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Business and Corporate Law

Business and Corporate Law

Harvey v. Capability Ltd

The Harvey case is one of the cases that addresses the binding of restrictions and exclusions stated in a contract. Just like in other contracts, an effective exclusion clause has to be intertwined in the certain undertakings. The exclusive clause is meant to eliminate a liability that is likely to occur. However, certain measures should be made to incorporate the clause in contracts. The terms in the contracts bind Harvey if he signed, but if he did not sign, then reasonable notice regarding the contract terms should be given to him. As stated in previous cases such as Parker v. South Eastern Ry (1877) 2 CPD 416, the most significant aspect is being notified of the terms rather than their definite synthesis or reading

In the case of Harvey, the clauses that are stated are found to be very legible, but the problem is that they are written on the back of the document. The face of the contract document does not give any notice that should alert the owner of the contract to turn it over for conditions that make the contract binding. Such a situation might be dangerous for Capability Ltd, because the court might say that the clause is invalid because there is no notice on the face of the ticket. Lack of notice on the face of the document in Handerson v. Steven (1875) LR 2 HL (Sc) 470 made the clause invalid. The court has put emphasis on the need to alert the other party on instances where the clause is burdensome or inflexible. Also, all notices given should be concomitant with the contract formation. Mr. Harvey was given the exclusion clauses pre-contractually since he had received before they agreed on the cost, and this prerequisite seems to have been met.

Despite complying with all the conditions pertaining notice, the common law presents other requirements. The document on which the clauses are written on has to be a contractual document, and an average man should always expect to have the conditions that govern the contract. A previous case, where non-contractual documents have been issued, is that of Chapelton v. Barry Urban District Council (1940) 1 KB 532. The courts, however, get flexible in determining what document fits to be contractual and may decide that the terms stated in the memorandum do no serve the purpose. As a result, there are cases where contacts exist elsewhere, and the court has to disregard the protocol.

It is essential to always emphasize that in a situation whereby the clause successfully is incorporated in the contract, interpretation against Capability Ltd will be granted for any ambiguity. Certain strict standards are required of clauses that are said to omit all liabilities because of negligence, and this form of liability will be kept if possible. These measures were explored in Alderslade v. Hendon Laundry Ltd (1945)1 KB 189 case. In an event that a defendant denies liability for any form of losses incurred, the court has the freedom to consider it as a way of trying to omit loses without specifying the cause of such loss. In Harvey’s problem, the clause does not directly refer to negligence. Therefore, the clauses will be interpreted to favour him.

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The UCTA 1977 in Section 2 Article 1 nullifies notice or contract term attempts to restrict or omit liability for bodily injuries caused as a result of negligence. In Harvey’s case, it is evident that leaving the truck in the middle of the driveway was a clear case of negligence. The first clause in the contract automatically becomes ineffective when Harvey claims for the injuries he sustained. The same Section of the Act also says that a person is not allowed to restrict liability or other damages or losses unless it is proved that the notice passes the reasonableness test. This indisputably applies to the Capability Ltd. Given the difficulty in deciding whether the terms by the Capability Company can be considered as ‘written standard terms’, it is important to decide whether the second clause can pass the test of being reasonable. The reasonability of a clause is tested at the time of making the contract.

Due to the seriousness of the test, the damage caused cannot be taken into account, but only the extent to which the loss would be reasonable as contemplated during the time that the contract was made. Using the interpretation provided in Stewart Gill Ltd v. Horatio Myer & Co. Ltd (1992) 1 QB 600, it is clear that Capability Ltd will not be able to justify how exclusion clause was inserted in the contract, and Gill maintains that the entire clause should be reasonable and should not be taken partially to satisfy the defendant. It is, therefore, likely that clause two fails because intentional breach of contract is punishable as stated in the contract (Watford Electronics Ltd v. Sanderson CFL Ltd (2001) EWA Civ 317)

It is also necessary to understand why the customer gave in to the clause when other opportunities were available elsewhere. Capability Ltd offers its services at a higher cost than other companies, and this calls for identifying the exclusion clauses the competitor company uses. Capability Ltd clause can be nullified by making a comparative assessment. Considering the Unfair Terms in Consumer Contract, there is no evidence that Harvey received any inducement to accept the contract term. It is possible that the terms can be inclined to favour the supplier and twist the obligations and rights of the involved parties as stated in the contract.

Gayle v. Exprop

Gayle and Exprop made a contract that is by all means enforceable. They arrived at an agreement, hence presumed that they had an intention of creating a legal relationship. The fact that Gayle promised to pay Exprop £10,000 to erect the stand where both agreed to it, the question arises if Exprop has the right to claim the additional £2,000 promised by Gayle. Given that there is evidence that the two parties met substantial part of their agreements, the court does not seek to understand the extent of the adequacy of the considerations given by the parties. It is, however, accepted that any duties performed according to a contract do not guarantee additional payments, especially when no additional costs were incurred.

The Stilk v. Myrick (1809)2 Camp 317 case, where the sailors promised to share wages with crew members if they remained until their destination, showed that the sailors did not give additional considerations because they were fulfilling their duties as provided in the existing contract. The court will only grant the consideration for extra payment if the promisee performed beyond the contractual duty. Hartley v. Ponsonby (1857) 7 E & B 872 case explores a situation where the crew moved out in large numbers until it posed a danger if the journey continued. In such a situation, the sailors were able to make a new contract that gave a higher pay to the crew. It is not clear whether Exprop exceeded the contract duties because it had to do the duties outlined in the contract. If it was able to achieve the ‘wow factor’ and incurred extra expenses, then it can claim the £2,000 promised by Gayle.

If Exprop does not manage to claim the additional money, and that he uncured extra expenses in constructing the stand on which Gayle has benefited from, it is advisable to enforce the bargain because it takes into account the benefits and expenses with the agreement entered by the parties. This approach was used in Ward v. Byham (1956) 1 WLR 496 and Williams v. Williams (1957)1 WLR 148. In the case of Gayle and Exprop, it can be concluded that Exprop did not exceed the duties in the contract, and he did not complete the contract earlier than the scheduled time, hence not entitled to the additional money. On the other hand, it can be concluded that the stand exceeded the specifications that were given in the contract and that Gayle was able to benefit from it. This grants Exprop the right to claim the extra money. The court will make a decision based on the specifications of the stand as stated in the contract.

Gayle v. Securefest

Gayle promised a security fee of £1,000 to Securefest that can be seen as doing a duty that a third party (WITW) was supposed to do. Securefest was able to prove the existence of an extra contract. If the court deemed the initial contract sufficient, then decisions used in the New Zealand Shipping Co. Ltd v. AM Satterthwaite & Co. Ltd (1975) AC 154 will be followed. Similar decisions were made in Pao On v. Lau Yiu Long (1980) AC 614. Securefest has incurred a detriment because it would be responsible to two parties if it failed to provide security. If Securefest failed, Gayle would be in a position to sue them. Therefore, Gayle has to pay the promised £1,000 for the offered security services.

Gayle v. Tech Weekly

The policy of requirement demands a concurrent exchange of requirements by the involved parties. This implies that if one of the parties undertakes an act that is in the consideration before payment promise is given, the consideration is deemed unenforceable. The case where the promise of a sound horse was given way after the sale of the horse as stated in Roscorla v. Thomas (1842)3 QB 234 case shows what past considerations are. In the case of Gayle and Tech Weekly, the promise came after Weekly had advertised the exhibition stand, hence not eligible to claim the promised £2,000.