contract law

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A collateral contract

I disagree with the statement as collateral contract is defined as a contract where the consideration is the entry into another contract and co-exist side by side with the main contract. This can be between one party and a third party. A collateral contract will be in the form of unilateral contract where only one party will make a promise and that is to do something for return. Here the promise to enter in to the original agreement is the consideration of a collateral contract. A collateral contract will exist only when a statement has a consideration for the main contract.

As stated above I would like to refer a case related to collateral contract. This is a case which was raise in Victorian Supreme Court. It was an interesting problem which is in the rescission of contract for innocent does not become a term of the main contract and it was incorporated it the contract as a warranty. The parties involved in the case are Mihaljevic v. Eiflel Tower Motors Pty. Ltd. and General Credits Pty. Ltd. lay down a clear articulation of the law relating to collateral contracts. The motor car dealer who was the defendant of the case published a advertisement in “situations vacant” in a daily newspaper. The ad was “ Driver interstate capable man with good credits and reasonable asset position requited for permanent contact invest of $1100 will earn approx. 4500 p.a. including no wages earnings receivables fortnightly all calculation available for inspection and right application may receive financial assistance right application may receive financial assistance”.

The plaintiff responded to the ad and was shown the earning from a contract of an interstate haulier at the time of his enquiry the truck was not there for inspection but the salesman plaintiff agreed to accept $2000 for his own vehicle and was deposited on the truck and next day he paid $200 as deposit and inspect credit company to enter into a hire purchase contract for the truck. The plaintiff started his process on the next day. But because of the blemished condition of the truck he completed only two operations on the next 17 days. He returned the truck to the dealer at the end of the period. The plaintiff then preceded the dealer claiming damages from the statement by the dealer’s servant. Also relaying on s 6(1) of the hire purchase act 1959.against the credit company for the claiming and return of money under the agreement.

Gillard .J although not believe the salesman. He could not find the evidence for the intention for the misrepresentation to be fraudulent the plaintiff should mention the salesman statement that the truck was in “Good condition” to succeed in his claim and including this. it was also promissory in nature. In the findings the statement was supported by the consideration so the plaintiff should enter the hire purchase contract. From his earlier judgment in J.J.Savage and sons v Blakney. Relying the case Gillard.J suggested seven rules which could be used to separate a misrepresentation inducing entry into a contract from a promissory statement which become a collateral contract.

Gillard.J felt that the hire purchase contract was executory in nature. That the restitution in integrum was possible. In his assessment the hire purchase agreement was absolutely a contract of an executory nature which was executed by the bailment commencing. Regarding the repayment in integrum Gillard’s followed Senanayake v.Cheng. The appropriate test is whether if the truck was bestowed under an order for ammulment the vehicle would be considerably of the same condition as it was when plaintiff regard in particular to the acceptance of the hire purchase offer on 22nd April and if returned it back on 25th April.

Seeing that Gillard.J had found that s.6 (i) of the hire purchase act put the appellant in the same position in such a way that the misrepresentation had been made by its agent. Does the plaintiff have right to damage the motor car dealer prohibited his right to countermand as against the credit company Confiscating that a contract for the sale of goods may be abrogated in a proper case for innocent misrepresentation. The buyer himself accepted the contract and also he had sufficient opportunity to inspect in a few days after he bought it. The reasoning of the Gillard.J seems that the plaintiff may have accomplished in his claim for rescission if the adumbration had been a collateral warranty or in the main contract as a warranty. If Mihaljevic case is expected, it seems that only misrepresentation is assimilated in to the main countermand for the innocent misrepresentation.

This case shows that the collateral contract and it will exist only when the statement has a consideration to its main contract.

Question 2

“Finders are keepers.”

I agree with the statement “Finders are Keepers” it states that a person who fined a property in public area or other he can own the property. It is true that the person who fined the property can own the property but there are certain rules to own the property. If a person find a property for example ‘if he find a golden jewel he should inform the police about the jewel or he should inform in the court regarding the jewel or he also can give an advertisement in the newspaper if the real owner of the jewel come for it the founder should provide the jewel to the real owner.

I would like to explain an article from Winnie Ma Assistant Professor School of Law Bond University, related to the statement stated above. This article says finders are the keepers and losers are weepers. Article placed an example that a person was dining with his boss and his client in a restaurant. He noticed something sparkling underneath his seat while he bend to see he discovered a diamond ring. He hands over the ring to the waitress. He told the waitress to find the real owner and hand it to him if not return it to him itself. Grievously no one can abide a huge diamond ring including him, the waitress, his boss and even his clients. This gives a priority altercation over found the thing. The “FINDERS LAW” will arbitrate who has right to the diamond ring.

The finder himself wants to retain the valuable diamond. The owner of the diamond ring may want to reclaim his or her property. The boss of the finder also wishes to claim the diamond ring because he found the ring during the business dinner. Consequent beneficiaries are the waitress who currently possesses the ring and the restaurant owner being the owner of the establishment where the ring was found. Except for the true owner and the finder’s employer the proof possessor ship is critical. Since the finder was the only party who has the priority disputes.

The main objective of the Finder’s law is to reconvene the lost property with its true owner and he has the priority over the finder. The thing which lost was abandoned for the true owner the next person who found the thing takes the position of the abandoned thing comes to the position of new owner. If the lost thing is not been abandoned then the owner win otherwise the finder the case the true owner has dropped the ring without intention. If the owner of the restaurant or waitress find the real owner then the real owners claim ascendancy against the finder. If the true owner was not fount according to the finders law the finder has a better claim than any other. He did the thing by passing the ring to waitress to find the true owner. As he was lawfully dining in the restaurant his position appears strong.

