Aspects of Contracts and Negligence for Business

ASPECTS OF
CONTRACTS
AND
NEGLIGENCE
FOR BUSINESS

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
1.1.................................................................................................................................................3
1.2.................................................................................................................................................4
1.3.................................................................................................................................................5
TASK 2............................................................................................................................................6
2.1.................................................................................................................................................6
2.2.................................................................................................................................................6
2.3.................................................................................................................................................7
TASK 3............................................................................................................................................8
3.1.................................................................................................................................................8
3.2.................................................................................................................................................9
TASK 4 .........................................................................................................................................10
4.1...............................................................................................................................................10
4.2...............................................................................................................................................11
CONCLUSION .............................................................................................................................12
REFERENCES .............................................................................................................................12
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INTRODUCTION
A valid contract is defined as an agreement signed between parties containing all the
essential elements of the valid contract (Connolly and Hoar, 2014). It is critical that all the
individuals that are engaged in signing the contract should have legal capacity for making a valid
agreement. Present report is based on aspects of contracts and negligence in business (Berger,
and Lester, 2015). The report describes about importance of essential elements that are required
for the formation of valid contract. In addition to this impact of different type of contract have
been discussed. Moreover, analysis of terms in contracts with references to their meaning and
effect has been mentioned. Along with this elements of contract have been applied in different
business situations and laws have also been applied on terms in different contracts. Furthermore,
difference between contractual liability and tort liability has been explained in the report.
TASK 1
1.1
There are some essential elements that are required Liau, T., 2015to be included while
making a legal contract. It is a legal process to make a contract and it is required that systematic
and legal approaches should be used by different parties while signing a contract (Liau, 2015).
Some essential elements that are required for making a valid contract are as described :
1- Offer :- When a party involves in signing agreement with other parties than some terms and
conditions are mentioned by parties for inviting others to enter into valid contract. If the next
party accepts the terms and conditions mentions the offer given by another than it is considered
as acceptance shown by another party (Carter and Courtney, 2016). Offer is an definite and
unequivocal promise or willingness to be bounded on specific terms without future negotiation.
It is assertive that terms of the contract should be accepted by both the parties and these terms
needs to bwe clear and definite. It has been referred from the case of Carlill vs Carbolic Smoke
Ball Co (1893) that an offer can be made to a particular person or to a class of person or even to
the whole world.
2- Agreement :- It is assertive that there should be free voluntary agreement between the
parties. It occurs if one party gives offer to another party and the offer is accepted by another
party (Thampapillai, Tan and Bozzi, 2012). It is the most essential element that is required to be
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included into agreement. Offer and acceptance are two terms that combine together for making
an agreement. Once a offer has been made it has than to be accepted before the contract can be
proceeded to the next stage (Sweet and Schneier, 2012). Acceptance is the unqualified and
unconditional agreements to all the terms of the offer. Acceptance can be oral, written or by
conduct.
3- Consideration :- It is essential that there must be some value or determining passing between
the parties. From the case of Dunlop Pneumatic Tyre Co v Selfridge &Co Ltd (1915 it has
been referred that consideration is an act or forbearance on the parts of one party to a contract as
the price of the promise made to him by the other party in contract.
4-Intention to create legal relation :- The parties must intend their agreement to have legal
consequences and therefore be capable for enforcement in case of breach (O'malley, 2012).
5-Legal capacity :- it is critical that each party signing contract should be equally capable to
enter into valid contract. A person below 18 years of age can not be engaged in signing any legal
agreement. Moreover an individual facing criminal charges can not be held liable for making a
valid contract with other parties and individual.
1.2
Different types of contracts are signed by parties when they enter into legal relationship
with each other. It is essential that impact of various types of contracts should be considered
while entering into legal relationship with other individuals. Legal effect and impacts of different
types of contracts is as described :-
1 – Bilateral contract :- ON the basis of formation these contracts are classified as A promise
made for promise. On the other hand unilateral contract are made for A promise for an act. A
bilateral contract is entered into by way of an exchange of promise between the parties (Oni-Ojo,
and Iyiola, 2014). The offer that is made for a promise becomes a promise by acceptance. Each
party that enters into a contract makes a promise to another party.
2- Void and voidable contract :- Valid contracts are those contracts that are having all the
essential elements which are required for formation of contract. On the other hand void contracts
are those contracts in which no contract exist and in voidable contract a party has option for
voiding or enforcing the contract (Lupton, 2013). There is one more type of contract that is
Unenforceable contract and this type of contract can not be enforced because of a legal defenses.
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