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COMLAW 101 Law In A Business Environment

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COMLAW 101 Law In A Business Environment

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COMLAW 101 Law In A Business Environment

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Course Code: COMLAW101
University: The University Of Auckland is not sponsored or endorsed by this college or university

Country: New Zealand

Aropa 2 
UpliftMovers (UM) is a moving company specialising in the relocation of businesses. Titanic Global Octopus (TGO) employs UM to move its office equipment including furniture and computers to its new premises. To do the job within the tight time frame specified (TGO must have its new office installed and ready for business by 9 o’clock on Monday morning) UM agrees to work over the weekend. 
At 3 am on Monday morning while making the final delivery Monty, UM’s driver, falls asleep at the wheel and crashes the delivery truck. Desks and computers fall onto the road and are damaged .
When TGO sees the damage to its desks and computers it wants to make a claim against UM. But UM points to the contract which TGO has signed that says, ” In the event of any damage by UpliftMovers, or its employees, to any of the client’s (TGO’s) property being moved, from whatsoever cause and howsoever arising, the total amount for which Uplift Movers shall be liable, regardless of the number of items damaged, shall not exceed $1,000.” 
TGO estimates that the damage to its property is $30,000. One of the computers was a personal computer owned by Karl. TGO has encouraged its employees to use their own computers in order to save costs. The computer was completely destroyed. A replacement computer will cost Karl $2,500. In one of the damaged desks was a ring owned by Lennie. He had been storing it in a locked drawer in his office desk for safekeeping before giving it to his partner on their anniversary. The lock was damaged and when Lennie got his desk back on Monday he discovered that someone had stolen the ring valued at $5,000. 

Whether Titanic Global Octopus (TGO) can hold UpliftMovers (UM) liable for the damages suffered by the company and whether Karl and Lennie can recover their damages?
A contract binds its parties into a legal relationship. They are obligated to comply with the terms of the contract or else the parties can legally enforce the contractual terms by going to the court. Thus, the contractual liability is imposed on the parties to a contract based on which the terms are legally binding upon the parties. However, this liability can be terminated by the party by including an exclusion clause in the contract. This clause provides that the party will not be held liable in case the term of the contract is violated. In case a valid exclusion clause is included in the contract, then the aggrieved party cannot hold another party liable the damages or claim compensation for the loss suffered due to breach of the contractual term. However, while including the exclusion clause in the contract, the parties are required to comply with the general rule of exclusion clause. In the case of Thornton v Shoe Lane Parking (1971) 2 WLR 585, the court provided that a party cannot just included an exclusion clause in the contract; it is important that the clause is brought into the attention of the party (Riefa, 2016).
In this case, a ticket was issued at the entrance of the parking lot, and an exclusion clause was written inside the parking. The court provided that the defendant cannot rely on the clause since it must bring into the attention while the contract is forming or before its formation. Thus, it is the general rule of the exclusion clause without which it cannot be considered as valid. However, there is an exception to this rule. The court provided in the case of L’Estrange v Graucob (1934) 2 KB 394 that the clause which is included by the party into a written contract without the notice of another party is considered as valid. Therefore, a party is not required to bring the exclusion clause into the attention of another party if it is included in a written contract which is signed by the party. The court provided that this fact is irrelevant whether while signing the contract, the term is read by the party or not (Russell, 2012). Moreover, the employees of a company can demand damages for the loss suffered by them in case a contract is formed between the parties for the same or the loss is suffered due to the negligence of the company.
In the given case study, a contract is formed between TGO and UM regarding transferring of the equipment from old office to new office. Due to the fault of UM’s driver, the equipment of TGO was damaged due to which the company suffered a loss. While claiming for the compensation, UM relied on the exclusion clause which is included in the contract formed between the parties which provide that the company will only be liable for $1000 whereas the actual loss of TGO is $30,000. TGO can rely on the general rule of exclusion clause to argue that it is not brought its attention based on which it cannot be considered as valid (Thornton v Shoe Lane Parking). However, as per the exception is given under L’Estrange v Graucob case, UM can argue that it did not owe a duty to bring the clause into the attention of TGO since a written contract was formed between the parties. Therefore, the exclusion clause is valid based on which TGO can hold UM liable for only $1000. Moreover, in the case of employees, they can file a suit for recovery of damages against the company for the loss suffered by them. However, in case of Karl, the company only encouraged its employees to bring their personal computer, and no contract was formed between the parties regarding protection of the personal computer. In the case of Lennie, the ring was brought by him without the permission of the company. Since no contact has formed between the parties, they cannot hold TGO liable for the loss suffered by them.
In conclusion, TGO can hold UM liable for $1000 only as per the exclusion clause. Moreover, the employees cannot demand damages from the company since no contract has formed between the parties regarding the safety of their personal belongings.
L’Estrange v Graucob (1934) 2 KB 394
Riefa, C. (2016). Consumer protection and online auction platforms: Towards a safer legal framework. Abingdon: Routledge.
Russell, C. A. (2012). Opinion Writing In Contract Law. Abingdon: Routledge.
Thornton v Shoe Lane Parking (1971) 2 WLR 585

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