in the invitation to a treat, the negotiations are open, and the price stated by the advertisement is subject to alteration. In advertisements, the sales people simply make invitations treat. According to the facts stated, Barry’s Sales simply made invitations treat on the newspaper, and they could not be bound by the advertisement. That explains why the consideration was lowered from $ 9,900 to 9,500 dollars. Consideration is defined as something valuable to back up the promise. In this case, the contract was concluded when the sale document was completed, and Betty promised to pay the $ 9,500 after one week. A contract is a legally binding agreement signed by at least two persons. The critical aspects of a contract are clearly shown in the facts stated (Schulze, 2007).
The facts ought to be considered and elaborate further and ascertain whether the ingredients that form a valid contract were present. Barry’s Sales made an invitation to treat; Betty offered to buy the car at $9,500. Barry Sales accepted her offer and within one week, Betty furnished $9,500 as consideration to Barry’s Sales. After paying the consideration, she was given all the necessary documents relating to the nature of the car, which she put in the boot. By the time she furnished the consideration, there was an existing contract between her and Barry‘s Sales. Both parties were legally bound to observe the obligations of the contract during performance (Ciro, Goldwasser&Verma, 2011).
The facts state that the car bought by Betty later developed numerous defects. In this case, she discovered that the car was slipping out of the gear, and it had covered 195,000 kilometers before she bought it. The clutch also needed replacement. The legal position on the Betty’s case is to the effect that the bargain was fair, and there were no elements of fraud, coercion, or undue influence. Since the contract is already in existence, the only remedy that she can exercise is finding facts that indicate that the contract was violated (Helewitz, 2010). Barry’s Sales did not disclose the exact kilometers the car had travelled. In the advertisement, the Barry’s Sales stated that the car had travelled low kilometers. The seller in this case is liable for misrepresentation.
Betty relied on the said misrepresentation to purchase the car, and she has suffered “a detriment”. For misrepresentation to succeed it is her onus to prove that she believed the misrepresented and acted to her detriment. According to the facts, she paid $9,500, which is “a detriment” due to the reliance on the statement that the car had travelled low kilometers. On the other hand, Barry’s Sales have a defense to defeat her claim. They have two defenses. First, the defense of caveat emptor is available for Barry’s Sales since the buyer only took the car documents and put them in the car’s boot. Secondly, Barry’s Sales can rely on the fact that their advertisement was merely an invitation to treat and Betty ought to have exercised due diligence in the process of purchasing and cross checking the document (Meiners, Ringleb& Edwards, 2008).
Question No.2
The second set of facts states that Bea has bought tickets from Coco’s Theatre restaurant where Bea is a regular patron. She paid $5 to deposit their coats. There was an offer, acceptance, and consideration. However, Coco’s theatre restaurant has various exclusionary clauses in their premises regarding liability once goods have disappeared. According to the restaurant, the goods are to be kept at the owners risk while the management exempts itself from any responsibility upon the loss of patron’s property. An exclusionary clause in the contract has the effect of limiting the claim of the party who has suffered breach. There is a likelihood of an exclusion clause been rendered inapplicable and the court ordering damages or any other remedy against the party who breaches the contract. Bea is the only party recognized under the contract. The general rule on Privity of contract dictates that parties to the contract are the only ones who can make valid claims upon a breach of a contract. Though the tickets were for Bea and Amy, Bea is the only one who can put up a claim against Coco Restaurant. This is the case unless Amy’s claims lie under the exceptions to the general rule (Andrews, 2011).
The arrangement of payment for tickets in the Restaurant is to the effect that the party to the contract should know the exclusionary clause before they make the payment. Bea is a patron but her sister was not aware of the exclusionary clause hence the doctrine of contra proferentem applies. The doctrine is to the effect that one party in the contract imposed the clause without giving the other party room for negotiations. The exclusion clause was also written in small font and at the back of the ticket. Therefore, this supported the fact that Coco’s restaurant is the only one that imposed the clause without negotiations. The clause should be clear and brought to the attention of the contracting party as seen in the case of Thornton v. Shoe Lane Parking (1972) 2 WLR 585. It should be noted that exclusion clauses do not apply in instances whereby the breach is fundamental and deliberate. The restaurant was negligent in leaving the cloakroom under no care. Thus, the exclusionary clauses are inapplicable as it was held in the case of Canada SS Lines v. The King (1952) A.C 192. Bea also stands to be compensated for damages on the breach of contract whereby Coco’s Theatre restaurant did not provide what they had agreed to offer (Meiners, Ringleb& Edwards, 2008).
The quantum of damages will include the price of the lost goods and compensation for breach. Coco’s theatre restaurant has a very weak defense whereby they can rely on the exclusionary clause to defeat Bea’s claim. The Restaurant can also use privity of contract doctrine to defeat any claim by Amy who was a beneficiary in the contract between Bea and Coco’s restaurant (Gillies, 2004).

 


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