Aspects of Contract: Essential Elements, Types, and Terms

This document provides an overview of contract law, including the essential elements of a contract, different types of contracts, and contractual terms. It also applies these concepts to real-life scenarios and discusses the remedies available for breach of contract. The subject is contract law, and the document type is a study material or essay.

Aspects of contract

Table of Contents
INTRODUCTION..........................................................................................................................................................3
TASK 1...........................................................................................................................................................................3
1.1........................................................................................................................................................................3
Essential elements of the contract........................................................................................................................3
1.2 ......................................................................................................................................................................4
Different type of contract.....................................................................................................................................4
1.3........................................................................................................................................................................6
Contractual terms.................................................................................................................................................6
TASK 2................................................................................................................................................................7
2.1........................................................................................................................................................................7
Apply the elements of the contract in Abel's case...............................................................................................7
2.2 ......................................................................................................................................................................7
Apply the terms in the scenario...........................................................................................................................7
2.3........................................................................................................................................................................8
Remedies available for the Eric...........................................................................................................................8
TASK 3................................................................................................................................................................8
3.1........................................................................................................................................................................8
Contrast liability in tort with contractual liability...............................................................................................8
3.2........................................................................................................................................................................9
Nature of liability in negligence..........................................................................................................................9
3.3........................................................................................................................................................................9
Vicarious liabilities..............................................................................................................................................9
4.1......................................................................................................................................................................10
Apply the element of the tort of negligence......................................................................................................10
4.2......................................................................................................................................................................11
Apply the vicarious liability in the scenario......................................................................................................11
REFERENCE................................................................................................................................................................12

INTRODUCTION
Contract law is considered important in the legal system. Contracts are not the promises
but are the agreement which is enforceable by the law. The contract is made between two or
more parties on the specific terms and condition which are decided by the parties themselves.
Contract law is important for the business as well as personal. As per the business context,
agreements are important to safeguard the rights of employer and define the duties in the
employment. A business requires contract to protect its interests. This project defines about the
contracts and other various aspects of the contract and provides knowledge for the same. The
project also defines about the negligence and the different type of liability in the contract and
also defines the tortuous liability (Appleman, and Holmes, 2015).
TASK 1
1.1
Essential elements of the contract
A contract is a legal binding agreement between the parties on the certain terms and the
condition. To form a valid contract, it is necessary to put all elements in the contract. These
elements are -
Offer in order to create a valid contract, there must be a lawful offer by one party because the
contract is based on the offer, if offer will be unlawful than later contract will not be enforceable
by the law. An offer or a promise or an agreement need to be in contract because if there is no
offer than there will be no contract. This is the element which makes sure that the contract is
legally valid or acceptable. The offer which is made by the offerer party could be for the specific
person or for the whole world (Marks, and Jackson, 2013).
Acceptance this is the second element of the contract and to create the valid contract there must
be lawful acceptance by the parties. Acceptance occurs when one party agree upon the terms of
the offer.
Consideration this is the main element of the contract. Consideration is the price paid for the
promise of the other party. The price must be something of value, although it need not be money
it could be the promise in return and anything else. The literal mean of the consideration is the
other person would be giving back something in return. Consideration in a contract is must so
that it would be legally valid.

Intention creates legal relations this is the essential elements of the contract. It is necessary to
create contract which must be based on the legal relation. If the contract is formed without the
legal intention then the contract will be not enforceable by the law (Smith, and Baumann, 2011).
Capacity of the parties As per the contract law, the parties who come into agreement must be
capable to come into contract. If the parties are not capable to come into contract then the
contract will not be enforceable by the law. The person who's age is below the 18 year comes
into minor and they cannot come into contract. And the person who announced as bankrupt and
the person who is unsound mind they cannot come into contract that is decided by the contract
law (Chomsky, 2014).
1.2
Different type of contract
As per the contract law there are different kind of contract that has been use to from the
contract. These different contract are-
distinction between the unilateral and bilateral contract
Bilateral contract is the most basic type of the contract as per the contract law. Bilateral
contract is an agreement between the parties. As per the business context, these are more suitable
form of arrangements.
These are the simple contract which usually use to form the simple contract
Unilateral contracts arise where only one party assumes an obligation under the contract. When a
person give advertisement about something that comes in the unilateral contract where the
obligation is on the one party the party who give the advertisement about their offer (Forster,
2010).
The first difference between both the contract is the number of parties which involve in the
contract. And the obligation which impose for the formation of the contract.
Distinction between Contracts under Seal (Deed) and simple contracts
Simple contract are the contract which are made by the parties. A simple contract can be
entered orally. In the simple contract, each party has to provide consideration to make the
contract valid. In the simple contract, all conditions written down or it can be form orally and it
is not required to put signature of the parties. So in that case , party can refuse for the term they
mention in the contract (Willsand, and Napier-Munn, 2015).

