Dr. Archer case study
Issue: In this case, the issue to be decided is if the contract is enforceable or if there has been a violation. If she can get out of having to pay the £2000 fine & whether she can sue for the injuries she sustained.
Law: While creating a contract, there are a few important factors to take into account. The contract's enforcement & legality will be decided by these factors. Several steps are involved in contract formulation to guarantee the validity & legal enforceability of the agreement1. These prevent misunderstandings & conflicts by assisting the parties in their negotiations, clarification, & finalization of the contract's provisions. Acceptance and offer, Consideration, and intention to create legally binding relationships, are the principle elements to form a contract. Writing, signature, & more formalities: If the terms of the agreement & any regulations that apply are met, there can be particular requirements that the agreement be in written form, signed by both parties. For a contract to be legally enforceable, all necessary provisions must be mutually agreed upon by each party & must be expressed in plain, unambiguous language that is there should be completeness & clarity of the terms1.
The fundamental components that make up a contract are an offer & an acceptance. An offer is a proposal that outlines the parameters of a possible agreement and is given by one party to another party. Once the person receiving the offer expresses their unambiguous acceptance of those conditions or terms, acceptance takes place1.
There are 2 kinds of exclusion clauses, with varying levels of exclusion; Exclusion clause and limitation clause. A provision that limits or eliminates liability for failure to fulfill or breach a contractual obligation is known as an exemption clause. It is necessary to construct an exclusion clause in compliance with standard contractual interpretative procedures1. Pricing & risk distribution are fundamentally influenced by the inclusion & limitation of provisions, but commercial parties retain the autonomy to negotiate & distribute risks as they see right. An exclusion clause may be added to a contract in one of three ways: a) Signature b) Notice c) Prior deals1. Where an exclusion provision satisfies the construction test, is included in the contract as a term, & is not deemed legally binding by the Consumer Rights Act 2015 or the Unfair Contract Terms Act 1977, it becomes legally enforceable on each of the parties. When a contract has been signed, the exclusion clause typically takes effect.
In the case of L’estrange v Graucob 1934, L’estrange had agreed to a contract of terms and conditions by Graucob for the purchase of a slot machine which contained exclusion clauses. The slot machine was deemed to be a faulty product, thus L’estrange attempted to claim based on the goods of sale act. In the terms and conditions to which L’estrange had agreed too it clearly stated that Graucob will not be liable if the product is faulty. As a result, the courts held that the L’estrange claim was not held because of his failure to read the terms and conditions and the contract was effective4. There is a well-established rule that states that a party cannot rely on a contractual term that is unusually onerous or uncommon yet is not visible until he has taken sufficient steps to equitably draw the other party's consideration to the term, effectively rendering it incorporated by reference. Otherwise, contracts that are signed are subject to the ruling in L'Estrange v. Graucob4, which states that the signature is obligated to the terms of the agreement regardless of whether he had read them.
Even if it has been determined to be included in a contract, exclusion clauses are not always binding because they might be exploited unjustly when individuals engage into a contract. A statute known as the Unfair Contract Terms Act of 1977 prohibits the enforcement of specific exemption provisions in contracts, this means that an individual's contractual liability cannot be restricted or eliminated.
Unfair exclusion terms in contracts are forbidden by the Unfair Contract Terms Act of 1977. The provisions of this kind are specifically forbidden by section 3 of Unfair Contract Terms Act5 of 1977 in cases where a party contract on the other person's "written standard conditions of business" or transacts as a customer. Regardless of what is said in the agreement, any company that sells products to customers is constitutionally bound to fulfill several implicit responsibilities. The "statutory rights" of customers are as follows. Products must be as described, of acceptable quality, & appropriate for the intended use5. Contract clauses that fail to give customers the opportunity for a complete refund if items are misrepresented or faulty may be deemed unfair by the rules & be invalid and not binding under other laws.
Group 4, Para 1(d) of Schedule 2, Unfair Contract Terms guidance states that customers are not entitled to a complete refund of all advance payments in cases when they cancel with no kind of explanation & the provider incurs losses as a result. However, it is obvious that a clause that stipulates they will always lose some of the money they paid in advance, no matter the total amount of expenses & losses brought on by the cancellation, an excessive charge that is more than the sale price will be viewed as an unreasonable charge.
Group 5, Para 1(e) of Schedule 2, Unfair Contract Terms Guidance7 states that penalties that are possibly too severe. If a penalty stipulates a set amount that must be paid in every situation, it may be contested if the amount is excessive in some circumstances.
Part 2 of the Consumer Right Act 2015 consolidates the laws about unfair conditions in "business to consumer" transactions & notices are clarified. Terms & notices included in consumer contracts must be reasonable. Solely fair terms shall be enforceable against the customer. "Unfair" provisions are defined as the ones that prejudice the consumer by restricting their freedoms or unduly raising their liabilities in comparison to the supplier's rights & responsibilities. The remainder of the contract will apply to the extent that it is practical if a term is determined to be unjust & not enforceable.
Section 2(1) of Unfair Contract Terms Act 1977 states one cannot limit or restrict his duty for negligence-related death or physical harm. This covers all conditions of contracts and notices to individuals. If the term or notification is reasonable, an individual may, however, limit or exclude their duty for further loss or harm.
Application:-In this situation Dr. Archer has incurred charges of £2000 for late fees of documents she had purchased online after agreeing to the terms and conditions by World Archives Ltd. An exclusion clause may be added to a contract in one of three ways: a) Signature b) Notice c) Prior deals. Where an exclusion provision satisfies the construction test, is included in the contract as a term, & is not deemed legally binding by the Consumer Rights Act 2015 or the Unfair Contract Terms Act 1977, it becomes legally enforceable on each of the parties. When a contract has been signed, the exclusion clause typically takes effect.
