As well as recovery of losses caused by the action of the other parties to the contract. Office Supply (OS) contracted to supply Dodgy Developers (DD) with a consignment of work stations to be fitted into new offices. DD also issued OS with a deadline for the refurbishment. The problem arises when delivering of goods arrived on the 30th November instead of the 28th which was the agreed deadline. OS said this was because of staff shortages so the arranged Shifty Shifters (SS) who are a independent contractors to deliver and unload the goods.
Due to negligent unloading 20 workstations where damaged. For DD to pursue an action against office supply or SS the exclusion clause contained in the contract must be taken into account. When assessing any liability against one party to a contract to another, it needs to be established whether there is a contract between the two parties, there has to be an offer and acceptance between them. This is called an agreement. In this there is a exclusion clause, terms and conditions which have to be explained clearly to both parties or whoever it may concern.
The terms and conditions were the same as the ones they normally received because they traded together for a long time. OS standard contract was to get the consignment delivered on time which they failed so, they had breached the contract. DD cant blame SS because they have no contract with them. Office supplies terms and conditions state ” Office Supplies, their servants, agents and independent contracts will not be liable for losses or damage howsoever caused. ” A exemption clause in a contract is one which works to exclude or limit in some way one’s party’s liability towards the other.
There are two types of these, one is limitation clause, where a party limits liability in a contact and the other is a exclusion clause where a party tries to avoid any liability at all in a contract. In the DD case OS are avoiding liability by blaming it on SS so there is a exclusion clause here. I say this because OS are taking no responsibility at all at what has happened. The rule of privity applies to this case, the meaning of this is where a contract is made between two parties e. g. OS made a contact with DD to deliver workstations on a agreed date.
If the terms of the contract impose duty on third party which could be SS and they fail to perform there part then it would be unfair for OS and DD to sue him as a result. This is because there is no contract from SS because they have not agreed to any. SS are a stranger to the contract. So OS and DD cant Sue SS But can sue each other. We can see from the case of Dunlop Pneumatic Tyre v Selfridge (1915) where Dunlop sold tyres to Selfridge on condition that they did not sell them below a price they agreed on. But Selfridge sold them to Dew who went on to sell them on for a price below what Dunlop disagreed on.
Dunlop tried to sue Selfridge but they later realised that there was no contract between them and only Dew could if they wished. Incorporation means, the clause part of the contract and how it was incorporated. There are a couple of issues when you look into incorporation the first which was established in the case Olley v Marlborough Court (1949) was that the terms must not come to late. Further more in the case of Parker v South Eastern railway (1877) it was set out that the term must be brought to the attention of the other party in a fair and reasonable manner.
If the courts follow the precedent it will be established that the exclusion clause set out by the office supply was correctly incorporated into the contract. The law is quite clear on exemption from liability for death and personal injury in consumer contracts, it is not allowed, where attempts are made to exclude or limit the liability the courts have to decide if this is reasonable. This means the way in which they interpret reasonableness is to fair given the circumstances known to parties at the time.
Other factors which the courts will look into are trade customs and previous dealings as seen in the case of Green v Cade (1978). OS have had many dealings with DD so it is not a first purchase. The courts have to take this into consideration. Further more OS may argue that the exclusion clauses set out in their terms and conditions was one that DD should of adapted and accepted at the time of making the agreement. The reason being was that DD often used OS for this type of work and the terms and conditions may take the stance that there was a course of dealing between the parties.
The contract between OS and DD was breached on OS part of the contract because they contracted the workstations to be delivered on Monday 28th Nov and they did not express that the consignment should be delivered in intact condition. In the case of Hochster v De La Tour (1853) a courier was employed for the summer holiday season and he was informed that he would not be needed before the date on which he was due to begin work. He sued before the starting date and recovered damages which were needed to support him during the time in which he would have been needed to work.
The courts can argue against OS because DD did not receive their consignment on the agreed date this could cause DD a set back in their work. The argument for this case is that DD can sue for recovered damages which they might of come across with a late consignment. Another question the courts will ask when assessing whether the exclusion clause will effect the action DD want to bring against office supply, can the clause cover the damage. There are two rules, which are the main purpose rule which means that the courts will not allow individuals terms to defect the main purpose of the contract.
In the case of Glynn v Margetson (1893) this was the case so we come back to our scenario where the main purpose of the contract was for OS to deliver work station to DD this was not achieved therefore it contradicts the very reason for the contract being made. The other rule was the Contract Referendum rule which means ambiguously in an exemption clause it may be interpreted against the person seeking to rely on it. This would not apply in DD’s case. Further in the unfair contract terms act (1977) it gives the opportunity for consumer rights within the contract formed.
The act operated by declaring certain terms which may already be within the consumers contract to be so unfair that they are invalid, such as in DD’s case they received a consignment of damaged goods, it does not clearly state what the procedures are for this so they have been treated unfairly and stuck with damaged goods of which are no good to them this leaves the liability with the supplier for defective products, DD can claim for negligence because OS owed them a duty of care to have the consignment delivered in good condition, this was not the case so there is a breach of contract.
If the courts follow the same approach DD can bring an action on the point we have stated above against OS. DD can argue that in their contact they did not mention anything about defective goods therefore the courts can look into the matter further the courts will only intervene in contracts where it is absolutely necessary following the idea of freedom to contract.
If DD wants to further their action for damaging their goods on delivery then we may look at defective product liability where strict liability for a defective product is placed on the producer without fault. The producer will in most cases be the manufacturer. The product is defective if the standard falls below what a persons are entitled to expect. DD and SS did not have any terms because the terms were between the other two parties (OS & SS).
Further there is no official contact between these parties therefore DD cant sue for damages. SS are an independent contractor therefore they have no contractual duty apart from deliver their consignments which they have been given by OS. OS could seek damaged from SS but I am obliged to discuss DD’s actions against the other parties. DD have some good points to argue their case as the one’s I have stated above but there is not much they can do to SS because they are an individual contractors and no contact was taken out with them.