Qantas Airlines Position Regards Delivery

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Qantas Airlines Position Regards Delivery

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Qantas Airlines Position Regards Delivery

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During the negotiation of a contract, there are representations with regards to the products from the seller directed at the buyer. However, all these representations do not form part of the contract. The ones which are considered important by either of the parties is drafted into the contract and hence called the contractual terms. It is imperative that there must not be violation of the terms of the contract by either of the parties (Carter, 2012).
The result of the violation of the term would be dependent on the fact whether the given term is a condition or a warranty. The conditions are typically those clauses which are so essential for the contract that in the absence of these, one of the parties would not enter the contract only. As a result, violation of any condition provides the right to the innocent party to declare the contract as void and also claim damages. This has been highlighted in the verdict of the Poussard v Spiers (1876) 1 QBD 410 case (Gibson & Fraser, 2014).  However, if the term breached represents a warranty, then the innocent party cannot declare the contract as void and instead can only claim damages to the extent of the losses suffered due to the breach of warranty. This is in line with the verdict of the Bettini v Gye (1876) 1 QBD 183 case (Harvey, 2009).
One of the ways to minimize the liability of a contractual party is through the insertion of an exclusion clause. This tends to either waive the complete liability or limit the same (Carter, 2012). In order for this clause to be applicable, the following conditions would need to be fulfilled.
Communication of the clause before contract enactment
The exclusion clause would be valid only when the clause has been brought to notice or communicated to the other party. In this regards, the party inserting the clause is expected to take reasonable efforts to put across the same to the other party irrespective of the fact whether the other party takes notice of the same despite sincere efforts (Lindgren, 2011). The exclusion clause which are inserted after the enactment of contract are not considered as enforceable which has been made apparent in the decision given by the honorable court in Thornton v Shoe Lane Parking [1971] 1 All ER 686 and Olley v Marlborough Court [1949] 1KB 532 case (Paterson, Robertson and Duke, 2015).
Legality of the underlying clause
It is pivotal that the concerned exclusion clause must not be used as a defense against any misleading and deceptive conduct which is required so as to safeguard the interest of the consumer (Davenport & Parker, 2014).
Exclusion clause related to negligence
In relation to potential negligent conduct it is necessary, that the party which inserts the exclusion clause regarding liability limitation or waiver in case of negligence must take reasonable measures to communicate to the other party that the clause has been inserted only with the intent of escaping or minimizing liability in case of negligence being exhibited (Gibson and Fraser, 2014).
Based on the given facts, it is apparent that there has been a contract between Airbus and Qantas with regards to supply of the airplane which would lead to daily savings to the extent of $800,000. There were a number of terms included in the contract with one being that the in-flight video system would have 36 channels for the entertainment of the passengers. There were other terms related to the engine and the distance that could be covered in a single flight. The plane that Airbus provided to Qantas had only 34 channels in the inflight video on account of software error on account of confusion. Clearly, the number of in-flight video channels would be termed as a warranty as it is not so essential to the contract. As a result, Qantas can only claim damages from Airbus since it is at fault for complying with the contractual term but cannot cancel the contract.
With regards to the quantum of liability, the exclusion clause which limits the liability of Airbus to $ 300,000 would not be applicable as during the contract negotiation or in the contract, there has been no mention of this exclusion clause and hence in line with the verdict prescribed in Olley v Marlborough Court [1949] 1KB 532, the exclusion clause would not apply and hence Qantas can claim all the financial damage which would be caused on account of the time delay and loss of savings.Agency law would come into existence when principal has appointed a person (agent) to execute contracts with the third party. As per this law, it is the main responsibility of the agent to follow the instruction of the principal and work accordingly. This is because the third party would enter into legal relationship with the agent by considering the fact the agent has sufficient authorization. Further, these agreements would be enforceable on the principal and the third party has the legal position to claim for damages or sue the principal for not satisfying the contractual obligations (Gibson & Fraser, 2014).
The enacted contract would be enforceable on principal only when any of the following authority is possessed by the agent and the agent acts within the scope of the same (Harvey, 2009).
In this authorization, the principal would provide the authority either orally or through written mode. This is the case of express actual authority. While, the principal does not express the authority directly but has entitled the agent with respective profile/position to conduct the act, then this is termed as implied actual authority. The Watteau v Fenwick [1893] 1 QB 346 case is the evident of actual authority. The requisite aspect is that the principal must notify the agent’s authorization to the third party (Paterson, Robertson and Duke, 2015).
When the agent has enacted contract with third party in order to safeguard the interest of the principal irrespective of the requisite authority, then this is called authority of necessity. The Northern Railway Co. v Swaffield (1874) LR 9 Ex 132 case provides evidence in this regard (Davenport & Parker, 2014).
In this case, the principal’s objective is not to extend any authority to agent, but because to the agent’s existing authority and related work, the third party presumes that the agent has sufficient authorization. In this case also, the enacted contract by the agent would be enforceable on the principal. The judgment given in Freeman & Lockyer v Buckhurst Park Properties [1964] 1 All ER 630 case provides evidence in this regard (Carter, 2012).
Absence of any of the above authority would not lead to the enforceability of the contract on the principal. Therefore, in this scenario, the principal is not liable to fulfill the obligations of the contract enacted by the agent with the third party. The verdict of Yonge v Toynbee [1910] 1 KB 215 case is the witness of this aspect (Lindgren, 2011).
There are set of responsibilities/duties that must be adhered to by the agent in regards to the conduct towards the principal.
It is the responsibility of the agent to act in good faith and safeguard the interest of the principal (Gibson & Fraser, 2014).

