Contract Law And Sale Of Goods Act - Liquor Shop Essay.

Elements of a Contract and Invitation to Offer

Write an essay about the liquor shop.
 

Contract may be defined as the agreement that exists either in written or spoken terms, makes the binding of more than two persons, or is enforceable under law in any court. Many elements are needed to be present in any contract during its formation (Andrews, 2015). The elements are intention, offer, consideration, acceptance and legal capacity to enter into a valid contract.

In the scenario given, Alan went to a liquor shop in order to buy Russian Vodka. During making the dealing with the storekeeper named Ben, Alan presented his demand to him. Ben also replied that the bottle that he was holding in his hands is a bottle of Russian vodka and that made Alan to order three bottles. At the time when Alan was making the payment of the money, he received a receipt from Ben that made contained the statement “Products sold are not refundable nor the seller responsible for the safety of the products.”

The elements those are present in the contract between Ben and Alan is:

• Offer: For the formation of a valid contract there has to be an offer by one party to a contract. offerer is the name of the person who makes the offer. In the scenario, there is invitation to offer or treat by Alan to Ben. Alan made such invitation when he entered the shop of Ben for buying Russian vodka. After getting such invitation, Ben made the offer to Alan by providing his requirement of Russian vodka.

The price variations that are made by any seller during the time of fixation of price with any buyer amounts to the invitation to offer. This principle is determined in the case of Harvey v Facey [1893] A.C. 552.

• Acceptance: In the given scenario, Alan makes the acceptance when he accepted the bottles of Russian vodka. It is an established rule that the acceptance by acceptor has to be communicated properly to the offer (Burton, 2013). In the case given, the Alan makes the proper communication of the acceptance to Ben.

There has to be the test of objectivity that has to be conducted for the determination of a valid acceptance or offer in any contract (O’Leary-Kelly et al., 2014). This principle is determined in the case of Smith v Hughes (1871) LR 6 QB 597.

• Legal Capacity: In order to enter into a contract, any party must be of the legal age. The legal age amounts to eighteen years. The parties must not be under mental sickness or under the effect of alcohol at the moment of entering into contract. The parties must not be either a bankrupt or prisoner (Fargion, 2016). Both Alan and Ben have the legal capacity to enter into a contract.
• Consideration: The exchange money that is given in return of the services delivered a party to any contract is known as consideration. The consideration in this case is the amount that is given by Alan to Ben for making the purchase of the bottles of Russian vodka.
• Intention of creating Legal Relationship: There has to be an intention in the free will of the parties in enter into legal contractual relationship. Such intention is present in their dealing.

The transactions of business are governed or administered by the provisions of the Sale of Goods Act. The Sale of Goods Act governs the transactions where the seller is involved in the transfer of any goods or services to any buyer for price. The Sale of Goods Act makes its involvement in the making the regulation of sale and contract of sale. In Part, 1(h) of the Sale of Goods Act renders the definition of the word goods. The word good under the Act means and includes the properties, that are moveable and makes the exclusion of the monetary claims (Durkheim, 2014). The timber, shares, growing crops or stock comes in the terminology of good. 

The primary objective of the Sale of Goods Act is to grant to the sellers and buyers, warranties or the protection against the factor of selling unauthorized goods. In the first part of the Sale of Goods Act, which is applicable in Singapore, make the express declaration of such warranties that grants protection to interest of the buyers from the fraudulent or unconscionable conduct or intention of the seller. In the first part through Section 15 of the Sale of Goods Act of Singapore, there is the declaration of implied warranty (Burrows, 2016). In simpler terms, the said section grants the warranty of goods that are sold by description (Davies, 2016). It means that whenever or wherever any good is sold by means of any description, then such goods must comply to the description that is provided by the seller. If such gods fails to comply with such quality that is described then it amounts to the breach of the Sale of Goods Act.

Sale of Goods Act and Implied/Express Warranty

The Sale of Goods Act through the application of Section 53, makes the dealing with the establishment of the rules and the norms that are followed by any buyer in case where the seller involves himself in breaching a warranty. The Section makes the statement that a buyer is entitled always to bring a legal action for the breach of a warranty against any seller. The Act also makes the provision that in case any seller makes the violation of any warranty breach, then the buyer could force the seller to make the reduction in the purchasing price (Eggen, 2015).

The case study that is given, makes the identification of Alan as the seller and Ben as the buyer. The demand of Alan was clear regarding the want of the purchase of the three bottles of vodka that is Russian. Alan entered in the liquor shop of Ben and held some bottles of vodka. Upon enquiring, it was held by Ben that the bottles in Alan’s hand were of Russian vodka. Alan made the belief of the words of Ben and then ordered three bottles. The bottles that are delivered by Ben were illicit drinks and that caused the illness of the three friends of Alan. The duty of Ben was to deliver the proper goods that is the bottles of Russian vodka, but he delivered illicit drinks. Hence, Alan could bring legal action against Ben.  

