Determining Liability for Compensation

The assignment report discusses the concept of vicarious liability, where an employer is held responsible for the actions of their employee. The report highlights that if an employee intentionally neglects health and safety arrangements, they cannot sue their employer or claim compensation. It also notes that the Occupiers Liability Act 1984 provides relief to the defendant party in cases where the defendant knowingly neglected health and safety arrangements.

ACNB

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Importance of the essential elements which are required to form a valid contract...............1
1.2 Impact of different types of contract.....................................................................................2
1.3 Analysis of the different terms of the contract in the context of their meaning and effect...3
2.1 Application of the elements of the contract with the context to business scenario...............4
2.2 Application of the different terms of the contract ................................................................5
2.3 Evaluating the effect of different terms of the contract ......................................................5
TASK 2 ...........................................................................................................................................6
3.1 Contrasting liability in tort and contractual liability.............................................................6
3.2 Nature of liability in negligence and employer's liability with reference to business
scenario.......................................................................................................................................6
3.3 Ways through which business can be vicariously liable.......................................................7
4.1 and 4.2 Elements of tort of negligence, vicarious liability and defenses .............................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Contract can be defined as a legal agreement or binding which creates legal relationship
between two or more competent parties. Contracts are usually made by parties in the written
form but it may be spoken or implied depending upon the nature of contractual aspects. In order
to create an agreement which is enforceable by law, parties to a contract must fulfill essentials
which are required to form a valid contract (Brack, 2014). It includes offer, acceptance, legal
consideration and intention to create legal relationship and obligations. The present report will
discuss the importance and essential elements of the valid contract. Besides this, it depicts the
impact of different types of contract upon the parties to a contract. This report will provide
deeper insight about the concept of nature of liability of the employer in the case of negligence.
It also states the application of elements of vicarious liability in the context of the case scenario.
TASK 1
1.1 Importance of the essential elements which are required to form a valid contract
Parties to the contract must fulfill essential elements which are required to form a legal
contract. For the valid contract there must be offer and acceptance, legal consideration and
intention to create legal obligation between competent parties. Agreement made by the
competent parties is legally enforceable by law only when they possess following attributes:
Element Features Cases
Offer
Offer can be defined as a proposal in which party
to the contract makes offer to another party or
general public to form a legal relationship and
binding. Offer highly differs from the invitation
to treat. Invitation is a request in which one party
invites other party to give offer (Chamallas,
2014).
As per the Fisher v Bell
good are displayed at the
shop along with their price
labels which are
considered as invitation to
offer instead of an offer.
Acceptance When offeree give consent about the terms and
conditions of the contract by giving legal
consideration in the form of money to the offeror
then it is termed as the acceptance.
According to the case
ODF Brogden v.
Metropolitan Railway Co.
(1877) acceptance can be
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written and other form of
communication.
Consideratio
n
It is one of the main elements of the valid
contract. For the legal binding, there must be
lawful consideration in form of money and other
economical benefits. As per the contract act both
the parties to the contract must be give and get
smothering. Consideration in the form of kind is
not valid (Lawful consideration, 2011).
With reference to the case
of Thomas v Thomas)
(1842) love and betting are
also considered as lawful
consideration.
Intention
In order to form a legal relationship there must
be an intention to create legal obligation between
parties which assure satisfactory performance
from both the sides.
As per the case of Balfour
v Balfour [1919]
agreements which are
made at domestic level are
not legally enforceable.
1.2 Impact of different types of contract
There are various types of contract such as unilateral, bilateral, collateral Written and oral
contract. Different types of contract places various impacts on the parties to a contract which are
enumerated below:
Types of
contract
Features Cases
Unilateral
contract
In unilateral contract, one party makes promise
to another party without taking consent of it. In
this, offeror are obliged to perform their promise.
Whereas, it is not necessary for the offeree to
perform the promise. If offeror repudiate the
contract then the innocent party has the right to
claim for the compensation (Horsey and Rackley,
2013).
In accordance with the
case of Carlil V Carbolic
Smoke Ball no party are
held responsible to
perform the promise.
Nevertheless, if offeree
performs the promise then
offeror is also obliged to
perform the same which
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she promised.
Bilateral
contract
Bilateral contract are those in which both the
parties to a contract give their mutual consent
and are thereby obliged to perform as per the
terms of the contract.
Considering the case of
Mattei v Hopper
Collateral
contract
In the collateral contract, competent parties
makes associated contract along with the main
contract on the basis of the lawful object and
consideration.
Poussard v
Spiers (1876) kings
Written and
oral contract
In written, contract terms are condition of the
contract which are mentioned in the written
format. It provides relief to the damaged party in
the case of any dispute. In this condition,
innocent party can represent the written contract
as evidence in front of the jurisdiction or any
legal authority. Whereas, in case of oral contract
all the terms and conditions are discussed in the
oral format among parties to a contract. In the
case of any dispute, legal authorities are not able
to resolve problem due to the absence of any
evidence.
According to the case of
Brogden v Metropolitan
Railway (1877) contracts
are formed by the conduct
of the parties. They either
may write or in any other
form are considered as
contract.
1.3 Analysis of the different terms of the contract in the context of their meaning and effect
There are mainly three types of terms such as express, implied and innominate terms
which place different impact upon the parties to a contract are enumerated below:
Terms of the
