Business Law: Analysis of Contract Case Study
AB107 Business Law
Written Assignment
Advise whether the terms of the Licence Agreement apply and whether the Exclusion of Liability clause is valid and effective in protecting UcanB007 from liabilities.
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The foremost issue pertaining to this case is that of whether the terms of the License Agreement are part of the contract between Ah Siong and UcanB007, and hence the enforceability of the terms should Ah Siong decide to sue UcanB007 in contract for his losses.
Due to the nature of this case being that of a shrink-wrap license agreement, there is contention regarding the point in time when the contract was formed, which clearly affects the incorporation of the terms and thus the term’s legal efficacy.
Adhering to the key elements required to form a contract, the purchase of product at the retail store fulfils the formation of a contract. The offer being made when Ah Siong brought the product (hardware and software) to the cashier for payment and the acceptance upon the receipt of the price. Consideration would have been executed since Ah Siong received the item and UcanB007 received payment. Since this is a commercial consumer transaction, there would be a general presumption that there is necessary intention to create legal intention.
Alternatively, the opening of the installation disk envelope could also fulfil the formation of a contract. The offer being the promise of un-exclusive right to use the UcanB2007 software, and the acceptance being the conduct of opening the envelope. The acceptance is deemed to be at that stage as the purchaser is still able to reject the software if the terms of the licence are unsatisfactory, due to its nature as an “accept-reject” licence. There was an opportunity to reject the offer by returning the product[1], but because Ah Siong did not do so, he is bound to the software licensing contract/the Licence Agreement; however, whether the terms are binding is another matter to be considered consequently.
Following the
Written Assignment
Advise whether the terms of the Licence Agreement apply and whether the Exclusion of Liability clause is valid and effective in protecting UcanB007 from liabilities.
[pic]
The foremost issue pertaining to this case is that of whether the terms of the License Agreement are part of the contract between Ah Siong and UcanB007, and hence the enforceability of the terms should Ah Siong decide to sue UcanB007 in contract for his losses.
Due to the nature of this case being that of a shrink-wrap license agreement, there is contention regarding the point in time when the contract was formed, which clearly affects the incorporation of the terms and thus the term’s legal efficacy.
Adhering to the key elements required to form a contract, the purchase of product at the retail store fulfils the formation of a contract. The offer being made when Ah Siong brought the product (hardware and software) to the cashier for payment and the acceptance upon the receipt of the price. Consideration would have been executed since Ah Siong received the item and UcanB007 received payment. Since this is a commercial consumer transaction, there would be a general presumption that there is necessary intention to create legal intention.
Alternatively, the opening of the installation disk envelope could also fulfil the formation of a contract. The offer being the promise of un-exclusive right to use the UcanB2007 software, and the acceptance being the conduct of opening the envelope. The acceptance is deemed to be at that stage as the purchaser is still able to reject the software if the terms of the licence are unsatisfactory, due to its nature as an “accept-reject” licence. There was an opportunity to reject the offer by returning the product[1], but because Ah Siong did not do so, he is bound to the software licensing contract/the Licence Agreement; however, whether the terms are binding is another matter to be considered consequently.
Following the