Contract Law Analysis Essay Example

the contract was already established before the document containing the clause was made known and presented. To support this argument, Christabel must demonstrate that a fully oral contract with all four essential elements had been formed immediately following negotiations. Next, Christabel must contend that the document in question did not appear to be contractual. Similar circumstances were examined in the case of D J Hill and Co Pty Ltd v Walter H Wright Pty Ltd where negotiations were conducted exclusively via telephone and the goods were delivered with an exemption clause located on the form that Hill's employee signed. It was determined that the signed document was nothing more than an acknowledgment of delivery in the form of a delivery docket.

Christabel's defense is that she was simply acknowledging delivery, while the contract includes explicit and implicit terms. During negotiation, Christabel stressed the significance of using environmentally friendly, chemical-free high-quality recycled paper to Dee, as Friends is an environmental organization. Dee acknowledges Paper's strong support of Friend's ethos. It's worth noting that the contract was drawn up to supply goods to a third party, rather than for personal, domestic, or household use, and therefore falls under Goods Act Part I.

Despite the fact that twenty boxes were intended for Friend's personal office use, they were actually meant for business usage. Although there was no written agreement regarding the terms, the verbal promises still apply as they are vital conditions to the contract. Paper has violated the contract terms by providing low-quality paper, characterized by thickness, rough texture and heavy chemical impregnation. When a condition is breached, the innocent party (Christabel) has the right to terminate the contract

and/or seek damages. Termination absolves both parties from further obligations and does not require compensation to return them to their original positions. Section I s of the Goods Act provides further guidance on such matters.

In the context of section 16(3), it is stated that if a buyer accepts goods, any violation of a condition must be treated as a breach of warranty. Additionally, Paper has breached section 19(a) of the Goods Act Part I, which implies that if a buyer informs the seller of the specific purpose for which the goods are required and relies on the seller's expertise, then the goods should be reasonably fit for that purpose provided they are of a kind that the seller deals in regularly as part of their business.

Christabel has emphasized to Dee, who is representing the seller, the significance of the product. However, despite this, Paper has violated the implied agreement by providing papers that are thick, rough in texture and contain high levels of chemicals. The breach of this implied agreement under this act is considered a breach of condition and entitles Christabel to the same remedies as mentioned previously.

In addition to that, Paper has violated the Sale of Goods Act Part I s. 87 for selling a misrepresented item. Beale v Taylor's case reveals that the seller advertised a convertible 1961 car for sale, but it did not match the description given to the buyer upon purchase. Despite the buyer's inspection, the sale was based on the description, leading to a breach of contract.

In Christabel's situation, despite having inspected the papers, the sale was made by description, resulting in a breach of contract by Paper.

This breach also violates the Goods Act Part I s. 20 (2) in regards to sale by sample. When a sale is made by sample: (a) there is an implied term that the bulk will match the quality of the sample; (b) there is an implied condition that the buyer has a reasonable opportunity to compare the bulk with the sample; (c) there is an implied condition that the goods will be free of any unmerchantable defects that are not visible upon examining the sample. In this particular scenario, Paper presented Christabel with their letterhead, which seemed to meet her requested specifications for type and quality.

Christabel received paper that was significantly dissimilar from the provided sample. The received paper was thick, coarsely textured, and saturated with chemicals, rendering it unmarketable. Inspecting 200 large boxes of paper would be an unreasonable expectation, so Christabel likely only inspected one. This lack of inspection led her to accept a majority of unusable paper. This situation constitutes a breach of the implied term stated under the Goods Act Part I s.

Christabel requested high quality recycled papers from Paper Supplies, but they failed to provide them. This is similar to the case of David Jones Ltd v Willis, where Willis requested walking shoes that would fit comfortably over a bunion. However, on the third use, one of the heels collapsed, leading her to sue for shoes that were unfit for purpose and unmerchantable. Both implied conditions may apply in many scenarios, including the case of Christabel and Paper Supplies.

Considering Paper's breach of both explicit and implicit terms, the only potential defense is tied to the earlier-explained exclusion clause. As

per Part I s. 61 of the Goods Act, any right, duty, or liability resulting from a contract of sale by law implication can be revoked or altered through an explicit agreement, past dealings between involved parties, or binding usage. Therefore, the exclusion clause in the contract could eliminate any implied terms. Nevertheless, to employ this option, Paper must establish that the exclusion clause was in the agreement and enforceable. Given the matter at hand, Christabel must make her case with regard to the aforementioned exception.

