Recourse

Recourse, as defined by law scholars, refers to the rights granted to the insurer, to subrogate. As a fiduciary, subrogation is held by the insurer who has legal rights to pursue a third party deemed to be responsible for an insurance loss. According to Blackfriars group Insurance, 2018, the rationale for recourse is to enable the insured to recover the amount of claim provided by the insurance carrier. The insured can enforce the legal doctrine in order to benefit from the loss. For example, in the case of Laundry v Newman (1949), the defendant had to incur the cost for delay in delivery of a boiler. Similarly, in Hadley v Baxendale (1854), the defendant was penalized for causing damage deliberately that led to huge losses.
As per the case presented, Garry doubtlessly acted as Hemma’s agent. Since it is Garry who recommended to Hemma that the three-year-old Ford Focus was a high-quality car, he would be held liable for the loss incurred. With regard to the UK’s contractual law, Garry, who is the agent in this transaction, is considered the liable party to take the responsibilities of the loss Hemma has incurred. The case of Williamson Baker & Co. v Main Street Bank(n.d) provoked many thoughts on who was responsible for the liabilities that led to the loss of much money after the collapse of True Building Group Ltd. With reference to the law of recourse, negligence by a party can lead to great losses to another party. The party which exhibits negligence leading to loss or damage is held liable.
The laws of recourse are applied such that the party to a contract can experience a liability or a claim because of the liability of another individual. In the supply chain for goods and services, some chains usually involve long channels comprising of suppliers, processors or agents. Each individual link obtains a reward and must act responsibly for their role and liabilities arising from the goods or services are rectified by the responsible party. Laws of recourse are crucial because the common law may place unnecessary liability on another party who is innocent who may lack insurance protection.
In the Hemma vs. Garry’s case, Garry waives the rights of recourse against the manufacturer, implying that the risks and responsibilities associated are assumed by the agent since he plays the role of the manufacturer. The consequence is that any loss or claim as a result of the sale of the vehicle is primarily the responsibility of the agent. The doctrine of impossibility emerged in Taylor v Caldwell (1963), in which fire was responsible for the damage of the contract. However, it would not be applied in this case because the events that led to the losses could be controlled by the defendant who neglected the fact that the car he was selling to Hemma was already in a bad state. I would advise Hemma to go ahead and pursue recourse against Garry because she is an innocent party in the claim incurred.
Part 2:
This case illustrates loss incurred by Screwsort due to a technical error that infected online transactions thus customers ordered and received goods worth thousands of dollars for just a few dollars.
1. From the law of indemnity, stipulates that an individual would take responsibility or have the obligation to pay for the loss or damage that might be caused by another party. Contractual agreements ordinarily protect individuals against liabilities, loss or damage unless otherwise. Regarding this case, customers who made orders and collected their goods at very low prices before the Company announced the technical glitch, have legal protection against the liability incurred by the Company. However, after realizing and announcing the problem that led to malfunctioning of the Company’s website, any more purchases would be subject to indemnity. Therefore, the Company can apply the rights to be indemnified by customers who made purchases after the problem had been publicly announced, by forcing them to make full payments for the products.
The case of Stilk v Myrick (1809), exemplifies the need to have an offer and acceptance in order for a contract to be legally binding. Additionally, the case of William v Roffey Bros (1991), elaborated that performing what you are already bound to was not a consideration. In the same manner Screwsort was already bound to the contract to deliver the goods and therefore, it had no rights to deny customers from receiving their orders or even to charge higher for the goods ordered at lower prices. Companies can incur huge losses due to negligence or unintended decisions. For example, in Carlill v Carbolic Smoke Ball Co. (1893), the medical firm advertised its new wonder drug that would cure people’s flu, and promised that if the drug never works, the Company would reimburse the customers with one hundred Euros each. After being sued, the defendant argued that the ad was not meant to be taken seriously. However, the Court of Appeal held a firm ground that for any reasonable man, it was a serious offer.
The enforcement of the laws of contract is also subject to limitations. In Euro Pools Plc v. Royal and Sun Alliance Insurance Plc (2018), the contract stated in a clause that the insured would notify the insurers about a possible claim for reimbursement. The claimant was insured against damages that might arise from the installation and outfitting of swimming pools. The major issue was that the mitigation cost that the insured claimed had exceeded the limit of indemnity. In a similar case of Kajima v Underwriter Insurance (2008) involved contest over whether the notifications provided covered earlier issues that arose from the new defects from the flats.
