The Key Aspects of Commercial Law - Essay Example

COMMERCIAL LAW Name: Course: Instructor: Institution: City: Date: Introduction In the day – to – day transactions of people, there usually are a number of contracts that are formed. What is funny enough is the fact that some of these contracts may be entered into without the prior knowledge of the parties involved. This is so common in local setups. Sometimes however, parties tend to believe that they have actually entered into a contract merely by entering into agreements between themselves. This is not necessarily true. The principle in commercial law of contracts is that there must be some intention to create legal relations between the parties involved. This paper therefore seeks to present the various options that Nathan has against Dubious Connections Pty Ltd and/ or John, who happens to be the company’s sales representative in the case provided. These arguments are of course going to be firmly founded on the commercial law and contracts law. Is there a Valid Contract between Them? Under the Privity of Contract, the parties to a contract usually have various rights as well as discharges. Moreover, according to this doctrine of Privity of Contact, a contract can be established by agreements made between the two parties involved. In this case involving Nathan and Dubious Connections Pty Ltd, there seems to be an absence of written documentation to certify that indeed the two parties signed a contract. If I were to advise Nathan with regards to the there being or otherwise of a contract between him and Dubious Connections Pty Ltd, then my foundational point of argument will be the Privity of Contracts. From this end, it is clear that there indeed does exist a contract between the two parties. The only distinction being that it is not documented like the conventional ones. In this case therefore, such a contract can be cancelled only by the same means with which it was formed i.e. by agreement between Nathan and Dubious Pty Ltd. Such a contract like this particular one; or any other contract other than this, are only valid up to the time when the agreed time actually lapses. This in itself leaves Nathan with no choice but to seek for an agreement with the company for them to end the apparent contract between them. The conditions guiding agency in commercial law clearly insinuates that an agent is mandated by their principal to undertake such duties as entering into contracts on behalf of the Dubious Connections Pty Ltd. With regard to this particular case, Nathan is a third party who has entered into a contract with Dubious Connections Pty Ltd of course through the company’s sales representative – John. Without an iota of any doubt therefore, this contract cannot be said to be incomplete or to be lacking some complements; it is a valid contract. The same argument about there being a contract between the two parties is reiterated by the Section 126; Clause (1) of the Corporations Act that says that as long as a company’s agents act under express or implied authority from the principal company, any contract that accrues through them is completely valid. What may not be clear per se in this case is whether John was actually mandated by Dubious Connections Pty Ltd to take advantage of its clients’ innocence and probably language problems. Whereas this may seem a mouthful of words, there are indeed some grounds that are in agreement with this notion that cannot just be disputed. The validity of the contract existing between Nathan and Dubious Connections Pty Ltd is also justifiable by the fact that What may not be exceptionally agreeable is the fact that there was some fraud in the contract on the side of John, the sales representative. Ethically, it would not have been proper for him to take advantage of Nathan’s innocence as well as his lack of understanding of English language. Though this still holds as a contract, the seller (Dubious Connections Pty Ltd through John, in this case) ought to pay for some damages under the Commercial Law. The fact however that John did not follow all the due considerations while executing the contract to the innocent Nathan, does not in any way disqualify the transaction from being a contract. It therefore still holds as a contract. This implies that in case of need for termination, the law of contracts still holds for this case. Remedies Available to Nathan If the consumer protection laws are to be analyzed keenly and in totality, there are indeed a number of remedies that Nathan is entitled to. Most of these remedies are related to the notion (or even the fact) that John did not perform his contractual duties as an agent of the Dubious Connections Pty Ltd. For lack of a better word, John manipulated or better still he may have cheated Nathan into signing the contract without taking into account some underlying issues such as the latter’s poor understanding of English language. In terms of Commercial legislation, any negative impacts, either physical or otherwise, befalling the buyer (Nathan in this case) amount to damages that the seller (Dubious Connections Pty Ltd) ought to take care of. It is assumed, and it is indeed a fact as well, that John had the option of being truthful and educative to his client (Nathan) even as he advances for him to sign his contracts. It can be seen here that if the contract were handled a bit differently (especially by Dubious Connections Pty Ltd, through John), probably Nathan would not have advanced for the contract To begin with, Nathan has the remedy for damages. Whereas this may seem ridiculous especially for Nathan’s case, it indeed did happen. In fact, this could form the greater part of his argument and support at least legally. But how