Case Study about the Contract of Sale Between Alan and Ben

Question: Case study about the contract of sale between Alan and Ben. Answer: Elements of a Valid Contract In the given case circumstance there is contract of sale between Alan and Ben, there are five essential elements to form a contract that is valid in nature; these five elements are (i) offer, (ii) acceptance, (iii) consideration, (iv) intention to create a legal relation and (v) legal capacity. Figure: 1: Elements of a valid contract (Source: Created by Author) Legal capacity is an essential element of a valid contract meaning thereby a person who is a minor (in Singapore from March 3009 the age of the minor is 18 years) or a person who is incapacitated mentally cannot form a valid contract. In the given case of Ben and Alan, it has been mentioned that Alan is an avid drinker, therefore, it is not possible for Alan to be minor and it is assumed that he has attained the legal age. Therefore Alan being the offeree is an adult. On the other hand, Ben who is the offeror is an employee though the legal working age in Singapore is 14 years however it has not been stated in the case study that Ben is a minor. Therefore an assumption is made that he has attained the legal age. Further it can also be noted from the situation that both Ben and Alan are not mentally incapacitated since Ben was able to explain to Alan the drinks that were available with him and Alan was able to put forth the specific preference that was required by him with respect to the drinks and was able to carry the whole transaction out without any issues. Thus since they have both attained legal age and both are not incapacitated legally they would hence be bound by the contract formed between them. For there to exist a valid contract there needs to be an offer, the offer is an expression which is defined as the willingness of a person to contract with terms that are specific. Further, these terms have been made with the intention of the same becoming binding as soon as the parties accept it. This party to whom the offer is being made is the offeree. There are three basic requirements an offer (i) that the offer must contain the exchange terms, (ii) there should be an indication that the person is willing to make such an offer ("Offeror) to have the contractual terms be binding on him and (iii) the offeree is conferred with the power to bind the contract of the offeror so that the same cannot be withdrawn from the latter once the offeror has accepted it. It was opined in the Pharmaceuticals Society of Great Britains case that the displayed products of a shop are there for being chosen by the customer however an offer is made only when the customer offers to buy such products. In the case between Ben and Alan, Alan who wants to buy liquor goes to Bens store where the same has been put on display. Thus this was an invitation to treat since he had gone to the store and was observing the various types of liquor that were on display. The offeror, Ben made to the offerree Alan a countr offer with respect to buying of Russian distilled thus leading to the initial treat to offer being nullified. Though, Alan insisted on buying only vodka that was Russian distilled and Ben the offeror assured him that the vodka would satisfy his requirement. In the Bannermans case it was opined Schawel vs. Reade it had been held that where it has been indicated to the representor by the representee the statements importance the same would be held to term, i.e. there has been communication of term that is specific in nature. Thus there has been a specific preference that has been made by Alan to Ben which Ben as assured at the time of negotiation to be the product that Alan had asked for thereby offer was made in furtherance of this intention. This offer was then accepted by Alan and consideration paid for the three bottles of vodka which was bought. There was acknowledgment of the same by way of receipt. Thus there has been a valid offer and acceptance in the given situation and also there was an intention of creating a legal relationship. There was consideration also paid for the products bought. Also either Ben or Alan was legally incapacitated to enter into the contract. Therefore all the elements of contract are present making it a valid. However in the given case the quality of the product was assured by Ben at the time of purchase however the consequences of this product proved to be dangerous hence there was misrepresentation of Bens part. Therefore since it was through misrepresentation that the contract was induced the same maybe set aside. The Sale of Goods Act Ben is a salesman at a shop that sells liquor, he sold Alan either by mistake or purposely alcohol that was illicit in nature. In the case of Rowland vs. Divall it was