Portfolio task question
Imagine that you receive the following instructions from your supervising solicitor:
“Our client has asked us for initial advice about a dispute in relation to the hire of a touring vehicle. Make yourself familiar with the client file. Once you have done this I want you to conduct the necessary research to allow you to make a recommendation about the strength of their case. It’s clear that this case revolves around a potential breach of contract but it appears that it might turn on the limitation and substitution clauses in the contract. For now I want you to concentrate on this legal aspect of the case and on any other pre-action or practical issues you think are relevant.
For clarity I want you to
1. Find out what you can about the law in relation to those substitution and limitation clauses in the contract
2. Provide me with all the relevant authority on this in an intelligible way so I can follow up your research and of course bill the client appropriately. Provide me with a full research log.
3. Look at what we might get out of this for our client in terms of redress
4. I value your input on any relevant “extra legal” matters or procedural issues which you come across.
I would like your input by 4:00pm Friday 12th February 2009”
There is no precise word limit for this part of portfolio item 1. See the examples from the recommended texts as a geode to how a log might look. All material referenced in you research summary should have a place in you research log.
Add your research log entry here:
Key to research identification
[O] Unread research but possibly relevant (needs further exploration)
[A] Read research and relevant
[?] Read research but unsure of relevance
[X] Read research but unlikely relevant
Re. Mr & Mrs Ungar (claimant) v Maddisons Vehicle Hire Ltd (defendant)
The main issue revolving around this case, is the question whether, Ungars are entitled to damages and refund of their deposit. However, this issue will explicitly and predominantly rely on whether there was a breach of a contract by Maddison Vehicle Hire Ltd. On the other hand, even if there will be a proof of breach, the claim will not be forthcoming, if there are any clauses in the contract which excludes or limits Maddison Ltd’s liability and Ungars’ rights.
In that sense, in order to know the strength of Ungars’ case, it is therefore very important to check whether there was breach, and if there is, the usage of common law and statutory instruments which limits unfair exemption clauses should be adopted in case there are any clauses which limits or excluded liability.
The issue of damages and refund will also entirely depend on other factors such as the availability of any restraints such as causation and so forth.
However, other important issues which will play a significant role on the prospects of the case will also be considered in the course of this research in order to bring about a desirable outcome to our client (Mr & Mrs Ungar).
1) Pre action and Procedural issues
Classification of the case in hand: Civil litigation for a breach of contract
Parties and legal capacities: It is important to know whether Ungars are legally able to sue, and whether the defendant (Maddison ltd) can be sued. It is provided that any person who is above 18 years of age and who is not classified as mental patient under the provisions of the Mental Health Act 1983 has the legal capacity to sue. Apply: In that reasoning, Ungars have the legal capacity to sue because they are not mentally ill, and also they have exceeded 18 years old as provided in the facts that they have reached the age of retirement.
Can Maddisons Ltd be sued? Companies are also classified as legal persons, and therefore can be sued. It is stressed that, a company is the one which has been registered under the Companies 1985. As such Maddisons Vehicle Hire Ltd can be sued. Table of contents
Research on procedural issues
Research for cause of action
A) Limitation clauses
B) Substitution clauses
C) Unfair Contractual Terms Act 1977
D) Sales of Goods Act 1982 and its relations to the Unfair Contractual Terms Act
E) Test of reasonableness
G) Contract of adhesion
1) Research on procedural issues
Procedural Initialisation [A]- S. Sime, A practical approach to civil procedure, (12th edn Oxford University Press, 2009, pp)
Generally it is for the claimant to select a cause of action and it is also important to note that multiple claims can be treated separately but this will however result in multiple fees.
According to the CPR r7.3 which takes directives from the Civil Procedure Act 2005;
“The claimant may use a single claim form to start all claims which can be conveniently disposed of in the same proceedings,”
“Any number of claimants or defendants may be joined as parties to a claim,"
“Joint claimants must not have conflicting interest in litigation and must be represented by the same counsel,”
Closely connected claims may be ordered to be consolidated and treated as a single claim. Another important note is that we must be accurate in our pleadings to cover the entirety of the case. For example in the Esso Petroleum Co Ltd v Southport Corporation  A.C 218 the doctrine of Res Ipsa Loquitur was rejected because a claim in negligence had not been a part of the initial pleadings.
This information will be critical in its application to Mr Unger because if the case fails due to our negligence in giving advice to Mr Unger and having the case dropped on a procedural issue then we are likely to be sued ourselves. The points raised in the CPR r7.3 are also highly relevant because it may allow for us to join both Mr and Mrs Unger as claimants in this circumstance as they can both jointly claim as a single party against the defendants as both claimants have a non-conflicting interest against the defendants. We must also be accurate with our pleadings as explained below we have many different causes of action so we must take care as to not exclude an important claim.
