Case Study

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Case Study

Name: Yazhou Xiao

Student No: 10408026

Date: 01/11/2012

Module Code: M5213

Tutor: Geoffrey Farmiloe

This essay will aim to discuss the actions of Harvester Agricultural Machinery Co Ltd. In this case, the freight forwarding agent ‘Polaris Logistics PLC’ made an oral assurance with the importers (Harvester), but in once transport the Polaris breach the assurance and two of the Harvester’s containers were washed overboard in a storm. The claimant (Harvester) required the defendant (Polaris) to pay for the claiming damages of £5,000 which relied on the oral assurance, but Polaris said there was no contractual promise and they only relied on the printed terms and conditions.

In order to analysis the Harvester’s actions, one first has to examine the contract law. Contract law is the law relative to the agreements or promises, to establish a legally binding contract, parties must reach an agreement which can be supported by consideration, and the agreement must be expressed in a form which is sufficiently certain for the law to enforce, moreover the parties should also have had an intention to create legal relations. When to decide whether the contract has come into being, it is necessary to prove that there has been an agreement between parties, in consequence, it must be shown that an offer was made by one party (offeror) which was accepted by the other party (offeree).

The contract between Harvester and Polaris was expressed in standard trade terms. A contract is made by a number of terms, and the terms are obviously of great significance to the parties as terms define the parties’ right and liabilities. There are a variety of terms in common use and trade terms is just one. Generally, trade terms contain such as CIF (cost, insurance, freight) and FOB (free on board), they are primarily devise for mercantile convenience and define the obligations of the seller and the buyer, so there is an understanding between Harvester and Polaris as regards the discounts, delivery expense, and contract of insurance or other documents which are necessary for the export and import of cargo.

In 2005, Polaris suggested to Harvester that the products should be shipped by container, and gave the assurance that the containers would be stowed under the decks. Harvester agreed to this change and accepted the offer. Harvester’s action seemed as an oral acceptance, as the offeror (Polaris) did not stipulated a method of acceptance, so the offeree (Harvester) could choose his own method, such as written, spoken or implied by conduct. What is more, there is a clause involved with telephone acceptance, when both parties are talking on the phone, there will be an acceptance when the offeror has heard and understand the offeree. As through the ‘courtesy telephone call’, the acceptance can actually be heard by the offeror (Polaris), so the apparent communication had already taken place, and this ‘Courtesy telephone call’ might be used as a mean of communication the acceptance of an offer, as an offer can be written, spoken or implied by conduct.

On the other hand, Harvester hoped to rely on the ‘courtesy call’ as an oral assurance, but Polaris claimed that what they mentioned on the phone was never written into the contract, and they only relied on the printed terms and conditions only. So, whether is a contract or a term that made in the ‘courtesy telephone call’? The general rule in common law indicate that the contracts can be made orally without writing or other documents, and a contract may be entirely in a written form or it may be partly written with the remainder orally expressed, when Harvester agreed and accepted Polaris’s suggestion, there are terms within the contract, and the contract has been bound as there is an offorer (Polaris) and an acceptance which was communicated by the offorer...
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