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1.

0 Introduction
The Law of Contract is systematic laws or regulations which directed to
enforce the agreement and certain promises. The area of Contract Law is vast,
but my focus in this essay will be on the breach of contract, express and
implied terms, and damages for breach of contract.

In the contract, the term can be express or implied. Express terms can be made
by written statements of agreement, or oral agreement, or a combination of
written agreement and oral agreement (Cheshire, Fifoot & Furmston, 1991).
Implied terms are those that have not been stated by the parties, but the Courts
may presume the parties to have agreed to these additional terms (Collins,
2003). If one party breach of the terms of contract, then the Court may question
whether that party has breach of conditions or warranty. A condition is the
fundamental term of contract or the root of the contract whereas a warranty is
considered as the less important term of contract (Moore, n.d.). The breach of
condition enables innocent party to treat the whole contract as the end, and
terminate his or her obligations. Conversely a breach of warranty unable the
innocent party to terminate the contract, but the innocent party could only sue
for damages for losses sustained by the breach of warranty.

In Bettina v. Adam, Bettina wants to sue Adam for breach of contract and
damages for lost of clients. Adam wants to sue for three months payment plus
extra hours he worked in the third month. To resolve their claims effectively, it
must to look at what they have written or said in the contract, and whether the
express terms have covered specific circumstance which could arise under the
contract. If terms have not been specify particular circumstance, then the Court
may imply terms into the contract.
2.0 Express Terms
As I said earlier, a contract can be made by writing or word of mouth, or a
combination of writing and word of mouth. Once if the extent of the contract is
in dispute, the Court will first determine whether the contract was made by
written document or oral statement. If it was a written contract, then the
discovery of what did contracting parties write will not be difficult, and its
contents are a matter exclusively within the jurisdiction of the judge. If the
contract is made by oral terms, then it must find as fact of what it was the
parties exactly said, and its contents are a matter of evidence but not within the
jurisdiction of the judge.

In Bettina v. Adam, the contract between two parties is express term, and
contractual obligations must be performed by both parties. That is, Adam is
entitled to be paid for period of time he worked for Bettina. If Adam was not
paid for monthly salaries, then Adam could sue Bettina for breach of contract.
In fact, Adam was paid as agreed in the first two months because all things
went well. But Bettina got into a dispute with Adam about times take to fix
problems and lost two clients in third month. They have terminated the contract
in the fourth month. In this circumstance, Adam can sue Bettina for breach of
contract, and Adam is freed from his part of obligations, and therefore his
claims for three months payments could be successful. Adam is required to
provide the standard of proof of what did Bettina write or say in the contract. If
Adam proved the contents in the contract, the express term is bound by
contracting party, and therefore Court will decide Bettina is liable for breach of
conditions.

However, if Bettina wants to sue Adam for breach of contract and damages for
lost clients, Bettina has to prove what was written or said by Adam. The Court
may question that was any additional terms incorporate in the contract. If
Bettina could provide the truth of what was the oral statement by Adam, then
the Court may treat the oral statement as the part of the contract. And if it was,
Adam is bound by express term so that fail to meet his promises, its breach of
warranty entitles Bettina to sue for damages for lost of clients, but she could
not terminate the contract.

In fact, Adam’s qualifications and times and the time required to fix problems
have not been mentioned in the contract. If so, the Court may not decide Adam
is liable for breach of warranty although Bettina could prove the oral evidence.
In Walker Property Investment Ltd v. Walker [1974], it was point out that the
oral agreement should be read with written instrument so as to form one
comprehensive contract (Cheshire, Fifoot & Furmston, 1991). That is, if
plaintiff could not prove oral agreement is incorporate into the contract, his or
her claim for damages could fail. In Bettina v. Adam, the statement said by
Adam could not be treat as an express term, because it has not been mentioned
in the form of a contract. Thereby, the Court will decide Adam is not liable for
breach of contract, and Bettina claim for damages will be failure.
3.0 Implied Terms
Sometimes express terms made by parties may not cover particular
circumstances which could arise under the contract. They may have thought
that something was so obvious to express (Koffman & Macdonald, 2007). It
may be argued that a term can be implied by Court, when issues arise which
have not been included such issues into the express terms.

