Student name : Nguyen thi hoai thuong Class : BTEC 23 Module : aspects of contract and negligence for business

Lecture : M !eff Lau Task 1 "n # $une 2%#3 & Ms 'aren (ng & the business manager of S)N*+TELL ,TE LTrecei.ed brochures from S(MSEN* ,TE LT- & ad.ertising the latest limited edition of iN"TE / smart phone for sale at 0#%% per set Ms (ng felt that it is good deal & so she sent an e1mail to S(MSEN* ,te on hehaft S)N*+TELL ,te stating & 2e are glad to place an order for #%% set & on 3%1day credit term3 "n 2 $un 2%#3 S(MSEN* pte ltd replied by e1mail that they could deli.er #%% set & on 4cash on deli.ery 4terms "n 3 $un 2%#3 & Ms (ng &sent out a letter on behalf of S)N*+TLL ,lt Ltd informing S(MSEN* ,tl Ltd that they 2ere agree to paying cash on deli.ery of the i"NE / smartphone 5 this letter reached S(MSEN* pte Ltd on 6 $une 2%#3 "n 7 $une 2%#3 S(MSEN* ,TE Ltd e1mailed S)N*+TELL ,te Ltd that stating that they 2ere unable to deli.er the i"NE / smartphone as they had run out of stoc8 5due to o.er2helming demand 1.1 In order to help SING & TELL Pte management team understand the case , explain the importance o the essential elements re!uired or the ormation o a "alid contract 9hat is contract : ( contract is an agreement bet2een t2o or more parties made into 2riting designed to protect each parties 5 "ne of the most essential re;uirement of a .alid contract is that it must be signed by the parties in.ol.ed5 (nd there <our Essential Elements of a Contract <our Essential Elements of a Contract (n agreement must contain four essential elements to be regarded as a contract5 )f any one of them is missing& the agreement 2ill not be legally binding5 "ffer There must be a definite& clearly stated offer to do something5 <or e=ample: ( ;uotation by sub1contractor to the main contractor and an offer to lease5 (n offer does not include ball par8 estimates& re;uests for proposals& e=pressions of interest& or letters of intent5 (n offer 2ill lapse: 2hen the time for acceptance e=pires> if the offer is 2ithdra2n before it is accepted> or

after a reasonable time in the circumstances )n.itation to treat (n in.itation to treat is a mere declaration of 2illingness to enter into negotiations> it is not an offer& and cannot be accepted so as to form a binding contract5 (n agreement is not created if there is an acceptance of the in.itation to treat5 (n in.itation to treat is part of the preliminaries of negotiation& 2hereas an offer is legally binding once accepted& sub$ect to compliance 2ith the terms of the offer5 <or e=ample: )n.itations to treat are ad.ertisements& price lists& circulars and catalogues5 (cceptance "nly 2hat is offered can be accepted5 This means that the offer must be accepted e=actly as offered 2ithout conditions5 )f any ne2 terms are suggested this is regarded as a counter offer 2hich can be accepted or re$ected5 There can be many offers and counter offers before there is an agreement5 )t is not important 2ho ma8es the final offer& it is the acceptance of that offer that brings the negotiations to an end by establishing the terms and conditions of the contract5 (cceptance can be gi.en .erbally& in 2riting& or inferred by action 2hich clearly indicates acceptance ?performance of the contract@5 )n any case& the acceptance must conform 2ith the method prescribed by the offerer for it to be effecti.e5 )ntention of legal conse;uences ( contract re;uires that the parties intend to enter into a legally binding agreement5 That is& the parties entering into the contract must intend to create legal relations and must understand that the agreement can be enforced by la25 The intention to create legal relations is presumed& so the contract doesnAt ha.e to e=pressly state that you understand and intend legal conse;uences to follo25 )f the parties to a contract decide not to be legally bound& this must be clearly stated in the contract for it not to be legally enforceable5 Consideration )n order for a contract to be binding it must be supported by .aluable consideration5 That is to say& one party promises to do something in return for a promise from the other party to pro.ide a benefit of .alue Consideration is 2hat each party gi.es to the other as the agreed price for the otherAs promises5 Bsually the consideration is the payment of money but it need not be> it can be anything of .alue including the promise not to do something& or to refrain from e=ercising some right5 The payment doesnAt need to be a fair payment5 The courts 2ill not inter.ene 2here one party has made a hard bargain unless fraud& duress or unconscionable conduct is in.ol.ed5 1.# In addition , $ou are re!uite to prepare a %rie presentation on the di erent t$pe o %usiness agreement , and discuss their impact respecti"el$

-)<<E ENT TC,E "< C"NT (CTS The .arious bases on 2hich the contracts can be classified are discussed belo2: Contracts on the Basis of Creation "n the basis of creation& the contracts may be classified as under: ?a@ E=press Contract E=press contract is one 2hich is made by 2ords spo8en or 2ritten5 E=ample : D says to C E9ill you buy my car for s #&%%&%%%:F C says to DF# am ready to buy your car for s #&%%&%%%5F )t is an e=press contract made orally5 ?b@ )mplied Contract : (n implied contract is one 2hich is made other2ise than by 2ords spo8en or 2ritten5 )t is inferred from the conduct of a person or the circumstances of the particular case5 E=ample : ( transport company runs buses on different routes to carry passengers5 This is an implied offer by transport company5 D hoards u bus5 This is an implied acceptance by D5 No2& there is an implied contract and D is bound to pay the prescribed fare5

?c@ Tacit Contract : ( tacit contract is one 2hich is inferred from the conduct of parties5 E=ample : 9ithdra2ing cash through (TM

