Tort 1: personal injury claim
Tort is a civil, not criminal, wrong which excludes breaches of contract. A tort entitles a person injured by damage or loss resulting from the tort to claim damages in compensation. Tort law has been built upon decisions made in reported court cases. Torts include for example:
· Negligence - the breach of a duty of care which is owned to a climate, who in consequence suffers injury or loss
· Trespass - direct and forcible injury, for example if person A walks over B's land without lawful justification or A removes B’s goods without permission.
· Defamation - publishing a statement about someone who lowers the person in the opinion of others. This is known as libel when in a permanent form, and slander if it is in speech.
· Nuisance - for example if A acts in a way which prevents B from the use and enjoyment of his land.
In the case of product defects causing damage or harm to consumers, strict liability, that is, legal responsibility for damage independent of negligence, is imposed on producers and suppliers by the Consumer Protection Act, which puts into effect on European Union Product Liability Directive.
Client briefing notes - personal injury claims
One of the clients of a large regional law firm is ‘Get Fit’, a chain fitness centers. Below is an extract from draft briefing notes prepared by the law firm, intended to inform the managers of ‘Get Fit’ off the potential cost in the event of a successful personal injury claim in negligence following an accident at one of their centers:
A person who has sustained an injury at the center and who believes that they may have a claim against the company will usually seek advice to assess whether the likely level of damages, i. e. the financial compensation that may be awarded, please sufficient to justify the risk of pursuing a claim.
The accountant of damages, moon is the quantum, is usually made-up of two aspects:
· General damages are paid to compensate the claimant, that is, the person making the claim, for the pain and suffering resulting from the injury and for the effect this has on their life. These damages are difficult to assess, and guidelines are published by the Judicial Studies Board, you mean hear these being referred to as the JSB guidelines. Reference is also made to the level of damages awarded by courts in similar cases.
· Special damages are calculated more objectively as this consists of claims for the past and future financial loss to the claimant. This typically includes loss of earnings, in addition to the cost of care and necessary equipment are required as a result of the injury.
In some cases, when liability is admitted, it may be appropriate to make interim payments on account of the full award. For instance, the claimant may be undergoing a course of medical treatment. This will fall into the special damages category and payment can therefore be made before the final claim is settled.
Question
Describe the liability of a client who owns a leisure or sports centre to users of the center in a jurisdiction you are familiar with, as if to a colleague from a different legal jurisdiction.
Forming a contract
Basic principles
The basic principle of contract law in the English system arises from established custom in rules and are fundamental to all areas of law in practice. Reference is made to this principle in drafting and interpreting the provision of any legal agreement, such as a lease, a loan agreement, a sales agreement, consultancy agreement, a hire purchase agreement, a hire contract, or service contract, etc. The principles of contract law will determine whether and at what point a binding agreement has been made between the parties concerned.
Formation of a contract
Formation of a contract requires the presence of four essential elements:
1. Offer
The contract must contain the basic terms of the agreement and be capable of acceptance without further negotiation. This does not mean that the initial communication between parties will in itself constitute an offer. For example, in an auction situation, the seller, known as the vendor, may make an invitation to treat - invite an offer - by setting out the condition of sale with the exception of the price. The offer is submitted by the purchasers, who offers to purchase at a specified price and will usually incorporate the terms of the invitation to treat into is his/her offer
2. Acceptance
There must be an unqualified agreement to proceed on the basis set out in the offer and it must be communicated to the offeror- the person making the offer - in order to be effective. If the offeree - the person receiving the offer - states that he or she accepts the offer subject to a contract, that is, some variation of the terms, then no contract is formed. This would be a qualified acceptance, which constitutes a counter offer.
Issues may arise as to whether the acceptance has been communicated. Two rules determine this:
· The reception rule applies to instantaneous forms of communication, for example telephone calls. The contract is said to be formed when the acceptance is received by the offeror.
· The postal acceptance rule, where there is a delay between the communication being sent and deceived, for example by post. The contract is formed when the acceptance is signed by the offeree.
To avoid uncertainty, the offeror may specify the method and timing of acceptance. Agreement on essential terms, for example price and delivery, must be certain and not vague.
3. Consideration
for a contract to be enforceable something of value must be given, for example a price, even if it is of nominal value, say £1.
4. Intention
it is assumed that contracting parties intend to create legal relations, particularly in commercial circumstances. This is, however, or rebuttal presumption – an assumption that can be contradicted - if there is contrary evidence.
Question
What are the basic elements of a contract in a jurisdiction you are familiar with?