opined that when possession of a good is by any means that illegal or illicit then the same is not justifiable. Where there is description of the goods to be sold then under Section 13 it is an implied condition that the goods are required to correspond to such description. This section is concerned not with the quality but the description of the product (Arcos v Ranaason [1933] AC 470). Thus the section 13(1) of the Sale of Goods Act (The Act) would be attracted since Alan had insisted on vodka that was Russian distilled and Ben had assured that it was what Alan had asked for however the description did not correspond with what was actually given to Alan. Though there can be an assumption which can be made that since Ben is only a sales person he might have sold this liquor unintentionally. Since it is not possible to make out with naked eyes if there is any fault in the product, further it was not until Alan and his friends drank that the fault was realized. Further section 13 cannot be relied upon in the cases where the products have been actually viewed by the buyer (Harlington Leinster v Christopher Hull Fine Art [1991] 1 QB 564). Thus as per section 14(2A) the product meets the satisfactory quality under Section 14(2B) since any reasonable man would have concluded the same (Compact Metal Industries Ltd v PPG Industries (Singapore) Ltd ([2006] SGHC 242, National Foods Ltd v Pars Ram Brothers (Pte) Ltd [2007] 2 SLR(R) 1048). The Sale of Goods Act (SGA) states that the quality of products is an essential requirement that needs to be met, by the products that are being sold, under section 14(2A). The standard of this is that which would be regarded as satisfactory by any reasonable person under the same situation ("Ch.09 Domestic Sale of Goods", 2016). Safety of the product is one of the most essential elements under section 14(2B) that needs to be satisfied (Nair, 1984). However action can be brought under section 14(3) since the product needs to serve the purpose for which it had been purchased. In the case of Frost v. Aylsbury (Frost v. Aylsbury Dairy Co. Ltd., 1905), that the alcohol that was bootleg would defeat the purpose of the product. In the case that there were certain qualities which the buyer had informed to the seller that the goods are required to have then the standards placed are under section 14(3) and these are much higher standard as compared to section 14(2). In this the seller would be liable if the product does not meet the specification as required by the buyer (National Foods Ltd v Pars Ram Brothers (Pte) Ltd, 2007). Thus the alcohol which Ben supplied did not satisfy the purpose and hence it actionable under 14(3) An acknowledgment is given by a party to contract in writing that they have received from the person named in the receipt the consideration that has been specified in the receipt. There is an acknowledgment of the receipt sometimes of having received a particular thing and also for doing another thing an agreement. However as far as the receipt goes it is only a prima facie evidence as far as the receipt is considered. Therefore as observed receipt is only a primary evidence of existence of a contract between two parties and not the contract itself therefore in the given example the receipt that was given by Ben to Alan was only an evidence of the contract that exists between them and not the contract itself and it cannot be assumed to be the same. There are three requirements that are required to be fulfilled for a written term to consider as being incorporated in the contract by the court. The first of these requirements is that the notice for the incorporation of the term has to be given either during the agreement or before the agreement of the contract. In the case of Olley v. Marlborough Court Hotel(Olley v. Marlborough Court Hotel, 1949), it had been established that for considering the incorporation of a term into the contract the notice of the same has to be given either before or during the time of the contract. Therefore since the exclusion clause needs to be informed either prior to the formation or after the contract has been formed in situation of Alan and Ben the clause of exclusion that the products sold are not refundable nor the seller responsible for the safety of the products the same should have been informed to Alan at the time when the contract was being formed which prior to the receipt of consideration or during the formation of the contract and not after the contract had commenced through a receipt. In the case of Parker v. SE Railway Co.