Validation of research
Civil Procedure Act 2005
S. Sime, A practical approach to civil procedure, (12th edn Oxford University Press, 2009)
Esso Petroleum Co Ltd v Southport Corporation  A.C 218 (validated as standing via Westlaw)
Joinder claimants and defendants and conflicts with identity of parties [A]
As explained above it is possible for claimants and defendants to be grouped together for the purpose of court. However it is important to note the identity of the parties when making a claim as bringing an action against the wrong party not only wastes courts time but can result in disciplinary action and/or rejection of the case.
Application of research to the case
This would be of particular importance to the current case as Madison in the contract makes references that all legal disputes are to be taken up with a third party. This may mean that in order for Mr Unger to correctly file for a claim he must name them as the defendant. However, if this is proved wrong or incorrect then it is possible for the case to be dismissed. Therefore in order to avoid such a problem it may be wise if the process of ‘Joinding’ is applied and make both the third party and Mr Madison co-defendants.
Validation of research
S. Sime, A practical approach to civil procedure, (12th edn Oxford University Press, 2009)
Vexatious litigants [A]
Vexatious Litigants are those that misuse the freedom of the court and Launch large numbers of un-meritous actions against defendants. The punishment for being a vexatious litigant can be suspension from the bar and work in law by the high courts.
Due to the amount of issues we can attempt to raise against Madissons Hire Vehicle Ltd as described below we must be careful to avoid penalization from the courts on the grounds that we are vexatious. It may be in our best interest to raise one strong claim and then in the course of proceedings raise the sub-issues to strengthen our own case.
Validation of research
S. Sime, A practical approach to civil procedure, (12th edn Oxford University Press, 2009)
Jurisdiction and governing law (S. Cunningham-Hill and K. Elder, Civil Litigation Handbook 2009-10 (OUP, Oxford 2009), chapter 1-7. (pp 1- 99)
The question of jurisdiction o jurisdiction will not require significant consideration since both the client and the opponent are situated within UK and the course of action occurred within the UK jurisdiction. Thus this case will not need considering the Civil and Judgement Acts 1982 1991 which covers the proceedings outside the UK jurisdiction.
The kind of dispute (Contractual dispute) & mechanism for dispute resolution
Apart from the above consideration, another important issue to be considered is the classification of the dispute. The classification of which is important because it gives a bearing on the kind of action to be taken. In breach of contract and consequently a claim for damages by innocent party, actions will normally depend on whether there is any clause which provides a mechanism for dispute resolution. If there is any clause which provides for adoption of Alternative Dispute Resolutions such as arbitration or mediation, then parties are bound by that clause. Thus, civil litigation cannot be adopted as a mechanism for solving the contractual dispute. However, these clauses are also subjected to common law controls such as the rules of incorporation and construction, as well as the statutory controls inclined on different acts which aim at ensuring fairness.
Application: Therefore because clause 21 of the contract provides for an alternative dispute resolution (mediation under The Society for Recreational Vehicle Distributors) other than litigation, technically both parties are bound by this clause and therefore cannot litigate. However, ADR procedures agreed before the dispute arose tend to be inappropriate for resolving the specific dispute that has risen. In addition, this method can sometimes limit the rights of the parties with a strong case in the eyes of the law. In that sense, as stressed above that these clauses are also subjected to controls under common law, it will therefore be important to term it void so as to ensure that Ungars’ claims are well settled in the Court of law through Civil Litigation. On other-hand it is also worth noting that ADR can sometimes appear to be advantageous to the parties. Such advantages are provided by Duncan are flexibility, speed, also they are less expensive than trials in court.
Advise: It is better for Ungars to opt for civil litigation from ADR because, first the body which has been chose by the defendant (Maddisons Vehicle Hire Ltd) is a body which does not aim at ensuring consumers welfare. In that sense Ungars rights might not be well saved by such a body. On the contrary, judicial attitude towards consumers such as Ungars, has always been positive, thereby it is better to take the matter to court.
Selection of court
The selection of court is also an important factor to consider. Both High Court and the county courts tend to hear an enormous number of claims. However, Civil Procedure Rules (CPR practice Direction (PD)) restricts parties selection as to the selection of courts since it provides that, only claims which exceeds £25,000 should be taken to the High Court.
Apply: Since Ungars’ claim do not exceed £25,000, the issue should therefore be taken to any of the county courts.