Seal deeds are the contract which is formed by the parties that is sealed by the parties
themselves. Seal deed requires the witness in the contract and the agreement will be signed by
the parties. As per the seal, they do not require consideration in order for them to be valid. A
deed requires more formalities in the contract for the execution for it to be enforceable.
Distinction between written contracts and verbal contracts
In the written contract, all the terms and conditions are written down on the agreement
and that is enforceable by the law and the terms and the condition were written down. The
written contracts are easy to prove if any issue arise. A written contract always refers to a
document that outlines an agreement entered into by two parties. These parties might be people,
organizations or businesses, but their identities will be specified on the contract. For written
contracts to be valid and binding they need to be signed by both parties(Friedman, 2011).
The verbal contract which actually means that any contract which is expressed in words. If the
contract has been expressed orally than terms can be extremely difficult to enforce. Verbal
contract are the contract which are not written in the contract and that are in oral form.
The verbal contract is any of the contracts which is expressed in words. If the contract
has been expressed orally, then terms can be extremely difficult to enforce. Verbal contract are
the contract which are not written in the contract and that are in oral form.
The terms ‘verbal contract’ and ‘written contract’ can both be used correctly to refer to
the same things, a ‘written contract’ is much more specific. Using the term ‘written contract’
when referring to one that is expressed in words on paper and signed by both parties avoids any
confusion caused by the ambiguity of the term ‘verbal contract’.
Distinction between Face to face and Distance Selling Contract
Face to face contracts are the contracts which are made when parties present at the same
palace. In these contracts, parties decide the contract when they meet and if both the parties are
not agree than they can change the terms in the contract and in this contract there are very less
chances of miscommunication.
Distance selling contract when both buyer and supplier are at distance to each other (Berenbach,
Lo, and Sherman, 2010). These contract are easy for the business purpose and now a days it is
mostly use by the business for the online shopping to expand the business.

1.3
Contractual terms
The contractual terms define as' any provision which is use to forming a contract'. The
terms which include in the contract each of them give obligation to the parties when breach of
contract is done by the other party.
Express or implied term
Express terms are the terms which expressly decided by the parties themselves. The contract is
basically form of the express term these terms define the reason of the formation of the contract.
Implied terms in the contract are define by the court and by the statute to make the contract
enforceable by the law. Implied terms are the terms which are decided by the court it is not
mandatory that court or the state put these terms but when it is required than court put these
terms in the contract. Sometime these term are statutory rights also.
Conditions, warranties and innominate terms
Conditions are the terms which re major terms in the contract and if any of the condition
breached by the party than the innocent party have a right to terminate the contract. Basically on
the conditions contract is based upon.
Warranties these are the minor terms in the contract and if any warranties breached by the parties
than innocent party can claim for the compensation. In this party does not have right to terminate
the contract.
Innominate term in the contract neither come in condition nor in the warranties. These are the
terms also know as intermediate terms. These terms in the contract define that the term is
breached by the parties come in the condition or in the warranty and that show the liability which
impose on the parties by the breach of the term.
Exclusion terms
Exclusion clauses are clauses, usually written down, that say that one party to the contract will
not be responsible for certain happenings (Kreitner, 2011).
A clause which may be inserted into the contract which term exclude or limit the liability of the
parties for the breach of the contract.
As held L'Estrange v Graucob (1934) the party singing the order from she was bound by all the
terms contained in the form irrespective of whether she had read the form or not. Consequently
her claim was unsuccessful.

