Scroll Top
10 Old Grimsbury Rd, Banbury OX16 3HG, UK

Contract Law Exam

Q1.Due to old age and health condition, Dementia, Ben Mack retired from his job as a truck driver and his daughter-in-law and granddaughter takes care of him after his retirement. Ella, his granddaughter is the primary caretaker of Ben and she works from 4 am to 8 pm Part-time job at Bakery so that she can make life easy for her as well as her grandfather. Ella always desire to own a car to ease her travel from bakery to home, while Ben always wanted to buy Dodge D100 which was a 1967 Vintage car. Hence, they bought the cars by their desires. Ben bought his vintage car by transferring the money to Classic Car’s Account, whereas, Ella, in short of money took a loan from the bank and Ben signed as guarantor. As they went back home, Ben’s son saw the car he purchased and demanded to return it. Meanwhile, Ella’s mother was shocked to see this Suzuki car and decided to return the same, but the dealer refused to give her money back as her problem is with the bank. In this case, a contract is made by both of the parties to accept the offer and they have given the consideration amount. To make a valid contract, there must be three elements:

1. Offer

2. Consideration

3. Acceptance

As this contract is comprised of all of the three elements, it is a valid contract. In Brogden v Metropolitan Railway Co (1877) 2 App Case 666 and Savvy Vineyards v Kakara Estate Ltd [2015], it was noted that the agreement can be inferred from the writing of both of the parties or the words or conduct of a party as an acceptance. As Ben’s Son wants to cancel the contract of buying the car and his wife wants to cancel the contract of Ella’s car by cancelling the contract, it is important to keep in mind the cases and liabilities that can arise due to cancellation. In New Zealand, Pt.2, Subpt 3 of Contract and Commercial Law Act 2017, talks about the cancellation of contracts. Sec. 36-42 of CCLA 2017 governs the circumstances in which a party to a contract may cancel the contract due to misinterpretation or breach. In Mana Property Trustee Ltd v James Developments Ltd [2010] NZSC 90 [2010] 3 NZLR 805, it was held that the term was essential and it was important of interpretation and the court appeal told that it was an essential term to make the contract valid. A Party to a contract and call off the contract by words or the demeanour and can repudiate if B doesn’t fulfil the obligations of the contract or the party has been induced to enter into the contract by Misinterpretation or fraudulent act done by or on the behalf of another party of the contract. But in this case, both of the parties are not entitled to cancel the contract as they have full knowledge of repudiation, breach and is affirmed by the party. As discussed in the cases above, Ben and Ella cannot return their cars to their respective owners as they have full knowledge of the contract they both made with the dealer and as they are of legal age and can enter lawfully into the contract, they have a general sense of wrong and right to enter into the contract and execute it. If they both still, want to refund their money and return the car, they can give an excuse of misinterpretation of contract and consideration. As they both have duly paid, they don’t need to stress about returning. By doing so, they can breach the contract made and can be sued in a court of law.

Q3.As there is the utilization of smart contract everywhere in the online world, smart contracts are the type of contracts that utilizes various technologies to make the transaction and utilize the blockchain to execute the orders which depend on the terms of the contract. Smart contracts are automatically executed and have clear terms and conditions, it is easy for the layman to understand the contract language and accept according to the wish. In this case, Kahu purchased smart television so that he can use a variety of shows and watch Netflix and they decided to purchase it to an online portal with the help of electronic stores called Joe’s Electronics which is collaborated with Sunny Times; a smart television brand. As purchases things that this company is owned by New Zealand based factory but in reality, it is California based company which provides their services all across the globe. After receiving the order Kahu notices and reads the clauses of the purchase and finds out the various clauses which are not fit for fair trading. As the contract between Kahu and Joe’s Electronic store is E-contract, it is legally enforceable. As there are clauses in the conditions which breach the person’s right to maintain privacy, there are clauses that breach the Fair Trading Act’s clauses. Also, the EULA is enforceable between Kahu and Sunny Times at the time of purchase. In Carie v Hastie (1968) NZLR 276 (CA) talks about the illegal performance and breach. As the Terms and conditions which are read further after delivery of a good, is against the good of the individual, it is also pragmatic which also breaches the rights of an individual. As the terms and conditions mentioned by the company are the prejudiced to the public safety and comets are taught to the third party or the person who is the end-user, it is advisable to Kahu that he should return the smart TV and purchase the TV which compiles every requirement and doesn’t infringe the basic right of the person.

Q2.Vinnie owns a farm in Waikato and settled up for rent to Lee under special conditions. As there was a great demand for Vinnie’s property in the market and discussed with Vinnie all the related requirements and conditions. As it was agreed by the owner of the farm and the real estate agent to sell the property and form an agreement with the third party prue, the agent talked about all the details and their requirements to enter into the contract and all the liabilities of the contract and the conditions along with consideration.  As agent did not mention the special condition which we had given to him by the seller and he told the buyer that half of the land was farmable and along with the weekly rent mention and he did not mention the condition that the lease will be terminated if the council refuses to grant the license but instead, he said the property would be likely to value $2 million and it will be a smart investment in farming in the area as this area will be divided for the residential purpose in future. As the real estate agent encourages the buyer to grab this opportunity by making this unconditional offer of buying at $2 Million, she agreed to buy the property and paid the deposit. As she approach the solicitor to check out the paperwork she noticed the special condition mentioned by the seller and later was told that her license will be expired soon. As she was not able to make mortgage payments without rental income valuation was carried out which show the farmable areas and it was accounted for 40% of the farm in which the market value was $1.6 million. Prue called Vinnie regarding the special clause and decided to cancel the agreement and blamed her for dishonesty. While the Estate agent was the main culprit. Later the buyer contacted the agent who offered his service free of charge to find the buyer who will be willing to take over the purchase of land later. As the agent founded by him was interested in purchasing the land, Prue’s solicitor road to  Vinnie’s solicitor advising that Prue wanted to nominate a third party as purchaser and there was confirmation among the agreement to nominate the third party. The nominee changed his mind due to diligence and the solicitor sent mail again to the legal team of Vinnie advising that they decided to cancel the agreement based on a series of metals interpretations and the mistake. Later they were replied with a statement and clause of the contract that was made and said that the other party has to complete the purchase without any cancellation. A major problem here is the misinterpretation which is caused by an agent who was the middle man for both of the parties. Under the Contractual Mistakes Act 1977, this law can help Prue to know about the mistakes that were probably made during the purchase and help her to escape the liability to purchase land. S23(1) talks about the mistake of law mistake of fact in which mistake of law includes in the stick of the interpretation of documents whereas document does not include the contract itself and it also applies to the mistakes which are made before or at the point of entering into the contract. As there was the mistake of the face of the special condition which Vinnie has set, the mistakes can be corrected. In Noble Investments v Keenan, the court considered whether the party can precede the completion to validly cancel the contract. Also, in West v Quayside Trustee Ltd [2012] NZCA 232 at [30], a representation of past and present fact that is false or misleading excludes the statements of intention and the opinion of law was interpreted by the court of law. Therefore, Prue is entitled to damages under S35 of CCLA, repealed Contractual Remedies Act 1979 s6 (1). As the Fair Trading Act 1986 prohibits misleading and deceptive conduct of agents, there are wide ranges of remedies available for the damage, if any done by mistake of fact or mistake of law.

Related Posts

Leave a comment

× WhatsApp Us