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Facts
On the 16th of June of the year 2019, Mark Brexit whom is a sitting member of the United Kingdom Council met with John Whiskey an engineer and building contractor were they discussed the construction of a bridge that would join the districts of the United Kingdom and Ireland.
Details of the bridge were:
- Length: 35,000 meters long
- Time of Construction: 8 Months to complete
- Total Cost of Construction: 2 Million Euros
Upon writing out a check of $100,000 Euros to John Whiskey for the commencement of the draft plan of the bridge and to mobilize his work team, he further mentioned that everything is in order and to submit his paper work for the upcoming council meeting.
Upon completing of the draft plans and other relevant materials and documents, John Whiskey submitted them to the Council. The meeting took place on the 18th of July of the year 2019, were Mark Brexit had an outburst where then the Council decided to vote him out. The Council later wrote to John Whiskey to inform of the situation where Mark Brexit could have by no circumstance be in position to enter into a contract in behalf of the council, and because of that, whatever contract Mark Brexit had concluded with him was ultra vires and therefore void.
Issues:
- Was Mark in position to start a contract with John?
- Was there a contract agreement with John upon receiving down payment and assured that all in in order?
- Was the decision made by the council to void the contract for ultra vires correct?
- Can John make claim for breach of contract by the Council of the United Kingdom?
The fact that Mark was a sitting member of the Council does not necessarily give him the authority to start a contract on behalf of the council alone. The meeting held by Mark Brexit with John was a Communication of intention. He writing out a check to John and informing him that all is in good stance now was the acceptance. Therefore, a contract was established by Mark Brexit on behalf of the Council however the acceptance of the contract something to be concluded by all members of the board together or by vote majority in certain cases.
- A similar case to this is that of Powell v Lee (1908) was Powell applied for a headmaster job at a school and the school managers decided to appoint him. One of the managers who acted without the consent from the other managers told Powel he had been accepted. The managers later decided to appoint someone else. Powel brought an action alleging that he suffered damages because of the breach of contract to employ him. The judge held that a contract was absent as there had been no authorized communication of intention to contract on behalf of the managers.
- Another case relating to this as ultra vires is that of Ashbury Railway Carriage and Iron Co v Riche (1875) were it was held that by entering into the transaction the company was in breach of its constitution, for it had no competence or power to make the contract and therefore the transaction had no legal effect. Therefore, Richies claim against the company for breach of Contract failed as there was no contract to be enforced.
Law
The general rule of English law is that any person is competent to bind himself to any contract he chooses to make, provided that it is not illegal or void for reason of public policy. (Smith & Thomas). Thereinafter, an acceptance is valid if communicated to an agent of the offeror having authority to receive it.
In the case of Ashbury Railway Carriage and Iron Co v Riche (1875) the House of Lords considered the contract to be beyond, or outside of, the powers of the company because of it being absent in the objects clause in its memorandum. Even if all the members of the company were to endorse the transaction, the company would still be in breach of its constitution.
The situation with Mark and John can relate to that of ACI Co V Riche of 1875, and even if John claims against the company for breach of contract, he would fail as there was no contract to be enforced.
Application
In this case, Mark Brexit alone writes a check to John for the commencement of Draft panning and mobilizing the team that will work on the construction of the bridge. Him accepting to pay the price John offered and by writing a check was ultra vires as this was a decision that all members in the council were to vote for. The contract would be complete when all members of the council vote for the commencement upon reviewing the terms and information provided by John. Therefore, their endorsement of the project is essential.
The facts of this case are related to that of Powell v lee. The contract was void due to the absence of authorization by the council. Instead, it was authorized only by Mark Brexit.
Conclusion
Based on the information provided, it can be said that there was no valid contract from the council with John. The actions taken by Mark Brexit to confirm to John that all is in good standing with the commencement of the project was ultra vires as he needed to consult first with all members of the council to give consent or vote to open a contract with Johns in regards to the offer provided.
References
- All Answers ltd, ‘Capacity Law Lecture Notes’ (Lawteacher.net, October 2019) accessed 15 October 2019
- All Answers ltd, ‘Ashbury Railway Carriage v Riche Case Summary’ (Lawteacher.net, October 2019) accessed 15 October 2019
- Revolvy, LLC. Powell v Lee on Revolvy.com. Revolvy, https://www.revolvy.com/page/Powell-v-Lee?uid=1575.
- Revolvy, LLC. Offer and Acceptance on Revolvy.com. Revolvy, https://www.revolvy.com/page/Offer-and-acceptance?uid=1575.
- Revolvy, LLC. English Contract Law on Revolvy.com. Revolvy, https://www.revolvy.com/page/English-contract-law?uid=1575.
- All Answers ltd, ‘What is an Offer & What is an Invitation?’ (Lawteacher.net, October 2019) accessed 16 October 2019
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