TASK 2
2.1
Apply the elements of the contract in Abel's case
As per the scenario in this case Abel was the one party and who was 22 year old and he is
capable to come into contract as per the elements of the contract. In this scenario unilateral
contract is formed by the city car dealers which was in a local newspaper one advertisement
come in paper and in the paper it was written that ' the first three person who run up to the
mountain and return to the showroom than a new car will be given to first three person and that
has to done within the three hour and the date was mention 1 November. Abel was one of them
who successfully complete the condition which was mention in the advertisement. But later the
car company refuse to give the car (Barnett, 2011). So as per the facts in this a unilateral contract
was formed by the parties in that the obligation of the terms are on one party and other party just
need to fulfill the conditions as per this the first element offer was made by the city car dealer
and that is accepted by the Abel and all the condition is fulfill by the Abel is this is company's
liability to fulfill the condition which was made by the them previously and Abel will be entitle
for the car as per the elements of the contract. As per this case Olley v Marlborough Court
[1949] it was held that The plaintiff booked in for a week's stay at the defendants' hotel. A
stranger gained access to her room and stole her mink coat. There was a notice on the back of the
bedroom door which stated that the proprieters will not hold themselves responsible for articles
lost or stolen unless handed to the manageress for safe custody." The Court of Appeal held that
the notice was not incorporated in the contract between the proprietors and the guest. The
contract was made in the hall of the hotel before the plaintiff entered her bedroom and before she
had an opportunity to see the notice.
2.2
Apply the terms in the scenario
As per the given scenario the facts are rani she was the owner of his car selling business.
She advertise about the sale of the car in her showroom. Eric read the advertisement and went to
buy the car. Eric signs the contract for the car. In the given contract it was written “ no liability is
accepted for death, personal injury, damage to property or consequential loss arising from
driving a car which is purchased from the show room”. Later when Eric start driving the car than

he suffer from the serious injury because there are some mistakes in the car and also the car is
badly damaged. And later Eric ask for the compensation from rani.
According to the facts in this the express term was mention in the contract. It has been seen in
the facts that exclusion clause was added as express terms and the exclusion clause that limit the
liability of a one party to save from the losses in the business. So as per the term which is
mention in there contract that save rani from his liability because she put that exclusion cause in
the contract and that give the limitation of the loss.
2.3
Remedies available for the Eric
As per the given facts in this contract the exclusion clause was mention by the party that
was '‘No liability is accepted for death, personal injury, damage to property or consequential loss
arising from driving a car which is purchased from the show room.’ exclusion clause are the part
of the express term which was added by the party there are different type of exclusion clause in
this limit clause added by the party from to save from some losses (Li-qin, 2010). So in this it
was Eric's responsibility to check the contract before singing but in this Eric did not complete his
duty to so as per the given facts Eric will not entitle for the compensation from the rani's car
selling business.
TASK 3
3.1
Contrast liability in tort with contractual liability
Contractual liability arise when the contract has been breached by the parties (Burbidge,
2014). The contractual liability is a form of civil liability that arise when two parties breach the
contract and they are obligated to pay the compensation to party. The liability which arise in the
tort is impose by the law and contractual liability is taken by the themselves. The duty in the tort
is generally a duty which every own owed and as per the contractual duty is owed only to the
other contracting parties (Kraft, and Kwantes, 2013). The object to award damages in the
contract is to put the claimant in the position that would have been in if the contract had been
performed. Similarly, a s per tort law the object is to put party in the position so that parties
would have been in if the tort had not happened. The contractual liability is strict liability which

is based on the breach of the contract and the tortious liability is based on the fault done by the
parties.
3.2
Nature of liability in negligence
Negligence is a situation when a person fails to take care the civil duty which is impose
by the common laws. It focuses on the situation as per the losses have been arisen as a result of
personal injury or other physical damage to property. As held Donoghue v. Stevenson (1932) in
this case the modern negligence established. To prove the negligence these are the essential to
prove.
Duty to care- it is necessary to see that whether the duty is imposed on the party or not. If the
duty impose on the other party than the plaintiff can get the compensation and If the person
doesn't have any duty toward the defendant than he shall be no liable for the damage.
Breach of duty the duty which arise to the party that must be breached by the other party to
prove the negligence. This is important element to prove for the recovery of damages. The
damage should be in liquidated term than only a party shall able to pay (Peppet, 2011).
Causation this means the causal relationship with the conduct and the result from the conduct.
This also define by the actus reus or by the mens rea. If in the action mens rea is present that
means party have intention to harm the other party and in Actus reas the party cause an action in
this injury is included. So that is classify than it will be decided by the court where the party is
liable to pay the compensation or not (Sliškovićand, and Penezić, 2016). proximity shall exist
between two parties whenever there shall be damages arising out of breach of contract
Damage in this the damage will be count as per the the losses and the how much amount the
defendant need to pay and it also consider that party who did the wrong is able to pay the amount
or not. And the damage should be liquidated.
3.3
Vicarious liabilities
This liability means the liability for the tort of other and arise because of a relationship
between the parties. The doctrine of agency respondeat superior means that the superior will be
responsible for the act of subordinate. The vicarious liability is a form of the strict liability so the
tort law impose strict liability on employers for the act of their employees (Nénot, and Stather,