However, does time allow the claim to be taken to court (Limitation periods)
Limitation periods are mostly covered by Limitation Act 1980. In order to be able to take the claim to court the claimant has to be sure that time is not jeopardy. Figure 7. 1 (p 99 in S. Cunningham-Hill and K. Elder, Civil Litigation Handbook 2009-10) provides that limitation period for contractual claims is 6 years as provided by Limitation Act 1980, s. 5.
Apply: The case can therefore be taken to court because the claim will be filed within 6 years
2) The main issue (strength of Ungars’ case)
a) The first issue to be determined is ‘whether there was any legal binding relationship between the parties’. (Elliot & Quinn ‘Contract Law’ 4th edn. PEL 2003, chapter 1, pp 9-12,).
For a legal binding relationship to exist there has to be a binding contract which has been reached through all the necessary stages such as offer and acceptance. The law provides that any advertisement, brochures and price lists amount to invitation to treat (Patridge v Crittendon  1 WLR 1204). Invitation to treat is an initial stage before any offer has been. After an invitation to treat, there has to be an offer, which as defined by Jill Poole p, 41, simply means an expression of willingness to contract on the given terms without inclusion of further negotiations, so that ‘’acceptance’’ could be made by the offeree so as to form a contract.
Apply: Maddissons Vehicle Hire Ltd invited Ungars to treat through an advertisement posted in Daily Moon magazine. As such, Ungars offered Maddison Ltd £ 900 pcm to hire a vehicle (sightseer), and eventually Maddisons Ltd agreed to form a legal binding relationship with Ungars by accepting their offer, by signing a 12 months contract with them. In that sense, it can be established that, the parties had a legally binding contract.
b) Another important issue to consider is the availability of duties.
i) Express obligation
It is important to assess whether there were any express duties, since this will be important in establishing whether or not there was a breach, which is an important question in relation to claiming damages (Jill Poole, p 328). This argument finds support in the law as follow. In Photo Production Ltd v Securicor Transport Ltd  AC 827, the law provides that, there is an automatic right to claim for damages in case of a breach of those duties.
The law: In order, to ascertain the duties in the contract, the law has provided a mechanism to do so through the ‘parol evidence rule’. In Henderson v Arthur  1 KB 10, it was held that, in any written contract all the obligations set in that contract can be ascertained by using the ‘parol evidence rule’.
Apply: Since all the terms which sets out the obligations of both parties are clearly listed in the contract, the parol evidence rule can be used to highlight those obligations and establish that, both parties are legally bound by those obligations. There are two obligations which serves as the base of the contract, and these are; Ungars are obliged to make payments and ensure safety of the car, while on the other hand, Maddisons Vehicle Hire Ltd is obliged to provide the Ungars with a product which he wishes for. A breach of any of these terms entitles the innocent party with damages (as per, Photo Production Ltd).
ii) Implied obligations (implied terms)
The law: s. 13-15 of Sale of Goods Act 1979, impliedly induce a obligations to sellers, and suppliers as to me the description, quality, fitness and sample of the product contracted for with the consumer.
Apply: In that sense if the car hired by Ungars, does not meet the quality, or description, this can be classified as a breach of an implied term under the SGA. In that sense, Maddisons Vehicle Hire Ltd, are under a statutory obligation of ensuring all the provisions provided under s. 13- 15 SGA are met.
c) The third issue to be considered so as to know the strength of the case in hand is whether or not Maddissons Vehicle Hire Ltd ‘breached the contract’. (Jill Poole, chapter 8, pp, 348-330).
A breach of contract will occur where, one party fails or refuses to perform his contractual duties without a lawful excuse. On the other hand, even if a party may perform its contractual duties, but if the performance fails to meet the standard of performance, that can also constitute a breach. (Jill Poole, Textbook on Contract Law, 9th edn, Oxford University Press, 2008, p. 324).
Note: The standard of performance can vary in accordance to the type of contract.
• For strict contractual obligation, the general rule s that ‘when the performance of contractual obligations is strict, the contractual obligations must be completely as well as precisely performed. (Jill Poole p, 324)
Apply: Since the contract in hand could be classified as a strict one as many contracts are, all set of obligations are supposed to be performed in a precise and a complete manner. As held in Arcos Ltd v Bonasson  AC 470, any trivial failure to do the oligations can be regarded to be a breach. In that sense, since Maddisons Ltd are under an obligation of ensuring that they provide their customers with the product they paid for, it can be argued that, the fact that they failed to give the Ungars, the car they contracted for, in a required time, this can be regarded as a breach.
Another ground to look for a breach is by basing on statutory provision.
The law: As provided by s.13- 15 SGA, any failure to met the description, quality, fitness, and sample amounts to a breach of an implied term under the SGA.