Forming a contract 2
Form of contract
A binding contract must be:
· In the form required by the law.
· between parties with the capacity to contract - that is, legally capable to contract - or made by agents or representatives of the contracting parties with the authority to act.
It should be:
Enforceable in the event that one of the contracting parties fails to perform the contract.
· Made in writing.
· Made orally.
· implied from conduct, that is, by the behavior of the contracting parties.
However, the law does require that some agreements are made in writing. This is usually because registration is required for the agreement to be effective, and the relevant registry requires a written agreement. Examples of agreements to be made in writing include:
· Contracts for the sale of land
· contracts of guarantee
· contracts for transfer of Shares
· contracts which must be made by deed, for example a lease for more than three years.
A simple contract requires consideration - the price in exchange for a promise to do something - and becomes effective on execution, generally when it is signed. In contrast, oh contract by deed does not require consideration. A deed has different formal execution requirements depending on the contracting parties. For example, a deed may need to be affixed with a seal - a printed company stamp -if one party limited company. Common law requires that a deed is delivered. This determines the date from which the parties are bound. It must be clear one on the face of a deed that it is executed by the parties as a deed. Deeds may contain standard worrying about execution, for example, this document is executed as a deed and is delivered, and they had effect and that did return at the beginning of it.
Void or voidable or unenforceable contracts
Sometimes a contract may be effective and may consequently be void or vegetable or unenforceable.
A contract may be void - that is, no contract exists – if one, or both of the parties is not recognized in law as having legal capacity to consent to a contract, For example minors - young people under 18 – or persons with certified mental incapacity.
A contract is voidable, that is, it may be avoided, or cancelled, by one of the parties if there is some defect in its formation. For example, if the contract for the sale of land is not in writing, the parties can either ignore the defect and treat the contract as fully binding, or one of the parties can use the defect as a means for setting the contract aside.
Some contracts may be neither by it nor voidable but cannot be enforced in a court of law, for example payment of a gambling debt. Lapse of time may render a contract unenforceable. The limitation period or legal action brought under a deed is usually 12 years from the date of occurrence of the cause of action. Any action on a simple contract is barred from being raised after six years.
Question
What agreements must be made in writing in a jurisdiction you are familiar with? What sort of problems can arise? How are they dealt with?
What is a contract?
According to Contract Act 2056, “contract is an agreement enforceable by law concluded between two or more parties to do or not to do something.” Thus, the contract has two major elements:
i. it is an agreement concluded between two or more parties, to do or not to do something
ii. it is enforceable by law,
Express and implied terms
Express terms
Express terms are set out and stipulated expressly in the contract.
For example: the seller will within a period of six months from the date of delivery of goods, where goods which are proved to the reasonable satisfaction of both parties to be damaged or defective or not to comply with the agreed specification due to defects in materials or workmanship or to faulty design, or repair or at its sole discretion replace, such goods, subject to the following conditions:
A condition is an essential term of the contract. If a condition is not performed, it may constitute a substantial breach of contract and allow the other party to repudiate the contract, that is, treat the contract is discharged or terminated. it may also give rise to a claim for damages. If all the conditions are performed, the contract is performed.
A warranty is a term which is secondary to the main purpose of the contract. A breach of warranty does not in itself permit the other party to treat the contract as discharged, Although it may allow the party to sue for damages in the event that losses suffered. When deciding whether a party is entitled to repudiate a contract, courts may try to determine the intentions of the parties with regard to the terms. For example, the courts might look at the commercial importance of a term in relation to a particular trade and examine the seriousness of the consequences of a breach. If statements made by parties before a contract is made are not intended to be legally binding, for example the stated age of an object offered for sale, they are usually known as representations. If a representation letter turns out to be false, this cannot give rise to a breach of contract but instead to a possible action for misrepresentation.
Implied terms
implied Terms are not made expressed within the contract but maybe implied into the contract in the following ways:
by custom: a term can only be implied into a contract by custom if there is no express term to the contrary. These may be terms which are customary in the market in which the contract is made or have been in previous dealings between the parties.
by statute: various statutes implied terms into different specific contracts. For example, the condition that employment contracts will be automatically transferred is implied under the statute in the contract for the sale of a business. In a sale of goods contract there are implied conditions that the seller has the right to sell, that the goods correspond with the description, are reasonably fit for the purpose, and are satisfactory quality. A contact for the lease of furnished flat automatically contains specific implied terms that the flat be reasonably fit for habitation.
by common law: by the intention of the parties, if it is a term which is necessary to make the contract work.
