(35586) Contract law assignment based on a different topic of contract law
Question
Task: For acceptance of an offer by email the receipt (communication) rule seems to be the most appropriate. Applying relevant case law discuss this statement in the contract law assignment. Provide an advice on misrepresentation in a contract. Outline the necessary ingredients for an actionable duress. Do you feel that English Law takes a restrictive approach?
Answer
Part A
Introduction
Communication through email helps in establishing instantaneous mode of communication with the involved party. This contract law assignmentsection will evaluate whether the application of UK postal rule in the mode of email communication is appropriate or not. As the email is considered as an instantaneous mode of communication there, often postal rules were not applicable in the email communication. Furthermore, the contract law assignmentsection will provide detailed justification in favor of the application or rejection of the postal rule in email communication so that clear ideas can be developed about the usage of email to form contact with other parties.
Discussion
Postal rule in UK discussed in the contract law assignment
Offer and acceptance is the integral part of contract formation where offer is the series of suggestions that help in forming legal bonds between parties and acceptance is the communication that reflects the other party agreeing to the presented terms by the other party. Exchanging offers and acceptance is important to form legal bonds between the involved parties. As per the contract law assignment postal rule is the series of rules that help in governing a situation where offer and acceptance are not made in person. The rule indicated that an offer which is sent by post or letter is not valid until it is accepted by the other party. The rule has simply favored the situation where communication took place with the help of post and acceptance becomes immediately effective after the receiver of the offer. According to English law it is important that the letter needs to be addressed properly and there is no rule that puts an obligation on the postal service to quickly dispatch the offer before the offer expires . On the other hand, it is fund in this contract law assignment that it needs to be noted that postal rules are often not active in case of instantaneous communication.
The digital revolution mentioned in the contract law assignmenthas changed the mode of communication and now people have the facility to use different modes of communication such as telephone, email and online chatting to convey their message. However, there is much debate whether to consider these modes of communication as legitimate mode of communication and if the general rule applies to it. For instance, website acceptance is treated differently than email communications and it depends on the actual space and time between the offering and sending the acceptance. The postal rule first came in practice after the Adam v Lindsell [1818] B &Ald 681 case . The court has decided to legitimate the contract by the formation period of mail. Two parties communicated through the mail in which the precise time of acceptance could not be determined as the mailing could last for a few days and both the parties were unaware about the actual time limit. To avoid the confusion in the communication process, postal law discussed in the contract law assignmenthas been developed. In case of face to face communication, both parties can discuss the concern that was raised in time of the offering process but as of distance communication, this service has not been available. Due to the unavailability of the instantaneous communication, both parties are unable to know about the acceptance or the refusal of the contract.
Mode of communication
Instantaneous communication
Postal law was often not applicable in the instantaneous mode of communication and it did not cover the fax and telephone and telex communication. One of the main reasons for not applying the postal rule on instantaneous mode of communication is that the offeree would be able to instantly know about the situation of the delivery and make instant changes in the offer so that it can be accepted. It is contrasted to the situation in which an offer would not be able to know about the situation of the offer and could not make any changes until the offer failed to deliver or was denied. In case of fax communication, it has been argued in the contract law assignmentthat faxes are also instantaneous modes of communication in which the sender immediately knows whether the fax has been sent or not.
Non instantaneous communication
It has been argued in the contract law assignmentwhether email should be considered as instantaneous or non-instantaneous mode of communication. It has been seen that email mode of communication reflects the characteristics of instantaneous mode of communication and it will be unfair to apply postal rules on it. However, in the case of David Baxter Edward Thomas and Peter Sandford Gander v BPE Solicitors (a firm) [2010] EWHC 306 (Ch)), the high court has stated that email mode of communication should be considered as the instantaneous mode of communication and postal rule should not be involved with it. On the other hand, in Kin Keong v Digilandmall.com Pte Ltd, [2004] 2 SLR 594; [2004] SGHC 71, case the court has stated that email communication is not instantaneous as the telephone or fax communication as the mail processed through the servers, routers and the internet service providers. As per the contract law assignment findings, different types of protocols have been associated with processes that may result in the arrival of messages in incomprehensive form. Like the mail, email also does not become effective until it is opened by the receiver.
Application of relevant of cases
Email is one of the popular modes of communication that not only used by the private sector but multiple governmental sites are also using as the pivotal part of the communication process. In the Athena vs Superdrug in 2019 case, it has been seen in the contract law assignmentthat a contract has been formed through the exchange of email and it is also considered as the legitimate source of evidence in this case that helps the court to deliver justice to the involved party . On the other hand, introduction of Electronic Transaction Act, 1999 and the Electronic Transactions Act 2000 has also made an impact on the postal rule of acceptance . Formation of the rule has altered the postal rule and considered email communication as a non-instantaneous mode of communication as the contracts will not become effective until the offeror got on the system.
