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Aspects of Contract

and Negligence for

Business

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Introduction

The purpose of this assignment is to identify the Aspects of Contract and Negligence for

Business. In our days the environment of business is entire with agreements which are done

between people and business. Thought agreements can be oral and written and are used by

the different businesses but the most common are the use of contracts which have a formal

written. Negligence are be developed very quickly into the system of business cornerstone to

compensation of people for accidental inuries and damages.

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TASK 1

1.1 Explain to how a contract is formed and the importance of the various elements

which has to be present to form a contract.

A contract can be defined as a legally enforceable commitment where one party or an

individual owes another party or an individual as the outcome of a formal act or an informal

agreement that gratifies the condition of contractual legality !"iller# $%&'(.

A contract which is regarded as valid has the enlisted ) essential elements*

1. Offer 2. Acceptance:A legal contract comes into e+istence and become valid when a

person, party make an offer to another person, party who accept it. Thus# an offer can be

understood as a promise that is conditionally based upon an act# forbearance or a return

promise in its e+change or performance. It must not be mistaken with a statement of intention

or a supply of information. Also# an offer and an invitation to treat are two separate things !as

was in the case of -ibson vs "anchester City Council# &/(.

An offer is a proposal to engage in a legal contract while an invitation to treat is inviting

someone else to make an offer. The individual or the party making the offer is termed as the

0offeror1 while the person receiving it is known as the 0offeree2. 3hen talking about a sales

contract# the offeror can be either a seller or a buyer#and on the other hand# when talking

about a services contract# an offeror can be either providing or receiving the service. The law

dictates that an offer will get terminated when reected by the offeree# lapse of time# death of

either person# when the subect matter is destructed# counter offer or revocation of the

offer.Acceptance of the contract entails manifestation of agreement or assent in the manner

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requested by the offeror !"cInnes# 4err and 5an6u7er# $%&'(. It can be written# oral or

implied. Acceptance must be positive.

. !ntention to create le"al relations:This element of a contract entails that the parties

involved in a contract must have an intention to enter this legal binding agreement. The law

presumes that the domestic or social agreements !agreement between different members of a

family or agreement between friends, acquaintances# respectively( do not carry the intention

to create a legally binding agreement. As was evidenced in the case of Balfour vs. Balfour

!&&(. 8owever# it can be rebutted in the presence of contrary evidence. 9n the other hand#

law takes a serious presumption that commercial agreements !sale or purchase contracts#

contracts for providing or receiving services. and contracts for employment( carry the

intention to create legal relations !:usoff# Isa# A7i7 and Chin# $%&$(.

#. $onsideration:Consideration is the element of a valid contract that can be understood as

the price paid by a party for the other party1s promise.It entails one party giving money to

avail goods or services of the other party. Consideration can be in the form of a present action

or forbearance or a promise for the same. Thus# it can be broadly categori7ed in two types*

e+ecuted consideration !promise made in present time against the performance of an act( and

e+ecutory consideration !a future promise ofreturn of the performance of an act(.

Consideration may or may not be adequate but it must be sufficient as was in the case of

Thomas vs. Thomas !&;)$(. The parties involved need to ensure that they are getting their

value for money in the contract. Also# considerations may be equated to 0money1s worth1 but

they may not necessarily be made in the form of money. Considerations are often payment in

kind. "oreover# considerations of the past# i.e. before the agreement# cannot be held valid for

the agreement. 9nly a consideration provided at the time of the agreement or later is regarded

as a valid one !

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1.2 %iscuss the impact of formin" contracts

!. &ace to face contracts

=epresent contracts in which both parties will be each other in front and the parts will enter

orally into the contract. Application* it will apply because the both parties involved will be in

front of each other so will be no confusions about the contract parties. Impact of the contract*

this contract also is known as a quasi contract# legally it is difficult to prove because the

parties can easy deny what they have said.Both the parties lack clear evidence of the

agreement. This tends to clear difficulties in case of breech and disputes !>athak# $%&'(.

