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Assignment based on Contract Law
Contract Law (tort)
Introduction
The case mentions a company ‘Quashquell Construction Limited’ which is into the business of developing the properties in Manchester and the company is registered in UK. The company has been successful in all its past ten years’ projects. But, for the past one and a half years, the business of the company is declining because of the fears associated with impending the BREXIT referendum and the possible implications that it could have on the business of the company. So, in response to this fear as well as risk, the company decided to move to a new location in Hull because it wanted to stay close to all its new projects which were based in Hull. For its new business premises, the company bought an old Victorian building and decided to start operations in it from March 1, 2016. In addition to refurbishing the building and making it useful for operations, the company wanted to install a central heating system in it. QQ (Quashquell Construction Limited) entered into various contracts and agreements for carrying out the activities associated with shifting in the building and for installation of the heating system. But, this gave rise to some contractual and tort-related issues.
Therefore, the purpose of this report is to identify those issues and advise various people involved in the case, i.e. QQ, Sally, Sean and Amy regarding their potential legal claims.
Therefore, the purpose of this report is to identify those issues and advise various people involved in the case, i.e. QQ, Sally, Sean and Amy regarding their potential legal claims.
Contractual and Tort-related Issues
Issue 1
QQ entered into a contract with Retro Salvagers Ltd (RSL) for refurbishing the building for £50000. The terms of contract stated that RSL would complete the work by 25th February 2016, failing in which, there will be a deduction of 4.5% of the payment to RSL for each day till the completion is delayed. The deduction and deadline was strict because QQ had to fulfill its contractual obligation under which he had to give vacant possession of the property in Salford to a buyer.
But, the refurbishment was not completed on the due date by RSL and the shifting to the Victorian building could not happen. But, QQ had to vacate the premises in Salford so they shifted their office in a hotel in Hull for ten days and they incurred a cost of £5200 per day (rent + profits).
This is a contractual issue because RSL failed to fulfill its contractual obligation i.e. it could not complete the refurbishment by 25th February and it is a tort-related issue too because QQ had to incur losses and additional costs due to the problem.
But, the refurbishment was not completed on the due date by RSL and the shifting to the Victorian building could not happen. But, QQ had to vacate the premises in Salford so they shifted their office in a hotel in Hull for ten days and they incurred a cost of £5200 per day (rent + profits).
This is a contractual issue because RSL failed to fulfill its contractual obligation i.e. it could not complete the refurbishment by 25th February and it is a tort-related issue too because QQ had to incur losses and additional costs due to the problem.
Issue 2
QQ entered into an agreement with Damar Heating Systems Ltd (DHS) for installing the central heating system by 25th February 2016 and if DHS failed in that, it had to pay £1200. This contract was made on the basis of the statement made by one of the salesmen of DHS who told QQ that they have tried and tested this heating system and it is better than all the competitors. Also, he mentioned that it is energy efficient and QQ will recover its installation cost in two years if it gets this system installed.
But, DHS failed to install the system on the due date. Since the building was cold and damp and QQ had moved into it, so it hired mobile heaters and incurred a cost of £100 per day. After installation of the system by DHS, it started malfunctioning in three weeks. When the system was not functioning properly, QQ again had to incur costs on the mobile heaters. But, the officials of DHS assured that the system will stabilize in a few days which did not happen. So, QQ demanded an expert to look in it and an inspection was carried out by an independent expert. After the examination of the system, and before the submission of the assessment report by the expert, the heating system got exploded. When the expert submitted his report, it revealed that the installation was not done properly and there were faults in it. The report also stated that the system was not energy efficient and the reason for the explosion of the system was gas leakage.
This is a contractual issue because DHS could not fulfill its contractual obligation of installing the system on time. The contract was made on the basis of the statement that was fraudulent and miss-represented. Also, after the installation of the system, the claim of DHS that the system will stabilize itself was false. The tort-related issue arises here because QQ had to incur additional costs when it used mobile heaters.
But, DHS failed to install the system on the due date. Since the building was cold and damp and QQ had moved into it, so it hired mobile heaters and incurred a cost of £100 per day. After installation of the system by DHS, it started malfunctioning in three weeks. When the system was not functioning properly, QQ again had to incur costs on the mobile heaters. But, the officials of DHS assured that the system will stabilize in a few days which did not happen. So, QQ demanded an expert to look in it and an inspection was carried out by an independent expert. After the examination of the system, and before the submission of the assessment report by the expert, the heating system got exploded. When the expert submitted his report, it revealed that the installation was not done properly and there were faults in it. The report also stated that the system was not energy efficient and the reason for the explosion of the system was gas leakage.