Apply: In that sense, since Maddisons Ltd failed to provide Ungars with a car which conforms with the original description (class A), and sample as seen in the Daily Moon magazine or the one seen during the signing of the contract, it can be established that, Maddisons Vehicle Hire Ltd has breached a contract under s. 13 and 15 SGA.
d) However, even though it has established that, Maddisons Vehicle Hire Ltd breached a contract, Ungars rights as to damages will depend on the validity of the exemption clause.
Jill Poole, Textbook on Contract Law, 9th edn, Oxford University Press, 2008, chapter 7, pp 266- 320 [A]
Therefore, it is important to consider whether or not the exemption clauses are valid enough to exclude or limit liability. The enforceability of clauses will depend on three legal questions;
• Have the clauses been incorporated in the contract?
• Do they cover the loss which has occurred?
• Are they rendered unenforceable under the Unfair Contract Terms Act 1977 and/ or Unfair Terms in Consumers Contracts Regulations 1999
Limitation and substitution clauses
Looked at with caution by the courts, as by being included within exemption clauses they can prove to be a benefit to commercial retailers, but prove a disadvantage to consumers.
Retailers or service providers may protect themselves of the amount they would be willing to give in damages/compensation were a contract is breached, for them it may prevent excessive claims.
The incorporation into the contract of these terms must be done correctly, for example can the party be fully aware of the clause, and its effects upon the party themselves. Also whether there are contradictions with the document containing the clauses.
The contra preferentem rule also exists, as to whether there is lack of clarity of the term, in this case and is construed against the party seeking to rely on it.
Application of research to Mr Unger
At clause 22 in the event of the Lessor being deemed in breach of this agreement, the parties agree that the Lessor’s liability in the event of complete failure to deliver an appropriate vehicle will be set at a value equivalent to 5% of the Contract dues. This particular clause in itself is a contradiction of the events of the scenario as Madison refused to accept that he had breached his contract when clearly here, due to his inability to deliver the appropriate vehicle.
This clause may cause uncertainty but in these circumstances the court will usually interpret the clause for the benefit of the consumer. They are managed under the Unfair Contract Terms Act 1977, and the Unfair terms in consumer contracts regulations 1993.
Substitution clauses [A]
A clause that allows for goods to be offered in exchange for others. I.E a contract may offer a gardener two bouquets of roses per week but a substitution clause may be in effect that allows the gardener to request for two different bouquets subject to whether their supplied has them in stock.
Application of research to Mr Unger
It is the service provided by Mr Madison that they will provide the vehicle requested, however within his terms and conditions, blame seems to shift to the consumer for not accepting a substitute and they lose out on their deposit for not accepting it even though the substitution was not ideal and would have greatly disadvantaged Mr Unger.
In our case Madison did not take ‘reasonable care’ to provide the correct vehicle and maintain the vehicle in good condition for Mr Unger. However Madison may argue that this was not under the control of the business and he could not provide a full guarantee that the vehicle would be safe at the moment it was needed. This could be a difficult but equally critical sub issue for us to deal with in our proceedings. If we can prove that Madison had been negligent in his duty of care towards Mr Unger then we have the ability to strengthen our case and make a more successful claim to damages.
• Common law techniques on controlling the exemption clause
In order to question on the enforceability of the clauses, the law requires the question to be based on two facts: Whether the clause has been incorporated, and if yes whether or not does it cover the actual breach (J. Poole ‘Textbook on Contract Law’ 9th edn. OUP. 2008, p 267)
- Law: In order to address the question of incorporation, it was established that, a signature can act as a proof of incorporation of a clause in the contract (L’ Estrange v Groucob [1934} 2 KB 394).
Apply: In that sense, if this principle is taken, it will be a disadvantage to Ungars, because all the clauses aiming at limiting liability will then be enforceable due to the proof of signature. However,
- Law: In the case Olley v Marlborough Court Hotel  1 KB 532, the law stressed for a need of incorporation by notice. ‘It was held that, the exclusion clause must be introduced ‘before’ or ‘at the time of the contract’.
Apply: In the case in hand, this criteria was not met since Mr Ungar signed the contract first and then the clause were afterwards introduced. An evidence of this can be seen in the document which acts as a contract between the two parties. (SIGNATURE IS AT THE FRONT PAGE). In that sense, all the clauses from section 18- 22 of the contract which aims at excluding and limiting liability as well as limiting Ungars rights, they can all be termed as VOID since they were not incorporated well.
