Biz Law Exemption Clause

Topics: Contract, Misrepresentation, Contract law Pages: 16 (4699 words) Published: March 28, 2013
Contents Page

1 First Scenario ------------------------------------------------------------------------------------ 3

1.1 Was there a Contract Formed?
1.2.1 Existence of Offer
1.2.2 Existence of Acceptance
1.2.3 Existence of Consideration
1.2.4 Existence of Intention to be legally bound
1.2 Terms v Representation
1.3 Condition v Warranty
1.4 Remedies for Breach of Condition
1.5 Exemption Clause
1.6.5 Incorporation by Signature
1.6.6 Incorporation by Notice
1.6.7 Construction
1.6.8 Unfair Contract Terms Act Reasonableness Hire-Purchase Act Misrepresentation Act
1.6.9 Legal Advice
1.6 Misrepresentation
1.7.10 Materiality Test
1.7.11 Actual Inducement Test
1.7.12 Types of Misrepresentation
* Fraudulent Misrepresentation
* Negligent Misrepresentation
* Innocent Misrepresentation
1.7.13 Remedies for Negligent Misrepresentation
1.7.14 Legal Advice

1 Second Scenario ----------------------------------------------------------------------------- 14

2.7 Fraudulent Misrepresentation
2.8 Remedies for Fraudulent Misrepresentation
2.9 Legal Advice
1 First Scenario

In order to address if Will is legally bound to purchase the art piece from grace or whether he can sue grace for breach of contract, we must first ascertain if there is a contract being made between the two parties.

1.1 Was there a contract formed?

There are four requirements that have to be satisfied in order for a legally binding contract to be formed that are stated below:

1) Offer
2) Acceptance
3) Consideration
4) Intention to create legal relations

All four requirements must be present for the formation of a legally binding contract.

1.1.1 Existence of Offer

Definition of offer
An offer is an expression made by one party (who is the offeror), to another party, (who is the offeree), communicating the offeror’s willingness to perform a promise. The offeror must intend to be bound if the offeree accepts all the terms in the offer without any qualification.

Definition of Invitation to treat
An invitation to treat is an invitation to commence negotiations. It is an attempt to induce or invite offers. The person making the invitation to treat has no intention to be bound; he is simply inviting others to make offers instead.

Hence, when Will saw the advertisement of the art piece in the window of the shop, it was actually an invitation to treat. There was no actual price being stated and thus, we can safely conclude that it was just a sign to induce Will into entering the shop to check out the art piece. Based on the case Fisher v Bell (1960) where defendant displayed flicked knives in his shop window and the court held that this display of goods was actually just an invitation to treat.

When Will paid the $10000 to Grace, he was making the offer. It was an unqualified and unequivocal act that showed his willingness of going into a contractual deal. This can be seen from the case Pharmaceutical Society of Great Britain v Boots Cash Chemist ltd (1953) where offer was made when the customer brought the goods to the cashier.

1.1.2 Existence of Acceptance

Definition of acceptance
An acceptance is an unconditional and unqualified agreement to all the terms of the offer. For the acceptance to be effective, it must be made and communicated to the offeror when the offer is still open and can be made in writing, orally or by conduct.

Grace showed her acceptance when she took the $10000 from Will. Referring to the case of Pharmaceutical Society of Great Britain v Boots Cash Chemist ltd (1953) again, acceptance was made when the cashier took the money from the customer.

1.1.3 Existence...
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