Let me start by briefly stating what the case is all about. In the case, Hussein, an owner of an apparently very attractive car, has been offered 4000 USD by Interjeet in exchange of his car. In other words, Interjeet wanted to buy Hussein’s car. Considering the average prices of automotive vehicles today, it would seem that 4000 USD is a steeply low price. As expected, Hussein did not give any word about Interjeet’s offer and has kept himself mum. He thought and felt that his car is worth more than what Interjeet has offered. Hussein did not formally reject nor accepted Interjeet’s offer to buy his car. Perhaps to put pressure on Hussein, Interjeet said “take your time, but I will assume that if I have not heard from you by 9 pm tonight that you have agreed to sell me the car.” The question here now would be the possible legal implications of the turn of events that happened between Hussein, his car, Interjeet, and his 4000 USD offer; whether Interjeet’s statement has any legal contractual effect; and whether Hussein would be bound to forcibly sell his car to Interjeet should he happen to forget to contact Interjeet by the aforementioned time. The best way to start answering these issues would be to clearly define what a contract is, and identify its key scopes and limitations.
A contract is something that two or more parties have voluntarily assumed to be a part of regardless whether such brings about more assets than liabilities or vice versa. In this case, Hussein and Interjeet would only be able to call their talk about the sale of Hussein’s car if and only if we can find clear indicators of the presence of the key components of a contract. All contracts start with an offer. An offer can be related or pertain to anything. It can be as simple as requesting an online reseller to sell you an item and can be as sophisticated as requesting a manufacturing company to manufacture a certain volume of goods for whatever purpose such may serve. An offer is made whenever the offeror intends to make himself liable and committed to whatever the terms of the offer he presented is, provided that the person being presented an offer does the same, which is a very common scenario. Negotiation follows an offer until a decision has been carried out. In this case, the offer was made when Interjeet voiced out his interests to obtain Hussein’s car for 4000 USD. In this case however, the negotiation phase quickly ensued but it turned out that Hussein wants to think more about the matter mainly because he thinks the offered price is too low for him to trade his car for and so he asked Interjeet to let him have more time to think first before he could finally make a decision. Interjeet, who seemed to dislike
Hussein’s response about his offer made a condition that would obligate Hussein to sell his car should the latter fail to abide by it. One way to look at this alleged contract is to look how Interjeet made his offer and how it was subtly rejected by Hussein who seemed to have believed that the offer presented to him was not even a little bit fair. An offer was made and there is no doubt about this but the negotiation phase did not push through or at least did not have a positive ending. The same was true for the finalization part of the contract wherein the people involved agrees whether a contract, be it a verbal or a written contract—as both are considered valid under contemporary business law principles, would be finalized or not. Once a contract has been finalized or in this case, once Hussein reaffirms the fact that he agrees to sell his car to Interjeet for the said amount in any comprehensible way. Unfortunately, no such thing exists and so in my opinion, and based on my informed observations of the case, and also based on the fact that Hussein did not offer to sell his car to Interjeet in the first place and that he did not show any signs of affirmation of the offer, I would say that the contract that Interjeet initiated is invalid regardless whether Hussein confirms by the time he set in his self-proclaimed contract conditions or not.
- Contract Law – Exclusion Clauses
This is a case of Konrad, a male resident of Sydney who decided to take his family to Goat Island for a day. He had chosen to ride a ferry to the island and upon paying was given tickets with the following words written on the back of it: “All vehicles and passengers use this ferry at their own risk.” The thing is that he was not able to check the back of the ticket and so it would be reasonable to assume that he and his family was not able to read the exclusion clause written on the back. A few hours later, the ferry hit an underwater obstruction which caused its demise. The ferry sunk slowly—slow enough for all the passengers to be rescued. The cars, of course, were not able to be salvaged. The issue now here is whether the ferry operator could be held liable for the loss of the cars inside the ferry as a result of the incident considering the fact that there were an exclusion close which were manifested as a note at the back of all regular passengers’ tickets.
What was written at the back of the ticket that Konrad and his family got was an exclusion clause. An exclusion clause is any legal statement that is usually presented in writing that is aimed at limiting or excluding a party’s liability for possible breaches in the contract terms and/or negligence. Usually, exclusion clauses are utilized in situations wherein external factors such as the weather, Acts of God and other external and uncontrollable factors come into play. As in the case of Konrad and his car, what was written on the back of the ticket was an exclusion clause because it was aimed to make the passengers understand that the ferry operating company could not be held liable in case an accident in the sea occurs as a result of external factors, and based on how that specific exclusion clause was structured, even internal ones. An exclusion clause should be incorporated into a contract and should be recognized as a formal part of any contract; it must also indicate the breaches that it would cover because in an event of a lawsuit, the court would first determine if an exclusion clause was established and duly revealed to all parties involved before the onset of the incident, and then determine the effects, scopes and restrictions of the clause where possible. Assuming that all constituents were reasonable informed or at least made aware that there is an existing exclusion clause in the contract they just decided to be legally a part of, the court would still have to determine whether the breach or negligence could actually be covered by clause and in doing so, it follows a set of rules just like in determining the validity of a contract.
The court’s ruling would also depend on the contra proferentum rule which is typically used in construing exclusion clauses in an event of a contract breach or negligence. Applying it directly in this case, Konrad can sue the ferry company because it has not been clearly mentioned the type of breach that can be covered by the clause; it also did not mention whether incidences caused by negligence could be covered by the exclusion clause. The cause of the sinking of the ship was negligence and if it could be proven that these two are true, then the clause can be construed and the court’s decision may well be in favor of Konrad. Another procedure usually done by the court is the three stage test for the exclusion of negligence. The main goal of this test is to determine the presence of any ambiguity in the language and words used in formulating the clause—the part that all parties can easily see, and then based on the results, check whether negligence and breaches can actually be covered.
The ruling in relation to exclusion clauses indeed seems very straightforward but one important thing that the court also checks here is whether the victim has signed anything or nothing. In this case, Konrad, upon purchasing tickets from the ferry ticket booth, has basically acknowledged agreeing to the policies and terms, including the exclusion clause printed on the contract. The court will focus on the document—the contract in its overall ruling. It would not matter anymore whether the victims were able to see the clause or otherwise. As long as the clearly defined clause was part of the contract and the victims acknowledged being part of the contract before the onset of the incident, the exclusion clause would most likely be found valid. So in this case, the ferry company has every legal reason not to be held liable of the loss of vehicles as a result of the incident and so in the same manner, Konrad does not possess the legal leverage to warrant for compensations, mainly because of the exclusion clause and the validity of the contract it was a part of.