Based on the case, developer Gail Watcher will be responsible to pay the pipe for Olander which included all of the contract work in accord with the plans, specifications and proposal prepared by the Watcher. Every decision was applied under Contract Act 1950. The acts that relevant to the case were section 26, section 28, and section 9.
Under section 26, an agreement without consideration is void unless it is in writing and registered, or in a promise to compensate for something done, or is a promise to pay a debt barred by limitation law. So, Olander Contracting Co is right, developer Gail Wachter should pay for the pipe. In their water and sewer construction contract, ...view middle of the document...
So, Wachter must keep the promise to pay Olander.
Besides that, According to the section 28 of the Contract Act 1950, restraint of trade is every agreement by which anyone is restrained from exercising a lawful profession, trade, or business of any kind, is to that extent void. In this section, it has divide into three exceptions. Exception 1 is saving of agreement not to carry on business of which good will is sold. Its mean that one who sells the goodwill of a business may agree with the buyer to refrain carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the goodwill from him, carries on a like business. Exception 2 is agreement between partners prior to dissolution which mean partner may, upon or in anticipation of a dissolution of the partnership, agree that some or all of them will not carry on a business similar to that of the partnership within such local limits as are referred to in exception 1. Exception 3 is during continuance of partnership, which partner may agree that some one or all of them will not carry business, other than that of the partnership, during the continuance of the partnership. While, Wrigglesworth v Wilson Anthony (1964) 30 MLJ 269 is best reflected example for this case. In this case, it revealed that the defendant, an advocate and solicitor, entered into an agreement of service with the plaintiff’s legal firm. Clause 8 of the said agreement stipulated that the defendant would not for a period of two years after the termination of his engagement by the plaintiff practice as or carry on the business or profession of an advocate and solicitor within a radius of five miles from Kota Bharu without first obtaining the written consent of the plaintiff. Such written consent was not given by the plaintiff. On 7 December 1963, the plaintiff agreed to discharge the defendant from practicing or carrying on the business or profession of an advocate and solicitor within a radius of five miles from Kota Bharu, Kelantan until 31 December 1965. The held is that plaintiff action must fail as any desire to restraint the defendant is illegal and void.
According to section 9 of Contract Act 1950, “So far as the proposal or acceptance of any promise is made in words, the promise is said to be express. So far as the proposal or acceptance is made otherwise than in words, the promise is said to be implied”. Therefore, in this case, Watcher has expressed the promise that he will pay. So, he should take the responsibility. The best example that can reflect this case is Interfoto Pictures V Stiletto Visual Programs (1989). In this case, the fact is “Stiletto ordered 47 photo transparencies from Interfoto’s photographic library. These were sent, together with a delivery note containing certain conditions. It provided, in clause 2, for a payment of £5 per day for each transparency held beyond 14 days. Stiletto did not read the conditions. They returned the photo’s almost...