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Rules of Part Payment of Debts and Consideration

Question:

Discuss About The Outdoor Activities Negligence Law Routledge?

The issue indentified in relation to the provided facts is that whether the provisions in relation to part payment of consideration and the exceptions to such provisions would make Marron Liable to pay PC solutions another 100 and whether she is entitled to make any further claim from the publisher.

The landmark case in relation to the rules of part payments of debts and consideration is the Pinnel's Case (1602) 5 CoRep 117a.  The primary ruling which had been made in this case was that a “part consideration is not regarded as a good consideration” where a promise has been made to settle the balance debt. In this case the defendant “Cole” owed the plaintiff “Pinnel” £8.50. Eventually, the plaintiff in the full settlement of his debts accepted a payment of £5.11 from the defendant. However, the plaintiff latter used the defendant for the remaining amount owed by him. In this situation the court ruled that in itself, part consideration is not to be considered as a consideration. In situation where the part payment has been made on the request of the creditor on an earlier date, the early payment would be considered as a consideration. Thus there would be a consideration in situation where part payment has been made on an earlier date, there have been some goods involved instead of money or part payment has been made in a different place (McKendrick 2014).

The rule provided by the Pinnel case in spite of its harsh nature has been used by the house of lords in the case of Foakes v Beer (1884) 9 App Cas 605. In this case the ruling that part consideration is not a good consideration had been affirmed by the court.

However as stated in Hughes v Metropolitan Railway (1876-77) L.R. 2 App. Cas. 439 where anything else it provided with the part payment in from of consideration t would be deemed that full consideration has been provided.


Another exception to this rule has been provided in the case of Wood v Robarts (1818). In this case compensation agreements had been identified as exceptions to the rule of part payment of consideration. In this case the plaintiff had accepted 0.50 for each pound as a full settlement of debt when the defendant was in liquidation. The court held that this situation would be a exception to the Pinnel case as the court held that making the defendant liable for the remaining amountIn the given situation it has been provided that Marron had got into a contract with PC solutions according to which she was to pay them $200 for repairing the computer in 24 hours. However due to unforeseen circumstances she no longer required the computer within such time. As a full and final payment of his debt the company accepted $100 along with a autograph. In the given situation through the application of the Pinnel case it can be stated that part consideration is not a good consideration. However through the application of the exception provided in Hughes case as an additional autograph had been provided with the payment it would be considered as a valid consideration.

Exceptions to the Rule of Part Payment of Consideration

In the other situation with the publisher it is evident that Marron is getting into a compensation agreement as the company is into liquidation and she has been asked to accept 0.20 pounds for each pound. Through the application of the Wood v Robarts case as this is a compensation agreement Marron cannot make any further claim.

The issue which has been identified after going through the situation is that whether and on what grounds the publishers can discharge the contract with Marron in relation to her writing services, legally

According to Cartwright (2016) a discharge of a contract signifies the way in which the contract is brought to an end. There a few ways in which a contract can be legally discharged. These ways are through

Performance- where the duties under the contract have been duly performed by the parties the contract is said to be discharged (McDermott 2017).

Agreement – this situation takes place where there is mutual agreement between the parties to end the contract between them

Breach – the condition is invoked when any of the parties to the contract are not able to comply with any or all of the obligations under the contract. In this situation the party who has invoked the breach is liable to pay the other party damages suffered by them (Andrews 2015).

A contract comes to an end automatically when frustration takes place. There are four conditions which need to be satisfied to identify the element of frustration. These conditions are as follows (MacQueen and Thomson 2016)

Firstly there has to be an event which is unforeseen in nature. This means that the event must be such that it would not be expected by the parties in a reasonable manner that the event would take place and thus no provisions in relation to the contract had been made for the event (Smits 2017).

Secondly, any of the parties to the contract must not be at fault in relation to the occurrence of the event. In the case of Maritime National Fish Ltd v Ocean Trawlers Ltd [1935] UKPC 1 it had been held by the court that the event must not be a “self induced impossibility”

Thirdly, the event must make the performance of the contract impossible. For instance where any one party to the contract has died it comes impossible for the contract to take place such as in the case of Taylor v Caldwell [1863] EWHC QB J1. However where a contract has become difficult or expensive to perform cannot satisfy the condition as provided in Contrast Cornish v Kanematsu.

