Contract Law – The Legal Rules Governing Contractual Relations Essay Example

style="text-align: justify;">According to the case, Dinky, the plaintiff did his duty by undergoing the 5 miles, but unable to complete another two because of the traffic jam, which means he did not completely perform the consideration of the contract between them. In this point, Patsy, the defendant could sue Asmara Ltd for did not completely provide the service as she has been a “fixed list” – a loyal passenger with the company. On the other hand, Asmara Ltd could claim for the monetary loss from Patsy as they provided the service for her over half way based on the meter in car, she might have paid for the five miles using service from the company.

Discharge of contract

Discharge by Breach

A party state that he will not perform his part of the contract before the time of the performance is due is called an Anticipatory Breach. Dinky stopped at the side of the road after 5 miles and suggested that it is better for Patsy to walk to the destination, showing signs that Dinky would not want to complete his duty of 7 miles. Similar case can be seen in Hochster v De La Tour (1853) where the Plaintiff sued the Defendant for expressing the statement that he “does not intend to perform his obligation” prior to the end of the actual performance. His act of switching off the air-conditioner did not breach any contract as his main duty is to transport Patsy from Huntington to Maynard. How Dinky does his duty is irrelevant.

Discharge by Performance

When Patsy (the defendant) does not fully perform the contract, it will

lead to a breach of contract and the other party, Dinky (the plaintiff) may claim for damages. In a contract, a price is payable upon completion, and completion is usually required to discharge the contract. In this case, Patsy has breached the contract by not fully performing her duty as a paying customer by not paying Dinky his 5 miles of damage. A similar case can be found in Bolton v Mahadeva (1972) where the defendant refused to pay money to the plaintiff because the plaintiff did not do any substantial performance at all as the case’s primary purpose to install the central heating system has been seen ineffective.

Remedies

Unliquidated Damages

Unliquidated damages are to be provided to the victim of a breach with compensation to monetary loss. In this case the defendant did not compensate the plaintiff for the service used. Patsy should have paid Dinky for the driving services and gas consumption for the major part of the journey. A similar case can be found in Ruxley Electronics& Constructions v Forsyth (1995) where the defendant refused to pay the plaintiff for the defects made. Therefore, the defendant is said to be liable for the plaintiff’s journey.

Injunction

It is an equitable remedy, where a court orders to a party to perform part of the contract, instead of imposing a fine (for non-performance or breach of contract) out of his or her obligations under the contract. Courts take this step when they are of the opinion that a payment of damages only is not good enough for a just settlement of the case.

In this case, Patsy

can use injunction for the court to make Asmara Ltd to perform part of the contract act for the breach of contract Asmara had done in the contract. Where Asmara Ltd only done 5 miles of 7 miles, therefore the agreement is not completed as like what being promised. This same case can be shown in the case of Kong Wah Housing Development Sdn Bhd v Desplan Construction Trading Sdn Bhd (1991).

Intention to Create Legal Relations

For a contract to exist the parties to an agreement must intend to create legal relations. It is the party’s free choice that makes the contract legally binding. When a contract is made, parties rely on the promise where later the promise also can be changed. It is considered that the contract with some conditions makes sure that it is legal to do so or to protect the parties in the contract.

Objective test is used based on whether a reasonable person would have believed the parties intended to enter into a contract. The presence of consideration will provide evidence of this, if the promisor has specified something as the price for the promise this - in most cases, carries with it an intention that the parties be bound.

In this case, Patsy as a “fixed list” passenger shows that she already have the intention to create legal relations, by using Asmara Ltd services for quite some time. This already can prove that she have the intention to create legal relation with Asmara Ltd, in term of using their taxi service.

While for the plaintiff (Asmara Ltd), the intention to create legal relations

can be seen when Asmara Ltd sent Dinky as Patsy's taxi driver to provide the service desired by their customer (Patsy). This shows that the promise should do something to make the promise legally binding.

Similar cases can be related with the existing case, such as the Kleinwort Benson Ltd v Malaysia Mining Corp Bhd (1989) and the Parker v Clarke (1960).

Free Consent

Section 13 of the Contract Act 1950 states that, two or more person are said to consent when they agree upon the same thing in the same sense. Section 14 contracts act 1950 provides that “consent is said to be free if it is not caused by coercion (section 15), undue influences (section 16), fraud (section 17), misrepresentation (section 18), and mistake (section 21, 22 and 23). It is the standard of freedom of contract depends for the individual rights.

In this case both parties are free consent. Where Asmara Ltd have the right to provide their service to anyone, here is Patsy (their fixed list passenger). As well as Patsy, she is the one who want the Asmara Ltd service. A case for free consent would be the Mohori Bibee v Dharmodas Ghose (1903).

Conclusion

For conclusion, in this case we are appointed to act for Asmara Ltd (plaintiff) and Pasty (the defendant). According to the case, Patsy is the one who made offer; while Dinky (taxi driver worked for Asmara Ltd) has accepted the offer made by defendant. Asmara Ltd have done part of the performance they should perform, however did not complete fully the service; sending Patsy from Deli supermarket, Huntingdon to

Maynard. In this case Patsy didn’t pay for that certain duties that Asmara Ltd done ( 5 miles of 7 miles).

With all point above stated that, Asmara Ltd company (plaintiff) have right to sue Pasty (defendant) for the discharge of performance in the contract between them. On the other hand base on the consideration in the contract between both parties, Patsy should not pay for the Asmara Ltd because the company has not completed the promise of the contract to take Patsy to her actual destination. Patsy has inform the Dinky that she is not in hurry but Dinky refused to move that action of him cause the discharge by breach of the contract. Therefore in this case the proper party to sue is Patsy for the breach of contract made by Asmara Ltd.