2. Some of the essential elements of a valid contract include the existence of offer and acceptance, mutual consent, legal intention, free consent of parties enjoined, competent parties, lawful object, and consideration. Before entering the contract to buy from the Screwsort Companies, customers consented to the terms and conditions. Similarly, the Company accepted the agreement after considering her customers as the competent parties. It means that the Company and the customers had a mutual agreement which is lawful, and every party had a legal obligation. By placing orders for purchase, the customer is abiding by the legal provisions of the contract. It is arguable that the Company, regardless of the technical problem they were experiencing, had to honor their agreement by delivering all the orders which had been made earlier.
3. An agreement remains so regardless of whether goods had been delivered or not. It is a breach of contract for the Company to accept orders from customers but refuse to deliver goods. The customers are innocent parties and it is wrong for the Company to force them to bear the consequences for the fault they never caused. It does not make any difference whether the customers’ orders have been delivered or not rather, all the deliveries should be made, after which the Company can shut down the faulty website as it rectifies the problem. The laws of recourse only compel the responsible party to reimburse the insured for the losses incurred. But in this case, the customers are not responsible for the Company’s losses whatsoever. The customers are neither the agents nor the manufacturer thus should not be compelled o pay the full price if the goods are obtained at a lower cost from the website which is the point of purchase.
Sometimes, losses or damages emerging from faults caused by the insured, upon proof, can lead to no recourse. In William Mcllroy Swindon v Quinn (2011), the insurer refused liability at it was established that fire which causes damage of the building that was insured was caused by insured use of a blow torch. In Sienkiewicz v Greif (2011), Enid Costello died from mesothelioma. The defendant was accused of negligence that led to the insured getting exposed to asbestos dust. However, it was difficult to establish a connection between asbestos with mesotheliona or even how the disease could have been triggered by the exposure. The Court admitted to no liability for the defendant because the latter never contributed much in the death of Costello.
Part 3:
The case of Williamson Baker ; Co. vs. Main Street Bank provokes many thoughts on who is responsible for the liabilities that led to the loss of money after the collapse of True Building Group Ltd. With reference to the law of recourse, negligence by a party can lead to considerable losses to another party. The party which exhibits negligence leading to loss or damage is held liable. In this case, Main Street has legal rights to sue Williamson Baker for the failure to reveal the true nature of the financial health of True Building Group Ltd., whose collapse led to many losses to the Main Street Bank. Negligence in the UK law is treated as an act of breach of contract. The development of the tort law of negligence goes back to 1977, when the Contract Terms Act was adopted. Business law is one area that has posted a lot of challenge until recently. The popular case of Hadley vs. Baxendale (1854) is an example of an incidence of negligence, where the defendant delayed the transportation of a broken mill from the claimant to the repairers. The claimant, in turn, sought reimbursement from the defendant for his negligence that resulted into the loss of profits – as the delay occurred.
In a similar case of Laundry v Newham (1949), the defendant’s negligence caused loss of profit and loss of a lucrative contract. The case of Caparo Industries plc v Dickman (1990) saw the claimant having significant losses as they relied on the auditors’ report to purchase the Company (ACCA, 2018). The claimants later understood that the Company made losses rather than the re-stated profits. According to CaseChecks.com, the cases involving Al Hamwi vs. Johnston ; ANR (2005), Al-Ruby vs. Quist solicitors (2007) and Andrews vs. Waddingham ; Anor (2006), all illustrate an instance of professional negligence. These cases prove that the tort law of negligence is crucial in a business environment. In the Al Hamwi vs. Johnston ; ANR, the defendant, a clinician, out of negligence, failed to give adequate warning to the patient regarding his safety, leading to regrettable loss. In Al-Ruby V Quist Solicitors’ case, the defendants were found to have acted out of negligence, which translated into damages to the claimant.
From the foregoing, it is evident that the law of recourse applies on the basis of the prevailing circumstances and exact situations. It is also clear that the particulars of the cases are essential in the determination of the appropriate response and resolution of disputes arising from recourse suits. Furthermore, the law of contract significantly affects the court’s decision, making in granting recourse rulings. Consequently, the unique situations and circumstances within a given case determine the extent to which recourse rulings are awarded.