A contract can be defined as an agreement between two or more parties or organizations and the requirements that the contract forms are recognizable by the law. Therefore a contract law is an agreement between organizations that if one organization is dissatisfied with another, the law can intervene and make a judgment (Miller, 2009). Many organizations, for purposes of correlation with others, enter into contracts though many end up in the hands of the law due to various misunderstandings between the two. I many cases, the offering company always wins most of the case due to ignorance of the contract terms by the offered. For a contract to be enforceable, it must be legal, it must have an offer, it must be accepted by both parties and it must have considerations to both parties. It is therefore advisable to keenly read the terms and conditions of a contract before entering in to it.
In our case here, we have two companies involved that are Clean and Tidy Ltd and PC Ltd. Clean and Tidy Ltd has been offering computer cleaning services to PC Ltd for four years now. It is seen that some computers are damaged and PC ltd is asking for compensations but Clean and Tidy Ltd look upon a clause that they had given to PC ltd. Before the cleaning took place, PC Ltd did not sign the contract. Clean and Tidy Ltd claims that they are only eligible to pay for any damages if they are notified in advance that the item damaged is particularly valuable, which PC ltd had not done. For the law to intervene in a contract case, it has to look at a number of things. First of all, was the clause incorporated as a term or a contract? It could be said that the clause was a term rather than a contract. This is because it was written at the back of slip of paper that Clean and Tidy had given to PC Ltd.
For the clause to be termed as a contract, it has to be well defined at the front of the written contract. As in the case of Woodruff vs. Clarke Company Farm Bureau Cooperative Association, where a farmer purchased chicken for the purposes of laying eggs. Most of them died after illness and the farmer sued the seller. The seller pointed to the language on the receipts that he gave to the farmer that stated “no warranties either express or implied have been made by the seller as to the condition of the poultry”. The court ruled the case in favor of the seller though it questioned whether the language was conspicuous enough to draw the attention of the farmer. In the case of Clean and Tidy Ltd and PC Ltd, it can be seen that the clause was written at the back of a slip of paper and so it was not conspicuous at all to the PC ltd company to see. The court should rule the case in favor of the PC ltd company.
Secondly, the terms of the contract should be visible and clear. As for the case of Henderson vs. Stevenson where a passenger travelling with luggage from Dublin to White haven on a ticket (Miller ,2009), which had a term written on the back which exempted the shipping company from liability for the loss of luggage. He never looked at the back of the ticket. He lost his luggage and sued for damages. He was entitled to damages as he was not bound by something which was not communicated to him. In our case here, it can be seen that the term on the Clean and Tidy Ltd being liable to pay for the damaged is not visible. It is situated at the back of a slip of paper that Pc Ltd was given. Therefore PC Ltd is entitled to damages and the law should rule the case in favor of it.
Thirdly, timing of the notice also matters. The major question here is was the notice given before or during the contract period? As for the case of Ramsgate Victoria Hotel Co., vs. Montefiore where an individual offered to purchase shares in a company by writing a letter on June 8 (Kelly & Anne, 2002). The company released the shares on 23rd November. The individual refused the shares. The law held to that the offer lapsed as it was not accepted within a reasonable time. In our case here, it can be seen that Clean and Tidy Ltd did not give their terms on damaged computers to PC Ltd on time or within a reasonable time. It was after the damage of the computers that the term came to light. The slip of paper that the term was written was given to PC Ltd on the day that Clean and Tidy Ltd cleaned the computers. This was too late since it was long after the contract was signed.
Also, in our case here, the Clean and Tidy’s term was written on a slip of paper. If the conditions are contained in a separate document that is delivered after the contract is complete, then the offeree is not bound by them. Such document is taken as a non-contractual document as it is not supposed to contain the conditions of the contract. According to R.S. Deboo vs. M. V. Hindlekar, it cannot be assumed that the printed conditions that are on any document attached to the actual contract (Gilles, 2004), may it be a receipt or a piece of paper, automatically become contractual terms or part of it. Take for example this case; a person hired a chair from the municipal council in order to sit on the beach. He paid the rent and was given a ticket which had a clause on an attached slip of paper at the back that exempted the council for any accident or damage arising from the hire of chairs. The person sustained injuries as he was sitting on the chair after it broke down. He sued the council for damages. The law ruled that the council was liable for the person’s injuries since the clause on the attached slip of paper do not automatically become contractual terms. This is according to Chapleton v. Barry U.D.C (Gilles, 2004).
The other essential thing is the reasonability of the term of contract (Kelly & Anne, 2002). In our case here, it can be seen that the term stated that Clean and tidy Ltd will not be responsible for any injuries or damages howsoever caused. The term then continues to say that the company will however pay a certain amount per computer damaged if it is informed in advance that the item is particularly valuable. This does not make sense at all. It either you are eligible or not. The term also states that it will pay a certain amount for a computer that is damaged if they are informed in advance of its value. This is an offer and for an offer to be valid, it must be communicated in time. In this case, it was not communicated to PC ltd and they were not aware of it. As for the case of Felthouse vs. Bindley a supplier sent a draft agreement relating to the supply of coal and coke to the manager of a railway company for his acceptance. The manager wrote the word “approved” on the draft and put it in a drawer with an intention of sending it to the supplier for a formal contract to be drawn up. The draft remained in the drawer. In this case, there is no contract since the manager had not communicated his acceptance to the supplier. In our case here, it can be seen that PC Ltd did not accept or respond to the offer that Clean and Tidy gave since they were not aware of it. The offer was revealed after the damages of the computers and therefore the law should rule the case in favor of PC Ltd since they were not aware of the offer and they even did not respond to it.
PC Ltd was not bound to the term that Clean and Tidy ltd gave on the damaged computers. First of all, the term was written on a slip of paper. Secondly, it seems that PC Ltd was not aware of the terms since they demanded compensation immediately there were damages on their computers. Thirdly, the term, having an offer in it was not communicated to the offeree. It was also communicated to the offeree at a very late stage when the damages had already occurred. Though, Clean and Tidy could however not be liable to the damages since they requested a notification of the value of the computers before cleaning them otherwise they are liable for the damages and they should compensate PC Ltd for them.