SCENARIO You are a solicitor working for a firm which provides a series of semin
ID: 349579 • Letter: S
Question
SCENARIO
You are a solicitor working for a firm which provides a series of seminars for clients wanting to set up a business for the first time. Your task is to produce a written report, to be given to each client attending the seminar, setting out in “user friendly” style the principles of law relating to the ‘Terms’ in a contract and ‘Exclusion of Liability’ clauses by answering the following questions:
QUESTIONS:
!A. (i) What is the meaning of the following contractual terms?
(ii) What remedy is available if these terms are broken?
a. Condition
b. Warranty
c. Innominate term
1B. (i) What is the meaning of the following contractual terms?
(ii) What is the result if the terms are put into practice?
a. Force Majeure
b. Price Variation clauses
c. Retention of title clauses
Explanation / Answer
1A
a. Condition is the fundamental basis of the contract, which is a representation made by the seller to the buyer, on the basis of which he /she can take the buying decision.
b.Warranty is the promise made by the seller to the buyer to replace or repair the goods in case of its non performance in accordace of its stipulated functions and value for the user, within a specified time.
c.Innominate terms are neither conditions nor warranty, but intermediate clauses that come into picture if they are substantial and serious enough to deprive the innocent party of whole benefit it could have derived from the contract.
II.
a. In case of violation of conditions, the suffering party may terminate the contract and / or sue the other party for breach of contract.
b. In case of breach or warranty, the suffering party may sue the other party for damages or losses due to that breach but can not terminate the contract.
c. In case of breah of innominate conditions, the suffering party can terminate the contract and sue the other party for damages if the condition given in definition is met, otherwise ( if the innominate condition is minor) it can not terminate the contract but can only sue for damages.
1B
a. Force Majeure is a clause that protects the parties in the contract against unforeseen circumstances that prevents the party to carry out the contractual obligations.
b. Price Variation clauses allows a seller to vary the prices of commodity /service under certain circumstances.
c. Retention of title clause is a provision in the sales contract of the goods that lets the seller keep the title of the goods until certain obligations are fulfilled by the buyer.
II
a. The clause saves the party which is not in condition to fulfill the contract due to circumstances beyond its capacity, like the acts of god, earthquake, floods etc.
b. It protects the right of the seller to vary the price of the commodity if circumstances demand it. This is useful when the seller operate in highly volatile and changing marketplace.
c. It protects the right of title of goods with the seller in case of non performance of an obligation by the buying party, which was part of the contract.
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