Essay on "Contract Law"

Essay 2 pages (664 words) Sources: 2

[EXCERPT] . . . .

As such, the clause that limited Finney's liability to the purchase price of the seeds was not valid because a lot of time and money has to be invested to cultivate the seeds and if they're duds from the onset, that obviously cause a huge loss to Mitchell that he had no legal burden to foresee but Finney absolutely did.

As for the burdens of what is "unreasonable" and improper in a contract as far as the above goes, there are five major classifications of what can be stricken or invalidated in a contract, and those are misrepresentation, indemnity clauses, contractual liability, sale of goods and negligence. Negligence would include actions or inactions that end up causing death of injury. Misrepresentation would include if the seller portends a warranty or quality that is not true and/or is actively known to be false by the seller. For example, if Finney knew the seeds were defective and sold them anyway, that alone would be a reason to throw the book at him.

Contractual liability can be negated if the agreement is breached by either party or if the expectations stipulated in the contract are or become unreasonable by virtue of how things play out or how the parties act. Similarly, indemnity clauses are allowable but only if they pass the reasonable test as noted above and as enforced in the Mitchell v. Finney case. Expecting Mitchell to take a 60,000 pound loss minus only what he paid for the seeds was not deemed to be reasonable because Mitchell either should have known the seeds were bad or he should have known. As such, the indemnity clause in that contract was not valid.

References

E-LawResrouces. (2013, August 15). George M

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itchell v Finney Lock Seeds. e-lawresources.co.uk. Retrieved August 15, 2013, from http://www.e-lawresources.co.uk/George-Mitchell-v-Finney-Lock-Seeds.php

UKLaw. (2013, August 15). Sale of Goods Act 1979. Legislation.gov.uk. Retrieved August 15, 2013, from http://www.legislation.gov.uk/ukpga/1979/54/schedule/1/crossheading/section-55-exclusion-of-implied-terms-i

UKLaw. (2013, August 15). Unfair Contract Terms Act 1977. Legislation.gov.uk. Retrieved August 15, 2013, from http://www.legislation.gov.uk/ukpga/1977/50 READ MORE

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Quoted Instructions for "Contract Law" Assignment:

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Study Section 55 of the Sale of Goods Act 1979 and consider Paragraph 15 of Lord Bridge’s speech in Mitchell v Finney Lock Seeds. Explain the importance of the case in the development of contract law. How does Section 55 relate to Schedule 2 of the Unfair Contract Terms Act 1977 which outlines the test that the courts use in determining the reasonableness of an exclusion clause?

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