Presumption of Legal Relation in Agreements Between Family Members and Friends

Discuss About The Ick Bentley Productions Harold Smith Motors.

The first court’s presumption where there is a conflict of an agreement between the family member and friends is that such an agreement is made for mere convenience but not with a purpose of creating a legal relation (McKendrick, 2014). This assumption follows the basic rule that agreements originating from social or domestic context lack the intention for a legal bond while those made in commercial settings are made with the intention. However, courts reconsider this assumption based on two outcomes. The first evidence that the claimant needs to show is that the agreement was in writing, the next evidence is that the entire agreement involved issues of financial gain or loss.

This rule was once witnessed in (Balfour v Balfour, 1919). The claimant (wife) agreed with the husband (defendant) that he would pay her £30 per month while she stayed in England. Later the relationship broke and the husband refused to pay. The claimant commenced suit on the husband but the court ruled that the agreement was made without the need for a legal bond. A contrasting case where an agreement between family members was found to be legally binding due to financial loss/gain was ruled in (Parker v Clarke, 1960). The case involved elderly relatives who advised the young couple (niece) to leave their property and settle with them in exchange for the house when the old relatives die. However, the elderly couple denounced their promise. The court found the agreement was binding between them as one party had lost financially.

Yes, Ali will win because she has the higher right over Charlie. The court will use the principle employed in the case of (Parker v Clarke, 1960). Even though the court disregard domestic agreements, the court will find that the agreement between Ali and Charlie involved financial losses and gains. Therefore, the agreement would be binding.

The issues in this case is a determination whether the police department action was a past consideration or an execution of a request made following implied promises to pay.

The law does not recognize agreements that are made when execution has already been made (Stone & Devenney, 2017). That is, promise to do something in return for an action that was done, or a promise of a contract where parties have already fulfilled their promises. The law terms these as past considerations. On the other hand, when one person requests the other for service and promises to pay for that service, the law terms that as a request bearing an implied promise for payment (Taylor & Taylor, 2017). Therefore, even though a service seems to be executed before an express agreement of paying, the law does not regard this as past consideration.

Determination of Financial Gain or Loss in Agreements Between Family Members

In (Roscorla v Thomas, 1842), the defendant provided a warrant for the horse soon after the claimant had bought it. When the claimant later realized the horse was vicious, he sort to sue the defendant for a breach of the warrant. The court ruled that the warrant was a past consideration.

In contrast, the ruling of (Pao On v Lau Yiu Long, 1980) applied the rationale of the request made with promises of paying for the service. The defendants made the claimants promise not to sell their shares to the company where the defendants were a key shareholder. The defendant promised the claimants a reimburse for their losses suffered if the claimant kept the promise.  However, the shares fell and the defendants dishonored their promise to reimburse. The court reasoned that the claimants were entitled to get the reimbursement even if the guarantee came after the promise to hold the shares.

No, Nick will loose in court. It was Nick who requested for an officer stationed outside the entrance all night. Therefore, the request was made by the promisor. Secondly, both Nick and the sergeant contemplated that there would be a payment after the service, the $1000.  Lastly, the performance was made in reliance of the payment.

The problem deals with the rules that apply to the case of part-payments of debts.

Issues of promises by the creditor to accept an amount less than what is owed by the debtor were first settled in the case of (Pinnel V Cole [Pinnel’s Case], 1602). The court will only allow such promises if there is a variation of the existing agreement though the provision of new considerations. New considerations can promise to accept lower amount on condition that; the debtor provides an extra service or goods; debtor pays sooner than the agreed date; debtor’s pays at a different location; creditor asked a third party to release the debtor with a less amount; there were more than one creditors; where equitable remedies of promissory estoppel apply (Kuhnel-Fitchen & Hough, 2014).

In (Foakes v Beer, 1884), Mrs. Beer allowed Dr. Foakes to pay a debt of £2,000 in installments of £500 without an interest. However, when Dr. Foakes cleared the debt, Mrs. Beer asked for the interest. The court allowed Mrs. Beer to claim for the interest as Dr. Foakes had provided no consideration. Lately, this rule has been shown to lack merit where some new consideration is provided. In (Antons Trawling Co Ltd v Smith, 2003), the defendant promised to provide extra payment if the claimant got an extra catch. When the claimant got the extra catch, the defendant refused to pay. The court ordered the defendant to meet his promises.

• Whether Helen will win I she sues Mike (2 marks)

Application of Legal Principles For Past Consideration in Contracts

Helen will lose the case. Mike will bring the defence under a promise to take a lower amount to surrender the original debt in consideration of an added service. When she asked Mike to pay $1000 and examine her BMW, the examination of the BMW was enough consideration for the variation of the initial agreement.

The issue in this case is the procedures for the incorporation of onerous terms of a contract.