(Parker v. SE Railway Co., 1877), the court was put forth the question of law as to whether the clause applied to Mr. Parker. It was found by the jury at trial that it was reaso nable on the part of Mr. Parker to not be reading the ticket which was the receipt. Thus in the case of Ben and Alan the exclusion clause can be only in the receipt and not in the receipt. Another factor which has to be taken into account with respect to an exclusion clause is reasonableness. The statement on the receipt clearly did away with any kind of responsibility of the seller and was very generic in nature. This would lead to the wrongdoings of the seller being limitless thus such an exclusion clause would not be enforceable. As opined in the George Mitchell case (George Mitchell v Finney Lock Seeds, 1983) that it was not unless the product has been used that the buyer will discover the breach thus such unreasonable clause would be strike down under UCTA section 6(3). The most essential thing that needs to be established for being able to claim under negligence damages is that there was a duty of care that existed and it was this duty of care which had been breached. If there is proximity between the defendant and the plaintiff there will be a duty of care that comes into existence. For establishing of whether there was duty of care that existed, the test of reasonable foreseeability is used. Alan had brought the alcohol was entertainment of his friends thus the friends are neighbors as per the principle since they are affected directly by the act of Ben. There is close proximity between Alans friends and Ben since there is a high likelihood of his friends consuming the alcohol. There will be a duty of care owed by the defendant to the plaintiff in the case wherein a harm that might be caused to the plaintiff due to any act or omission of the defendant can be reasonably foreseen. Thus, it this case it become obvious that there has been a breach of duty on the part of Ben for selling liquor that had been obtained through bootlegging and he could have foreseen reasonably the harm that could have been caused by such alcohol(Donoghue v Stevenson, 1932). It was also stated further there needs to be reasonable care that needs to be taken for avoiding any kind of acts or omission that can be reasonably foreseen as causing an injury to the neighbor. Under law neighbors are those who are affected directly and closely by a certain act (Donoghue v Stevenson, 1932). It is to the ultimate customer that duty of care is owed to when it comes to the sale of goods. Thus in the light of the principle of product liability it may be concluded that there was duty of care which w as owed to the neighbors and the ultimate customers for ensuring that no such omission or act is conducted which would have a chance of causing harm. In the given case there had been a breach of duty by Ben for selling alcohol to Alan that was harmful in nature he would be held liable even for the harm that had been caused to the friends of Alan as the relationship is not remote and they are the ultimate consumers. There also exists a relationship between the harm that has been caused to Alan and the negligence of the part of Ben. It is required by the principle of causation that the harm is a condition which is necessary for there being negligence, and it is within the scope of liability of the defendant that the harm is falling. The causation and remoteness issues are tended to separately of which the key is the but for test where the question that is raised is whether the loss could have been sustained but for the defendants negligence. In this regard one of the landmark cases is that of Barnett v Chelsea and Kensington(Barnett v Chelsea and Kensington, 1969). Thus application of this principle in the given situation would indicate that had it not been for the harmful alcohol that Ben provided Alan and his friends would not have fallen sick thus this liability fell within Bens scope. Further action can be brought by Alans friends under the "Contracts (Rights of Third Parties) Act" Chapter 53B where third party contract terms are enforced. It is under the neighborhood principle that the friends will be able to qualify. References Articles and conditions of building contract.(2011). Singapore. Bannerman vs. White, 10 CBNS 844 (1861). Barnett v Chelsea and Kensington, HMC (1969). Ch.09 Domestic Sale of Goods. (2016).Singaporelaw.sg. Retrieved 4 July 2016, Compact Metal Industries Ltd v PPG Industries (Singapore) Ltd, SGHC 242 (2006). Donoghue v Stevenson, AC 562, 580. (1932). Frost v. Aylsbury Dairy Co. Ltd., 1 KB 608 (1905). George Mitchell v Finney Lock Seeds, 2 AC 803 (1983). National Foods Ltd v Pars Ram Brothers (Pte) Ltd, 2 SLR(R) 1048 (2007). Neyers, J., Bronaugh, R., Pitel, S. (2009).Exploring contract law. Oxford: Hart Pub. Olley v. Marlborough Court Hotel, 1 KB 532 (1949). Parker v. SE Railway Co., 2 CPD 416 (1877). Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd., 1 Q.B. 401 (1953). Rowland v. Divall, 2 KB 500 (1923).