- Law: In any contract which has onerous or unusual terms, the offeror has to draw attention of the offeree by using a red font, or red hand pointing at such clause (As per Lord Denning in Thornton v Shoe Lane Parking Ltd  2 QB 163) and followed in Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd  QB 433
Apply: In that sense, all those onerous clauses which put Ungar in such a disadvantage position that he could not anticipate, such as clause 18 -22 which limits Maddissons’ liability whilst deliberately limiting Ungars rights, all these clauses were supposed to be highlighted in order to draw Ungars attention. Since that was not the case, then it can be concluded that, all those onerous clauses, cannot be enforceable.
- Law: ‘Obiter’. In Ocean chemical Transport Inc v Exnor Craggs Ltd  1 All ER, the Court of Appeal suggested that whenever a contract has been signed under pressure, and it includes onerous terms, the offeror has to make sure he draws offeree’s attention by using the directions given in Thorton’s case.
Apply: Since this obiter is from the Court of Appeal, which is the second highest court in the land, it therefore be a very persuasive authority. In that sense, because Ungar signed his contract under pressure since he was told to sign the contract at the very moment when Maddison Ltd lowered the price to £ 900, the clauses which aim at limiting Maddisson’s liability in an unfair and unusual way can all be termed invalid, since the company did not draw Ungars attention.
• The current law in relation to incorporation is the one based on Interfoto, which requires a high standard of incorporation for onerous clauses.
Construction (Jill Poole, pp 273-74) [X]
Once it is established that the clauses were incorporated, it becomes necessary to show that the clauses do not cover the actual breach. Note: This will not be important since the clauses were not incorporated in the contract due to above reasons.
The law: However, in order to be on the safe side, the contra proferentum rule provides that, if the clause was constructed in an ambiguous way, the courts will construe that clause on the benefit of the consumer (Evidently in case law in Houghton v Trafalgar Co Ltd  2 All 1409) [X]
Fundamental breach: Even when tha clause covers the breach the law provides that in circumstances where there is a fundamental breach, exemption clauses cannot limit or exclude liability (Fafinski p, 97)
Law: The above legal principle was reached by the Court of Appeal in Photo Production Ltd v Securicor Transport Ltd  AC 829, where the CA reversed its own previous decision in the same case. However, because of the supremacy of the House of Lords the decision of the CA was reversed by the HL when the case was taken to the HL.
Current law: THE DOCTRINE OF FUNDAMENTAL BREACH WAS REMOVED BY THE HL.
• Statutory control of exemption clauses (Fafinski,& Finch ‘Contract Law’ 2nd edn Pearson,2010 p 98-112)
Unfair Contractual Terms Act 1977 [A]
The unfair contract terms Act 1977 applies to business liability, things done or to be done in the course of a business and also deals with consumer-business relations.
Liability for negligence: S.2 of the Act negligence is defined by the 1977 Act as breach of an obligation to take reasonable care or to exercise reasonable skill arising out of the express or implied terms of a contract – the use of an exemption clause to allow the business to not be liable for damages when they fail to maintain a clause of the contract due to negligence is a breach [X]
[X] Negligence under UCTA. Fafinski 99, is described as;
S 2 (1) UCTA provides that liability for death or personal injury resulting form negligence cannot be excluded by any clause. [X]
UCTA applies to business liability. This is defined in s. 1 (3) as liability for breach of obligations or duties arising from ;
a) The things done by a person in the course of business. (Apply)The scope covers the case in hand since Maddissons Ltd was operating in the course of business.
b) From the occupation of premises used for business purpose of the occupier [X]
The act does not cover certain types of contracts; [X]
- Contracts of insurance [X]
- Contracts relating to creation, transfer or termination of an interest in land.[X]
- Contracts relating to creation, transfer or termination of an interest in any patent, copyright or trademark [X]
Breach of Contract under UCTA [A]
S 3 (2) (a) of the UCTA provides that where one party ''deals as consumers'' or deals on the other's written standard terms of business, the other party cannot exclude or restrict liability for a breach of contract, unless the term satisfies the reasonable test.
Apply: Since it was established that, Maddisons Vehicle Hire limited breached a contract under s. 13 and 15 SGA, and also because Ungars were acting as consumers, this implies that, all the clauses limiting liability for a breach will be termed as void under s. 3 UCTA.
Dealing as a consumer??? [A]
S. 12 (4) UCTA provides that, in order to deal as a consumer;
- One party must not make the contract in the course of business.
Apply. In that sense, Ungar can be classified as a consumer because he was not operating under the course of business, since his primary objective for conducting the trip was to fullfill their long living ambition of touring the UK
- The other party must make the contract in the course of business.