In the scenario that is given, the receipt that was delivered by Ben to Alan should not be considered as a contract. The receipt must be considered as an evidence of the implied contract that existed between Ben and Alan. The scenario that is given suggests that there Alan made the invitation for offer to Ben. Alan made the invitation to Ben to offer him three bottles of vodka from Russia. Ben is a shopkeeper and made the offer to Alan of his required quality vodka to which Alan accepted and in return, Ben gave the receipt to Alan as a proof of the dealing between the two parties (Poole, J. 2012).

The terms that in the receipt depicted the instructed that the goods or the products once sold from Ben’s shop is not entitled to be refunded. Further, the receipt also encrypted that the seller is in no way responsible for the safety of any products that were sold by the shop. In the case the problem emerged when three friends of Alan got diarrhea along with food poisoning after drinking the vodka sold by Ben. On making the further research, it was found out that the vodka purchased by Alan from Ben contained illicit drinks.

In accordance to the contract law, there has to be the proper performance that has to be made by the party who is of the duty to do the same (Burrows, 2016). The lack of proper performance or non-performance amounts to the breach of contract. In the case that is given, the performance of the contract between Ben and Alan was to be done by Ben. Ben failed to make the proper performance by delivering illicit drinks instead of Russian vodka to Alan. We can also say that there is also fraud involved Ben’s part as he knowingly delivered wrong product to Alan (Davies, 2016). Hence, from this fact we can say that there is breach of contract on Ben’s part as the contract between the parties was entered for the purchase of Russian vodka and not any illicit drinks.

Breach of Contract and Legal Action

In accordance to consumer laws, no seller has the right to make the selling of any product that lacks the quality of merchandise (Kenny, 2014). The act of Ben shall also be considered as illegal because of the provisions of the consumer laws that demarcate in clear terms that every customer bears the right to receive proper goods from the sellers. 

In the context stated above, the terms of the receipt that the seller is not responsible for the safety of its products is not valid. As it is proved that the bottles delivered by Ben were faulty, he is bound to refund the money to Alan.

The case ACCC v Pepe’s Duck in the year 2012, held the defendants claim as false in determining the fact that the ducks produced by them were done in the process that is regarded as natural. The Court fined the defendant an amount of $400,000 (McKendrick, 2014). The case is similar to the given case as the claim of Ben that bottles sold to Alan were Russian Vodka was false. 

The principles that are related with negligence, foresee ability and proximate cause are applicable and are to be discussed while making the answers for the question 4 of this assignment. In the assignment that is given, it is seen that there are three friends of Alan who got affected as a result of diarrhea by having the drinks that were supplied by Ben.

The case study provided in the assignment suggests that Alan went into the shop of Ben for making the purchase of Russian vodka. He made the purchased three bottles of drinks on the assurance of Ben that those bottles meet the requirement of Alan. On that assurance, Alan made the purchase and those drinks turned out to be illicit. By drinking such drink, three friends of Alan suffered from food poising and diarrhea. Now, the primary concern of the scenario is that whether the act of supply of illicit drinks by Ben is responsible for the ill health of them. The second issue is whether they are eligible to brink any claim against Ben as they were not involved in making the purchase of the illicit drinks directly from Ben.

The issues in the scenario can be solved through the application of the principle of proximate cause. The term proximate cause in law relates to any kind of event that can be recognized as the cause of injury to any third party (Gifford & Robinette, 2014). The cause of any kind of injury to any party by the act of any person would be deemed the proximate cause of that injury. In the case of Palsgraf v. Long Island Railroad Co., the court held that if any party acts negligently and that leads to the injury of any third party, then such party would held liable for having the proximate cause of that injury. In the scenario, the delivery of illicit drinks by Ben is regarded as the proximate cause of damage of health of the friends of Alan (Richardson & Rackley, 2012).

The term foreseeable means any act that is attachable directly to the act of any person for causing the harm of any other person. In the scenario that is given, the storekeeper Ben supplied the illicit drinks instead of Russian vodka and that caused the harm of health of the friends of Alan. Hence, it can be said that the act of Ben is foreseeable directly for the ill health of them and they possesses the right to sue Ben (Robbennolt & Hans, 2016).

The law of negligence depicts that if the defendant fails to take the proper care of the goods of the plaintiff under legal duty, then he is liable for the damage that is sustained by the plaintiff for that lack of care (Sharkey, 2016). In the scenario of the assignment, the legal duty was on the part o0f Ben to make the transfer or delivery of original vodka to Alan. Ben made the breach of his duty by making the supply of illicit drinks that caused the ill health of the friends of Alan. Therefore, Alan’s friends are liable to bring suit against Ben.    

Reference List    

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