!!. 'ritten contracts

Is referring to agreement between two parties which is being made into a written form. The

agreement must include portions or factors and all the parties involved must sign the contract

for this one to be considered a valid one. 3ritten contracts purposes are ensuring in general

that the parties involved understand the agreement and are committed to comply all the

contract stipulations. ?uch a contract is generally prepared by a licensed attorney who ensures

that both the parties are clear about the terms and conditions before sealing the deal. A written

contract has to be signed by the both the parties. The process and nature of a written contract

is completely formali7ed. In case of any dispute or breach of contract# the law will also refer

to this written document !4ehoe# $%&'(.

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!!!. %istance sellin"

@This requires a contract between the restaurant and the suppliers and the linen hire

companies so they are not required to be in front of each other# the contract will be made on

internet or over the phone. Application* it will apply because all the parties will have the

option to enter into a contract even when they aren1t in front of each other. Impact* this is a

contract which is valid and can be enforceable because there is a distant selling regulation

which is protecting the right of all parties involved.

http*,,www.elawresources.co.uk,Contentsofacontract.php

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1. (ive an anal)sis of the followin" terms in contracts with references to their meanin"

and effect

&. $ondition represent a term which is significant which is having as base the reason

principle for the agreement. A condition break is qualifying for the party harmed for

denying the agreement and causing harm. The party harmed is deciding additionally

into happening with the agreement# regarding the rupture and harm recoup. >oussard

v ?piers !&;/(

$. 'arrant):A warranty represent a tem which is less essentialD is doing head off to the

agreement formulationD A warranty rupture is ust giving the party harmed the

appropriate right for claiming harmD he cannot be revoked the agreement. The contract

will not be terminated but is requiring performing at such level. !Bettni 5s -ye(

'. Exclusion clauses:E+clusion clauses are being bought to attention of the other party

prior to enter into the contract for being effective. If the party accepts the e+clusion

clauses must have knowledge about their e+istence. These ones are being used for

absolving the liability of companies otherwise they will be too risky for the

business. Fnfair e+clusion clauses !Thornton vs shoelane( parking

). !nnominate term:There are innominate terms where the breach remedy is depending

on the breach effects within the time that is happening. If there is n effect which is

substantial on the party aggrieved it will be a fundamental term and will give the right

of the party to terminate the contract while claiming for damage. 8ong 4ong fur vs

4awasaki

TASK 2

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2.1 Appl) the elements of contract

Case 1

Into a contract law there is a conventional offer and acceptance and important thought are

begin acknowledged. The principle of the offer and the principle of the acceptance are

incorporated quality offers# acceptance and a correspondence around the parties involved into

the agreement is being important. Carol do not have a contract with the seller because Carol

ust has made an offer to buy the couch but the seller din not present any evidence that he

accepted the offer of Carol# for that there is not a contract between them.

Case 2

Consideration into a contract is having the meaning that the other person would be able to

give certain back into return. This will be taken into consideration as e+change which would

be made between the promissor and promise. -eorge is entitled to enforce >reston as they

would get back certain in return for hiring 6evi.

2.2 Appl) the law on terms

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Case 3 Exclusion clause

@E+clusion clauses are being bought into the parties1 attention in order to make an

effective contract. There must be checked out if the contact is having e+clusion clauses before

signing him.

Gor an e+clusion clause to be effective# it must pass at least these tests*

it must have been incorporated into the agreementD

its wording must cover the liability in questionD

it must not be prohibited by statute or other law H e.g. under the Fnfair Contract

Terms Act &// !@FCTA(# the Fnfair Terms in Consumer Contracts =egulations

& !@FTCC=( or the Consumer >rotection Act &;/.

Case 4 Implied terms

Implied termsis it reasonable to hold that the parties entered into the contract on the

basis# and with the knowledge# that their agreement would be on the terms set out in previous

contracts entered into.!Henry Kendall & Sons v William Lillico & Sons(.