This is a contractual issue because DHS could not fulfill its contractual obligation of installing the system on time. The contract was made on the basis of the statement that was fraudulent and miss-represented. Also, after the installation of the system, the claim of DHS that the system will stabilize itself was false. The tort-related issue arises here because QQ had to incur additional costs when it used mobile heaters.
Issue 3
When the heating system exploded, Sally and Sean, the two employees of QQ suffered from serious injuries. Then, Amy tried to escape from the room and used the new staircase built by RSL, but she slipped because of the slippery surface of the stairs and her ankle got dislocated.
This is an issue because the employees of the company faced injuries due to the accidents because of the negligence of RSL and DHS. Some suffered from serious injuries and some from the minor. Thus, this is a tort-related issue that has to arouse in this case.
This is an issue because the employees of the company faced injuries due to the accidents because of the negligence of RSL and DHS. Some suffered from serious injuries and some from the minor. Thus, this is a tort-related issue that has to arouse in this case.
Advise to QQ for the potential legal claims
QQ can file the following legal claims:
• QQ entered into a valid contract with both DHS and RSL because the terms of the contract had all the elements of valid contact i.e. consideration was present, the intent was there, parties were not incapacitating to contract, etc. When the valid contract was formed, it was the duty of all the parties to fulfill their contractual obligations. RSL had the obligation to refurbish the building on time and DHS had the obligation to complete the process of installation on time. Since neither of the duties was performed on time, QQ has the right to claim damages from these companies. Under the English Contract Law, when any party fails to perform his/her duty under the contract, then it is termed as breach of contract. The aggrieved party has the right to claim damages if the breach happens. Under the same law, the aggrieved party gets compensation for damages which intends to help the party in making its loss good and do not let the party suffer from the breach of contract. So, QQ can sue both the companies for breach of contract and can claim for damages from them. Also, it was mentioned in the terms of the contract with them that RSL was liable to pay damages to QQ for every day the work gets delayed and DHS was also to pay lump sum damage to QQ if the installation was not completed on time. Therefore, QQ can claim compensation from both the parties for delaying the contractual obligations. Also, there was no valid reason of non-performance of their duty on time.
• Due to non-fulfilment of contractual obligation by RSL, QQ had to incur extra cost of staying in hotel. Also, the company suffered from losses during that time. In this case, QQ will have to establish an entitlement to substantial damages for breach of contract. This provision is also provided under the English Contract law. But, to obtain this, the injured party has to show that the loss that it has suffered is caused by the breach of contract. Along with this, the type of loss needs to be recognized and finally, the loss should not be too remote from the terms of contact or the obligation under the contract. In this case, QQ can claim the damages legally because it is clear that the loss that it has suffered is due to the breach of contract, the loss is monetary and it is not far from the contract, it is a direct result of non-performance of duty on time by RSL and DHS. So, QQ is entitled to get compensation from both the parties.
This compensation will be separate from what they will pay as compensation under the terms of the contract. The aim of this remedy is to put QQ in the same or nearby financial position that it would have been if the promise by the parties had been fulfilled.
• QQ can sue DHS for misrepresentation. The English contract Law defines misrepresentation as a false statement of fact that is made by one party in a contract to the other party which induces another party to enter in contract. When QQ contacted DHS for the heating system, the salesman made a misrepresentation of the fact that ‘the system is tried and tested’ and ‘it is best among competitors’. He also said that ‘it is energy efficient’. All these statements were proved to be false when the expert submitted his inspection report. Due to these statements, QQ was induced to make a contract with DHS. Therefore, it is clear that misrepresentation happened and made QQ enter into a contract with DHS. Also, the energy efficiency clause was not expressed in the written contract, but, it made QQ enter in contract. So, this will be considered in the claim.
In this case, QQ can opt for rescission of contract which will set the contract aside and will put QQ back in its original position where it was before the formulation of contract. Then, QQ can also ask for indemnity where the court can order DHS to pay for the expenses that QQ incurred in complying with the terms of the contract. For example, the payment of mobile heaters that QQ made when the system did not work properly after installation. Finally, QQ is also allowed to claim for damages. Since this is a fraudulent misrepresentation, QQ has an automatic right to claim the damages. These damages can be claimed under the English contract law or under the Misrepresentation Act of 1967.
• Lastly, QQ has the right to sue both the companies for not performing their duties in an expected manner. This is because; three of the employees of QQ got injured due to the negligence of RSL and DHS. There were the implied conditions of the contract that whatever work they will do, it should not harm the people and should be done in a proper way. But, due to the negligence of both the companies, the employees of QQ suffered from serious injuries. So, QQ can also make them pay for the damages that the company has suffered as a result of proving the expenses for treating the employees as well as the cost that the company suffered due to the absence of employees at work.