Contracts on the Basis of E=ecution "n the basis of e=ecution& the contracts may be classified as under : ?a@ E=ecuted Contract )t is a contract 2here both the parties to the contract ha.e performed their respecti.e obligations under the contract5 E=ample: D offers to sell his car to C for s #&%%&%%%5 C accepts D offer D deli.ers the car to C and C pays 's #&%%&%%% to D5 )t is an e=ecuted contract5 ?b@ E=ecutory Contract )t is a contract 2here both the parties to the contract ha.e still to perform their respecti.e obligations5

E=ample: D offers to sell his car to C for s5 #&%%&%%%5 C accepts D3s offer5 )f the car has not yet been deli.ered by D and the price has not yet been paid by C& it is an e=ecutory contract5 ?c@ ,artly E=ecuted and ,artly E=ecutory Contract )t is a contract 2here one of the parties to the contract has performed his obligation and the other party has still to perform his obligation5 E=ample: D offers to sell his car to C for s5 #&%%&%%% on a credit of one month5 C accepts D3s offer5 D deli.ers the car to C5 Gere& the contract is e=ecuted as to D and e=ecutory as to C5 ?d@ Bnilateral Contract (n Bnilateral contract is one sided contract in 2hich only one party has to perform his promise or obligation to do or forebear5 ?e@ Bilateral Contract ( Bilateral Contract is one in 2hich both the parties ha.e to perform their respecti.e promises or obligations to do or forebear5

Contracts on the Basis on Enforceability "n the basis of enforceability& the contracts may be classified as under : ?a@ Halid Contract : ( contract 2hich satisfies all the condition& prescribed by la2 is a .alid contract5 E=ample: D offers to marry C5 C accepts D3s offer5 This is a .alid contract5 ?b@ Hoid Contract : Section 2?$@ of the )ndian Contract (ct& #IJ2& E( contract 2hich ceases to be enforceable by la2 becomes .oid 2hen it ceases to be enforceable5F )n other 2ords& a .oid contract is a contract 2hich 2as .alid 2hen entered into but 2hich subse;uently became .oid due to impossibility of performance& change of la2 or some other reason5 E=ample: D offers to marry C5 C accepts D3s offer5 Later on C dies5 This contract 2as .alid at the time of its formation but became .oid on the death of C5 ?c@ Hoid (greement (ccording to Section 2?g@& E(n agreement not enforceable by la2 is said to be .oid5F Such agreements are .oid1ab1initio 2hich means that they are unenforceable right from the time they are made5 E=ample: (n agreement 2ith a minor or a person of unsound mind is .oid1ab1initio because a minor or a person of unsound mind is incompetent to contract5 Thus& a .oid agreement ne.er matures into a contract5

?d@ Hoidable Contract (ccording to Section 2?i@ of the )ndian Contract (ct& #IJ2& Ean agreement 2hich is enforceable by la2 at the option of one or more of the parties thereon but not at the option of the other or othersF& is a .oidable contract5 )n other 2ords& E( .oidable contract is one 2hich can be set aside or repudiated or a.oided at the option of the aggrie.ed party5F Bntil the contract is set aside or repudiated by the aggrie.ed party& it remains a .alid contract5 <or e=ample& a contract is treated as .oidable at the option of the party 2hose consent has been obtained by coercion or undue influence or fraud or misrepresentation5 E=ample: D threatens to 8ill C if he does not sell his house for s #&%%&%%% to D5 C sells his house to D and recei.es payment5 Gere& C3s consent has been obtained by coercion and hence this contract is .oidable at the option of C& the aggrie.ed party5 )f C decides to a.oid the contract& he 2ill ha.e to return s #&%%&%%% 2hich he had recei.ed from D5 )f C does not e=ercise his option to repudiate the contract 2ithin a reasonable time and in the meantime& K purchases that house from D for s #&%%&%%% in good faith& C cannot repudiate the contract5 ?e@ )llegal (greement (n illegal agreement is one the ob$ect of 2hich is unla2ful5 Such an agreement cannot be enforced by la25 Thus& illegal agreements are al2ays .oid ab1initio ?i5e5 .oid from the .ery beginning@5 E=ample: D agrees to pay C s #&%%&%%% if C 8ills K5 C 8ills K and claims s #&%%&%%%5 C cannot reco.er from D because the agreement bet2een D and C is illegal as its ob$ect is unla2ful5 ?f@ Bnenforceable Contract )t is a contract 2hich is actually .alid but cannot be enforced because of some technical defect ?such not in 2riting& under stamped@5 Such contracts can be enforced if the technical defect in.ol.ed is remo.ed5 E=ample: (n oral agreement for arbitration is unenforceable because the la2 re;uires that an arbitration agreement must be in 2riting5 )f the oral agreement for arbitration is reduced to 2rit it 2ill become enforceable5 1.& 'ith re erence to the stated case , $ou are tasked to anal$(e the term in contracts 'ith re erence to their meaning and a ect . discuss 'hether there is a %inding contract %et'een S)*SENG Pte and LTd and SING&TELL Pte Ltd $ou ha"e to highlight the concept o o er and acceptance postal rule, capacit$ o contract , and +or counter,o er to explain the case

"n # $une 2%#3 & Ms 'aren (ng & the business manager of S)N*+TELL ,TE LTrecei.ed brochures from S(MSEN* ,TE LT- & ad.ertising the latest limited edition of iN"TE / smart phone for sale at 0#%% per set ? that is in.itation to treat no contract yet @