Apply: Maddisons Ltd made the contract in the course of business because it is a company, which hire cars with a motive of getting profit.
Sales of Goods Act 1982 and its relations to the Unfair Contractual Terms Act [A]
Law: Section 6 (2) of the UCTA can be of crucial importance. It stresses that, provided that the claimant is dealing as a consumer the other party cannot exclude liability for breaches of implied conditions as to: Sections 13-15 of the Sales of Goods Act [A]
a) Conformity with description (S. 13)
b) Quality fitness (S. 14)
c) Conformity with sample (S. 15)
Apply: Therefore all the sections which aimed at limiting Maddisons’ liability in case of a breach are void.
The provisions under section 7 UCTA are the one which relates to the terms implied to the contract for the Supply of Goods and Services Act 1982 (SGA 1982). Those provisions apply to all clauses which limit or exclude liability for a breach of an implied obligation under the contracts of which deal with transfer of possession and ownership of goods but not the sale of them (Fafinski, p 100) [A]
Section 2 provides that ''provided that the injured party is classified as a consumer,” (as per section 12 (4) UCTA ), liability for breaches of implied terms as to:
a)Transfer by description (SGSA 1982, section 3)
b)Quality of fitness (SGSA 1982, section 4)
c)Transfer by sample (SGSA 1982, section 5)
These cannot be excluded.
Apply: The car did not meet the description, since the original contracted car was class A, whilst the substitute was class C. Also it did not meet the sample as viewed in the first place before signing the contract and during the signing of the contract. In that reasoning, Madison holds no right to exclude liability as to the breach of the implied conditions covered by section 13 and 15 SGSA.
The test of reasonableness- Ungar is classified as a consumer, therefore [X]
It is covered by section 11 UCTA. It is irrelevant to us because the task of proving reasonableness (as covered in section 11 (1) UCTA) of an attacked clause, is for the party which wants to rely on that clause as in Warren v Truprint Ltd  BTLC 344.
Application to Mr Unger
In that sense, Madison Ltd will have to prove that all the clauses were reasonable. However, the chances of them succeeding are very minimal since Unger’s are classified as consumers, therefore section 7 (3) which exempts limitation of liability in circumstances where the other party is not a consumer, whilst on the other hand the clauses satisfy the reasonable test, will be inapplicable as an immunity to them. This section is therefore irrelevant to Unger’s side.
The Unfair terms in Consumer Contracts regulations 1999
Taylor, Remedies (OUP, Oxford 2009) pp 27-35 [A]
Damages (Taylor, chapter 5, p 27)
Were a contract has been breached; damages should be available as a matter of right. The principle of the damage reward is to compensate the claimant for his losses, rather than measure the award by the amount of gain derived by the defendant.
Classification of damages
Law: Expectation (or loss of bargain) basis – Are forward looking (Robinson v Harman (1848) 1 Ex 850). They aim at putting the claimant in his original position which he would have been without the breach of the contract. This includes both the loss of the promised performance and the loss of profit due to the failure of performance
Apply: Largely inapplicable because, the trip was not a business one. Classification regards Ungar as a consumer. Thus this is irrelevant
Reliance (or wasted expenditure) basis - Reliance loss arises where the claimant has spent money which is then wasted in preparation for the contract or in partial performance of the contract. Aims at putting the claimant in a good position he was in before the contract was made.
Law: In case of uncertainty as to expectation loss, reliance loss can then be claimed. (McRae v Commonwealth Disposals Commission (1950) 84 CLR 377) In Anglia Television Ltd v Reed, it was established that, pre contractual expenses are recoverable as part of reliance loss, so long as ‘ it was such as would reasonably be in the contemplation of the parties as likely to be wasted if the contract was broken’ (per Lord Denning MR at p 64) as cited by Taylor at page 29
Enrichment (unjust enrichment) - This considers, where the claimant in performing his obligations under the contract, has conferred a benefit on the defendant and wishes to claim it back for example, where the claimant has paid money in advance for a product which is not delivered, in which case he is entitled to the return of the money the claimant paid. Apply: In the case in hand, Ungar can base on this principle to seek for his deposit.
When damages can be obtained for distress and disappointment (Non- pecuniary loss) [A]
The general rule is that damages for distress are not available in an action for breach of contract.
The current law: However, contracts entered into for purposes of enjoyment, damages will be available for the loss of enjoyment (Jervis v Swans Tours  1 All ER 71 Apply: In relation to the case, Reliance, due to the fact that in preparation of the trip in which goods were bought and subsequently wasted due to the trip not taking place
Law: In contracts which aim at bringing pleasure, damages can also be available for the mental distress and disappointments caused by the breach (Diesen v Sampson 1971 SLT 49) Apply: In that sense, based on the above law, Ungars can claim damages for the disappointments they suffered because of the breach which made them fail to reach their long living dream of touring the UK
Specific performance [X] - Time has already lapsed, the contract cannot be re-enforced. There is no point for it. However, it is judges’ discretion.