Conclusion
After analyzing the different forms of business communication, it can be seen in the contract law assignmentthat email is non-instantaneous in nature as it does not allow the offer to become active until the offeror gets in the system. Just like the postal system, one cannot get information about offers until they use the system. There is also the presence of delay in sending and receiving emails that provide opportunity to apply postal rules in the email communication. It is found in this contract law assignment governments have also introduced Electronic Transaction law to support the usage of email communication in offering and accepting offers. Amendments of the postal rule would support the online business performance and benefited the both involved parties.
Part B of the contract law assignment
Issue
Aliyah had a long ambition from quite a long time to own a Bed and Breakfast (B&B) in the Welsh Countryside. After consulting with a number of traders, magazines and thorough internet search, Aliyah found an attractive property that she is interested in. Aliyah contacted the B&B and arranged a meeting with the owner Rose. It is mentioned in the contract law assignment that the owner mentions at the meeting that the property is very successful to grab the attention of clients as it is a popular tourist destination site, just a mile away. Moreover, Rose presented the account statement reflecting the profits and losses of the last few years to Aliyah. However, Aliyah declines the acceptance as she is unable to understand the statements and send it to her accountant to verify the accounts. B&B was not as successful as Aliyah wished to be due to the announcement of closure of tourist attractions that was held after the meeting with Rose. Rose knew everything from top-notch to bottom, but she did not disclose it to Aliyah before signing the contract. Aliyah now feels herself as a victim and of misinterpreting the situation due to which she needs proper advice.
Law
It is found in the contract law assignment that misinterpretation is an untrue statement of fact or information provided by a party to the other party in due diligence to earn more wealth or assets. According to Misinterpretation Act 1967, a person entering the terms of a contract suffers a loss or is liable to damages if a misinterpretation is made to him/her after the fraudulent services . Misinterpretation in business contracts generally occurs when inaccurate information is shared by one party to the other before the signing the contract. As per the contract law assignment this can cause enormous financial losses to business as well as the party standing on the opposite side. As per Section 2 under Subsection (2) of Misinterpretation Act 1967, damages for the misinterpretation need to be proved under solid evidence and truth after claiming the contract in lieu of rescission caused to the sufferer. Failing to provide necessary information to the counterparts is one of the significant legal issues that needs to be considered within a business intervention. According to UK Fraud Act 2006, a general offense of fraud is imposed on an individual if he/she is committing fraud services by three ways, false representation, failing to disclose information and abuse of position . As per the contract law assignment it is increasingly important to ensure fairness and diminish the risk of contractual terms while entering into agreement. As per the Subsection (4) of Section 2 under UK Fraud Act 2006, a representation should be expressed or implied through words or communicated by conduct. The communication needs to be practiced either written or spoken or more astoundingly posted on a website. As per Section 3 of UK Fraud Act 2006, it is an offense to commit fraud if an individual has failed to disclose information intentionally or unintentionally to the required counterpart, where there is a legal obligation to disclose the minute details or information to another. As per the contract law assignment the active concealment of a fact even having the knowledge or belief of the fact can fit to a deceitful nature of an individual and declare it to be a fraudulent activity. According to Section 11 of UK Fraud Act 2006, obtaining services dishonestly for which payment is required is a critical offense as the litigators gain commission or profits on the subject consideration .
Application
In consideration to the contract law assignmentcase of Aliyah, the owner of B&B had not disclosed the information that the tourist attraction was closing. This led Aliyah to be the victim as she got to know everything after signing the contract, which was certainly a big loss for her as she now owned a closed property. Application of Misinterpretation Act 1967 in the case scenario reflects that Aliyah was misinterpreted by Rose due to which she suffered loss on the property and would be liable to damages in respect to the misinterpretation. Moreover, Rose provided incomplete and inaccurate information on their property that is the reason for face loss for Aliyah. For instance, the case of Smith v Land & House Property Corp (1884) 28 Ch D 7 indicates the misinterpretation of a plaintiff, who has put up a hotel for sale stating that he will allow a most desirable tenant . After agreeing the contractual terms of the hotel, the tenant was suddenly bankrupt. As a result, the defenders refused to complete the contracts and were sued by the plaintiff due to such misinterpretation. In terms of the contract law assignmentcase of Aliyah, she needs to revoke the contract or claim damages by addressing the Misinterpretation Act 1967 to get back the payments as written in the contract paper while owning the stake of B&B property. In case of misinterpretation, contacts are often canceled or rescinded provided both the parties agree for the fraud stated in the contract law. It is important for Aliyah to seek legal advice and find out the inducing mistake she has performed while owning the stake in the B&B and leaving herself at a crossroads. For instance, the case of Smith v Hughes (1871) LR 6 QB 597 reflects the misinterpretation of a plaintiff farmer with a defender, who was a trainer of racehorses . The defender purchased a whole quantity of oats from the farmer after seeing the sample and later claimed that he would not buy new oats, as he thought it was old oats. It is found in the contract law assignment moreover, the farmer knew it was new oats, refused to take it back and sued for the price due to which a deceitful activity of the farmer was evident against the defender. Implementation of Section 11 of UK Fraud Act 2006 needs to be practiced in such cases to get back the commission or profit amount of Rose while selling the property as it is often dishonest work. Therefore, it is advised in the contract law assignmentthat Aliyah should take the help of legal advice to claim against the fraudulent activity of Rose, where she failed to disclose the information correctly.
