Is the gluten-free nature of almond flour a term for the given contract?
The central issue is to opine on whether the gluten free nature of almond flour is a term for the given contract.
Certain representations are terms and are considered to be an imperative statement for a legal contract. When the party completely depends on validity of the statement to execute the contract that means if the statement was not correct then the party would not have entered into the legal contractual bond with the other party. Further, contract formed on the ground of wrongly represented statements can potentially be declared void. The respective factors related to the given statement being considered as a term are outlined below:
- If the statement is a vital element for party to create contract, then it would recognized as term under argument made in Bannerman v White
- It is essential that the timing between defining the statement and creating the contract on behalf of the party should be minimal, then the statement become term of the contract. The relevant case is Couchman v Hill.
- Position of the party to define or check the validity/accuracy of the statement would make a statement a legal term for the contract under the decision announced in Dick Bentley Productions v Harold Smith Motors
- It has been observed from various case laws, that if the parties have specifically documented the statement in contract in formal manner then the court will consider it as a term for the respective contract. The leading case is Birch v Paramount Estate
It is apparent that Mikaela who is an owner of a cake making shop specifically asked for the gluten free almond flour from the supplier Tower Flours. Rickey, acting as the agent of Tower flour has right away said that their almond flour is gluten free. After a while, Mikaela filled the contractual form sent by Rickey and ordered 40 kg of almond flour. It can be considered that almond flour of being gluten free is term by taking the below mentioned aspects into account.
- It is vital feature on behalf of Mikaela because it might be possible that she should not order almond flour if Rickey said that there almond flour is not gluten free.
- The time leg between defining the statement on behalf of Rickey and ordering the almond flour on behalf of Mikaela is subsequently very less.
- Mikaela most of the times ordered ingredients from Tower Flour, which is a well-known flour shop. Hence, it can be said that Tower Flour is in the position of deciding the accuracy of statement that what exactly Mikaela is demanding for.
Conclusion
It can be stated based on the above discussion that the statement of almond flour being gluten free is a term for the contract.
The central concern with regards to the contract for supply of cake to Dan and Jacob is to determine whether the usage of gluten free almond flour was an implied term or not.
Terms can either be express or implied. Express terms refers to those which are explicitly specified in the underlying contract which may be enacted either through oral or written agreement. In sharp contrast, implied terms are those which are assumed to be present even though there is no mention of the same in the contract. Since, there are critical for the contract, hence the parties need to ensure that these are not violated or else the plaintiff may sue the other party on account of contract breach.
The various situations which potentially give rise to implied terms are as follows.
- Customary Terms
There are certain terms which are implicitly applicable on the basis of established customs and conventions with regards to contact formation in a particular field. Hence, in such cases, only the express terms are mentioned while the implied terms are assumed to be already applicable as is apparent from the verdict of the Hutton v Warren case.
- Court induced Terms
Express and Implied Terms in a Contract
At times, certain terms are assumed to be included or may be added by the court for enhancing and preserving the underlying commercial purpose. Also, in case of defined relationships such as that between customer and service provider, certain terms are implied especially the ones related to taking care of the customer while providing product or service. This has been highlighted in the arguments extended in the Liverpool City Council v Irwincase.
It is apparent from the given facts that a contract for cake has been enacted between Mikaela & Dan and Jacob. As per the given information, the customer had coeliac disease due to which he could not consume any product containing gluten or it could trigger allergic reaction. The question arises as to whether Mikaela was aware of the condition that customer had to which the answer would be yes as she used gluten free almond flour for making the case. If she would not have aware of the condition of the customer, then she would have been the normal almond flour. Since Mikaela was aware of the disease, hence there is an implied term whereby she is expected to ensure actions whereby no harm is caused to the customer through her products. Hence, based on the relationship the use of gluten free flour is an implied term.
Conclusion
It may be concluded that the use of gluten free flour is an implied term Mikaela was aware of the condition of the customer and used gluten free flour for the preparation.
The issue is to ascertain if the colour of the icing on the cake as specified by Kimiko would be a warranty or a condition for the given contract.
It is noteworthy that any particular term may either be a condition or a warranty. The essential difference between the two would arise on the basis of the underlying utility for the contract.
A term which is so pivotal for the fulfilment of the contract that in the absence of which, the contract may not stand or make sense for either of the parties would be classified as condition. For the breach of a condition, the contract may be terminated as exhibited in the decision of the Poussard v Spiers case. However, a term which is only incidental to the contract and does not form the crux is classified as warranty. For the breach of a warranty, the contract cannot be terminated but damaged can be recovered as exhibited in the decision of the Bettini v Gyecase.
The case information suggests that the customer Kimiko had given specific instructions about the colour of the icing on the cake. However, taking all the circumstances into picture, it does not seem the colour in itself is that significant an element that in breach of which the contract would lose utility. Also the seller has complied with the other specifications which were comparatively more important and hence the icing colour would be warranty but not condition.
Conclusion
The icing would be warranty but not condition
The core concern is to analyse the right of the customer Kimiko to hold Mikaela liable for breach of warranty considering the presence of exclusion clause.
As per common law provisions, the breach of warranty would attract damages on the defaulting party directed towards the innocent party. In case of presence of exclusion clause for the breach of warranty, it is essential that the service provider or product seller must bring to the notice of the buyer the existence of any such clause even though the same may be written in the form of a sign which might lie in the direct line of sight of the customer. It is then up to the buyer who may or may not decide to go ahead with the purchase of product or service. However, in the absence of the above efforts on the part of the seller to bring the exclusion clause to the notice of the buyer, the exclusion clause would not be applicable even if the buyer happens to read it by mistake.
In accordance with the relevant information, due to the change in the icing colour there has been a clear breach of warranty. However, while placing the order, no effort was taken by Mikaela to bring to the notice of the customer i.e. Kimiko about the existence of the exclusion clause. In fact, when the order was being finalised, Kimiko did observe the sign and did not probably consider it too important to be any significant relevance. As a result, the exclusion clause would not be valid a Kimiko can recover damages from Mikaela due to warranty being breached.
Conclusion
The exclusion clause would not be valid a Kimiko can recover damages from Mikaela due to warranty being breached.
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