Ms (ng felt that it is good deal& so she sent an e1mail to S(MSEN* ,te on behalf of S)N*+TELL ,te stating& 2e are glad to place an order for #%% set& on 3%1day credit term35 This is an offer& because they are indicating the conditions and descriptions of the sales5 "n 2 $un 2%#3 S(MSEN* ,te Ltd replied by e1mail that they could deli.er #%% set& on 4cash on deli.ery 4terms5 This is counter Loffer because they ha.e proposed a ne2 condition for the sales& 2hich is Cash on -eli.ery5 "n 3 $un 2%#3 & Ms (ng &sent out a letter on behalf of S)N*+TeLL ,lt Ltd informing S(MSEN* ,tl Ltd that they agreed to paying cash on deli.ery of the i"NE / smartphone 5 this letter reached S(MSEN* pte Ltd on 6 $une 2%#3 )f according to ,ostal rule& this 2ill e;ual to an acceptance by post because according to ,ostal ule& the acceptance is completed the moment the letter is being posted5 "n 7 $une 2%#3 S(MSEN* ,TE Ltd e1mailed S)N*+TELL ,te Ltd that stating that they 2ere unable to deli.er the i"NE / smartphone as they had run out of stoc8 5due to o.er2helming demand 5 )f according to ,ostal ule& S(MSEN* ,TE LT- 2ill ha.e to fulfill the contract as the Contract has been accepted as soon as the letter is being ,osted5 Go2e.er& they can dispute the acceptance because there are no indication of acceptance must be completed by ,ost5 Moreo.er& during the negotiation process& email has been the default communication5

#.1 )nal$(e the rights and o%ligations o *r -ustin .lur%lur , super ast car rentals Pte Ltd and reall$ asts car Pte Ltd in respect o the rented %ridal car . 'hat are the speci ic contract terms 'ith re erence to their importance and impact it these term are %roken/ a. representation and misrepresentation 0 term 1 M( representation is a statement of fact made by one party to the contract ?the representor@ to the other ?the representee@ 2hich& 2hile not forming a term of the contract& is yet one of the reasons that induces the representee to enter into the contract5 ( misrepresentation is simply a representation that is untrue5M GalsburyAs La2s of England has a 2hole boo8 on Misrepresentation5 )t describes misrepresentation as follo2s: M( misrepresentation is a positi.e statement of fact& 2hich is made or adopted by a party to a contract and is untrue5 )t may be made fraudulently& carelessly or innocently5 Misrepresentation M9here one person ?the representor@ ma8es a misrepresentation to another ?the representee@ 2hich has the ob$ect and result of inducing the representee to enter into a contract 555 2ith him& the representee may generally elect to regard the contract as rescinded5 M)n these circumstances& he may in.o8e the aid of the Court& 2hich may confirm by declaration his entitlement to so regard the contract& and grant him other relief as may flo2 directly from the fact of rescission& for e=ample& the return of money paid or chattels deli.ered by him pursuant to the terms of the contract5 M(lternati.ely& he may set up his entitlement to regard the contract as rescinded by 2ay of a defence in any proceedings brought against him in order to enforce its terms5M (lmost since time immemorial& misrepresentation often lur8s 2hen goods are sold by asserti.e salesmen& al2ays ready and prepared to trump their 2ares& and close the deal> innocent e=aggeration or contractual misrepresentation: Because of that constant pressure& and the ine;uities that ha.e& from time to time& resulted& the common la2 and e;uity ha.e been smitten 2ith misrepresentation resulting in a comple= set of rules to apply in any attempt to determine in each indi.idual case& 2hether grounds for rescission e=ists or not5

"ne of the many detours of the la2 in this area is a class of contracts in 2hich the courts 2ill loo8 more harshly upon any misrepresentation 1 merely because of the nature of the contract or the po2er1relationship bet2een the parties to the contract to 2hich& lea.ing the la2 e.en more remote to the non1la2yer& they ha.e gi.en a Latin name: uberrmae fidei5 Cheshire& <ifoot + <urmstonAs La2 of Contract& in politically1correct terms& describes the present state of the la2 of misrepresentation in the conte=t of contracts as an Mamalgam of common la2 and e;uityM5 Bp to #N/3& the la2 in some $urisdictions did not help out those 2ho had been .ictims of 2hat 2as called innocent misrepresentation& presumably 2riting it off as $ust a feature of salesmanship5 )n an attempt to contain $udicial acti.ism& some $urisdictions ha.e enacted statutes such as EnglandAs Misrepresentation (ct of #N/J 2hich has& at O# and 2& codified the la2 ?emphasis added@: M9here a person has entered into a contract after a misrepresentation has been made to him& and the misrepresentation has become a term of the contract> or the contract has been performed> or both& then& if other2ise he 2ould be entitled to rescind the contract 2ithout alleging fraud& he shall be so entitled& sub$ect to the pro.isions of this (ct& not2ithstanding the matters mentioned ?abo.e@5 M9here a person has entered into a contract after a misrepresentation has been made to him by another party thereto and as a result thereof he has suffered loss& then& if the person ma8ing the misrepresentation 2ould be liable to damages in respect thereof had the misrepresentation been made fraudulently& that person shall be so liable not2ithstanding that the misrepresentation 2as not made fraudulently& unless he pro.es that he had reasonable ground to belie.e and did belie.e up to the time the contract 2as made the facts represented 2ere true5 M9here a person has entered into a contract after a misrepresentation has been made to him other2ise than fraudulently& and he 2ould be entitled& by reason of the misrepresentation& to rescind the contract& then& if it is claimed& in any proceedings arising out of the contract& that the contract ought to be or has been rescinded& the court or arbitrator may declare the contract subsisting and a2ard damages in lieu of rescission& if of opinion that it 2ould be e;uitable to do so& ha.ing regard to the nature of the misrepresentation and the loss that 2ould be caused by it if the contract 2ere upheld& as 2ell as to the loss that rescission 2ould cause to the other party5 http:PP2225duhaime5orgPLegal-ictionaryPMPMisrepresentation5asp= %. Importance o Terms, conditions and 'arranties Today3s ;uality systems mandate contract re.ie2 as an integral part of an enterprise3s critical business system5 Terms and conditions are seldom gi.en the critical e=amination that they deser.e5 9hile they are often thought of as mere contingency