Conclusion
It can be concluded from the contract law assignmentthat Aliyah is a serious victim of the case as she was not informed of the closure of tourist attractions on that property. Formation of specific UK laws has altered the case scenario as it is remarked as a misinterpretation and a fraudulent service by B&B due to which they need to be punished on criminal grounds. Application of relevant case laws in the contract law assignmentreflects the misinterpretation Aliyah faced due to the fraudulent activity or failing to disclose the information from Rose. Being a victim and arising the feeling of misrepresentation, Aliyah should seek legal advice in the court to get back her money she paid to Rose while signing the contract.
Part C of the contract law assignment
Outline the necessary ingredients for an actionable duressin the contract law assignment
Duress reflects the condition in which threat, violence and other types of action are being used to force someone to perform something against their will. In context of the contact law mentioned in the contract law assignment, it can be defined as when a party uses duress against another to form a contract in which the party does not want to enter either the unfavorable condition of the contract or terms of the contract. One of the main ingredients of actionable duress is the pressure and the practical use of it reduces the availability of choice to the victim. It is also illegitimate in nature and pressurizes the claimant to enter in the contract unwillingly.
Duress by threat
Use of threat to pressurize the party to enter in the contact is considered duress by threat. If the party is able to prove that they are coerced to enter into the contract, then the contract will be violated. However it is found in this contract law assignment, it is essential to prove that nature of force is enough to the amount of duress and it has the effect of forcing the claimant to enter into a contract. In the case of Barton v Armstrong [1976] AC 104, a threat of murder had been used to force the claimant to enter in to contact.
Economic duress
Economic duress refers to the threat that hampers the financial interest of the involved party. For instance, if both parties enter into contact and any of them threatening others to renegotiate the contract is considered the economic duress. The doctrine of the economic duress was first established after the case of Pao On v Lau Yiu Long [1980] AC 614 . However it is found in this contract law assignment, it is essential to prove that pressure is legitimate and it is one of the significant causes that induce the claimant to make the contract.
Lack of practical choice
Lack of practical choice is another form of duress that can lead to sufficient loss for either of the involved parties. In case of B & S Contracts & Design Ltd v Victor Green Publications Ltd [1984] ICR 419, it has been seen that builders had refused to work unless they were paid more money . Therefore it is found in the contract law assignment, the claimant had no choice other than paying extra money to complete the project on time. Therefore, lack of practical choice would lead to the suffering of claimants to avoid any type of losses.
Restrictive approach of English Law discussed in the contract law assignment
English Law has no general liability for an offense or violation of omission as exists in other countries such as France practicing the French Penal Code. Recent cases around the English law have seen the possibility of public body liability in the court in terms of negligence that cast a doubt on the policy reasons of restrictive approach of English cases. As per the contract law assignment there appears to be a growing trend that the English courts are prepared to take a restrictive approach if the scope of litigation comes under the exclusion clause. For instance, the case of Kudos Catering (UK) Ltd v Manchester Central Convention Complex Ltd reflects the restrictive approach of Court of Appeal where they refused to believe the contractual remedies of Manchester and wrongfully claim a substantial sum of £1.3 million from Kudos due to loss of catering equipment for the venue of catering services . On the contrary, the jurisdiction of English law under Group Litigation Orders (GLO) has been interpreted restrictively by the courts to give proper judgment on the social, personal and financial interest of the involved parties. It is found in the contract law assignment that the dichotomy between the course of action under the English law is performed on the cases of objection, where loss of self-determination is evident on the part of the defendant. For instance, the recent case of Lloyd v Google subjects the restrictive approach of English law on privacy protection under the Data Protection Act 1998 to unify human right standards on the losses of their control over the personal data . Undertaking the restrictive approach of English law reflects the jurisdiction of claimant in terms of data damage as it amounts to an acknowledgement of privacy violations. As per the contract law assignment a plea of insanity is often treated as the same footing as induced under the statutory exception under the English law due to the comparatively easy pleading of private defense. The presence of actionable duress is also the reason for restrictive approaches in English law that has created pressure and reduced the availability of choices to the victim. Moreover it is found in the contract law assignment, forcing a claimant to enter into a contract or renegotiating a contract is the cause of such duress that renders to create a restrictive plan-of-action under the English law to avoid any type of losses or breach the contract substantially.
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