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Law Assignment Question
John agrees to build an extension to Chen's house. At the time they enter the agreement, the price of building materials is increasing week by week. John is reluctant to set a price for the work until he knows how much it is going to cost. Chen agrees in the contract that he will pay John 'the purchase price of materials as at the date of completion plus $6000 for labour'. The parties also agree that the work must be completed by the end of June, as Chen's family is coming to visit him at that time. Before the work begins, there is an unexpected increase in labour costs and an equally unexpected drop in the price of building materials. John tells Chen that he will need to increase the labour component to $10,000 or not do the job at all. Chen is anxious that the work is completed by the end of June so reluctantly agrees to the change. John builds the extension but does not finish it until the middle of July. Because of this, Chen had to pay for his family to stay in a hotel for three weeks at a total cost of $3000. Chen is now refusing to pay John more than the price of materials plus $6000 for labour. In addition, he wants John to compensate him for the money he had to pay for the hotel.
Required: Answer the following questions. In each case, give reasons for your answers, and support your reasons with case law.
I. Is there a valid enforceable contract between Chen and John?
I. What arguments could Chen use to support his refusal to pay John more than the original agreed price?
I. What arguments could Chen use to support his claim for compensation for the hotel?
I. What arguments could John use to support his claim to the $10,000 he wants Chen to pay?
Law Assignment Solution on Judicial Precedent
The case study comprises of the analysis of person called Phillip who has a fire insurance from AMM insurance Company and is claiming the insurance amount after indemnifying him for damages that his premises and content had which got destroyed in a fire.
Under the Insurance Contract Act of 1984, Phillip is entitled to claim against the AMM Insurance indemnification for the loss of his building and furniture. To have a better understanding, we will look into the nitty-gritties of the case and understand the charges that can be levied on Phillip and the countermeasures and defenses to be applied as provisioned by the law. The general term of the insurance is one year within this stipulated period Phillip has to renew or extend the insurance contract providing additional disclosure of the nature of profession he is into, while AMM insurance company deny the claim by citing several clauses in the policy like, occupancy, undisclosed profession of fireworks, alleged failure to ensure security of the premises and violation of clauses of disclosure and failure of Phillip as an insured to oblige of making proper disclosure under the policy. The fire caused major destruction of the premises and the insurance policy should provide cover. Further, it can file a case of fraudulent or misrepresentation of the claim under the Section 21 (1) Section 56 (1) of Insurance Contracts Act 1984. (Australian Government 2014)
For the purpose of the case study, we will refer to difference sections and subsections of the act to lay our focus on the feasibility of winning the case. The following sections are referred Sections 21, 28(3) and 26, 56 Insurance Contracts Act (1984)
The first part of the below report is divided into subparts where we have tried to analyze what are repercussions and charges applicable under the Contract Act 1984 that AMM company can levy on Phillip to outcast his insurance amount. The second subpart discusses the new amendments made in the Act because of which Phillip is eligible to reclaim his insurance amount under the provision of the Act. Phillip's disagreement with the AMM's decision and to sought indemnity for the sum insured of the premises and contents (furniture) under the policy, or for a replacement of the building is stated here. Further a calculation is provided to calculate the basic amount that Phillip is entitled to get.
The Part 2 of the report comprises of a concise essay, wherein the general matters that a specific to the insured and are not required to disclose under the Insurance Contract Act 1984 is mentioned. For the purpose of the essay Section 21 of the Act has been taken into consideration.
ISSUES in DISPUTE with RELEVANT POLICY PROVISIONS
AMM Insurance Company denies the claim by citing clauses like undisclosed profession of fireworks, alleged failure to ensure the security of the premises. Risk accepted while entering into the insurance policy was different and non-substantial as compared to what was inscribed in the later profession. Relevant law under Sections 21; 21A; 28; 59, and 60 of the Insurance Contracts Act (1984) (the Act) .
(Some parts of the solution has been blurred due to privacy protection policy)