Terms implied b) statute*the ?ale of -oods Act &/. The key provisions are*

o ?ection &$* the person selling the goods has to have the legal right to sell

them.

o ?ection &'* if you1re selling goods by description# e.g. from a catalogue or

newspaper advert# then the actual goods have to correspond to that description.

o ?ection &)* the goods must be of satisfactory quality H that is# they should

meet the standard that a reasonable person would regard as satisfactory. Also#

if the buyer says they1re buying the goods for a particular purpose# there1s an

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implied term that the goods are fit for that purpose. (The Saleof Goods Act

1979)

Terms implied b) the courts

o As a matter of fact. ?omething that1s so obviouslyincluded that it didn1t need

to be mentioned in the contract.

o As a matter of law. This is about general considerations of public policy H the

courts are laying down# as a matter of law# how the parties to certain typesof

contract oughtto behave. * uppl! of Goods and er"ices Act 198)

2. Evaluate the effects of different terms

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Case #

The law gives you certain !sometimes referred to as statutory( rights under this contract. If

the goods do not conform to the contract# in other words are not of satisfactory quality# fit for

purpose or as described# you are legally entitled to one of the remedies. :ou are entitled to

ask the trader to repair or replace the goods at their e+pense. The trader can refuse to do so if

the repair or replacement is impossible or disproportionate !too costly( when compared to

other remedies. !Sale o" #oods $ct 1979%

Innominate or intermediate terms are being either warranty or condition and the parties must

take into consideration the importance of the breach for determining the appropriate remedy.

The remedy available to the party is depending on the effect and nature of the breach at the

occurred time.

The breaches deprive the party of the entire contract benefit and this is a condition which is

allowing the party to terminate.

Case $

Condition

A condition represents an important term within a contract which is going to the contract

roof. If there is breached a condition than the innocent party is being entitles for repudiating

!end( the contract while claiming for damages.

oussard v Spiers!&;/( & JB6 )&%

Breach of condition

If is breached a condition# the party aggrieved is having the right for treating the breach as

@repudiatory which is having the meaning that the party aggrieved might*

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Terminate the contract

Treating the contract as continuing !affirm the contract(

Into the both cases the party aggrieved is able to claim for damages. Is being important for

saying that breaching a condition is entitles the party aggrieved for terminating regarding the

consequences nature or the breach nature of the breach# even if the party aggrieved has

suffered few losses as a breach result.

Breach of warranty

3arranties are being minor term within the contract which is not being central to the contract

e+istence. If there is breached the warranty the party which is innocent will be able to claim

for damages but it cannot end the contract*'ettini v #ye&;/ JB6 &;'

TASK

.1 Similarities and differences of liabilit) in tort with contractual liabilit)

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The contractual liability can be understood by the e+emption or e+clusion clauses in a

contract are the clauses that limit the liabilities of the parties involved in an agreement within

their contract. Fnder common law# contractual liability must be incorporated into the terms of

the contract by notice by display# notice by signature# notice in document or notice by course

of dealings. As far as damage or loss of property is concerned# it is considered reasonable

!6eva# $%&$(.

8owever# even when clearly integrated in a contract# an e+clusion clause becomes

invalid if it causes personal inury or death. 9n the other hand# Kaw of Tort is an English

common law under which a person who has suffered personal inury because of negligence of

another person has the right to sue the wrongdoer for the damages. Thus# tortuous liability is

the liability incurred by a person who has breached his,her duty of care primarily fi+ed by

law. The breach of tort liability is repressible by an action for unliquidated damages !Kevi#

$%&'(.

The Tort and Contractual liabilities are the two separate aspects in common law. Their

similarities are that they both are civil laws and that the claimant can sue the defendant for

compensation but not punishment. 8owever# the two laws have certain differences as well.

Gor instance# in the contractual liability# the contract creates as well as governs the

relationship between the parties.

