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Compact and International Tire Inc

Essay by   •  February 10, 2019  •  Case Study  •  1,999 Words (8 Pages)  •  2,171 Views

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  1. Is there a valid contract between Compact and International Tire Inc.?  Explain fully with specific reference to the key elements.          (6 marks)

Yes, there is contract existing between International Tire Inc. and Compact.There are certain four elements signed before a contract is made between parties. They include: consideration, acceptance, intent and offer (Bayern, 2015). By observing theabove four elements we need tosee that it’s predictable an offer was made among both parties. Compact obtained International Tire Inc. to renovate their computers at quick turn-around at a lesser cost. International Tire accepted offer when Nancy and Sid convincednumerousof the National companies Business in the System to changeinto Compactnumerous of dealingsrecognized the offer thereby anxious to change their business, comprising International Tire Inc. The contract consideration encompassed that Compact would make repair to all of International Tire’s computers in anappropriateway. They would alsoassemble, overhaul and yield the computers contained by the regular timein the business. In exchange International Tire Inc.later woulddirect all of its repairs on computers to Compact within period of 3years.

2 ASSUMING THAT THERE IS A VALID CONTRACT, was the contract breached?  Which party (or parties) breached the contract?  How specifically was the contract breached?  At what point in time could legal action be started by each party that you have identified as breaching the contract?  (8 marks)

In existence of valid contract among the parties there exists breach that lead to legal actions that need to be taken. Every single contract breached allows the acquitted party right to far-out when other party does them wrong (Bayern, 2015). In time of solving what the clarificationought to be the courts first will reflecteither the breach is classified as warranty or condition. Condition breach allows the guiltless party termination right regarding the claim and contract to the damages; where as breach in warranty permits the innocent party entitlementto damages. In the condition of International Tire Inc. and compact yes, a contract can be opened as Systems of Compact was not capabletrail through with the interaction made between International Tire Inc. and them. The terms of the contract were:

The wise resolution International Tire Inc. ought to haveperformedis to gather approval of the court that Compact breached the contract, so International Tire Inc. would have the right of not sending their computers to get repaired by Compact The same solution would also apply to Compact, if they stated to the court what type of breach the average timeframe to repair a computer was the courts would have been more than willing to take this direction from the contract.  

  1. How would the court approach the question of damages relating to the Compact and International Tire Inc. contract?  What factors would be considered?  (8 marks)

As both parties committed a breach of contract, damages can now be evaluated. Damages are a monetary compensation for breach of contract or other actionable wrong (Bedi, 2012). Damages can be measured in two ways; expectation damages and punitive damages. Expectation damages are damages which provide the plaintiff with the financial equivalent of prescribed performance (Bedi, 2012). Punitive damages are considered as an award to the plaintiff to punish the defendant for malicious, oppressive and high-handed conduct.  

The first two areas that have to be inspected in this case are to discover if the measure of damages were made with the intention of expectation damages or punitive damages. In the situation of International Tire Inc. they lost in terms of monetary amount due to the delay in repairs. In this case it was not mentioned that there was a monetary amount set in the contract therefore, the courts will have to decide the worth of the damages, and evaluate what the delay of repairing a computer cost International Tire Inc. in terms of lost work and income. By the evidence that International Tire Inc. had a financial loss due to late repairs, the court can charge Compact for Expectation Damages and will have to pay International Tire Inc. the amount of  money the business loss for not repairing their computers on time.

  1. Is there a valid contract between Compact and American Tire Corporation?  Will Compact be able to successfully bill American Tire Corporation for $100,000 per year?  What arguments can Compact bring forward?  Will it be successful? (6 marks)

To verify that if the contract is legal between American Tire Corporation and compact, All-outof 1300 computers annuallyneed to be submitted to Compact to repair and upgrade.

The casetermsevidentlydisplay Compact BusinessSystems responsibilitiesareeager to signal to American Tire Corp. A word in the contract that does not give a vibrantthoughtful is ‘tip top shape.’ ‘Tip top shape’ meaning to Compact set standardand the standard of ‘tip top shape’ can have a diversesignificance to American Tire Corp. This hence may be able tocause confusion and if there was everdifference with this contract it would be agreed to court and they would decide what the truest meaning of ‘tip top shape means.’

As both parties decided and have plans to accomplish the contract Nancy observed that the contract defines that per year payment would be $10,000 per year as an alternative of the $100,000 they presumed they would collect.

  1. Does Shawna have any action that she can take against Compact?  What steps can she take (assuming her parents let her out of the house)?  Will she be successful?  In a court action, who would be the plaintiff and who would be the defendant?  (8 marks)

Shawna have got severalalternativesto takehence shedoesn’t have to compensate the expensive order signed. Compact can too sue Shawna failing to pay the $750.00previously signed in the contract, but Shawna could succeed in the disagreement by declaring the point that she is 17 years old. The fact that Shawna is 17 years old categorizes her as a minor, which means that she does not have the legal capacity to contract until she is the age of majority. This indicates that contracts are not enforceable against her; she is only able to impose in the contractual relationship they are. By the evidence given in this case Shawna could argue that the sales clerk was insistent that this was the only way her computer would be fixed and this is the reason why she signed the contract in the first place and that she trusted their input when making the decision to seek the services from Compact.Another point of misrepresentation Shawna can point out is that the clerk told her that the only way to improve her computer is to purchase Compact’s Deluxe Upgrade package for $750.00 by the statement said by the desk clerk this would be a statement of fact.  Shawna can prove herself by having an opinion of an expert stating that the statement the desk clerk told her was false and there were cheaper options for Shawna could choose from. Instead of taking the route of suing for misrepresentation Shawna can file charges for unconscionability. An unconscionable contract is an unfair contract formed when one party takes advantage of the weakness of another. Shawna can use this by testifying that she is underage and has lack of knowledge and experience in purchasing software. Either route Shawna chooses to follow she has higher chances to win the case.



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