In this situation Dr. Archer had given her approval for accepting the terms and conditions by ticking the box. Therefore, making the terms and conditions of the contract incorporated. In the case of L’estrange v graucob 1934, L’estrange had agreed to a contract of terms and conditions by Graucob for the purchase of a slot machine which contained exclusion clauses and later returned to Graucob on the basis of goods of sale Act. In the terms and conditions to which L’estrange had agreed too it clearly stated that Graucob will not be liable if the product is faulty. As a result, the courts held that the L’estrange claim was not held because of his failure to read the terms and conditions and the contract was effective. The conclusion of this case demonstrated that it does not matter that Dr. Archer did not read the terms and conditions because she gave her signature. The act of ticking the required box and accepting the terms and conditions despite not reading them or failing to understand them is her own mistake. Therefore, she has to honor the contract.
However there are certain protections which can be availed by Dr. Archer. She can also argue that the terms and conditions she agreed to be unenforceable because it could be considered as unfair terms and conditions. This is due to the fact that Dr. Archer had to agree to the terms & conditions to finalize the sale of the original archive documents. She did, however, accept the terms and conditions, which does not make the contract any less legitimate.
Despite this, Dr. Archer can claim that the terms & conditions clause was burdensome to avoid having to pay the £2000 late returns fee. There is a well-established rule that states that a party cannot rely on a contractual term that is unusually onerous or uncommon yet is not visible until he has taken sufficient steps to equitably draw the other party's consideration to the term, effectively rendering it incorporated by reference [L’estrange v graucob 1934].
In the case of Interfoto v stiletto, it was held that if a contract contains a severe or unusual word that deviates from standard business procedure, the party wishing to count on the clause must ascertain that the other party has been made aware of it. If not, there's a chance the clause won't be enforceable. Thus, it's a result of Dr. Archer not receiving a just & reasonable amount of notice or not made aware of the risk before the indictment being brought against her, a contract term “Late returns imposing a penalty of £50 per document” that is extremely burdensome or uncommon and that the bound party "Dr. Archer" would not typically be aware of is only binding if it was brought to their knowledge. Thus, Dr. Archer can claim that the terms & conditions clause was burdensome to avoid having to pay the £2000 late returns fee.
Dr. Archer can also claim the contract to be void under the Regulation 5(1) of the Unfair Contract terms act. Unfair exclusion terms in contracts are forbidden by the Unfair Contract Terms Act of 1977. Group 4, Para 1(d) of Schedule 2, Unfair Contract Terms guidance states that customers are not entitled to a complete refund of all advance payments, it is obvious that a clause that stipulates they will always lose some of the money they paid in advance, no matter the total amount of expenses & losses brought on by the cancellation, an excessive charge that is more than the sale price an excessive charge that is more than the sale price will be viewed as an unreasonable charge. Group 5, Para 1(e) of Schedule 2 of Unfair Contract Terms guidance states that penalties that are possibly too severe. If a penalty stipulates a set amount that must be paid in every situation, it may be contested if the amount is excessive in some circumstances. Therefore, Dr. Archer having to pay the £2,000 as late returns fee is unreasonable as the sale price is £192 and late fees is £2,000 which is excessively high can be contested in the court on the basis of Regulation 5 of Unfair Contract Terms Act of 1977.
Furthermore, Dr. Archer can also argue that under Section 64 of Consumer Right Act 2015 which includes the laws about unfair conditions in "business to consumer" transactions & notices are clarified. Terms & notices included in consumer contracts must be reasonable. "Unfair" provisions are defined as the ones that prejudice the consumer by restricting their freedoms or unduly raising their liabilities in comparison to the supplier's rights & responsibilities. Thus, Dr. Archer can avoid paying £2,000 if it can be proved that the term of late fee was not transparent & prominent thus being an unfair term of the contract.
Dr. Archer can also claim for the injuries sustained from her visit to the company. Even though she agreed to the terms and conditions and it was clearly stated that the company would not be liable for any injuries occurred as a result of the contract or on their premises. According to Unfair Contract Terms Act 1977, Section 2(1), one cannot limit or restrict his duty for negligence-related death or physical harm. This covers all conditions of contracts and notices to individuals. If the term or notification is reasonable, an individual may, however, limit or exclude their duty for further loss or harm. Hence, Dr. Archer can sue for damages as it was negligence on the company’s part that Dr. Archer had tripped over a broken floor tile in the company’s reception area and the company did not present any warnings of the broken floor tile which is a safety hazard. Additionally, it was their duty to do so to avoid any potential scenarios where it would be reasonably foreseeable that individuals would sustain injuries consequently.
Conclusion: Dr. Archer has several arguments which she can employ to make the contract void including reasonable amount of notice was not brought to her, a contract term “Late returns imposing a penalty of £50 per document” that is extremely burdensome or uncommon and that the bound party "Dr. Archer" would not typically be aware of. Secondly, Dr. Archer having to pay the £2,000 as late returns fee is unreasonable and she contest this in the court as late fees is £2,000 which is which is excessively higher than the sale price is £192 on the basis of Regulation 5 of Unfair Contract Terms Act of 1977. Thirdly, Dr. Archer can avoid paying £2,000 if she can prove that the term of late fee was not transparent & prominent thus being an unfair term of the contract under Section 64 of Consumer Right Act 2015. Furthermore, even after giving up World Archives Ltd. of there, Dr. Archer is entitled to compensation for losses she endured.
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