Limitations on the availability of damages (Fafinski, p 177)
-Causation- The claimant can only recover damages if the breach of contract caused his loss. As such, if the breach does not cause the losses as found in County Ltd v Girozentrale Securities  3 All ER 834, the claimant will not receive damages.
Apply: In relation to the case it could be established that, Ungars’ will be compensated with damages because, the breach was the cause of their insurance payments, and other bookings, as well as loss of enjoyment.
-Remoteness- After proving that the loss was caused by the breach it is then important to prove that the loss was not too remote from the breach. (Hadley v Baxendale (1854) 9 Ex 341) [ O]
-Mitigation of loss- The innocent party has the duty under law to take reasonable steps to minimise the extent of their loss arising from the breach. This principle was applied in Brace v Calder  2 QB 253.
Ungar tried his level best to minimise the losses and come into understanding with Maddisons Ltd by even accepting a car which he did not go for in the first place. However, Maddisson appeared to be unreasonable by being reluctant to lower the price of the substitute.
Exemplary or punitive damages (Taylor p, 31) [X]
-They are not applicable in contract law.
Application of research to Unger
This particular piece of research will be vital in order to assess the damages that can be awarded to Mr Unger. Importantly are the damages of Expectation, centring on the loss of earnings which resulted in the trip being unable to take place and negating the deal with the newspaper and Enrichment, which should enable our client to reclaim the deposit he made as this represented a benefit to Mr Unger in securing the specific vehicle.
Contract of Adhesion [?]
The process by which a contract is un-negotiated with the contracting parties and as such represents an unfair contract.
Application in the case of Unger
It is noted in the memo that Unger was offered a cheaper deal from £950 to £900 if he would sign the contract then and there. Taking this information into account it is possible to suggest that there was a chance that Unger was not aware of the contractual undertakings especially clauses 18, 19, and 20. The specific placing of the signature at the top of the contract preceding the terms logically suggests that Unger may have signed the contract before being alerted to such terms.
Research route- This section shows how sources (primary sources) were found and how we insured that they are up to date.
1) Hard copies:
- Law Reports series. (Appeal cases)- This is because they are more authoritative.
-Statute books available in Sydney Jones Law Library at the first floor, Abercomby wing.
-All the above cited books.
-Many books used were up to date (from 2004-2010), therefore the cases and statutes used are the ones which are up to date. No amendments or repeals have occurred in due time. This has also been clarified through online resources such as Justcite which directs us to Westlaw and LexisNexis for detailed information of the primary source.
- One of the case which was overruled by the House of Lords and the Court of Appeal was the Photo Production Ltd v Securicor Transport Ltd  AC 829. At first, the Court of Appeal decided that exclusion clauses cannot cover fundamental breach. However, on an appeal the CA overruled its own previous decision to hold otherwise. Nonetheless, the HL concluded the matter, by reversing the second CA’s decision, to hold that ‘fundamental breach’ can also be limited or excluded by clauses.
-All the materials were validated as provided in the main body.
2) Online: Portal -LexisNexis: Cases and statutes
- Westlaw: Cases and statutes
Method- In both Westlaw and LexisNexis the search was done by using citations, subject or name in some circumstances.
Research rationale and explanation
(Target word limit 1000 words)
Add you research rationale and explanation here:
MR & Mrs Ungar (claimant) v Maddissons Vehicle Hire Ltd (defendant)
The issue revolving around this case is whether Ungars are entitled to damages for the breach of the contract, as well as the refund of their deposit.
• Ungars are in a good legal position of winning the case because of the following reasons:
There was a binding relationship, epitomised by the contract. Furthermore, parties were under duties as could be traced by using the parole evidence rule . However, Maddisons Ltd has an implied duty under s. 13-15 Sale of Goods Act 1979 where it has to make sure that, goods conform with the description, quality, fitness and sample.
There was breach of contract. In Arcos Ltd v Bonasson , it was held that, any failure to match the contractual obligations, regardless how trivial it is, will be regarded as a breach. Since the contract is covered by the SGA 1979, s. 13-15 of which, provide that obligations as to descriptions, fitness for the purpose, quality and correspondence with sample, these obligations are strict obligations, thus subjected to the rule set in Arcos Ltd v Bonasson. As such, since Maddisons Ltd failed to offer Ungar a car which he contracted for, and instead offered him a substitute which does not correspond with the description (class),and sample, Maddisons Ltd can be held liable or a breach of contract under s. 13 of the SGA.
