Contract Law (tort)
Therefore, the purpose of this report is to identify those issues and advise various people involved in the case, i.e. QQ, Sally, Sean and Amy regarding their potential legal claims.
Contractual and Tort-related Issues
But, the refurbishment was not completed on the due date by RSL and the shifting to the Victorian building could not happen. But, QQ had to vacate the premises in Salford so they shifted their office in a hotel in Hull for ten days and they incurred a cost of £5200 per day (rent + profits).
This is a contractual issue because RSL failed to fulfill its contractual obligation i.e. it could not complete the refurbishment by 25th February and it is a tort-related issue too because QQ had to incur losses and additional costs due to the problem.
But, DHS failed to install the system on the due date. Since the building was cold and damp and QQ had moved into it, so it hired mobile heaters and incurred a cost of £100 per day. After installation of the system by DHS, it started malfunctioning in three weeks. When the system was not functioning properly, QQ again had to incur costs on the mobile heaters. But, the officials of DHS assured that the system will stabilize in a few days which did not happen. So, QQ demanded an expert to look in it and an inspection was carried out by an independent expert. After the examination of the system, and before the submission of the assessment report by the expert, the heating system got exploded. When the expert submitted his report, it revealed that the installation was not done properly and there were faults in it. The report also stated that the system was not energy efficient and the reason for the explosion of the system was gas leakage.
This is a contractual issue because DHS could not fulfill its contractual obligation of installing the system on time. The contract was made on the basis of the statement that was fraudulent and miss-represented. Also, after the installation of the system, the claim of DHS that the system will stabilize itself was false. The tort-related issue arises here because QQ had to incur additional costs when it used mobile heaters.
This is an issue because the employees of the company faced injuries due to the accidents because of the negligence of RSL and DHS. Some suffered from serious injuries and some from the minor. Thus, this is a tort-related issue that has to arouse in this case.
Advise to QQ for the potential legal claims
• QQ entered into a valid contract with both DHS and RSL because the terms of the contract had all the elements of valid contact i.e. consideration was present, the intent was there, parties were not incapacitating to contract, etc. When the valid contract was formed, it was the duty of all the parties to fulfill their contractual obligations. RSL had the obligation to refurbish the building on time and DHS had the obligation to complete the process of installation on time. Since neither of the duties was performed on time, QQ has the right to claim damages from these companies. Under the English Contract Law, when any party fails to perform his/her duty under the contract, then it is termed as breach of contract. The aggrieved party has the right to claim damages if the breach happens. Under the same law, the aggrieved party gets compensation for damages which intends to help the party in making its loss good and do not let the party suffer from the breach of contract. So, QQ can sue both the companies for breach of contract and can claim for damages from them. Also, it was mentioned in the terms of the contract with them that RSL was liable to pay damages to QQ for every day the work gets delayed and DHS was also to pay lump sum damage to QQ if the installation was not completed on time. Therefore, QQ can claim compensation from both the parties for delaying the contractual obligations. Also, there was no valid reason of non-performance of their duty on time.
• Due to non-fulfilment of contractual obligation by RSL, QQ had to incur extra cost of staying in hotel. Also, the company suffered from losses during that time. In this case, QQ will have to establish an entitlement to substantial damages for breach of contract. This provision is also provided under the English Contract law. But, to obtain this, the injured party has to show that the loss that it has suffered is caused by the breach of contract. Along with this, the type of loss needs to be recognized and finally, the loss should not be too remote from the terms of contact or the obligation under the contract. In this case, QQ can claim the damages legally because it is clear that the loss that it has suffered is due to the breach of contract, the loss is monetary and it is not far from the contract, it is a direct result of non-performance of duty on time by RSL and DHS. So, QQ is entitled to get compensation from both the parties.
This compensation will be separate from what they will pay as compensation under the terms of the contract. The aim of this remedy is to put QQ in the same or nearby financial position that it would have been if the promise by the parties had been fulfilled.
• QQ can sue DHS for misrepresentation. The English contract Law defines misrepresentation as a false statement of fact that is made by one party in a contract to the other party which induces another party to enter in contract. When QQ contacted DHS for the heating system, the salesman made a misrepresentation of the fact that ‘the system is tried and tested’ and ‘it is best among competitors’. He also said that ‘it is energy efficient’. All these statements were proved to be false when the expert submitted his inspection report. Due to these statements, QQ was induced to make a contract with DHS. Therefore, it is clear that misrepresentation happened and made QQ enter into a contract with DHS. Also, the energy efficiency clause was not expressed in the written contract, but, it made QQ enter in contract. So, this will be considered in the claim.
In this case, QQ can opt for rescission of contract which will set the contract aside and will put QQ back in its original position where it was before the formulation of contract. Then, QQ can also ask for indemnity where the court can order DHS to pay for the expenses that QQ incurred in complying with the terms of the contract. For example, the payment of mobile heaters that QQ made when the system did not work properly after installation. Finally, QQ is also allowed to claim for damages. Since this is a fraudulent misrepresentation, QQ has an automatic right to claim the damages. These damages can be claimed under the English contract law or under the Misrepresentation Act of 1967.
• Lastly, QQ has the right to sue both the companies for not performing their duties in an expected manner. This is because; three of the employees of QQ got injured due to the negligence of RSL and DHS. There were the implied conditions of the contract that whatever work they will do, it should not harm the people and should be done in a proper way. But, due to the negligence of both the companies, the employees of QQ suffered from serious injuries. So, QQ can also make them pay for the damages that the company has suffered as a result of proving the expenses for treating the employees as well as the cost that the company suffered due to the absence of employees at work.
Advise to Sally for the potential legal claims
• Sally was an employee of QQ and got injured during the explosion of the heating system. She was not part of any contract between QQ and DHS but, under the English Tort Law, she can claim to get justice. This law governs the implicit civil responsibilities that the people have towards each other and these responsibilities are not necessarily laid out in contracts. Under this law, Sally can get legal remedy and she can also get monetary compensation because she has been damaged by DHS’s failure to meet the implicit responsibility that was, to provide a safe and secured heating system.
Sally can make DHS liable for negligence under tort law because a breach of duty of care has happened which DHS owed to all the employees of QQ. To install a safe system and to take care of the injuries to people, DHS was responsible for the general duty of care. In Donoghue v Stevenson, Donoghue was given compensation for an illness that she suffered when she consumed a decomposed snail in the ginger beer bottle supplied by Stevenson. It was held that Stevenson was responsible for taking care of the bottles and the contents that he was supplying to people. Similarly, in this case, DHS was responsible to take care of all the people who were exposed to that system. So, Sally can claim for monetary compensation from DHS for the expenses that she incurred in her treatment and she can also sue the company and ask the court to suspend its operations in the future.
Advise to Sean for the potential legal claims
In the similar fashion of Sally, Sean can also make DHS liable for negligence under tort law because a breach of duty of care has happened which DHS owed to all the employees of QQ. To install a safe system and to take care of the injuries to people, DHS was responsible for the general duty of care. In Gregg v Scott, Gregg was given compensation for the injury that he suffered due to the incorrect installation of a fan that was done by Scott. It was held that Scott was responsible for taking care of the installation process of fan and he was liable to all the people who were exposed to the working of that fan . Similarly, in this case DHS was responsible to take care of all the people who were exposed to that system. So, Sean can claim for monetary compensation from DHS for the expenses that she incurred in her treatment and she can also sue the company and ask the court to suspend its operations in the future.