Law of Contract
Introduction
Contracts form a central component in enhancing how transactions between individuals and businesses established and executed by giving legal ground on which the parties to the contract can seek legal redress, for example, in the event of a breach of contract. A number of factors that include an offer, intention, acceptance, and consideration, must be present in order to establish legal relations (Jones, 2017, p. 190). Nevertheless, contracts may become void or voidable because of diverse vitiating factors. Among the notable vitiating factors include misrepresentation and mistake. Misrepresentation occurs when a party to a contract makes an untrue statement of fact during the process of negotiating a contract that influences one party’s decision to enter into a contract (Andrews, 2011, p.707). The English legal system has established a set of laws that parties to a contract can apply in the event of the contract being affected by vitiating factors (Stone, 2005, p512). This paper entails an analysis of the legal position that Gary’s Butchers and Tom’s Frozen Food Deliveries may consider in relation to the law of contract. The examination of the scenario is undertaken in relation to different Acts that include the Sales of Good Act, the Unfair Terms in Consumer Contract Regulation Act 1999, and the Misrepresentation Act 1967.
Analysis
Gary’s Butchers legal position
One of the legal issues evident from the case study entails misrepresentation. Gary’s Butchers should consider suing Tom’S Frozen Food Deliveries for misrepresentation. The misrepresentation occurred when Colin, an employee of Tom’s Frozen Food Deliveries, working as a Customer Service representative, informed Gary that the firm’s trucks were capable of maintaining a constant temperature at -18oC. However, Gary discovered that the trucks and vans were only possible of maintaining a temperature at -12oC and that the driver who delivered Gary’s order did not have specialized training on how to handle frozen meat.
In seeking legal redress, Gary should consider citing the Misrepresentation Act 1967. The Misrepresentation Act 1967 stipulates that contracts entered on the ground of misrepresentation are considered voidable. One of the remedies that Gary may consider includes rescission by seeking the court to compel Tom’s Frozen Food Deliveries to return the monies that he might have paid for the delivery (Chen-Wishart, 2008, p. 226). Under the Misrepresentation Act 1967, the Court has a right to award damages to the affected party following a contract that was entered on the basis of misrepresentation (Reynell et al, 2010, p.307). According to Section 2(1) of the MA 1967, a party who persuades another party to enter into a contractual relationship based on misrepresentation of facts will be liable for any damages suffered by the claimant in the event of incurring a loss following such a contract based on misrepresentation (Ewan, 2018, p.134). As such, Gary should argue that the contract between Gary’s Butchers and Tom Frozen Food Deliveries was based on a fraudulent ground. In view of the voidable nature of the contract, Gary has a legal right to abandon any trade obligation that he might have had with Tom’s Frozen Food Deliveries.
In his argument, Gary should cite the case of Esso Petroleum Ltd v Mardon (1976), in which Esso’s sales representative wrongly advised the defendant on the capability of the new garage to sell approximately 200,000 gallons of petrol annually. The claimant subsequently relied on the advice provided by the sales representative in entering into a 3-year tenancy agreement with Esso. Mardon later discovered that the garage’s capability was only half of what Esso’s sales representative had claimed.
In making a ruling over the case, the Court argued that a party who holds or professes to possess distinctive knowledge regarding a certain issue and represents such information to another party with the purpose of persuading him or her to enter into a contract is obliged to ensure that the information given to the party is correct (Jill, 2016, p.651). As such, Esso’s sales representative involved in misrepresentation. In the case of Hedley Byrne & Co Ltd v Heller and Partners Ltd 1964, the court held that the defendant failed to exercise the duty of care in making statements that the claimant relied on in entering into a contract hence incurring a financial loss. Similarly, the sales representative at Tom’s Frozen Food Deliveries did not employ reasonable care in ensuring that the information provided to Gary was correct. On the basis of the voidable nature of the contract as a result of misrepresentation, Gary has a legal ground to raise a claim against Tom’s Frozen Food Deliveries for compensation and any additional cost that the firm might incur in finding a new firm to deliver the meat.
Tom’s Frozen Food Deliveries legal position
On its part, Tom Frozen Food Deliveries should consider suing the manufacturer from which it sources the trucks and vans that it uses in distributing meat for involving in misdescription of goods. The truck and van manufacturer involved in misdescription by stating in the company’s website that its trucks and vans can maintain a temperature of -180C while Gary discovered that the truck’s temperature capability was only -120C. In seeking legal redress against the truck and van manufacturer, Tom’s Frozen Food Deliveries should cite the Trade Description Act 1968 (Martin & Turner, 2005, p.2005). Section 1(1) (a) stipulates that it is an offense for a party to apply misleading trade descriptions in marketing their goods and services (Tillson, 2018, p.132). The TDA 1968 further stipulates that it is an offense for a firm to supply or make an offer to supply products based on false trade descriptions. Tom’s Frozen Food Deliveries should thus argue that the trade description on the manufacturer’s website was misleading. In supporting its argument, Tom’s Frozen Food Deliveries should consider making reference to the case of Yugo Tours Limited v Wadsley (1988). In this, case a tour firm had advertised that it offers a full sail aboard a three-masted schooner and included a photograph in the advert. Some customers relied on the advert in booking a holiday but revealed that the tour firm only operated a two-masted schooner and did not have sails. In making a ruling over the case, the Court held that the firm involved in a breach of the Trade Description Act of 1968 (Kelly, Holmes & Hayward, 2002, p. 245). Similarly, in the case of British Gas Board v Lubbock (1974), the Court held that British Gas Board committed an offence for issuing misleading advertisements on the physical characteristics and composition of its gas cooker. By making reference to Section 1(1) (a) of the TDA 1968, Tom’s Frozen Food Deliveries will succeed in compelling the court to impose contractual liability against the manufacturer.
Conclusion
From the case study, Gary has a legal ground to raise a legal claim against Tom’s Frozen Food Deliveries for its involvement in misrepresentation through its sales representative. In doing so, Gary should consider applying the Misrepresentation Act 1967. Thus, Gary can legally terminate the contract and raise a claim for compensation against Tom’s Frozen Food Deliveries for the financial cost that he might incur in searching for a new meat supplier. Conversely, Tom’s Frozen Food Deliveries should consider suing the truck and van manufacturer for a misdescription of its trucks and van on its website since it relied on the trade information in entering into a contract for the supply of the vans and trucks. Tom’s Frozen Food Deliveries should, therefore, consider applying the Trade Description Act 1968.
Bibliography
Books
David Kelly, Ann Holmes and Ruth Hayward. Business law (London: Cavendish, 2002).
Jacqueline Martin and Chris Turner. Consumer law (New York: Routledge, 2005).
Judith Tillson. Law express; commercial and consumer law (Harlow, UK: Pearson, 2018).
Limited 2018).
Lucy Jones. Introduction to business law (Oxford: Oxford University Press, 2017).
MacIntyre Ewan, Essentials of business law (Harlow, United Kingdom: Pearson Education
Mindy Chen-Wishart. Contract law (Oxford: Oxford University Press, 2008).
Neil Andrews. Contract law (Cambrdige: Cambridge University Press, 2011).
Poole Jill, Casebook on contract law (Oxford: Oxford University Press 2016).
Richard Stone. The modern law of contract (London: Psychology Press, 2005).
William Reynell, Beatson John, Andrew Burrows and John Cartwright. Anson’s law of contract (Oxford: University press, 2010).
Case Law
Esso Petroleum Co Ltd v Mardon [1976] EWCA Civ 4
Yugotours v Wadsley [1988] Crim LR 623.