Advise to Sally for the potential legal claims
• Sally was an employee of QQ and got injured during the explosion of the heating system. She was not part of any contract between QQ and DHS but, under the English Tort Law, she can claim to get justice. This law governs the implicit civil responsibilities that the people have towards each other and these responsibilities are not necessarily laid out in contracts. Under this law, Sally can get legal remedy and she can also get monetary compensation because she has been damaged by DHS’s failure to meet the implicit responsibility that was, to provide a safe and secured heating system.
Sally can make DHS liable for negligence under tort law because a breach of duty of care has happened which DHS owed to all the employees of QQ. To install a safe system and to take care of the injuries to people, DHS was responsible for the general duty of care. In Donoghue v Stevenson, Donoghue was given compensation for an illness that she suffered when she consumed a decomposed snail in the ginger beer bottle supplied by Stevenson. It was held that Stevenson was responsible for taking care of the bottles and the contents that he was supplying to people. Similarly, in this case, DHS was responsible to take care of all the people who were exposed to that system. So, Sally can claim for monetary compensation from DHS for the expenses that she incurred in her treatment and she can also sue the company and ask the court to suspend its operations in the future.
• QQ entered into a valid contract with both DHS and RSL because the terms of the contract had all the elements of valid contact i.e. consideration was present, the intent was there, parties were not incapacitating to contract, etc. When the valid contract was formed, it was the duty of all the parties to fulfill their contractual obligations. RSL had the obligation to refurbish the building on time and DHS had the obligation to complete the process of installation on time. Since neither of the duties was performed on time, QQ has the right to claim damages from these companies. Under the English Contract Law, when any party fails to perform his/her duty under the contract, then it is termed as breach of contract. The aggrieved party has the right to claim damages if the breach happens. Under the same law, the aggrieved party gets compensation for damages which intends to help the party in making its loss good and do not let the party suffer from the breach of contract. So, QQ can sue both the companies for breach of contract and can claim for damages from them. Also, it was mentioned in the terms of the contract with them that RSL was liable to pay damages to QQ for every day the work gets delayed and DHS was also to pay lump sum damage to QQ if the installation was not completed on time. Therefore, QQ can claim compensation from both the parties for delaying the contractual obligations. Also, there was no valid reason of non-performance of their duty on time.
• Due to non-fulfilment of contractual obligation by RSL, QQ had to incur extra cost of staying in hotel. Also, the company suffered from losses during that time. In this case, QQ will have to establish an entitlement to substantial damages for breach of contract. This provision is also provided under the English Contract law. But, to obtain this, the injured party has to show that the loss that it has suffered is caused by the breach of contract. Along with this, the type of loss needs to be recognized and finally, the loss should not be too remote from the terms of contact or the obligation under the contract. In this case, QQ can claim the damages legally because it is clear that the loss that it has suffered is due to the breach of contract, the loss is monetary and it is not far from the contract, it is a direct result of non-performance of duty on time by RSL and DHS. So, QQ is entitled to get compensation from both the parties.
This compensation will be separate from what they will pay as compensation under the terms of the contract. The aim of this remedy is to put QQ in the same or nearby financial position that it would have been if the promise by the parties had been fulfilled.
• QQ can sue DHS for misrepresentation. The English contract Law defines misrepresentation as a false statement of fact that is made by one party in a contract to the other party which induces another party to enter in contract. When QQ contacted DHS for the heating system, the salesman made a misrepresentation of the fact that ‘the system is tried and tested’ and ‘it is best among competitors’. He also said that ‘it is energy efficient’. All these statements were proved to be false when the expert submitted his inspection report. Due to these statements, QQ was induced to make a contract with DHS. Therefore, it is clear that misrepresentation happened and made QQ enter into a contract with DHS. Also, the energy efficiency clause was not expressed in the written contract, but, it made QQ enter in contract. So, this will be considered in the claim.
In this case, QQ can opt for rescission of contract which will set the contract aside and will put QQ back in its original position where it was before the formulation of contract. Then, QQ can also ask for indemnity where the court can order DHS to pay for the expenses that QQ incurred in complying with the terms of the contract. For example, the payment of mobile heaters that QQ made when the system did not work properly after installation. Finally, QQ is also allowed to claim for damages. Since this is a fraudulent misrepresentation, QQ has an automatic right to claim the damages. These damages can be claimed under the English contract law or under the Misrepresentation Act of 1967.
• Lastly, QQ has the right to sue both the companies for not performing their duties in an expected manner. This is because; three of the employees of QQ got injured due to the negligence of RSL and DHS. There were the implied conditions of the contract that whatever work they will do, it should not harm the people and should be done in a proper way. But, due to the negligence of both the companies, the employees of QQ suffered from serious injuries. So, QQ can also make them pay for the damages that the company has suffered as a result of proving the expenses for treating the employees as well as the cost that the company suffered due to the absence of employees at work.