Earlier it was explained that if Paper breaches their agreement, Christabel may be entitled to remedies such as termination and damages. Damages aim to compensate the plaintiff for losses incurred due to the defendant's actions and include expenses resulting from reliance on the defendant's conduct. The primary objective of damages is to provide fair compensation rather than punishment or retribution. In this case, Paper's breach resulted in damaging Friend's expensive laser printer which cost $1000 to repair. Friend can claim damages for this loss if the exemption clause is not binding. Another option for Christabel to recover damages is by proving negligence and establishing a duty of care owed by Paper.

The duty of care previously only covered the risk of physical or mental harm from goods. But after the case of Shaddock & associates Pty Ltd v Parramatta City Council, economic losses can also be included in the duty of care. For Christabel's situation, a duty of care existed because Papers were informed that she belonged to an environmentally friendly organization and required top-quality recycled papers. However, the papers purchased were unsuitable and discovered to have high levels of chemicals,

resulting in damage to her laser printer.

The second step pertains to the standard of care that must be provided, which is determined by what an individual or company with the necessary qualifications and resources can reasonably be expected to provide within their community. Since Paper specializes in supplying papers, they should be knowledgeable about Christabel's specific needs. The final step is assessing whether the damage was too remote to be reasonably foreseeable.

Christabel may be entitled to compensation for both the printer and the operator's hiring due to the circumstances of the situation. A precedent has been set in Reg Glass Pty Ltd v Rivers Locking Systems Pty Ltd where the high court ruled that proper security measures would have prevented theft of goods. Similarly, in Christabel's case, the printer would not have malfunctioned and the operator would not have become ill if it weren't for the chemically treated papers. However, it is important to consider that the exclusion clause at the end of the contract may negate Paper's responsibility in this matter.

However, Paper, the operator of Friend's word processor, can argue that the damage caused to the printer due to their breach is too remote for the damages of replacement. This is due to several serious allergies that Paper has. This argument is supported by the Hadley v Baxendale case. In the Koufus v C Czarnikow case, the House of Lords concur with this viewpoint.

As a reasonable businessman, it was contemplated that Czarnikow could suffer a loss that was foreseeable and a usual occurrence resulting from the breach. Paper may argue that the damage to the word processor operator was not a foreseeable loss

or a typical incident from the breach.

Christabel will not be awarded damages for the cost of finding and hiring a replacement for four weeks as it is considered too remote and unforeseeable. The loss of Friend's clients due to 'environmentally unfriendly' products is another issue. Two clients have cancelled future contracts and demanded a full refund. It is possible for Christabel to sue for damages for disappointment and distress, but this may prove difficult based on the reluctance of courts to grant such damages in commercial cases. Referring to Jarvis v Swan Tours may provide some precedent. Christabel could attempt to prove extreme distress when her clients cancelled future contracts and demanded refunds.

In the case of Baltic Shipping company v Dillon, the High Court authorized compensation for damages, which includes damages for disappointment and distress due to the loss of entertainment and enjoyment. Similar to this case, Christabel's company may experience distress when clients cancel future contracts that are crucial to the business, causing a loss of image and ultimately affecting her own image. Furthermore, Paper initially agreed to forgo payment and offer a 10% discount on future purchases. Nevertheless, Paper later sent Friends a letter enclosing an account statement, and indicating that it intended to rely on the document signed by Christabel during delivery. It is important to note that while Dee's agreement with Christabel is not contractual per se, it is more of a promise.

Christabel is able to make a legal argument concerning promissory estoppel based on the case of Central London Property Trust Ltd v High Trees House Ltd. In this case, the plaintiff agreed to lower the rent

and chose not to seek repayment. Had they attempted to do so, it would have been denied due to estoppel. Similarly, Christabel can contend that there is an agreement in place that prevents enforcement of payment for this delivery. If Paper were to pursue payment, they would also be prevented from doing so by estoppel.

Christabel's reliance on the promissory estoppel rule hinges on her ability to establish all four elements of the doctrine: assumption, responsibility, reliance, and detriment. The legal relationship between Dee and Christabel is evident, as Dee, acting as Paper's representative, assumed that payment for the delivery would not be collected. In response to this assumption, Christabel took action, assuaging customers' dissatisfaction. However, Dee's failure to honor the promise would cause Christabel significant harm. In light of these considerations and citing relevant precedent, Christabel's claims for both breach of warranty and damages are likely to be upheld.