9n the other hand# in tort liability# the relationship is imposed by law and is non

contractual in nature. Also# the contractual liability comes into play when the parties enter the

contract consensually. But the tort liability is not based on consent. "oreover# in contractual

liability# the inured party sues the wrongdoer with an aim to restore their position in the

contract but in case of tort liability# the claimant sues for the loss they have incurred and the

compensation depends on the e+tent of the damage !8asnas# $%&)(.

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.2 Explain usin" suitable examples how liabilit) for ne"li"ence can arise

%ut) of care:6uty of care includes the situations and relationships recogni7ed by law as

leading to a legal duty to one party to take care of the other. If they fail to do so# the inured

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party may sue them. The party in breach of its duty of care when found liable for damage,

loss, inury is required to pay compensation to the claimant !"c4endrick# $%&)( as was

proven in the case of 6onoghue vs. ?tevenson &'$. The 8ealth and ?afety at 3ork Act#

&/)# also dictates the duty of care of an employer towards his,her employees at workplace.

+reach of dut):In order to successfully claim compensation for negligence# the claimant has

to provide evidence indicative of breach of duty on part of the defendant and how it has

caused the damage, los, inury to him,her. 8owever# it needs to be cleared at certain

behaviour may be accepted in emergency situations which are otherwise unacceptable in

ordinary circumstances !-reene# $%&'(.

%ama"e,causation and remoteness of damage*6amage can be caused in two manners* direct

and legal. 6irect cause is also termed as factual causation of damage. It entails assessing the

circumstance to deduce whether the loss was going to happen anyhow even if the defendant

did not violate their duty of care towards the claimant !=hee# $%&'(. Kegal causation can be

assessing to escape any loss that the inured party may supposed to e+pose !Kevi# $%&'(.

=emoteness of the damage is concerned with the consequences of breach. The inured party is

awarded for the loss they have incurred as was in the case of =u+ley Electronics and

Construction Ktd. vs. Gorsyth !&L(.

Occupier liabilit): 3hen a person is in charge of some premises under given stations

!occupier(# they assume the responsibility for the safety and wellbeing of the people visiting

or working on those premises. As per the 9ccupier liability Act &L/# an occupier is

responsible for any damage, loss, inury to the visitors in his,her premises !8asnas# $%&)(.

. Explain what vicarious liabilit) means and how a business such as )our or"ani-ation

can become vicarious liable

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Emplo)ers liabilit): doctrine of common employment. Fnder the employer1s liability# an

employer is responsible for providing a staff which is competent# for having adequate

equipment# for offering a safe workplace and a safe system of work. In case an employer fails

to provide these with reasonable skill and care# he,she will be held liable for any loss or

inury suffered by his,her employee. But the employee has to show that there was a breach of

duty of care on part of the employer and that it has led to certain loss, damage, inury

!-oldman and ?igismond# $%&'(.

/icarious liabilit):5icarious liability refers to the situations under which a defendant is

found guilty and held accountable for the damage, loss, inury even if they did not commit

the offence themselves. Gor instance# the employer is liable for the damage or loss incurred

because of a careless employee# over7ealous employee or a criminal employee. By adding

vicarious liability# employers are being encourage to use as much of their power as possible

to reduce liabilities and ensure that their employees get to work in the safest manner possible

!-reene# $%&'(.Gor instance# there is an art house that delivers paintings and other handicrafts

to a retail store. The friend of the owner of the art house works as an agent for him. 8e is

responsible for delivery of products. The truck being used is also owned by the art house

owner and the agent drives it as per his instructions. 9ne day# the agent meets with an

accident and gets severely inured. 8e sues the art house owner for the accident. The owner

of the art house becomes vicariously liable for the accident as it was in accordance to his

directions that the truck was being drive when the agent met with the accident.