Onerous terms in a contract are terms which are unusual or seems to contradict the usual standards of a trade. These can be terms such as those that stipulate higher penalties or charges than the ordinary prices in the trade (Poole, 2016). The law requires that any person relying on such terms should provide reasonable notice to bring the knowledge of the other party of the existence of such terms. These terms require a higher degree of notice to the other party.

In (Interfoto Picture Library v Stilletto, 1989), the defendant hired photographic transparencies from the claimant. Among the terms there was a clause affirming that the failure to return transparencies on time would attract a penalty of £5 for each per day delayed. The claimants delayed with 14 days and the total amount rose to over £3,700. The court ruled that the claimant did not take reasonable steps on informing the defendant on the clause.

The store will not win. Lizzie will call the defense stating that there was no substantial information regarding the unusual terms. She will explain her case linking it to (Interfoto Picture Library v Stiletto, 1989). However, Lizzie would still not go unpenalized, the court will award the DVD store the amount that would be reasonable as a penalty in the trade.

The issue in this case is the validity of an exclusion clause in a signed document.

Whether someone read or did not read an agreement before signing it does not matter. Signing a contractual document automatically binds the party regardless of whether they read it or not (Kuhnel-Fitchen & Hough, 2014). The only exception to this rule is only where there was oral misrepresentation that induced the party into signing.

In (Curtis V Chemical Cleaning Co, 1951), the claimant dress was stained by the claimant who was offering cleaning services. The defendant had made the claimant sign an agreement with a clause that excluded all damages. In addition, the defendant had orally told the claimant that the clause was only excluding the sequins and beads which was not the case. The court held the clause was invalid since there was a misrepresentation.

Rules for Part-Payments of Debts

In (L’Estrange V Graucob, 1934), the claimant signed an agreement without reading it. It later turned out that there was an exclusion that shielded the defendant from providing warranty of the machine. When the machine failed and the claimant sued for warranty, the court affirmed that a signed agreement cannot be overturned whether the claimant read it or not.

Tori would will not win. The dry cleaners will argue their position quoting the rule set in (L’Estrange V Graucob, 1934). Here ignorance that the drycleaner would avoid liabilities in such a manner would not help in law. The court will see her signing as acceptance of the clause.

The main issue here regards a reliance on the statement or advice provided by the party purporting to have special skills or knowledge in that business.

Section 9 (a) of the Goods Act states that where a buyer has expressly informed the seller the purpose of the goods and expresses the reliance on the seller’s skill and judgment, there is an implied duty of the seller to provide goods that are fit for the purpose explained by the buyer (Goods Act , 1958). In part (b), the law states that if goods are bought following the seller’s description or advice, such goods are bought with an implied warrant for a fit for purposes (Goods Act , 1958).. An exception to this rule only comes where the buyer examines those goods and affirms that they are fit.

In (Dick Bentley Productions v Harold Smith Motors , 1965), the claimant provided the car dealer (Defendant) with details for the car that he wished to purchase. The defendant provided a car that had done 100, 000 miles instead of what he had stated as the 20,000 miles. The court found that the statement made by the dealer influenced the buyers decision so there was a contractual obligation.

Yes, since Sandra relied on Smith’s statement in purchasing the copier, Smith was liable of misrepresentation. Following the provisions of the Goods Act, Smith is provided an implied warrant since Sandar explained the copier that she was looking for and Smith instead provided a faulty copier.

References

Antons Trawling Co Ltd v Smith (2003) 2 NZLR 23.

Balfour v Balfour (1919) 2 KB 571.

Curtis V Chemical Cleaning Co (1951) 1 KB 805.

Dick Bentley Productions v Harold Smith Motors (1965) 1 WLR 623 Court of Appeal .

Foakes v Beer (1884) UKHL 1.

Goods Act (1958) Vic.

Interfoto Picture Library v Stilletto (1989) QB 433.

Kuhnel-Fitchen, K. & Hough, . T., 2014. Optimize Contract Law Optimize Series. NY: Routledge.

L’Estrange V Graucob (1934) 2 KB 394.

McKendrick, E., 2014. Contract Law: Text, Cases, and Materials Text, Cases and Materials Series. 16 ed. UK: Oxford University Press.

Pao on v Lau Yiu Long (1980) AC 614.

Parker v Clarke (1960) 1 WLR 286.

Pinnel V Cole [Pinnel’s Case] (1602) 5 Co. Rep. 117a.

Poole, J., 2016. Textbook on Contract Law. 13 ed. UK: Oxford University Press.

Roscorla v Thomas (1842) 3 QB 234.

Stone , R. & Devenney, J., 2017. The Modern Law of Contract. 12 ed. NY: Taylor & Francis.

Taylor , D. & Taylor, R., 2017. Contract Law Directions. 6 ed. UK: Oxford University Press.