Agent must not conduct a work on the name of principal for his own personal interest as per the decision of Christie v Harcourt[1973] 2 NZLR 139 case.
Agent must not make any secret money from principal as highlighted in Bentley v Craven(1853) 52 ER 29 case.
Agent must not use the confidential information of principal for his own work as per Robb v Green[1895] 2 QB 315 case.

Work as per the authority provided by the principal
Agent must be conduct the work based on the instruction offered by the principal.
Therefore, it is essential that agent must work as per the above highlighted facts or else the principal can sue agent and recover the damages.  It is imperative to note that if the third party has enacted a contract with agent in good faith and the agent does not have necessary authority, then also the contract is binding on the principal. However, it is vital that the principal has not informed the third party regarding the level of authority or withdrawal of authority of agent. If principal denies, then the third party can sue the principal (Harvey, 2009).
Frank is a sole trader who runs a shop which sells appliances. Gemma is working as a sales person for Frank. There is an old dishwasher in the shop with a cost of $350. Tom a customer wants to purchase this for $ 350 and he goes home to find the suitable space for dishwasher. At that moment only, Gemma called her niece and sold the dishwasher for the price $300 by misleading Frank that the true value is $ 300 and not higher. It is apparent that she has performed the work of her own interest because Tom is ready to pay $350 for the dishwasher. Therefore, the breach of fiduciary duty would extend the right to Frank that he can recover the damage of worth $50 from Gemma.
Frank has employed Bob in his shop as a salesperson. Bob’s duty is to sell large quantities of washing machines to laundries. Also, he has negotiated with Angela many times. Further, due to the bad habits or Bob (late coming to work and drinking), Frank has withdrawn all the authority from Bob and fired him. However, he does not notify this to Angela and later on, Bob sent an e- mail to Angela and offer 10 washing machines for $10,000. Angela accepted the offer and entered into contract with Bob and also made the contractual payment of $10,000. It is apparent that Bob has performed the act after the revocation of the authority and therefore, Frank can sue Bob for behaving fraudulently and can recover the damages. Also, Angela does not know that he has fired Bob and hence, enacted the contract in “good faith.” Therefore, the contractual liability would be enforceable on Frank and he has to deliver the ten washing machines to Angela at $ 10,000. If Frank refuses to deliver the order, then Angela can sue Frank and claim damages. 
Bo has enacted the contract irrespective of authority and hence, Frank can sue Bob and recover the amount of $10,000. Further, Frank has not notified Angela about the revocation of the authority from Bob and hence, Frank is accountable to complete the contractual liability.
Carter, J. (2012) Contract Act in Australia. (3rd ed.) Sydney:  LexisNexis Publications.
Davenport, S. & Parker, D. (2014) Business and Law in Australia (2nd ed.). Sydney: LexisNexis Publications.
Gibson, A. and Fraser, D. (2014) Business Law (8th ed.) Sydney: Pearson Publications.
Harvey, C. (2009) Foundations of Australian law (3rd ed.)  London: Tilde University Press.
Latimer, P. (2005) Australian business law (24th ed) Sydney: CCH Australia Ltd.
Lindgren, K.E. (2011) Vermeesch and Lindgren’s Business Law of Australia (12th ed.) Sydney: LexisNexis Publications.
Paterson, J. Robertson, A. & Duke, A. (2015) Principles of Contract Law (5th ed.) Sydney: Thomson Reuters

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