Finally where the purpose or object of the contract has been destroyed the contract is deemed to come to an end by the doctrine of frustration as provided in the case of Krell v Henry [1903] 2 KB 740.

In the given situation it has been provided that the publishers want to discharge the contract as the company has got into liquidation. They do not want Marron to work for them anymore. Thus it can be provided that the contract has not been discharged by performance as the obligation under it have not be fulfilled. In addition the contract has not been discharged through an agreement. Thus there either has been a breach or a frustration.

Grounds for Legal Discharge of a Contract

In the given situation to provide that frustration has taken place the four elements of frustrations have to be applied. Firstly it can be stated that the liquidation of the company was unforeseen when the contract was entered upon by the parties. They would have not reasonably expected the liquidation of the company. In addition there was no fault of either party in relation to the liquidation. Further the liquidation has made the performance of the contract impossible. Finally the purpose of the contract has been defeated due to the liquidation of the publisher company.

Thus it  can be stated that the contract can be discharged through frustration by the publisher company and it is not a breach of contrac

The issue which has been identified in relation to the provided facts is that through the application of the provisions of Agency law whether authority was present in the part of the repair technician to release the computer. The issue is also to identify any breach of duty committed by the technician.As stated by O'Sullivan and Hilliard (2016) “a principal is liable for all acts of his agent who has been provided with an actual or apparent authority during the course of employment in relation to the third party. Any contract which has been entered into by the agent with a third party with respect to actual or apparent authority is binding on the principal.

In the landmark case of Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 it had been ruled by the court that even in situation where the agent does not gave a actual authority his acts would be binding in the principal in situations where the third party had relied on the authority to enter into a contract with the agent.

On the other hand where the third party has the knowledge that the agent does not have any authority provided by the principle and with this knowledge enters into a contract with the agent they cannot make a claim in relation to apparent authority as per the case of Quinn v CC Automotive Group Ltd t/a Carcraft [2010] EWCA Civ 1412 and Criterion Properties plc v Stratford UK Properties LLC [2004] UKHL 28

In addition were the third party has not made any reasonable inquiry in relation to the presence of the authority the court will deny the claim of the party as done in the case of Acute Property Developments Ltd v Apostolou [2013] EWHC 200 (Ch).

Employees have a fiduciary obligation towards the employer which means that there must be a notion of mutual trust and confidence between them. The actions of the employees can directly affect the employer. Thus the employees have a duty that they will not be exercising any actions which have not been authorized by the employer. Where the employee has acted beyond the authority provided by the employer the employee has the liability of compensating any loss which has been In the given situation it has been provided that Marron has got his computer released from a repair technician who worked at PC computers. In the given situation any action which is done by the repair technician is binding on the employer done in the course of employment as per the case of Freeman & Lockyer. In addition according to the principles of the Criterion Properties plc case where the third party has relied on the authority of the agent to get into the contract the contract is binding on the principle. Here there has been a valid contract between Marron and the technician where the computer was released for a consideration of an autograph and £100. The contract has been entered by relying on the fact that as the technician is the agent of PC computers he has the authority to release the computer. Thus according to the principals of agency the contract is binding on PC computers.

Elements of Frustration

However PC Computers can make a claim from the technician as he has misused this position and breached his fiduciary duties as an employer. He had a duty that he will not be exercising any actions which have not been authorized by the employer which he did in the case.

The contract between Marron and the agent is binding on the employer PC computers. The employee has violated fiduciary obligations owed to PC Computers.

The issue which has been identified in relation to the situation is that whether there has been negligence on the part of PC Computers or not. The issue is also to determine the applicability of the exclusion clause.

The concept of negligence had originated through the ruling made in the landmark case of Donoghue v Stevenson 1932 AC 562. The case provided the three basic elements of negligence which are Duty of care, Breach of duty of care and causation. These principles had been applied in Ireland various cases such as the case of Glencar Exploration Ltd, v Mayo County Council [2002] ILRM 481.