Under common law controls, and statutory controls, all the onerous clauses which unfairly exclude and/or limit Ungar’s rights and Maddisons’ liabilities, are unenforceable. The law provides, for clause to be incorporated, the contract has to be signed . This criterion is met since Ungar signed the contract. However, in Olley v Marlborough Court Hotel it was established that exemption clauses must be introduced ‘before’ or at the time of the contract. This criteria is not met since parties signed the contract first (signature is at the front page), and then the clauses were introduced. In addition, the current law provides that, in contracts which include onerous terms, the offeror has to make efforts in drawing the offeree’s attention by using the red hand rule (red font and hand pointer) . In that sense, such onerous clause as clause 19 which imposes heavy burden on Ungar, and clause 20, 21, 22 which deliberately limit Ungars’ rights, can all be termed void since Maddison did not take any reasonable steps to draw Ungar’ s attention. This standard has also been emphasised in Interfoto Picture Library Ltd in cases which signature was obtained under pressure, as it is the case when Maddisson lowered the price to £900 and urged Ungar to sign the contract at the very moment. Since the clauses have not been incorporated, there is no point of proving their construction.
The clauses are also void due to statutory controls. S. 6 of Unfair Contract Terms Act 1977 provides that, if the claimant was a consumer, any exclusion clause which aims at limiting liability for a breach of s. 13-15 of SGA as to defects in descriptions, quality , fitness, sample is void. Since Ungar was dealing as a consumer as provided by s. 12 (1) UCTA, clauses 22 and 23 which aim at limiting Maddisons’ liability cannot be enforceable. In that sense, in relation to damages, Ungar will be entitled to full amount and not as limited in those clauses.
In addition, all the clauses which aimed at limiting Ungars rights as to damages (22) and (23), and the method of resolution in case of a dispute (21), they are also void. S. 13 (1) (b), (c), invalidates any clauses which aim at excluding or limiting any right in respect of liability, or which aim at excluding or limiting rules of evidence or procedure. In that sense, clause (22), (23) are void because they limit Ungar’s rights as to damages, as well as clause (21) which limits Ungars rights as to a method of dispute resolution, by making the enforcement of liability under onerous conditions.
Ungars are entitled to damages and refund of his deposit. Damages are available as right for the innocent party . Damages could be limited if the loss suffered was not a consequence of the breach .This is not the case since due to the breach, Ungar lost £ 2362 on insurance and ferry booking. If the loss was too remote which was not the case because the loss of money incurred was a natural outcome of a failure to conduct the trip as planned. Ungar is also entitled to damages because as the principle of mitigation of loss, he took reasonable steps such as accepting the substitute car if only the price was lowered, so as to reduce his losses. Reliance loss will be claimed for since there is a need to place Ungars in position which they could have been if the contract was not conducted. In such a way they will be able to get back £ 2362 which they lost in insurance and booking. They can also get their deposit back, because the law on deposit forfeiture clauses provides that the payer may recover the money when the receiver of the deposit breaches the contract.
They can also receive damages for distress , lack of enjoyment and loss of time . Since the main objective of the contract was to fulfil their dream and provide enjoyment, currently the law allows compensation of such losses.
Despite the strength of the case, it could be important if the parties could negotiate first before taking any further actions. However, if negotiations fail, I would advise Ungar to take the matter to court and not in any ADR body, because, by doing so they will be abandoning some of their rights since courts tend to preserve much the idea of consumer welfare.
Criteria to consider:
Research log should:
1. Demonstrate the ability to locate and reference individual primary and secondary sources
2. Demonstrate an understanding of the relationship between legal sources
3. Demonstrate an ability to evaluate the relevance of authority to the particular facts of the simulated case
4. Demonstrate an understanding of authority of legal sources generally, including but not exclusively precedent and the hierarchy of the courts
5. Demonstrate an understanding of rules of court which relate to the use of and the citation of authorities
6. Demonstrate an ability to record the research process in a manner which allows a third party to understand the events listed in the research log, and which facilitates the efficient search for materials by the researcher or by other team members.
The research rationale and explanation should:
1. Demonstrate an appreciation of the legal issues arising from the simulated case
2. Demonstrate an ability to apply the law to the facts with the appropriate level of certainty or caution
3. Demonstrate an ability to apply principles relating to remedies to the known facts in the case
4. Demonstrate an appreciation of significant practical, tactical and procedural issues which might arise in relation to a practical ‘real-life’ legal dispute.