details& the day may come 2hen the contingency has arri.ed5 Go2 has your organiQation implemented contract re.ie2: 9arranty e=clusions& remedy limitations and indemnification language are only a fe2 possible points of concern5 (fter a contract is formedRregardless of 2hether itAs 2ritten or oralRa Ebattle of the formsF can ensue 2hen t2o companies trade purchase orders and sales proposals or confirmations 2ith preprinted terms and conditions5 Each companyAs form 2ill contain terms and conditions& many of 2hich are contradictory to those of the other party5 (n offer to ma8e a contract can be accepted by any method that is reasonable under the circumstances5 (n offer to buy goods can be accepted by a prompt promise to ship or by the current shipment of conforming goods5 (ny acceptance or 2ritten confirmation that indicates an intention to enter into a contract 2ill be effecti.e as an acceptance& as long as it is sent 2ithin reasonable time5 This is true e.en if the acceptance states different terms for the contract unless the acceptance is e=pressly conditional on assent to the acceptance terms5 )f different terms and conditions are sent in return& additional terms 2ill be added to the contract unless they ha.e a material ad.erse affect on it5 )n the e.ent of a conflict& both terms 2ill be eliminated and the terms of the BCC 2ill be applied5 )f you are a seller& here are some strategies to help you a.oid the battle of the forms: )nsist on 2ritten agreements& either in the form of a formal contract or a purchase order5 Bse a process that ensures that the other party ac8no2ledges in 2riting that your terms and conditions supersede their terms and conditions5 )f you are the buyer& use a process that ensures that you 8no2 2hat terms and conditions are go.erning your agreement to buy5 The BCC is still a rele.ant source for understanding and resol.ing sales contract la25 Cour companyAs contract re.ie2 process is an important business practice designed to help 8eep you from ha.ing to learn too much about the BCC5 EConditionsF are terms that the parties consider so important that it must be performed5 )f a party fails to perform a condition& the other party is entitled to treat the contract as being at an end5 "nce the breach of a condition has been established& the innocent party may choose to either: Terminate the contract and sue for damages& or (ffirm the contract ?i5e5 the innocent party continues to perform its contractual obligations@& sue for damages and pursue other remedies li8e in$unctions or specific performance5

<or instance& in a contract for the repair of a computer& a condition could be e=pressly stipulated by the parties such that the repairer has to use safe parts to replace the faulty ones5 )f the repairer utilises subpar replacement parts& the customer may choose to regard this as a breach of an essential condition and sue the seller for damages5 The customer may e.en choose to terminate the contract and loo8 for another repairer5 E9arrantiesF& on the other hand& do not refer to 2arranties that come together 2ith the purchase of certain items li8e mobile phones or electronic goods5 )n legal terminology& the 2ord E2arrantyF is used to identify a less important term of the contract5 )f a 2arranty is breached& the innocent party may sue for damages for the loss suffered& but he is not allo2ed to terminate the contract5 )f he does so& he may instead find himself being sued in turn for un$ustified contract termination .reach o conditions
Breach of a condition constitutes breach of the contract, and entitles the aggrieved party to call for setting aside (rescission) of the contract, and to claim for damages. A minor term (incidental point) of the contract is called a warranty, breach of which may call for damages as compensation but not rescission of the contract. See also condition precedent, condition subsequent, innominate term, and intermediate term.

c. %reach o 'arranties ( breach of 2arranty in.ol.es a bro8en promise about a product made by either a manufacturer or a seller5 The term also co.ers a failure of a statement or agreement by a seller of property 2hich is a part of the contract of sale& 2hen the truth of the statement is necessary to the .alidity of the contract5 9arranties are also e=press or implied5 (n e=press 2arranty is a particular stipulation introduced into the 2ritten contract& by the agreement of the parties> an implied 2arranty is a guarantee imposed by la2 in a sale5 E.en though the seller may not ma8e any e=plicit promises& the buyer still gets some protection5

Breaches of contractual agreements are bad for business and damage professional and public opinion of the guilty party. Every breach, regardless of its size, creates the potential right for the injured party to claim damages. A breach of contract is a more severe failing than breach of warranty. In cases where breach of contract can be proven, the injured parties may repudiate the entire contract and also claim for damages. In cases where breach of warranty is proven, the injured party may only seek damages and cannot repudiate the contract as a whole.

)nal$sis o 2ase <or !ustin& the description of the Car& is the e=pressed condition of the contract 2ith Super Cars and the ability of the Car to be dri.en& especially a <errari is an implied condition of the contract5 Therefore& the core of the contract has been breach5 ( 2arranty of the contract 2ill be minor issues of the car> for e=ample& air1conditioning or the audio is not 2or8ing5 #.# a. Expressed terms and Implied Terms Terms are the contents or sub$ect matter of a contract5 They are binding obligations 2hich the parties agree to perform in order for the contract to be complete5 E=press termsThe terms that the parties specifically and mutually agree to are 8no2n as e=press terms and they may be 2ritten or oral5 )f they are oral then the courts 2ill ha.e to determine 2hat may ha.e been said5 )mplied termsare not terms that the parties ha.e agreed on but are terms that are part of the contract& because they are implied from a number of sources : local custom and practices& the courts ?common la2@ and legislation5 )mplied Term . E=press Term)f there is an implied term 2hich conflicts 2ith an e=press term& the e=press term 2ill normally o.erride the implied term5 Go2e.er& if the term is implied by statute& the implied term 2ill o.erride the e=press term agreed by the parties5 Terms implied by customThese are terms that are implied to e=ist in contracts because of a local custom that e=ists and is generally regarded as being associated 2ith such contracts5 Such custom and practice needs to be established as reasonable& certain and notorious5 in Gutton . 9arren #I3/a term that 2as not e=pressly stated in the contract 2as held to be implied to e=ist because of the 2ell 8no2n agricultural custom in the area5 Terms implied by legislationTerms are included and implied into contracts bet2een parties by .irtue of legislation5 <or e=ample& Employment ights ?N)@ "rder #NN/)n an employment contract legislation implies terms relating to minimum pay& holidays& dismissals& protecti.e lea.e& notice etc5 Sometimes parties may ha.e the option to contract out of the statutory terms so that they are not sub$ect to the terms implied by legislation5 Sale of *oods (ct #NJN5 Go2e.er& many statutory terms are implied into contracts 2hich do not allo2 the parties to contract out of them5 S5*5(5 #NJN implies terms regarding consumer protection into all sale of goods contracts and these terms cannot be e=cluded in any consumer contract5