2013). The employer will be held liable for the tort committed by the employee in the course of
employment. In simple meaning this is a situation where other person will be held responsible
for the actions or the omission of the another person. As per the business context the employer
will be liable for the act done by the employee but that has to done in the course of employment
if the act is done out of the employment than person himself will be liable for the act. In order to
establish the liability on the part of employer there are some several requirement which must be
satisfied by the parties first is the wrong must be done by the employee and which always
impose on the employer or that also impose on in the parents and child relation it define that the
superior one will be held responsible for all the act of subordinate (Erhun, 2011). In this case
Storey v. Ashton (1869) it was held that The defendant, a wine merchant, sent his car man and
clerk to deliver wine and pick up empty bottles. On their way back, they diverted to visit the
clerks house in the course of which they negligently knocked down the plaintiff and injured him.
So in this employer shall be vicariously liable for his injury and he will pay the damage.
TASK 4
4.1
Apply the element of the tort of negligence
As per the given scenario the the facts are Denis and his wife want out to dinner in fresh
foods restaurant. While the Denis wife Emma was eating she starts feeling sick and throwing up
so Denis took her to the hospital and they discovered that she suffers because the food was
served in the restaurant was poisoning due to some careless. The food which was served in the
restaurant was poisoning because that was warned several time (Watt, 2010). According to the
elements of the negligence that it was the duty of the restaurant that to take care about the food
which was served in the restaurant at lest that should not harm anyone because person who come
into restaurant they pay the considerations amount and if than only they do such mistake than the
breached of the duty is done by than and the in this scenario clearly see that the cause is prove
that wrong is done by the restaurant and the damage shall be given by the fresh food restaurant
and the damage will be count as the bills of the hospital and the other damage shall be count. As
per the negligence it is failure of the duty which is impose by the common law and it has to be
done fulfill by the every individual. As per the damage in the negligence it is important that to
count the damage which defendant need to pay. In the negligence burden of proof is on plaintiff

he has to prove the negligence of defendant than only defendant will be liable to pay the
compensation (Qi, and Chau, 2015).
4.2
Apply the vicarious liability in the scenario
vicarious liability means a person will be held liable for the act of the third person. It
shows that vicarious liability a rule of responsibility which define the defendant liable for the tort
committed by another. As per the business point of view there is classic example of the employer
and employee. The employer will be strictly liable for the tort ODF his employees and also
define that the act must be committed in the course of employment. In such circumstance,
liability is impose on the employer and that is not because of the wrongful act but because of the
relationship between the employer and the employee (Hillman, 2012). As per the facts in the
case the in this the Denis and his wife want for the dinner in the fresh food restaurant but due to
lack of care the chef serve poisons food to Emma and she got sick because of that food in this the
liability arise on the management or to the head chef to take care of the food which was going to
serve in the restaurant. In this the vicarious liability arise on the restaurant manager has to
manage all the things and he know all the inner thing of the restaurant that for how much days
the same food I been using so the manager will be libel to pay the damage which was caused by
the chef of the restaurant. In this scenario the manager will be vicariously liable.
CONCLUSION
Contract is important to protect the rights of the employer and the employee in the
business. Above in the project it is discuss that how parties and forum the contract the steps are
mentioned and the different kind of contract is mention in the project and the terms which use to
make the contract are mention and define these terms and how the terms are important and
liability impose when the term is breached by the parties (Weihe, 2010) . This project consider
the nature of the liability to make the reparation for the losses and which is caused due to
negligence and this project focuses on the situation where losses have arisen as a result or
personal injury to physical damage of the property. As per the project it analysis that the without
the contract it so difficult to deal in the business. And the negligence which is caused by the
parties in the business that give the adverse effect on the business.

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