did he suffer damages? It can be seen from the case that after a period of two months into the contract, Nathan found that the additional expense of the monthly phone bill was becoming more and more difficult to manage. This even as his allowance from Red Cross remained as meager as it used to be that he could no longer be able to keep up with the bill. Having said that, I would advise Nathan to follow some steps and seek some legal redress. However, the very first step to take for Nathan is to privately argue out his case to Dubious Connections Pty Ltd through John prior to going the legal way. Nathan should know that the legal way is not necessarily always the better option especially for such an apparently delicate case. It only is an option if diplomacy fails. Why? Nathan as a buyer also has some responsibilities that he would have otherwise taken, that he probably did not do. This in itself implies that he equally has a case to answer. If negotiation with Dubious Connections Pty Ltd does not bear fruit, then that is when he would have to go the legal way. Assuming it does fail, then I would advise him to follow the following steps in order to seek both to withdraw from the contract as well as receive some monetary compensation for the already-incurred increased expenses that he had experienced for the two months. Remember, he is only eligible to seek this kind of redress on the basis that Dubious Communications Pty Ltd (of course through their sales representative – John) took advantage of his innocence and poor understanding of English language to lure him into signing the said contract. He will therefore have to consider the following parameters before ever deciding to follow the legal process. First, Nathan would want to assess whether there has been a breach of contract in the first place; otherwise there is no case. In this case, a breach occurred since John did not perform due care as a seller. He had a leeway to bring in an interpreter, but he intentionally decided not to. Secondly, the apparent breach caused some loss (though not physically visible) to Nathan. Thirdly, the damage caused (unplanned increased monthly bills) is not too remote. This being the case, Nathan has a cause to pursue and it therefore gives him some points to put forward. The same argument is adopted by the Tort of Negligence. It is assumed that Dubious Connections Pty Ltd owed Nathan duty of care and it was as a result of this negligence that Nathan suffered the consequences relating to the unplanned financial crunch that he ended up in. Even with blatant knowledge of the fact that Nathan did not understand English language well, John opted to propose his contracts to Nathan without even bothering to get him an interpreter to translate the details of the contract to Nathan. This is what may be referred to as the Tort of Negligence. In addition, the case clearly points out to the fact that John knew very well that Nathan had neither owned a phone nor contracts in his entire life and therefore knew very little, if not nothing, to do with phones. The second remedy that is available for Nathan is that of suing the agent himself – John. It should be remembered that the first remedy involves Nathan suing the company itself – Dubious Communications Pty Ltd for mistakes that her sales representative’s wrongs. On the other hand however, Nathan has a case to present against John individually. The law allows it. Yes. Under the circumstances when a company’s agent acts outside the authority mandated to them by the principal, it is legally permissible for the client (the third party) to sue the agent for misrepresenting or even breach of warranty of authority. Under such situations, the agent is personally liable and may be dealt with individually by the complainant. So this is one thing that Nathan can ultimately consider approaching with regards to this case. Nathan may also argue that John knowingly misinformed him regarding the details of the contracts. He out of prior knowledge failed to explain to Nathan the possible consequences that would befall Nathan in case he decided to terminate the contract before its due date i.e. after three years. Nathan, for example only knew that he could let go off the phone contract any time he wished provided he returned the phone to Dubious Connections Pty Ltd. He knew absolutely nothing about paying the full contract price of $3120 plus the price of the Ios7.1 which was additionally $800. The case of Freeman v Lockyer can act as precedent to Nathan’s case. In that case, the court laid down three key foundations for ascertaining the ostensible authority. The first was a representation that the agent had exceptional powers. Secondly, there was a representation which happened as a result of a person who had the actual authority to perform what was actually performed by the agent. Finally, the complainant was induced by such representation to literally sign the contract. Nathan could as well argue from this perspective. Conclusion In conclusion therefore, it would be prudent to say that the above-discussed points are only valid if the lawyer or advocate for that matter is standing from the side of Nathan (the plaintiff). Otherwise, if neutrality were to be considered, Nathan would probably find himself in a quagmire if he were to pursue this case the way it is. However, that is not to say that if he argued his case out with regard to the points discussed here that he would not win the case. No. it all remains with the discretion of the judges to preside over the case and probably how they may interpret the law in relation to the case at hand. Reference Goode, R., & McKendrick, E., 2009. Goode on Commercial Law. Penguin, Ch. 3 and 4, pp.69-176. Read More