Terms implied by the courtsThe courts may determine that the parties intended a term to be included in the contract based on the facts& e.en if it 2as not specifically e=pressed in the contract5The courts may also imply a term in the contract if they consider that the la2 implies such a term into the contract based on common la2 decisions5 )n The Moorcoc8 #IINthe o2ners of a ship entered into a contract 2ith the 2harf operators to ground their ship at the 2harf5 The ship suffered damage5The ship o2ners sued for breach of contract and the 2harf operators argued that no term of the contract had been breached5 GeldThe Court of (ppeal held that there 2as an implied term in the contract that reasonable care 2ould be ta8en by the 2harf operators to enable the ship to moor safely5 (lso& in Scally . Southern Gealth and Social Ser.ices Board ?Northern )reland@ #NN2the court ruled that defendants should ha.e ta8en reasonable steps to inform a doctor of his ne2 pension rights5 (lthough the contract did not state that such steps should be ta8en& the court stated that it could be implied in la2 http:PP;uiQlet5comP##J3NJI#Pcontract1la21e=press1and1implied1terms1flash1cardsP ? cai tren 8 duoc co the dung thu cai duoi http:PPla2e=ams5comPimplied1contracts@ %. 3hat is standard orm contract, its ad"antages and disad"antages ( standard1form contract is other2ise 8no2n as standardiQed contract5 Standard1form contract is usually a preprinted contract containing set clauses5 Such contract is mostly used by a business or 2ithin a particular industry by ma8ing slight additions or modifications in order to meet the specific situation5 Since a standard1form contract fa.ors the drafting party& they can amount to adhesion contracts5 Bnforeseeable contingencies affecting performance& such as stri8es& fire& and transportation difficulties can be ta8en care of 2ith the help of standard1form contract5 Some ad"antages and disad"antages are as %elo' (d.antages Sa.e Time Sa.e time by using a standard form contract in your ne=t business transaction5 ,ull out a preprinted contract and fill in the blan8s5 Cou can use this for real estate transactions& such as a rental agreement& 2here both parties agree on the basics of the contract and most of the terms5 <ill in the length of the rental& the amount of the rent& and ha.e both parties sign for a .alid standard contract5 Ease of Bse ,urchase a standard form contract normally used in your business5 <ind them at a stationary stores or office supply stores5 Copy the standard form contract and file the copies to ha.e them a.ailable each time you need them5 Consider a soft2are program 2hich contains the standard form contract 2ith fillable forms5 *i.e your standard form contract a more professional loo8 by inserting the names and addresses of the parties& as 2ell as the terms directly into the contract before it is printed5

reduction negotiating educe time you may spend negotiating each of the terms of the standard form contract5 -etermine 2hich terms are necessary for a smooth business transaction and concentrate your negotiation on those terms5 Cross out the terms 2hich are inapplicable and 2rite in other applicable terms not co.ered in the standard form5 e.ie2 terms such as arbitration or a.ailability of attorney fees for dispute clauses& application of state la2s clauses& and termination clauses to determine if these terms are acceptable5 Eliminate (ttorney <ees Cou can eliminate attorney fees 2ith a standard form contract5 emo.e the need to ha.e the attorney negotiate the contract& 2rite the contract& and re.ie2 the contract5 Benefit 2ith additional money in your poc8et by using a standard contract to complete your business transaction5 -isad.antages Boilerplate Boilerplate usually is found at the end of a contract5 This is standardiQed language that most contracts ha.e5 Many people do not e.en read this section& considering it to be $argon5 The problem is not usually 2hat the boilerplate puts in but 2hat it lea.es out5 <or e=ample& if the person issuing the contract has deleted the part that says the loser in litigation 2ill pay the 2innerAs attorney fees& you could find yourself at a disad.antage e.en if you 2in a dispute5 (nother e=ample of problems 2ith boilerplate is the section that says disputes 2ill be resol.ed by arbitration instead of a la2suit5 )f you 2ant to reser.e the right to sue& as8 that this boilerplate section be remo.ed5 ead all boilerplate painsta8ingly to 2atch for sections that you do not agree 2ith5 ,rice <i=ing "ne of the main problems that arises in legal actions regarding standardiQed contracts is price fi=ing5 )f a .endor offers you a standard contract 2ith the prices for products printed as part of the te=t& you could be a .ictim of price fi=ing5 ( standard contract 2ould lea.e the price blan8& sub$ect to negotiations5 Cou might not be in a position to as8 for fa.orable pricing& but you can as8 that a phrase be added that allo2s you to renegotiate price at a future date5 Some trade associations ha.e been found guilty of price fi=ing by issuing standardiQed contracts that all .endors in that association use5 )f prices are part of the standardiQation& that is price fi=ing5 Language ,roblems The la2 often hinges on language5 9ords ha.e specific meanings in contracts& and though your eye might gloss o.er 2ords that sound right& you must be a2are that a simple 2ord change can alter your legal status5 <or e=ample& use of the 2ord MshallM has specific connotations5 )f a contract says that you shall do something that means you are obligated to perform that action5 )t is legally binding language5 )f this 2ord is used

