Case Study on Law
NB Your submission must be electronically submitted using ICP House Style.
This individual assignment requires an answer of no more than 1500 words (excluding bibliography). Do not exceed a tolerance of 10%.
This assignment requires you to analyse the position in Contract law, in the given scenario.
Your answer should:
– not exceed 1500 words (excluding bibliography) with a tolerance of 10%
– state and apply legal principles relevant to the law of Contract
– cite relevant case and statute law
– apply the relevant legal principles to the facts
– indicate matters of fact that may affect liability, and
– outline the legal remedies available, indicating how any damages will be assessed.
A class briefing will be given on the assignment, to give an opportunity to ask questions.
Working with other students is permissible in your investigation and research, but the work you submit MUST be prepared by you alone.
Copying from published or Internet sources without acknowledgment is plagiarism, a serious disciplinary offence which could result in exclusion from the course.
Copied work MUST be properly acknowledged and referenced as to its source using the Harvard/APA 6th Edition referencing system.
If in doubt, please ask the lecturer.
TASK
Consider the legal position of Plywood Studios in Contract, in relation to two contracts; matters relating to contract formation, contract terms, and legal remedies available.
You are NOT asked to consider the liability of Plywood in respect of the injured person.
SCENARIO
Plywood Studios, a film company (“Plywood”), was making a historical drama.
Plywood’s props manager, Ann, approached Gendry, a blacksmith, to make replica broadswords for fight sequences. “They must be able to stand up to something like a real fight”, Ann told him. Gendry said that this was not a problem as he was a qualified armourer. He showed her two examples of finished swords, demonstrating them in a mock fight with his assistant.
Before closing the deal however, Ann noticed a clause in Gendry’s terms that read, “my liability shall only extend to the value of the items ordered.” Ann asked by email what this meant. Gendry emailed back, “That’s just in case your actors kill each other!” Ann knew that Plywood carried full personal injury insurance, so went ahead; a contract was made for 10 swords at a total cost of £35,000.
During filming a sword blade broke and injured Ralph, the ‘lead’ actor. Ralph was hospitalised and required minor surgery. This disrupted the filming schedule, at extra costs to Plywood.
Ann felt that it was not safe to use any of the swords; Gendry offered to replace the batch of swords at no charge, but Ann saw that it would take too long, and did not feel that he was reliable (she had by then discovered that Gendry had no qualification as an armourer).
Ann looked online for replacements and found suitable replicas on the website of Sturdee Props Inc., a US company (“Sturdee”), with whom she had not dealt before.
Sturdee’s terms and conditions included the following:
- All contracts shall be governed by the federal law of the United States of America and these terms which shall prevail over any terms in the client’s order.
- Prices are subject to revision and we reserve the right to pass on any increase in costs since date of order to the client.
- No contract shall exist until we acknowledge client’s order.
Ann emailed Plywood’s order for 10 “Foehammer” swords at a cost of $45,000. This order form carried the studio’s terms and these stated, “contract price to be as at date of order”.
Sturdee sent a brief email acknowledging the order and giving a delivery date. The acknowledgment made no mention of either party’s terms.
The Foehammers arrived, with Sturdee’s invoice for $47,500 and a note expressing regret that material and labour costs had increased. Ann is unwilling to pay the increased price.
Advice for “case study” assignments
Q. Do I need to do an introduction?
A. No! Get straight into the analysis. You could start: “The first issue here is whether a contract exists between [the parties]”; or you could quickly identify the legal topics that are relevant in the case, before tackling them in turn.
Q. Do I need to recite the facts of the case?
A. No! Rehashing the data facts just pads out the writing and shows no understanding.
Q. So how do I refer to a fact that seems important?
A. Refer to it as you bring in the relevant law e.g. “The fact that the goods are faulty is a breach of the implied condition of fitness for purpose under the Sale of Goods Act 1979 s 14(3)”
This formula (“The fact that…[fact].. may be seen as ..[legal idea]”) is a useful and concise way of showing that you understand the legal significance of the data.
