3 Cases of law assignment Essay Example

  • Category:
    Law
  • Document type:
    Assignment
  • Level:
    Undergraduate
  • Page:
    2
  • Words:
    1135

Lecturer

Business Law

Peter wants to start a new business of resupplying imported goods from China to Australia. Due to his financial constraints, he asks his elderly uncle Ji to assist him. Ji goes on to get a loan on behalf Peter from XZA Bank Pty Ltd, which Peter would service every month. Peter’s business failed six months down the line and neither he nor his uncle could continue with the loan repayment. The bank claims to take a legal action and sell the house to recover the accrued amount.

Common law provides that when any debt has been accrued on a mortgage, the corresponding assignee or endorsee is entitled to redeem money upon liquidation of account. This was applied in the case Carpenter v. Longan – 83 U.S.271 (1872)1. According to the proponents of Section 60 of the Indian Transfer Property Agreement (ITPA), a mortgagor is bound to repay the accrued interest and principal sum. Section 65(e) ITPA stipulates that whenever the mortgage is an encumbrance on property, the mortgagor should continue paying interest on such an encumbrance whenever it’s due and should dischargeaccrued principal moneyon a similar prior encumbrance2. According to Section 86 ITPA, a mortgagor is entitled to reclaim or redeem the property (right of redemption) either on the date of foreclosure or prior to that date3.

Application

XZA Bank Pty Ltd is the mortgagee while Uncle Ji is the mortgagor. If the contract between them does not provide any provision for redemption of the mortgage, then the contract is ipso facto. Uncle Ji is legally obliged to pay principal sum and loan interest until completion failure to which the mortgagee may either appoint a receiver or foreclose. However, under the right of redemption, Uncle Ji may recover his property by redeeming it.

Conclusion

Uncle Ji should redeem his property, as it is a fundamental and legal right. However, he should ensure that he exercises this right anytime before the foreclosure date. In the event of foreclosure coming up first, he will still exercise this right but a penalty will be imposed.

Cecilia, a professional model and allergic to cosmetic products containing chemicals went to a beauty parlor for a facial and explained her condition to Laura the beautician. Laura assigned the task to Nina (her employee) and failed to observe her closely. Subsequently, Cecilia developed an allergy and her face become very swollen and was later shown a clause stating that there will not be liability caused to clients by any unsuitable treatment

Under statutory law, the Unfair Contract Terms Act 1977 covers contract terms that purport to restrict liability in contracts. Section 3(UCTA) of this act clearly outlines that where either a notice or contract term purports to exclude liability for negligence, then a person’s agreement of it will not be used as an indication of risks or voluntary acceptance4. In Section 3a (UCTA), any obligation that may arise from the express or implied terms of the contract to exercise caution and reasonable care should be conformed to. Moreover, making a liability (or its enforcement) subject to a restriction is an onerous condition. The act applies to exclusivity clauses or contracts that define the responsibilities and obligations of the parties5.

Application

A contractual relationship subsists between Cecilia and Laura as they had an intention to create legal relations from the onset. There was also an exclusion clause that Laura usually uses to exclude herself from liabilities that may arise as a result of unsuitable treatment. Nevertheless, the exclusion clause will not hold water as Laura failed to exercise reasonable care and caution while handling Cecilia as a result of her negligence.

Conclusion

Laura will therefore be liable for all the losses that Cecilia suffered due to her negligence. This is because her negligence overrules the exclusivity clause. The wording of Section 13 (UCTA) is crystal clear to cover any disclaimer that prevents a duty which comes into existence from refusal to exercise reasonable care and skill. A similar ruling was observed in Smith v Eric S Bush [1989] 2 WLR 7906.

Vince had won the Melbourne Grand Prix in the year 2013 and signed a contract with Oz-Oil to display their trademark on the front of his white racing car for the next four years. Before the end of one year, Vince later purchased a new car and changed the color of the trademark from green and yellow to white and brown as he still wanted it to be noticed in his green car. A week later, Oz-Oil terminated the contract and did not pay any money to Vince.

In the case, Boardman v Phipps [1966] UKHL27, Boardman was the sole solicitor of trust assets of a family. Boardman and a beneficiary (Phipps) went to a general meeting of the shareholders of a company as they had realized they would turn the Company around8. They decided to buy a majority stake but did not obtain consent from all the beneficiaries. The Company made a capital distribution without reducing the shares value where Phipps and Boardman made $75,000 while the trust benefited by $47,000. Phipps and another beneficiary opted to sue for the profits on the grounds of conflict of interest9. Wilberforce J held that Boardman had breached his contract and was liable to pay for that breach of loyalty and he could also be paid for the services he had delivered before he breached the contract. This is in accordance with the doctrine of Quantum Merit10.

Application and Rule

Vince has enforceable legal rights because before he breached his side of the contract, he had already completed part of what was required and Oz-Oil failing to pay the whole sum of $255,000 will be more of a detriment in his side. Vince therefore ought to claim payment for the services he offered before he breached the contract, which will be less than the agreed yearly amount as observed in Boardman v Phipps [1966] UKHL2.11 Furthermore, he terminated the contract in good faith as he thought changing the color of the trademark would make it conspicuous on his new car.

1
Pound, Roscoe. Jurisprudence Union, (Hoboken: Law book Exchange, 2000), 412

2
Pound, Roscoe. Jurisprudence Union, 414

3
Elias, Gbolahan. Explaining Constructive Trusts Union, (Hoboken: Law book Exchange, 2002), 72

4
Transfer of Property Act, 1882

http://dolr.nic.in/Acts&Rules%5CTransferOfPropertyAct%281882%29.htm

5
Shephard, & Brown, K. Commentaries on Transfer of Property Act, 1882 … Seventh edition Pp. xxxviii 643. (Thacker, Spink & Co: Calcutta; London printed1910)

6
Smith v Eric S Bush [1989] 2 WLR 790

7
Boardman v Phipps [1966] UKHL2

8
Elias, Gbolahan. Explaining Constructive Trusts Union, (Hoboken: Law book Exchange, 2002), P 73

9
Elias, Gbolahan. Explaining Constructive Trusts Union (Hoboken: Law book Exchange, 2002),72

10
Peter Gillies. Business law Sydney: (Federation Press 2004) p447

11
Boardman v Phipps [1966] UKHL2