regarding an action that you feel you should not be obligated to perform& as8 that it be changed to Mmay5M <a.oring "ne ,arty 9hen you are told that a contract is standard& as8 2hose standard contract it is5 The 2ord MstandardM might sound li8e a group of attorneys some2here agreed this is 2hat a contract should say& but that is ne.er the case5 The standardiQation could ha.e been done on the part of the company issuing the contract5 )t could be its standard contract5 (s such& it could fa.or the company5 Cou ha.e a right to negotiate your o2n fa.orable terms5 The moment you hear that a company has gi.en you a standard contract& start reading the fine print to find areas that put you at a disad.antage5 #.& a. exemption clauses, ( party to a contract may include a term in a contract to e=clude or limit hisPher liability in the e.ent of a breach of contract or in any specified circumstances5 E=emption clause see8s to restrict the liabilities that may arise from the legal relation5 <or e=ample an e=emption clause can be included as E,arty ( 2ill only accept liability up to the amount of /% dollars5F E=emption clause is generally included in a contract to protect the party drafting the contract from being sued by the other party for damages& negligence or other losses5 E=emption clauses can be used by the parties to allocate ris8 bet2een them5 E=emption clauses can be split into e=clusion clause and limitation clause5 E=clusion clauses e=cludes liability completely for specified outcomes5 Limitation clauses limits a ma=imum on the amount of damages the party may ha.e to pay if there is a failure of some part of the contract5 Courts generally interpret e=emption clauses narro2ly ad$usting it to reasonable circumstances5 )f the court thin8s that the e=emption clause used in the contract is unreasonable& court can declare it as .oid5 (s a contract cannot be made unilaterally& only reasonable restrictions can be brought by e=emption clause5 http:PPdefinitions5uslegal5comPePe=emption1clauseP %. airness o exemption clause and un air contract term act. <airness in Contracts 9hen loo8ing at contracts& the courts 2ill usually ta8e into account the fairness 2ithin the contract 2hen considering liability5 )n the case of *reen . Cade ?#NJI@& the sellers had sold potato seeds 2hich 2ere infected 2ith a .irus& and as a result& the buyers had endured a loss of profit5 The courts had decided that the sellers did not gi.e any oral information to the buyers that they 2ere different from the original bought5 The sellers had stipulated that there 2as no complaint about the seeds 2ithin the re;uired three days of deli.ery5 Go2e.er& it 2as decided that the buyers could not ha.e 8no2n the presence of the .irus in the seeds 2ithin three days of it being deli.ered5 Therefore& the defence that 2as claimed by the sellers 2as that no

complaint 2as made 2ithin the time stated& and this 2ould not ha.e been fair to the buyers5 (nother case of St (lbans City and -C . )nternational Computers ?#NN7@& the court decided that there 2as a breach of contract by the defendants ?)nternational Computers@& that there 2as negligence on the part of the defendants& and the clause 2as seen as unreasonable5 )n the case of ".erland Shoes Ltd . Schen8ers ?#NNI@& the re;uirements under the Bnfair Contract Terms (ct #NJJ had been fulfilled5 This 2as appealed by the defendants> the court decided the defendants could not claim that the clause 2as unfair or unreasonable5 )n the case of *eorge Mitchell . <inney Loc8 Seeds ?#NI3@& the plaintiffs ?*eorge Mitchell@ claimed that seeds 2ere not the cabbage seeds that 2ere ordered because they did not ha.e commercial .alue5 The plaintiff endured a financial loss5 The court a2arded the plaintiff& and decided that limiting liability did not apply in this contract5 The defendants appealed& ho2e.er& the court dismissed the appeal& deciding that the defendants liability 2as not limited due to 4conditions3& and that breach of contract could not be due to conditions& 2ithout the defendants negligence5 The court decided that it 2ould not be fair to rely on 4conditions3 2hen concerned in the seed business& and that defendants could pro.ide guarantee against crop damage& 2ithout increasing price of seeds& and that it 2ould not be fair or reasonable to depend on 4conditions3 that 2ere not enforceable5 The Bnfair Contract Terms (ct #NNJ This act outlines rules on liability and e=emption clauses5 Section #?3@ of the act states the rules surrounding liability in business5 The act states that the liability 2ill be present as a result of acti.ities during business or from business premises5 Section #2 outlines that a person becomes the consumer 2hen that person is not part of the business5 Section 2?#@ states that personal in$ury or death that results from negligence in a contract cannot e=clude or restrict liability5 Section 2?2@ states that if it is fair& then a contract can e=clude or restrict other liability as result of negligence5 The Bnfair Terms in Consumer Contracts (ct #NNN This act states that a contract is unfair if there is 4significant imbalance3 in the contract to the disad.antage of the consumer5 Section 6?#@ states: 4( contractual term 2hich has not been indi.idually negotiated shall be regarded as unfair if& contrary to the re;uirement of good faith& it causes a significant imbalance in the partiesA rights and obligations arising under the contract& to the detriment of the consumer53 http:PP2225inbrief5co5u8Pcontract1la2Pe=emption1clauses1in1contract5htm ? .i du o day http:PPboo8s5google5com5.nPboo8s: idSTflM2mTM**oC+pgS,(#/3+lpgS,(#/3+d;SfairnessUofUe=emptionUclauseUan dUunfairUcontractUtermUact+sourceSbl+otsSL/6"./G'-!+sigSaD.,!SeGb;<T#2rL1 stIs9<%T 7+hlS.i+saSD+eiS2g=uB.JbE)"*rTeh$C*(CT+.edS%C<ET/(E2BT

