Contract Law Case Study

3017 words - 12 pages

Contract Law Case Study Both the parties in the question have come to a problematic situation
which is complicated to resolve. Friend's of the Forest (Friends),
represented by Christabel, is involved in a commercial trade with
Paper Supplies Pty Ltd (Paper) which is represented by Dee.

A contract needs four essential elements to exist. In the situation,
it is obvious that the four elements are satisfied. As the details are
not fully provided, it is arguable as to when the contract was formed
which will affect the legal rights and obligations of both parties.

The first main issues to be discussed regarding the contract is
whether is the exemption clause binding and enforceable, is the
document contractual in nature, and was the exemption clause a term of
the contract.

It is arguable that the contract was formed only after the goods and
delivery note had been delivered, and Christabel retained the goods
without making any objection to the conditions on the note. But this
did not mean that all conditions contained in the note were terms of
the contract. It was not possible for Christabel to negotiate the
terms in the document as it was delivered by the driver and is
reasonable to assume that the driver is not an agent of Paper. Thus,
Christabel could not negotiate the terms with Dee.[1] Nevertheless,
Christabel did sign the document which will become binding as the fact
that a person that has signed a document is strong evidence that the
person has agreed to be bound by it. In the case of L'Estrange v F
Graucob Ltd, Mrs L'Estrange signed a document containing an exemption
clause without reading it. The court held that Mrs L'Estrange had
signed the agreement and therefore was bound to it. In the situation,
regardless of whether Christabel has read the terms of the document,
the signed agreement has been signed by her and therefore she is bound
to it.

A possible exception is that Christabel can argue that the contract
was already formed after the negotiations and it was before the
document containing the clause was presented. To prove this,
Christabel has to prove that it was a fully oral contract which was
formed right after the negotiations where the four essential elements
of a contract already exist. Following that, Christabel has to argue
that the document did not appear to be contractual. In D J Hill and Co
Pty Ltd v Walter H Wright Pty Ltd, the negotiations were conducted
entirely by telephone and when the goods were delivered, Hill's
employee signed a form which contained an exemption clause. The
document signed was regarded as a delivery docket and that when they
signed it; all they were doing was acknowledging delivery. Christabel
can argue that she was merely acknowledging delivery.

...

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