Advise to Sally for the potential legal claims
• Sally was an employee of QQ and got injured during the explosion of the heating system. She was not part of any contract between QQ and DHS but, under the English Tort Law, she can claim to get justice. This law governs the implicit civil responsibilities that the people have towards each other and these responsibilities are not necessarily laid out in contracts. Under this law, Sally can get legal remedy and she can also get monetary compensation because she has been damaged by DHS’s failure to meet the implicit responsibility that was, to provide a safe and secured heating system.
Sally can make DHS liable for negligence under tort law because a breach of duty of care has happened which DHS owed to all the employees of QQ. To install a safe system and to take care of the injuries to people, DHS was responsible for the general duty of care. In Donoghue v Stevenson, Donoghue was given compensation for an illness that she suffered when she consumed a decomposed snail in the ginger beer bottle supplied by Stevenson. It was held that Stevenson was responsible for taking care of the bottles and the contents that he was supplying to people. Similarly, in this case, DHS was responsible to take care of all the people who were exposed to that system. So, Sally can claim for monetary compensation from DHS for the expenses that she incurred in her treatment and she can also sue the company and ask the court to suspend its operations in the future.
Advise to Sean for the potential legal claims
• Sean was also an employee of QQ and got injured during the explosion of the heating system. She was also not part of any contract between QQ and DHS but, under the English Tort Law, she can claim to get justice. As mentioned earlier, this law governs the implicit civil responsibilities that the people have towards each other and these responsibilities are not necessarily laid out in contracts. Just like Sally, Sean can also get legal remedies under this law, and she can also get monetary compensation because she has been damaged by DHS’s failure to meet the implicit responsibility that was, to provide a safe and secured heating system.
In the similar fashion of Sally, Sean can also make DHS liable for negligence under tort law because a breach of duty of care has happened which DHS owed to all the employees of QQ. To install a safe system and to take care of the injuries to people, DHS was responsible for the general duty of care. In Gregg v Scott, Gregg was given compensation for the injury that he suffered due to the incorrect installation of a fan that was done by Scott. It was held that Scott was responsible for taking care of the installation process of fan and he was liable to all the people who were exposed to the working of that fan . Similarly, in this case DHS was responsible to take care of all the people who were exposed to that system. So, Sean can claim for monetary compensation from DHS for the expenses that she incurred in her treatment and she can also sue the company and ask the court to suspend its operations in the future.
In the similar fashion of Sally, Sean can also make DHS liable for negligence under tort law because a breach of duty of care has happened which DHS owed to all the employees of QQ. To install a safe system and to take care of the injuries to people, DHS was responsible for the general duty of care. In Gregg v Scott, Gregg was given compensation for the injury that he suffered due to the incorrect installation of a fan that was done by Scott. It was held that Scott was responsible for taking care of the installation process of fan and he was liable to all the people who were exposed to the working of that fan . Similarly, in this case DHS was responsible to take care of all the people who were exposed to that system. So, Sean can claim for monetary compensation from DHS for the expenses that she incurred in her treatment and she can also sue the company and ask the court to suspend its operations in the future.
Advise to Amy for the potential legal claims
• There is an element under the Tort Law, which is called ‘duty of care’. These are all the circumstances and relationships that the law recognizes and they give rise to the legal duty of taking care of the people who have the potential to get affected by the activities or duties performed by one party. When such care is not taken, the defendant has the liability to pay the damages to the party who has suffered some loss or damage. In this case, the RSL is liable to Amy because it was the duty of RSL to provide an appropriate surface to the stairs so that no accident happens. But, the duty was not taken care and the surface was slippery which made Amy slip and she was injured. When the stairs were made, RSL was responsible to take care of the fact that whether everything was made properly or not and whether the surfaces were safe from accidents or not. Since RSL neglected its duty and became the reason for the accident, therefore, Amy can sue the company and claim damages from it.
Conclusion
Form the above discussion, it can be concluded that the company QQ and all the people involved in the case can claim for compensation and damages from both RSL and DHS under the two laws: one is the English Contract Law and the other is the Tort Law. It has been found from the analysis of the case that all the provisions of these two laws apply in the situation and all the four parties are innocent in the case. Therefore, they have been advised to sue the companies of Hull and make them liable to pay for the damages. The above case has been studied using the provision of misrepresentation or fraudulent activities, the breach of contract and the remedies provided under it, the negligence of the duty of care in the tort law, and the entitlement to substantial damages for breach of contract. These provisions have helped in advising QQ and the employees in claiming for the potential legal benefits from RSL and DHS. The compensation differs in all the cases but it is sure that if they sue the companies, then they will definitely get the compensation and the court will help them in getting that.
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