V.Sonepage+;SfairnessW2%ofW2%e=emptionW2%clauseW2%andW2%unfairW2%contract W2%termW2%act+fSfalse@ c. Exemption o lia%ilities protected %$ Sales o Goods )ct 4 )ction to claim damages or un air contract terms Misrepresentation in English la2 is an area of English contract la2& 2hich allo2s a person to escape a contractual obligation or claim compensation for losses5 )f one person can sho2 that he entered an agreement because of another personAs false assurances& then the other person 2ill be unable to enforce the agreement against him& and may ha.e to pay him damages5 ( misrepresentation can be an outright lie ?fraud@& an unintentional but careless falsehood ?negligence@& or an innocent slip of the tongue5 )n most casesX#Y English la2 allo2s escape from the bargain 2hen a misrepresentation 2as made& because it holds that people should only assume contractual obligations 2hen they ha.e gi.en their true consent5 9hen a misrepresentation has been made and an agreement 2as ?or at any rate appeared to be@ concluded& the misrepresented ?the one told the lie& falsehood& etc5@ does not ha.e to bring a halt to the deal5 Misrepresentations generally do not render a contract .oid& as does the contractual doctrine of common mista8e or frustration5 )t merely means that a contract 2ill be .oid able at the option of the misrepresented5 This is because not all contracts entered into on the strength of misrepresentations 2ill al2ays be bad& and it is thought more $ust to gi.e the 2ronged party the choice about ho2 to proceed5 emedies are partly regulated by the Misrepresentation (ct #N/J5 English la2 generally allo2s a contract to be un2ound& so that both parties are put bac8 into the position before the agreement 2as made5 )t may be that the misrepresentation 2as incorporated into the contract as a term& so as an alternati.e one can claim the contract should subsist and claim for a loss in e=pectations5X2Y )n this case the misrepresented can e;ually sue for damages as if the misrepresentation had been true5 ( misrepresented may also sue for any losses 2hich resulted from her relying on the misrepresentation. -amages Monetary compensation that is a2arded by a court in a ci.il action to an indi.idual 2ho has been in$ured through the 2rongful conduct of another party5 -amages attempt to measure in financial terms the e=tent of harm a plaintiff has suffered because of a defendantAs actions5 -amages are distinguishable from costs& 2hich are the e=penses incurred as a result of bringing a la2suit and 2hich the court may order the losing party to pay5 -amages also differ from the .erdict& 2hich is the final decision issued by a $ury5 The purpose of damages is to restore an in$ured party to the position the party 2as in before being harmed5 (s a result& damages are generally regarded as remedial rather than pre.enti.e or puniti.e5 Go2e.er& ,uniti.e -amages may be a2arded for particular types of 2rongful conduct5 Before an indi.idual can reco.er damages& the in$ury suffered must

be one recogniQed by la2 as 2arranting redress& and must ha.e actually been sustained by the indi.idual5 The la2 recogniQes three ma$or categories of damages: Compensatory -amages& 2hich are intended to restore 2hat a plaintiff has lost as a result of a defendantAs 2rongful conduct> nominal damages& 2hich consist of a small sum a2arded to a plaintiff 2ho has suffered no substantial loss or in$ury but has ne.ertheless e=perienced an in.asion of rights> and puniti.e damages& 2hich are a2arded not to compensate a plaintiff for in$ury suffered but to penaliQe a defendant for particularly egregious& 2rongful conduct5 )n specific situations& t2o other forms of damages may be a2arded: treble and li;uidated5 Compensatory -amages 9ith respect to compensatory damages& a defendant is liable to a plaintiff for all the natural and direct conse;uences of the defendantAs 2rongful act5 emote conse;uences of a defendantAs act or omission cannot form the basis for an a2ard of compensatory damages5 Conse;uential damages& a type of compensatory damages& may be a2arded 2hen the loss suffered by a plaintiff is not caused directly or immediately by the 2rongful conduct of a defendant& but results from the defendantAs action instead5 <or e=ample& if a defendant carried a ladder and negligently 2al8ed into a plaintiff 2ho 2as a professional model& in$uring the plaintiffAs face& the plaintiff could reco.er conse;uential damages for the loss of income resulting from the in$ury5 These conse;uential damages are based on the resulting harm to the plaintiffAs career5 They are not based on the in$ury itself& 2hich 2as the direct result of the defendantAs conduct5 The measure of compensatory damages must be real and tangible& although it can be difficult to fi= the amount 2ith certainty& especially in cases in.ol.ing claims such as pain and suffering or emotional distress5 )n assessing the amount of compensatory damages to be a2arded& a trier of fact ?the $ury or& if no $ury e=ists& the $udge@ must e=ercise good $udgment and common sense& based on general e=perience and 8no2ledge of economics and social affairs5 9ithin these broad guidelines& the $ury or $udge has 2ide discretion to a2ard damages in 2hate.er amount is deemed appropriate& so long as the amount is supported by the e.idence in the case5 ( plaintiff can reco.er damages for a number of different in$uries suffered as a result of another personAs 2rongful conduct5 The plaintiff can reco.er for a physical impairment if it results directly from a harm caused by the defendant5 The $ury& in determining damages& considers the present as 2ell as long1range effects of the disease or in$ury on the physical 2ell1being of the plaintiff& 2ho must demonstrate the disability 2ith reasonable certainty5 Compensatory damages can be a2arded for mental impairment& such as a loss of memory or a reduction in intellectual capacity suffered as a result of a defendantAs 2rongful conduct5