Q. How do I know whether I have discussed all relevant topics?
A. Careful reading and re-reading of the scenario, and course notes, should “shake loose” what is relevant. In case studies, not all relevant issues will present themselves, and marks can be gained by dealing – even briefly – with matters that don’t ‘jump out at you’. For example, if the study seems to concentrate on the issue of offer and acceptance, there’s no harm in reciting the other elements of contract (intention, consideration) and covering them as briefly as seems appropriate.
The chart with the arrows on from week 2 can help you check what topics may be relevant; it should also suggest the order in which you might address each topic.
Q. What if I can’t make up my mind on an issue?
A. Then don’t. The purpose of the case study is to show that you can apply the law, not to sort out the lives of these non-existent people. If there’s a doubtful point of law, consider the alternatives, preferably in separate paragraphs.
If it is a question of fact that’s in doubt, phrases such as “A court may think that…” or “This will be a question of fact for the court to decide” can be useful to stop you chewing over a point and ‘chasing marks that aren’t there’.
Q. How do I reference cases and statute?
- In the text, a case may be referred to by name (and maybe date) alone, e.g. “In Butler Machine Tool Ltd v Ex-Cell-O Ltd, the court held that…” If the case is mentioned again in your text, it is enough to refer to it as Butler (in italics or underlined)
Do not recite the facts of cases (“In 1877, Mr Parker left a bag…”); it is the holding of the court that is important.
Statute names, dates and (sometimes) section numbers should be given. There is no need to quote statute at any length.
- At the end of your answer, your references should appear in full, thus:
REFERENCES (this heading signals turnitin® to discount anything after it)
Sale of Goods Act 1979 s.14(2) and (3)
Butler Machine Tools Ltd v Ex-Cell-O Ltd [1979] EWCA Civ 9; 1 WLR 401
Use paragraphs when changing topic or direction. Use the legal terminology if you can – but your own wording will do. There is no penalty for incorrect grammar or usage.
After you have finished…
Proof-read your answer and be prepared to edit or correct it. You will usually come across something that isn’t right, or isn’t clear; or think of something you have left out.
SCENARIO 1
Last January the Audley Manor Hotel’s website carried this advertisement:
“If you stay with us any 3 nights in January or February, we’ll give you 50% off this year’s Easter Break (30th March to 2nd April)!”
In the hotel’s general terms and conditions, the website also advises:
“Please note that if you cancel your booking, these cancellation charges apply:
25% of accommodation rate if you cancel within 21 days of your booked date(s);
50% for cancellations within 14 days of your booked date(s);
75% for cancellations within 7 days of your booked date(s).”
On 10th March Mr Penn telephoned the hotel and booked an Easter Break. The hotel told Mr Penn they would confirm the booking in writing, and did so by letter the same day. On the morning of 12th March Mr Penn rang the hotel again to cancel his booking. Mr Penn received the hotel’s confirmation letter on the 13th.
The hotel wishes to charge Mr Penn the 25% cancellation charge; Mr Penn has refused to pay, saying firstly that he did not see it mentioned on the website, and that it was not mentioned to him when he telephoned; and also that the hotel’s confirmation letter arrived after he had cancelled.
Mr Chance arrived on 30th March and paid in full for his Easter Break. He was a ‘nightmare’ guest, and complained constantly about minor matters throughout his stay.
When Chance came to leave – on Sunday the 1st – he said he wanted a refund in respect of the Sunday night. He also claimed the 50% Easter discount, because in January he had stayed there three nights. “I’ve only just seen the deal on your web page – bit of luck eh?” Mary, the hotel manager, refused to make any refund whatsoever.
Assume that there are no vitiating factors in the agreements.