Question
What terms may be implied into contracts in a legal system you are familiar with? How do the courts interpret written contracts terms in the case of a dispute?
Exclusion, limitation, and standard clauses
Exclusion and limitation clauses
Commercial contracts may seek to exclude liability for specific categories of damage and to limit liability for breach of contract. For example:
The company will be under no liability for any defect arising or introduced by a buyer in the course of storage or handling of the products where that buyer acts as agent or distributor of the company's products.
The company shall not be liable whatsoever for any consequential or indirect loss suffered by the buyer whether this loss arises from breach of duty in contract or tort or in any other way including loss arising from the company's negligence. Non exhaustive illustration of consequential or indirect loss would be loss of contracts; loss of profits; loss of goodwill; damage to property of the buyer or anyone else, and personal injury to the buyer or anyone else except so far as such injury is attributable to the company's negligence.
Parties assumed that the terms of an exclusion clause will be binding if they are contained within a signed written contract. However, legislation imposes limits on the use of unfair contract terms. One of the two parties may have greater bargaining power than the other or may try to bring conditions into the contract whose significance is not realized by the other party. Dispute arises around clauses which purport to, that is, intend to limit or exclude obligations attaching to parties to the contract. Courts are generally called upon to construe, or interpret, the meaning of such clauses.
Standard Clauses
Standard clauses, also known as boiler-plate clauses, Are generally towards the end of most agreements and frequently include the following:
· A force majeure, which aims to release parties from liability for named risk outside their reasonable control. Non-exhaustive examples are acts of God, fire, flood, earthquake, war, riot, explosion, breakdown of machinery, strikes and lockouts.
· A time of the essence clause, which makes it clear whether or not the time limits contained in a contract or essential conditions.
· An assignment clause, which sets out the parties’ rights to transfer or assign contractual rights to third parties and any need for prior written consent.
· A severance clause, which provides that the other parts of an agreement continue to be in force in the event that some of the provisions are held illegal or unenforceable.
· A choice of governing law and jurisdiction clause, which specifies the jurisdiction and law which will govern and construe the contract in the event of a dispute.
· A language clause, which specifies the language which will prevail if the contract is translated.
Question
How does the law regulate exclusion clauses in a jurisdiction you are familiar with? Compare the different types of contract terms in a legal system you know with those sit out here.
Privity of contract, discharge, and remedies
Privity of contract
The principle of privity of contract means that a third party can neither be bound by nor enforce a term of contract to which they are not a party, even though the contract was intended to confer a benefit on them. However, since the enactment of the contract act 1999, such a party may be able to enforce contractual rights depending on the circumstances. If appropriate, it is now usual for contracts to include a clause which provides that such rights are not to apply.
There are other ways in which a third party can be affected by the terms of a contract:
· A contract may be made by an agent on behalf of his principal. Such a contract may be enforced by and against the principal.
· It is for a contract to contain an express provision relating to assignment. The obligations under contract cannot be assigned, that is, transferred, without the consent of a party entitled to the benefit of such obligations.
· In the novation of a contract, a subsequent agreement between the original parties and or third party may have the effect of entirely replacing the original contract.
Discharge of contract
Parties may be released from their contractual obligations, that is, maybe discharged, by performance, by breach, by agreement, or by frustration.
If a contract is substantially performed, the terms are entirely carried out and there is no right to repudiate the contract, that is, to reject it. If a contract is partly performed, a breach of condition is committed. However, if the innocent party accepts the partial performance, a claim to remuneration may be raised in a court. If there is defective performance, for example a condition is breached, the innocent party may have the right to repudiate the contract and treat it as terminated once he or she has communicated acceptance of the breach of contract.
A contract may be discharged by agreement between the parties in a process known as accord and satisfaction. If it becomes impossible to perform, for example due to the non-occurrence of a particular event which forms the basis of the contract, or the death of a party, the contract is discharged by frustration.
Remedies for breach of contract
An award for damages – money claimed as compensation for loss – is the primary remedy for a party who suffers a breach of contract. In some circumstances, the courts may use their discretion to compel or defaulting party to perform his contractual obligations. This is known as a degree of specific performance. It may not be appropriate if the obligation is not sufficiently clearly defined, or if enforcement would require the continual supervision of the court over a long period of time. In other circumstances, the court may grant an injunction to restrain a party from breaking the contract. In certain circumstances, for example misrepresentation, parties may rescind, that is, cancel, a contract and by rescission (the act of cancelling an agreement) be restored to the same position they were in before the contract was made.
Question
How are contracts discharged in a jurisdiction you are familiar with?