( plaintiff may reco.er compensatory damages for both present and future physical pain and suffering5 Compensation for future pain is permitted 2hen there is a reasonable li8elihood that the plaintiff 2ill e=perience it> the plaintiff is not permitted to reco.er for future pain and suffering that is speculati.e5 The $ury has broad discretion to a2ard damages for pain and suffering& and its $udgment 2ill be o.erturned only if it appears that the $ury abused its discretion in reaching the decision5 Mental pain and suffering can be considered in assessing compensatory damages5 Mental pain and suffering includes fright& ner.ousness& grief& emotional trauma& an=iety& humiliation& and indignity5 Gistorically& a plaintiff could not reco.er damages for mental pain and suffering 2ithout an accompanying physical in$ury5 Today& most $urisdictions ha.e modified this rule& allo2ing reco.ery for mental anguish alone 2here the act precipitating the anguish 2as 2illful or intentional& or done 2ith e=treme care1lessness or rec8lessness5 "rdinarily& mental distress brought on by sympathy for the in$ury of another 2ill not 2arrant an a2ard of damages& although some $urisdictions may allo2 reco.ery if the in$ury 2as caused by the 2illful or malicious conduct of the defendant5 <or instance& if an indi.idual 2rongfully and intentionally in$ures a child in the presence of the childAs mother& and the mother suffers psychological trauma as a result& the defendant can be liable for the motherAs mental suffering5 )n some $urisdictions& a bystander can reco.er damages for mental distress caused by obser.ing an e.ent in 2hich another person negligently& but not intentionally& causes harm to a family member5 Compensatory damages of an economic nature may also be reco.ered by an in$ured party5 ( plaintiff may reco.er for loss of earnings resulting from an in$ury5 The measure of lost earnings is the amount of money that the plaintiff might reasonably ha.e earned by 2or8ing in her or his profession during the time the plaintiff 2as incapacitated because of the in$ury5 )n the case of a permanent disability& this amount can be determined by calculating the earnings that the in$ured party actually lost and multiplying that figure out to the age of retirementR2ith ad$ustments5 )f the amount of earnings actually lost cannot be determined 2ith certainty& as in the case of a salesperson paid by commission& the plaintiffAs a.erage earnings or general ;ualities and ;ualifications for the occupation in 2hich she or he has been employed are considered5 E.idence of past earnings can also be used to determine loss of future earnings5 (s a general rule& lost earnings that are speculati.e are not reco.erable& although each case must be e=amined indi.idually to determine 2hether damages can be established 2ith reasonable certainty5 <or e=ample& a plaintiff 2ho bought a restaurant immediately before suffering an in$ury could not reco.er damages for the profits he might ha.e made running it& because such profits 2ould be speculati.e5 ( plaintiff 2ho is unable to accept a promotion to another $ob because of an in$ury 2ould stand a better chance of reco.ering damages for loss of earnings& because the amount lost could be established 2ith more certainty5 )ndi.iduals in$ured by the 2rongful conduct of another may also reco.er damages for impairment of earning capacity& so long as that impairment is a direct and foreseeable conse;uence of a disabling in$ury of a permanent or lingering nature5 The amount of damages is determined by calculating the difference bet2een the amount of money the

in$ured person had the capacity to earn prior to the in$ury and the amount he or she is capable of earning after the in$ury& in .ie2 of his or her life e=pectancy5 Loss of profit is another element of compensatory damages& allo2ing an indi.idual to reco.er if such a loss can be established 2ith sufficient certainty and is a direct and probable result of the defendantAs 2rongful actions5 E=pected profits that are uncertain or contingent upon fluctuating conditions 2ould not be reco.erable& nor 2ould they be a2arded if no e.idence e=isted from 2hich they could be reasonably determined5 ( plaintiff can reco.er all reasonable and necessary e=penses brought about by an in$ury caused by the 2rongful acts of a defendant5 )n a contract action& for e=ample& the party 2ho has been in$ured by anotherAs breach can reco.er compensatory damages that include the reasonable e=penses that result from reliance on the contract& such as the cost of transporting perishable goods 2rongfully refused by the other contracting party5 )n other actions& e=penses a2arded as part of compensatory damages may include medical& nursing& and prescription drug costs> the costs of future medical treatment& if necessary> or the costs of restoring a damaged .ehicle and of renting another .ehicle 2hile repairs are performed5 )nterest can be a2arded to compensate an in$ured party for money 2rongfully 2ithheld from her or him& as 2hen an indi.idual defaults on an obligation to pay money o2ed under a contract5 )nterest is ordinarily a2arded from the date of default& 2hich is set by the time stated in the contract for payment& the date a demand for payment is made& or the date the la2suit alleging the breach of the contract is initiated5 http:PPlegal1dictionary5thefreedictionary5comPdamages )nal$sis o the 2ase (ssuming that the standard form contract is being used& the e=emption 2ill probably be one1sided to2ards the seller5 )n such cases the e=emption clause may not be fair to the buyer5 E=emption clause should not be used to omit the liabilities that form the condition or the core of the contract5 )n the case for !ustin& he need to 8no2 that the Sales of *oods (ct has pro.ision for the condition of sales5 #5 *oods must be of ;uality and fit for purpose5 Gis <errari 2ith eally <astQ has bro8en do2n mid12ay and this is mean the car is not of satisfactory ;uality5 25 *oods must meet the description5 Ge has as8ed for a <errari but 2as gi.en a Mercedes5 The goods that he recei.ed is not the same as the goods he has as8ed for5

)n conclusion& the e=emption clause is unfair to him because his basic rights are not being protected5 Therefore& he can .oid both contract and then as8 for compensation5