Tas0 #

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#.1 Appl) the elements of the tort of ne"li"ence

Civil criminal act can certainly perform every single man and a senior who is in some

enticing environment. "ay be given some e+ample of a doctor who performed a fraud

against the state regarding their work or outside work# eg. sale of a bad product at a high price

in their favor. I can mention some law tort committed by the other person* breach of an

agreement# if someone inures loss of property or any relationships that were caused by the

act of someone from the other side. To avoid any fees for legal protection# especially what

they should require all businesses need to have a basic knowledge about torts. It will be best

for them since they can recogni7e and reduce risks where the most effective position of your

business.

e"li"ence:If a person does something irresponsible and will behave without character and

he will be indifferent to everything# if you say one word it2s a bad person and do not

appreciate anything and then obviously guilty of negligence. To cite ust a traffic accident* If

the driver was going too fast as it was designed in a particular lane and not adapt their driving

according to brand and then the resulting court is likely to determine the driver2s negligence

as a criminal offense.

%ono&hue " te"enson 1'32

The fact:went to a cafe with a friend. The friend brought her a bottle of ginger beer and an

ice cream. The ginger beer came in an opaque bottle so that the contents could not be seen.

poured half the contents of the bottle over her ice cream and also drank some from the bottle.

After eating part of the ice cream# she then poured the remaining contents of the bottle over

the ice cream and a decomposed snail emerged from the bottle. suffered personal inury as a

result. ?he commenced a claim against the manufacturer of the ginger beer.

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%ecision:8er claim was successful. This case established the modern law of negligence and

established the neighbour test.

hitehouse " 1'1

The fact:The claimant went to the hospital to have a baby and had been identified as likely

to have a difficult birth. The defendant surgeon first tried delivery by forceps but this was

unsuccessful and he then carried out a Caesarean delivery. The baby suffered brain damage

and the claimant argued that too much force had been used in trying the forceps delivery# and

this caused asphy+ia and brain damage.

%ecision:The 8ouse of Kords# in dismissing the claimant1s appeal# said that the test whether

a surgeon has been negligent is whether he has met the standard of the ordinary skilled

surgeon. The doctor2s standard of care did not fall below that of a reasonable doctor in the

circumstances and so the baby was awarded no compensation.

#.2 Appl) the law of vicarious liabilit)

T*ine " +ean,s Express 1'4$

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The fact:In this case there was a notice in the driver1s part of the van that the firm1s drivers

were forbidden to give lifts. The passenger was killed in an accident.

%ecision:the passenger was a trespasser and ain offering a lift the driver was not acting in

the course of his employment. The driver was liable personally# not the company.

%-.E "/ 0c+ET TECTIE AGE5C-6 I5C 1''

The fact* was a security guard employed by "c=oberts and working at National Bank of #

which had contracted with "c=oberts to provide security services. Acting on a longstanding

personal grudge and against specific orders to remain at his post in the bank lobby# Gigueroa

deliberately attacked plaintiff# who was a security supervisor employed by the bank# at her

work station in the basement and then# following her# attacked her again in the lobby# to

which she had fled.

%ecision:Not only was defendant motivated by private concerns and far from his assigned

post# but his conduct in attacking a bank employee# for which he subsequently pleaded guilty

to assault in the second degree in satisfaction of criminal charges# was not remotely related to

any conduct that his employer could have foreseen he would engage in as part of his duties.

$O$3S!O

Contracts form the backbone of running a business. Thus# the people and parties involved

must have indepth knowledge and understanding of different aspects of contracts# right from

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its various elements to its implementation in different scenarios. As it is important to

understand contracts# you also need to have great understanding of your liability and how it

comes into play when there is negligence in business. It aims to develop you as a better

organi7ation, business.

4E&E4E$ES

8A=>3996# 5. !$%%;(.(odern )ort La*+Kondon* =outledgeCavendish.

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"A=TIN# 4. !$%&$(. contract analysis and contract standards. =etrieved November $# $%&)#

from contractanalysis* http*,,contractanalysis.blogspot.com,

"IKKE=# =. K.# M ENT