SCENARIO 2
In January the hotel wanted to install a walk-in freezer room and contacted ChilCor, suppliers and installers of refrigerated units. On January 5th ChilCor sent a written price quotation for one of its units, of £6000 fully fitted.
The quotation sheet carried ChilCor’s terms and conditions, which included:
- These terms and conditions shall govern the agreement made between us and the customer, and shall prevail over any terms suggested by the customer.
- We reserve the right to alter the quoted price to reflect increases in the cost to us of components.
- Our total liability to the customer under this contract shall not exceed the value of the goods as invoiced, and shall not extend to losses that are consequential to any defect or malfunction of the installation.
On January 9th Mary replied to the quotation on the hotel’s standard order form; the form carries terms including one that states, “invoice prices of goods ordered are to be as at date of order”.
On January 11th ChilCor acknowledged the order by email.
Installation was delayed until early March. ChilCor then invoiced the hotel for £6500, explaining that increased costs had caused the increase. (ChilCor’s terms and conditions are on the back of the invoice.)
It is now June and Mary is refusing to pay any money in respect of the price increase.
Mary also holds ChilCor responsible for losses incurred when the unit broke down in May and could not be repaired for ten days. Inspection by an independent engineer has revealed that the installation work had not been competent, and this had caused the breakdown.
£1500 worth of goods had to be destroyed, and Mary had to reimburse various guests £2000 in respect of their disappointment (the hotel’s restaurant is famous and highly rated).
Explain the hotel’s legal position in Contract with regard to BOTH scenarios.
MARKING SCHEME
Marks indicated for different aspects are approximate.
Scenario 1
- PENN
Intention to be bound will be inferred as this is a commercial contract 2
Each party gives consideration 2
Terms stated on phone will probably be certain and so amount to offer; there may even be a verbal contract. 4
Even if this is not so, the confirmation letter is a letter of acceptance, envisaged as the means of communication, and is therefore effective when posted (Adams v. Lindsell). 6
Even if cancellation is caused by frustration, fee is chargeable 2
Consideration of rules on incorporation of contract terms. 5
– if in a contract document, it is valid (L’Estrange). Does not apply here.
– the hotel must take reasonable steps to bring its existence to guests’ attention (Parker) 5
this will be a question of fact. 2
Under the CRA 2015 Penn is a consumer and the hotel a trader; the terms must be clearly displayed to be effective. 5
- CHANCE
Advertisement may be seen as an offer to the world at large (Carlill) – acceptance is made by staying. 5
No communication of acceptance is needed in such a case. 1
Case law (R. v. Clarke) suggests someone cannot accept an offer they do not know of. 2
The “Easter Break” contract is entire and not divisible – the price is for the whole (Cutter v. Powell); Chance cannot claim a pro rata discount. 2
If Chance has grounds for complaint, there may be minor breaches of contract (breaches of warranty) which would entitle him to a reduction of the bill. 2
Total marks for scenario 1: 45 marks
Scenario 2
Facts suggest that Mary may be able to prove breach of an implied condition under SGSA 1982 to carry out the contract with reasonable care and skill. 7
There is a “battle of the forms” situation. 2
ChilCor’s terms accompany their quotation, which may be seen as an offer. 5
The hotel’s order will be viewed as a counter offer that destroys the offer (Hyde v. Wrench; Butler Machine Tool v. Ex-Cell-O). 5
ChilCor’s terms will not therefore be incorporated in the agreement. 3
ChilCor’s clause 3 is an exclusion clause as defined by UCTA 1977 as it seeks to limit liability 5
UCTA 1977 controls exclusion clauses 2
clauses that seek to exclude liability for breach of statutory terms 2
are subject to a test of reasonableness (s.11) 3
Damages for breach; general measure; …had contract been performed. 3
Remoteness generally (Hadley v. Baxendale) 3
Total marks for scenario 2: 40 marks
Marking in respect of ILSC skills:
Research, coherence of writing, citation and referencing 15 marks
Total marks: 100