Whether the duty of care exists, can be analyzed by applying the proximity test or the Caparo test used in the Caparo Industries pIc v Dickman [1990] 2 AC 605 case. The case is not applicable where there is only economic loss but can be applied where the loss is because of a damage to property.  The breach of duty of care is analyzed by the application of the objective test or the reasonability test as per Vaughan v Menlove (1837) 3 Bing. N.C. 467 by analyzing the action of a reasonable person in place of the wrongdoer. Causation is determined by the application of the “But For” test as per Barnett v Chelsea & Kensington Hospital [1969] 1 QB 428 where if the injury is cases as a effect of the breach of duty only then negligence can be established (Austria et al. 2016).

According to the case of L'estrange v Graucob (1934) where a contract has been signed by the parties it is deemed that the parties have accepted all the terms of the contract even if they have not read the terms stated in the contract.

An exclusion clause is incorporated by the parties to the contract to limit the liability which may arise out of the contract. The clause if incorporated properly into a contract makes the party immune to the particular liability.

However as per the case of Thornton v Shoe Lane Parking (1971) exclusion clause in order to be valid has to be incorporated appropriately into the contract. This means that the other party has to be made aware of any clause which has been incorporated into the contract to the detriment of the party (Fulbrook 2017).

It has been provided through the facts of the study that the hard drive of Marron’s computer has been completely wiped out by PC computers. Whether there has been negligence on their part or not will be assessed by the application of the elements of negligence in the situation. Firstly the duty of care needs to be analyzed. It can be stated by the application of the proximity test that there was a duty of care owed by PC computers to Marron in relation to the safety of data. In addition where the objective test is applied it can be stated that a reasonable person must have ensured that the data which was very important to Marron is not deleted from the computer. Thus while not been able to do so PC Computers have violated the duty of care. In addition where there had been no loss of data Marron would not have been subjected to any financial losses. Thus there is negligence in the situation on the part of PC Computers.

In addition it has been provided that there was a exclusion clause which was present in the contract through which PC Computers could not be held liable for the loss of data. As per L'estrange case where a contract has been signed between the parties they are bound by the terms of the contract whether they have read it or not. However where the exclusion clause has not been added properly it cannot be binding. In the situation the clause was not adequately notified to Marron by PC Computers. Thus in this situation the clause cannot be held as appropriately incorporated and PC Computers are liable to pay compensation to Marron.

Conclusion

There is negligence on the part of PC Computers and the exclusion clause cannot be used to limit their liability as it has not been incorporated in a proper manner.

References

Andrews, N., 2015. Contract law. Cambridge University Press.

Austria, I.I., Bulgaria, I.V., Denmark, V.I., England, V.I.I., Estonia, W.V., Finland, I.X., France, X., Germany, X.I., Ireland, X.I.V., Latvia, X.V.I. and Lithuania, X.V.I.I., 2016. European Tort Law Yearbook. Issues, 5(1).

Cartwright, J., 2016. Contract law: An introduction to the English law of contract for the civil lawyer. Bloomsbury Publishing.

Fulbrook, J., 2017. Outdoor activities, negligence and the law. Routledge.

MacQueen, H. and Thomson, J., 2016. Contract law in Scotland. Bloomsbury Publishing.

McDermott, P.A., 2017. Contract law. Bloomsbury Publishing.

McKendrick, E., 2014. Contract law: text, cases, and materials. Oxford University Press (UK).

Morgan, J., 2015. Great debates in contract law. Palgrave Macmillan.

O'Sullivan, J. and Hilliard, J., 2016. The law of contract. Oxford University Press.

Poole, J., 2016. Textbook on contract law. Oxford University Press.

Smits, J.M. ed., 2017. Contract law: a comparative introduction. Edward Elgar Publishing.

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[Accessed 18 July 2024].

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My Assignment Help. Understanding Outdoor Activities Negligence Law Routledge Essay. [Internet]. My Assignment Help. 2019 [cited 18 July 2024]. Available from: https://myassignmenthelp.com/free-samples/outdoor-activities-negligence-law-routledge.

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