Commercial Law Marine Construction Limited

Question: Discuss about the Commercial Law for Marine Construction Limited. Answer: Introduction: A contract was present between the Western Australia Regional University and Marine Construction Limited (MCU). It was supposed to be completed by 1st March, 2016. Prior to the completion of the project, MCU observed and found out that work was very difficult to complete because there were many construction related glitches. The questions that might rise from the following facts can be- Did any breach of contract occur between the contracting parties? Whether there was an existence of negligent misrepresentation on the part of MCU? What recourse could the University have to amend the wrongs? Relevant cases There was occurrence of dual contract in the present case. The second contract was a product of negligent misrepresentation committed by the Marine Construction Limited. The main purpose for getting into the original contract was that the university wanted to accommodate students into their private hostel. So they wanted to build a hotel and then change it into a hostel in order to accommodate students into it. The initial cost to the university was $ 2, 00,000. A month before completion of the assigned work, MCU broke it to the university that the endeavour was difficult to be finished within allotted time frame since many structure related paraphernalia ensued. They were in need of an excess amount of $500,000 to finish the work in time. This showed elements of negligent misrepresentation on the part of Marine Limited. Negligent misrepresentation usually differs from a misrepresentation which is done with innocent intentions (Gillies and Selvadurai, 2009). Certain facets needs to b e taken into consideration in order to prove negligent misrepresentation which are- There should be an element of duty to take care between the person who makes the representation and the person to whom the representation is made. The representation which is made must lack accuracy, contain fallacy and mislead the believer. Even though misrepresentation occurs, the person to whom the representation is mad e must believe it to be plausible. There should be an irresponsible and frivolous conduct on the part of the person making such representation. As a result of the misrepresentation, the sufferer of the misrepresentation who believes in it must have faced punitive losses which were adverse in nature. Misrepresentation can be linked to free consent which is an essential element for the formation of a contract. It is a hindrance in the way of free consent and causes annulment of a valid contract. If taken in a literal sense, it means when a party shows a fake fact to the other party with a wrong intention and that is plausible to the other party, it implicates to be misrepresentation. The present tenet can be found in Queen v Cognos Inc [1993] ISCR 87, wherein the Supreme Court of Canada discovered that the person who claims negligent misrepresentation to have occurred have to prove that there are elements of misrepresentation present in the case (Fletcher and Fletcher, 2007). Section 18 of the Competition and Consumer Act, 2010 (Cth) prohibits legal entities and individuals from doing activities which are frivolous and misleading in object. Although the university can ask for remedy in the form of punitive compensation from the construction company for causing losses due to neglig ent misrepresentation, it would be an uphill task to prove the same (Paterson, 2011). In the case of Howard Marine v Ogden [1978] QB 574 the individual who was trying to show element of negligent misrepresentation was unable to prove on valid grounds which showed that they had the registration document which displayed their true capacity (Willmott et al.,2005). No credulous explanation could be provided to prove that the Lloyds register was different from the registration document. When analysing the second part of the contract, the principle of economic duress also comes into scene. In A Little Company Limited v Gregory Raymond Peters [2007] NSWSC 833 (3 August 2007), it was found out that Peters was compelled to enter the contract caused by economic duress. Finally the accused was held culpable and was made to shell out money due to breach in contract. Application of the case to the issue Relying on the cases and legal analogies discussed it is well established that the construction company had fudged the facts and the situation to the university resulting in the university authorities to believe in what they said (Monahan and Carr-Gregg, 2007). It resulted in detrimental punitive setback to the university which was understandable because they had a stringent deadline. The University had advertised about 150 overseas students coming over to accommodate the hostel. The MCU were casual in analysing their situation and due to their lackadaisical work could not finish their work which made them to ask more funds for completion of the project. They could have avoided this adverse situation had they been diligent is estimating the viability of the work. The ultimate sufferer was the university who had to shell out extra money to ensure that work was being done within time. The university can claim monetary compensation for this loss but they also have to establish the eleme nts of misrepresentation before the court to prove the loss. Conclusion The instant case revolves around the act of misrepresentation which was done for negligent work product of the construction company. There was a belief instilled by the company into the university that the work could be completed within the stipulated time frame with the earlier budget. However they vitiated the contract by not completing their object within time. Reference Fletcher, K. and Fletcher, K. (2007).The law of partnership in Australia. Pyrmont, NSW: Lawbook Co. Gillies, P. and Selvadurai, N. (2009).Law of contract. Sydney: Federation Press. Monahan, G. and Carr-Gregg, S. (2007).Essential contract law. New York, NY: Routledge-Cavendish. Paterson, J. (2011).Unfair contract terms law in Australia. Pyrmont, N.S.W.: Thomson Reuters (Professional) Australia. Willmott, L., Christensen, S. and Butler, D. (2005).Contract law. South Melbourne, Victoria, Australia: Oxford University Press.