In Bettina v. Adam, qualifications of Adam and time required to fix problems


have not been mentioned in the express term. Thus, the Court may imply such
terms to give business efficacy to the contract. Because the time required fixing
problems is so obvious it goes without saying that both parties had thought
about it. In the Moorcock [1889], it was pointed out that there was no express
promise in the contract that the berth was safe for the ship, but the court held
that one would be implied (Parris, 1985). From this, the Court may recognize
the time required fixing problems as an implied term into the contract, and if
the Court do so, then what Adam has done can be considered as breach of
implied terms.

In addition, the Court may imply terms into a contract that dependent on the
previous course of dealings between two parties. In Hillas & Co v. Arcos Ltd
[1932], the Court held that an implied term was that the same standard of wood
would be supplied in the later transaction (Moore, n.d.). Assume that if Adam
could repair computer packages with two hours in the first two months, then
the time required fixing problem should be same in the later month.

Overall, Bettina could sue Adam for breach of implied term and damages for
lost clients only if the Court has determined that an implied term was given
business efficacy to the contract. Also the previous course of dealing will be
also taken into the consideration when implying terms.
4.0 Damages for breach of Contract
The breach of contract entitles innocent party to sue for damages and terminate
the contract (Moore, n.d.).

In Bettina v. Adam, the damages are assessed based on two issues: causation
and remoteness. The test of causation in contract is whether the loss sustained
by Bettina is specifically related to or the result of the Adam’s breach of
contract. If the test is satisfied, then Bettina’s claim damages from Adam’s
breach of contract will be effective. If the test is not satisfied, then Bettina
could apply the test of remoteness for suing damages.

The test of remoteness is developed in Hadley v. Baxendale [1854]. It was


point out that if the plaintiff wants to succeed under the second rule, he must
prove that the special circumstances were given to the defendant’s attention
(Moore, n.d.). It is a matter of fact that Bettina has told Adam about receiving
complaints from clients. Hence, the second rule of Hadley v. Baxendale is
satisfied. And therefore Bettina will be able to claim damages caused by Adam.
5.0 Conclusion
In conclusion, Adam could sue Bettina for beach of conditions and claim
payments from Bettina. But Adam is requested to provide the proof of what
was Bettina express in the contract. If written contract is a matter of fact and
has been proved by Adam, then the Court will determine that Bettina is liable
for breach of contract.

On the other hand, Bettina could sue Adam for breach of implied term and
damages for lost clients only if the Court has implied terms into the contract.
In the end, if Bettina wants to claim damages from Adam, she is request to
apply the test of remoteness to prove that she has given attention to Adam
about clients’ complaints. Once the test is satisfied, Adam is liable for lost of
clients and Bettina could sue Adam for compensations.
6.0 Reference
Cheshire, C.J., Fifoot, C.H.S., Furmston, M.P. (1991). Cheshire, Fifoot and

Furmston’s Law of Contract (12th Edi). London: Butterworths Co.Ltd.

Koffman, L., & Macdonald, E. (2007). The Law of Contract (6 th Edi). London:

Oxford University Press.

Collins, H. (2003). The Law of Contract (4th Edi). London: Cambridge

University Press.

Parris, J. (1985). The Standard Form of Building Contract JCT 80 (2 nd Edi).

London: Collins Professional and Technical Books.

Moore, B.J.(n.d.). Legal Framework I Guide. Perth, Western Australia: Edith

Cowan Univerity.

Australian Contract Law (n.d.) Law of Contract. Retrieved January 22, 2010,
from http://www.australiancontractlaw.com/law/scope.html#terms.