On the next scenario he gives the ring to the waitress to find the real owner she has the present possession of the ring while he had the prior possession. As the prior possession has the abandoned it does not apply for subsequent possession unless he sells or gifts the ring to someone. Next his boss approached him for the ring and raises the general rule. But his employer has the better claim only when the finder was in duty while he found the ring. As the founder was in business dining he was not in the duty and now also he has the better claim on the ring as the finder. The final competitor was the restaurant owner who wishes to claim the ring as the ring was found in his premises. His claim also depends on the proof of possession. The restaurant owner will have better claim only when he /she was aware of the existence of the ring in his premises. The greater degree of attachment the easier it is prove possession. The restaurant owner has the greater degree of the attachment between the thing and premises. He became the prior possession were as the finder is in the subsequent possession. As the general rule the prior possession defects the subsequent possession unless it has been abandoned. On this scenario the finder have the better claim as he only found the ring lying on the floor unless the restaurant owner shows his declared intent to control over the ring. As the conclusion the finder has the superior claim than the waitress, employer, client and the restaurant owner because the true owner was not found so the finder is the keeper thus I conclude that the finders are the keepers.

Question 3

John was playing golf with three friends at his local golf course in a weekend golf competition. John hit a drive and proceeded along the fairway towards the green. John waited in the tree line to the side of the fairway whilst his friend Peter hit his golf ball. Peter’s accuracy was not good and Peter’s golf ball struck John on the head. John suffered injuries to his eye. Peter called out “watch out John” rather than the usual “fore” which is required as a warning.

John wants to bring legal proceedings against Peter and against the Golf Club

In this case I prefer john will succeed if he brings legal proceeding against peter I would like to explain in brief that how he can succeed against peter.

John was the appellant who had taken his shot and went to find his ball in behind some tree which was in the side of the fairway. Peter the defendant was the next to hit the ball and john was waiting behind the tree for peter to hit the ball. Peter aim to hit the ball to the green but his aim was deflected to towards the tree where john was standing. On seeing his ball towards the tree he shouted “watch out john” rather than the usual one “force” which is used as the warning in the golf club. But the ball struck to a branch of the tree ann bounced against john and hit on his head. John got a saviour injury in his eye.

The respondent’s duty of care to give a warning to john before he hit the shot but peter fails give warning. He didn’t provide a timely warning of his golf ball travelling toward john shouting ‘fore’ instead. If he warned before are after the shot may prevent john from injury. It was peters duty to warn his co players before he use to hit the ball but he fails to do in. It was clear evidence and a common practice that every player should shout “force” before for the warning.

The court of appeal unanimously upheld the trial judge’s

finding as to the respondent’s duty to warn. It was clear on

the evidence produced at trial that it was not common

practice by players at the club to shout “Fore!” before

The appellant’s failure to establish causation was also

upheld on appeal. It was found the appellant’s injury

would not have been prevented had the respondent

warned he was about to take his shot before he knew he

would mishit. Such a warning would not have conveyed

any information to the appellant he did not already

possess as he was expecting the respondent hit the ball

at any moment.

However, the respondent did have a duty to warn at

instant he mishit the ball and its trajectory changed such

that it travelled toward the appellant. The court accepted

that the respondent’s cry of “Watch out Errol!” after he

saw his ball travel toward the trees was sufficiently

synonymous with a call of “Fore!” which was the

commonly accepted golf term. This was therefore a

reasonable response in the circumstances.

Moreover the appellant could not demonstrate that he

would have responded in a different manner had the

respondent called “Fore!” instead of “Watch out Errol!”.

Particularly because any attempt to move out of the path

of the ball would have been entirely fortuitous as the ball’s

trajectory could not be predicted after it had deflected

from the trees.

Other findings of fact, such as the respondent’s skill level,

the amount of protection that was afforded by the

Melaleuca trees, and the trajectory of the respondent’s

intended shot were disputed by the appellant on appeal.

However these arguments were dismissed on the basis

they were not material to the conclusion on liability.

Although it was not necessary to contemplate any further

defences available to the respondent, the trial judge

considered that he could rightly also be relieved of liability

on the basis of volenti non fit injuria and ‘obvious risk’

pursuant to s15 of the Civil Liability Act 2002 (Qld) (CLA).

On appeal the appellant attempted to argue that the

obvious risk was not the risk of ‘incurring injury’ but rather

the risk that the respondent would take his shot without

warning. The court of appeal rejected this argument as it

considered that s 15 of the CLA contemplated a ‘risk of

harm’. It reasoned that a risk of being put at risk lead to

the unreasonable requirement of a warning that no

warning was going to be given.

White AJA and Holmes JA again upheld the trial judge’s

position on this point. Her Honour McMurdo P considered

that, had the respondent not warned the appellant and

causation been established, neither argument would be

sufficient for the respondent to escape liability entirely.

However she made no comment as to whether the

defences applied to the actual circumstances of the case.

Accordingly, although one assumes the risk of being hit by a golf ball upon

stepping onto the course, it is quite clear that failing to provide a warning to

another player when the ball is travelling in their vicinity (when that warning

would provide information that is not already apparent to the other player)

may constitute negligence. The case also contemplates that the duty owed

by players to warn of an impending shot, will differ according to skill level. If

there is less chance the ball will travel in the intended direction, a more

onerous duty to warn will arise.