- 20 Marks
BCL – L1 – Q36 – Agency
Question
Peter, a 17-year-old undergraduate, had his attachment training at Harmony Rural Bank. The internship coincided with the acquisition and installation of the TechSoft software, and Peter worked alongside the IT team to install the software.
Upon completion of his internship, he returned to college but solicited online for customers for TechSoft Solutions, the software service providers. They occasionally paid him some allowance and, in some instances, Peter assisted the new customers to install the TechSoft software for which he received additional fees that were not made known to the service provider.
Prosperity Rural Bank purchased and installed the TechSoft software with Peter’s assistance but is very unsatisfied with the service as the solution failed to meet their expectations. They threaten court action against TechSoft Solutions for breach of contractual obligations and seek consequential damages. There is no formal contract between Prosperity Rural Bank and Peter, and the service providers are denying liability and claim Peter is a minor who lacked capacity to have entered into a formal agreement with TechSoft software solutions.
(a) You are the only professional in Prosperity Rural Bank, and the Managing Director has come to you seeking to pick your legal brain on this.
(b) Explain the significance of contracts under seal.
Answer
(a). Peter is a gratuitous Agent of TechSoft as no formal agreement had been entered into between him and TechSoft.
An agent needs to have contractual capacity, which Peter lacks as a minor.
By the conduct of TechSoft, they are estopped from denying liability since they occasionally paid him allowance and allowed him to assist in the installation of the software to new customers. Relevant case study (Coastal Farmers Union v Mensah).
Prosperity Rural Bank should pursue court action against TechSoft. The suit may result in limited damages.
(b). A contract under seal is also termed as sealed contract, special contract, deed, covenant, specialty, specialty contract, or common-law specialty. A contract under seal is a formal contract which does not require any consideration and has the seal of the signer attached. A contract under seal must be in writing or printed on paper. It is conclusive between the parties when signed, sealed, and delivered.
- Tags: Contract Law, Contract under Seal, Formal Contract
- Level: Level 1
- Topic: Contract Law
- Uploader: Samuel Duah