Bob Contract Case Analysis

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Description

Bob Contract Case Analysis

Issue

  1. Whether Bob is contractually obliged to install the double gazed doors.
  2. Whether Tom will be successful in recovering the $10,000 compensation.

Rules

  1. A party cannot introduce evidence of prior oral agreements that occurred before the agreement had been drafted into its final form.
  2. Contractual obligations must be performed within the prescribed time if any or within a reasonable time.

Analysis Bob Contract Case Analysis

The negotiations about the café glass doors saw Tom make it known to Bob of his desire to ensure minimal noise to the neighborhood. Tom told Bob that it would be important for the doors to be double gazed to that effect and Bob said that he could do that. However, these statements were only made during negotiations. When Tom was given another order with new terms, he initiated a new contract which nullified the previous negotiations. It was an offer made by Bob and it was up to Tom to accept or reject the offer. Upon signing it, he accepted to work within the new terms and conditions.

Not all statements made during negotiations end up as terms (Turner, 2014). These statements can only be regarded as mere representations, statements, or terms that have no binding effect to the contracting parties. Furthermore, in the case of Mercantile Bank of Sidney V Taylor (1891)it was held that if a contract is reduced to writing and the document appears to be the whole of the contract, the presumption is that the written document contains all the terms of the contract. Thus, verbal statements not included in the written agreement do not form part of the contract.

To this effect, Bob is not contractually obligated to perform actions that were mere statements and did not form part of the contract between the parties.

As to whether Tom will be successful in recovering the $10,000 compensation:

Tom told Bob that the renovations must be completed in two weeks. Bob was positive and he constantly assured Tom that the renovation would be complete within two weeks. Failing to do so was a breach of a contractual term. Bob is liable for the losses incurred and in this case, the $10,000 lost as a result of not opening the café.

Contractual obligations must be performed within the prescribed time.  When time is expressly stated to be “of the essence” or vital, the parties normally must perform within the stated time period because the time element becomes a condition (Turner, 2014). The court applies its descrition in determining whether time is indeed of essence and while doing so, will consider the implication of failing to undertake a contractual obligation in time. in this case, a four day lateness saw the plaintiff make a loss of $10,000 making it a breach of a condition in the contract.

In his defense, Bob chooses to rely on the exclusion clause. However is it a valid defense? In the case of L’Estrange V F Graucob Ltd (1934), it was held that signing on an exclusionary clause meant that the party had read, understood and accepted the terms of the contract. However, the exclusionary clause was specific. It provided that frustration caused by poor weather would be the only exception for liability on the part of Bob’s failure to undertake his contractual obligation in time. Indeed if the delay had been caused by what had been specifically provided, then the agreement on time would be voidable.

Conclusion Bob Contract Case Analysis

From the case, Bob is not contractually obliged to install the double gazed doors and Tom can successfully sue for $10,000 in damages suffered as a result of a breach of condition.

References

L’Estrange V F Graucob Ltd, , 2 KB 394 (1934).

Mercantile Bank of Sidney V Taylor , 12 LR (NSW) 252 (1891).

Turner, C. (2014). Unlocking Contract Law (4th ed.). London: Routledge.