Case Analysis of a Softwood Studio Contracts

Introduction

The first issue, in this case, is first to consider if there is a contract between Softwood Studios and Wayland in the first agreement. Chloe, the Softwood's props manager, approached Wayland, a blacksmith enquiring is he would make replica broadswords for fighting sequences in a historical drama. There is a signed contract between the two parties. However, the contract signed by Chloe only goes as far as the value of the items purchased is concerned. This means that Wayland has no obligations or any responsibility for any injuries or deaths that his items would cause at the show. Therefore, Chloe goes further to purchase the swords from Wayland under sales of good legislation (Mann & Roberts, 2011). However, at the show, the lead actor is injured by one of the swords. Chloe during this time realizes the Wayland is not a qualified blacksmith and that the swords were of poor quality and unfit for use for the drama.

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In contract law, there is no protection for buyers and widespread abuse in quality of the items sold. However, in this case, Chloe's deal as a customer is protected according to consumers' right 2015 (Whish & Bailey, 2015). Chloe can use the statement made by Wayland during negotiations. The reason is that under section 9 subsection 11 of the CRA, any statements made in the course of the negotiations are regarded as terms of the contract signed (Whish & Bailey, 2015). Therefore, Wayland breached the contract when he failed to provide good quality swords as it had been agreed in the negotiation. Implying that he was a qualified blacksmith was offering incorrect information which was wrong. Therefore, despite Wayland offering to repair the damaged sword, the sale could be considered ineffective under the article UCTA 1977 that excludes liability for breach of stationary of implied terms (The Draft Directive on Consumer Rights and UK Consumer Law, 2009). As a result, Chloe, in this case, is entitled to obtain a full refund of the money spent to purchase the swords. Moreover, she is also entitled to a compensation for the extra cost incurred during the disruption of the film. The reason for the compensation is because it happened due to quality issues with the sword which is negligence on Wayland's side.

The contract between Chloe and Wayland was discharged due to substantial performance and frustrations. Although both the parties fully carried out their obligations as agreed in the contract, it was met by defects such as the blade of the sword breaking and causing injury in the process. Although Wayland offered to repair the damaged Sword, Chloe felt it would take too long thus costing her more due to the disruption caused. Additionally, she felt that Wayland was not a reliable party in the contract because she found out that he had no qualifications in armorer. Therefore, she did not trust that he would perform any better. To remedy the situation, Wayland would have renegotiated the deal and come and made fresh promises to make better quality swords. However, he must realize that Chloe had an option of accepting or refusing the fresh negotiations (Mahoney, 2002). Chloe, on the other hand, would have negotiated and asked for a refund of the money used to purchase the low-quality swords.

After the discharge of contract between Softwood Studios and Wayland, Chloe looked online for a replacement where she found suitable replicas from a US company website called Monster. Therefore, the second main issue is to determine if there was a contract between Softwood Studios with Monster Props Inc. in second agreement. In this case, a contract only exists when the company acknowledges the client's order. For that reason, there was a contract agreement between the two parties since the company acknowledged Chloe's order. The company's terms and conditions were offered in a clearly stated manner in the email sent to Chloe. Chloe noted that one of the terms included pricing being subject to revision and the company reserves the right to increase the cost from the date of order. In response, Chloe counteroffered by stating that the terms and conditions of Softwood studios to contract price to be as the date of order. She, however, did not wait for the company to respond or agree to her terms and went ahead to make an order.

In this case, there is a conflict of terms between both parties where one feels that they can increase prices after an agreement while the other feels that the prices should remain as negotiated in the agreement. There is no record of further negotiations between both parties where they communicate to agree on the conflicting issue. It is worth noting that both parties recognize the conflict before the signing of the agreement. Consequently, each party is aware of the difference in the terms of agreement (Bridge, 2017). However, Chloe goes further to order the required goods from the company. Monster, on the other hand, ignores Chloe's terms and goes on to acknowledge the order thus validating the contract. Monster company then sends the ordered goods with an invoice that indicates a price that is higher than the originally agreed amount expressing regret that material and labor had increased.

On Chloe's side, it was inappropriate for her to make the order without communicating with the company and coming to an agreement. However, she has the legal right to refuse to pay the extra amount of money that Monster has added on top of the agreed amount. The reason is although Chloe is bound by a legal obligation to Monster for the services provided; it was done under conflicting circumstances. Considering that Chloe had not had any previous dealings with Monster, the company had a legal responsibility to make Chloe aware of the terms and conditions indicated. As a result, more action needed to be taken to Chloe aware of the term referred in the contract before acknowledging and validating the contract (Lawson, 2011). If in case, Chloe had had previous dealings with Monster, then it would be presumed that she was aware and understood the terms and conditions of the contract.

On Monster's side, he has the legal obligation to sue Chloe if she does not pay the entire amount demanded on the delivery of the goods. However, he should understand the legal consequence of ignoring Chloe's counteroffer of their company's term. In this case, both the parties are negligent at thus bound by section 13 of UCTA. In this section, the law denies any legal liability for issues that would be covered by the law of negligence (Poole, Devenney & Shaw-Mellors, 2017). Both parties were negligent when discussing the terms of agreement and they overlooked a crucial part of the agreement leading to disagreement.

Consequently, the disagreement is a possible platform for breach of contract between both parties. If Chloe decides not to pay the extra amount of money indicated on the invoice, then she will be breaching the contract. On the other hand, Monster adding the extra amount of money without reaching a conclusive agreement is a breach of contract. However, both parties can remedy the situation by coming together to address the conflict and disagreement between both parties (Stone, 2013). Both Chloe and Monster can come up with fresh promises, and a balanced ground where both parties benefit without the other feeling exploited or as if the other is being unfair.

Conclusion

To conclude this discussion, it is worth mentioning that each industry had its unique business law issues. The reason is that the businesses are all different and have different legal obligations to the customers and the public at large. In most cases, business owners and managers are reluctant when it comes to hiring attorneys to handle legal matters in the business. Often times, the business owners try to negotiate sales of goods and services on their own without the help of a legal expert to guide them through the legal process. As a result, most of these businesses end up facing different problems such as loss of profit, canceled contracts, and in worse scenarios legal penalties. Therefore, it is advisable for business owners to get business law attorneys early enough in the negotiation process in order to ensure that their legal rights are protected.

References

Bridge, M. G. (2017). The international sale of goods. Oxford University Press.

Lawson, R. G. (2011). Exclusion clauses and unfair contract terms. London: Sweet & Maxwell.

Mahoney, P. G. (2002). Options Pricing and Contract Remedies. The New Palgrave Dictionary of Economics and the Law, 1373-1376. doi:10.1007/978-1-349-74173-1_261

Mann, R. A., & Roberts, B. S. (2011). Smith and Roberson's business law. Cengage Learning.

Poole, J., Devenney, J., & Shaw-Mellors, A. (2017). 6. Exemption clauses and unfair contract terms. Law Trove. doi:10.1093/he/9780198803850.003.0006

Stone, R. (2013). The modern law of contract. Routledge.

The Draft Directive on Consumer Rights and UK Consumer Law - Where now? (2009). Modernising and Harmonising Consumer Contract Law. doi:10.1515/9783866538603.6.289

Whish, R., & Bailey, D. (2015). Competition law. Oxford University Press, USA.