contract
Features
Express terms Express terms can be defined as those which are included by the contracting
parties at the time when contract is made. Besides this, in the express terms
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both the parties give their mutual consent in relation to terms inserted by the
parties (Jennings, 2010). In these terms, if defendant party breaches the terms
of contract then innocent party have the right to sue or demand for the
compensation from the defendant.
Implied terms
It can be stated as default rules which are inserted by laws and legislation
which provides safety to innocent party against to the defendant party.
Innominate
terms
It is a contractual terms it may either a condition or warranty depending upon
the nature of loss suffered by the damaged party. Conditions are the major
part of the contract. In case of breach of condition innocent party has the right
to revoke the contract and claim for the damages. In contrary to this, warrant
is the minor part of the contract which does not affect the contract. In case if
warranty is breached then innocent party only possess the right to claim for
the damages but do not have the power to revoke the contract.
2.1 Application of the elements of the contract with the context to business scenario
In order to make valid contract parties to a contract must meet all the four essentials
which are needs to form a legal binding. On the basis of the given case scenario Ivan went to the
Todor's bookshop and saw HND book. After seeing this, Ivan expressed his feeling to buy this
book which is worth of £50. Ivan took the book from the counter in order to purchase the book.
Nevertheless, Todor's refused to sell this book to Ivan because he already sold this book to Carl
but forgot to remove it from the display. The main attribute of this case are as under:
 Invitation to offer- It can be seen in the case of Fisher V Bell if products are displayed at
shop along with their price tag then it is recognized as invitation of offer instead of only
offer.
 Initial party is entitled to accept or reject the offer: As per this aspect offeree possesses
the right to accept or reject the proposal within the time frame (Kelly and et.al, 2013).
 Validity of contract: Contract is valid only when if there is offer, acceptance, legal
consideration and intention to create legal obligation between the parties.
In the above mentioned case Ivan make an offer to Todor's in relation to the purchase of
book £50 but Todor's refused to sell this book to Ivan. Thus, there is an offer but no acceptance
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from the other sides. To make a valid there contract there must be presence of both offer and
acceptance. Therefore, Todor's is entitled to refuse sell his book to Ivan.
2.2 Application of the different terms of the contract
It is cited in the scenario that Adam made an advertisement to the general public at large
about the reward of £1000 for the first person who swim across the English Channel from Dover
to Calais. It can be seen in the case scenario that Brian saw the advertisement and decided to
swim across the English Channel. On the similar day when Brian is in the mid of the swimming
channel he placed another advertisement which contains that rewards system is withdrawn with
the immediate effect. Brian is unaware from this advertisement and accomplishes his
performance as per the terms of the contract. After the accomplishment Brian asks Adam for the
reward which he promised but he refused to give for the same.
According to the case of Carlill v Carbolic Smoke ball Co it is considered as unilateral
kind of offer. In this, one party make offer to the another party without taking consent of him. In
this, offeror are obliged to perform their promise as per the terms of the contract (Platz, 2007).
Since, the Brian started his performance before the next advertisement placed by Adam. On the
basis of this aspect, Brian is entitled to claim for the damages against the defendant party. The
case of Carlill v Carbolic Smoke ball Co states that if offeree acts as per the terms of the contract
then he has the right to claim for the damages if defendant party makes default in their
performance.
2.3 Evaluating the effect of different terms of the contract
On the basis of the given scenario Barry went to the local park which is managed by the
local council. Barry saw the notice and decided to hire the chair for 50p per hour. Barry accepted
the offer which is made by the local council by giving 50p per hour and there entered in the
contractual relationship. As Barry sat on the chair the chair broke down. Due to this aspect,
Barry got injured and his cloths were also damaged. Barry claim to the local council for the
compensation but the local refused for it on the basis of the exclusion clause. According to the
case of Chapelton v Barry exclusion clause were mentioned on the back side of the ticket. It is
clearly mentioned in the clause that local is not accountable for the any injury which occurs due
to the hire equipment. According to this aspect, it is considered as express terms of the contract.
It states that both the parties are entered into a contract with their mutual consent (Steele, 2007).
It is the mistake of Barry that he did not read the statement which may cause of the injury.
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Therefore, local council would not be responsible to compensate the Barry for the loss suffered
by him.
TASK 2
3.1 Contrasting liability in tort and contractual liability
There are significant differences between contractual liability and liability in tort.
Contractual liability is arise only when defendant party fails to fulfill the terms and condition of
the contract. On other hand; liability in tort occurs when parties to the contract fails to perform
according to the standard roles and duties. In addition to this, rights and obligation are
determined by the competent parties in the case of contractual liability. Where as in tort
obligation are determined or imposed by the judicial authority (Twomey and Jennings, 2010). In
contractual liability legal binding or relationship is formed by the competent parties. On other
hand; in tort legal relationship is imposed by law.
3.2 Nature of liability in negligence and employer's liability with reference to business scenario
Negligence represents the situation in which employer fails to provide reasonable care to
their employees who may cause of injury to another person or employee. As per the cited case
scenario Ben is the owner of the Regent hotel where as Roger is the dish washer who is facing
the problem of skin rashes due to the long period of washing up. In order to overcome this
problem Ben had provided skin gloves to their employees and there by perform his
responsibilities towards his employees. After making arrangements of the safety measures most
of the employees are still do not make use of the safety gloves. Employee has the right to make
sue upon the employer's or claim for the compensation only when then employer's fails to
provide healthy and safe working environment.
According to the negligent act injured party can claim for the compensation in against to
the defendant party only when they satisfied the conditions such as breach of duty, duty of care,
causation and foreseeable.
 According to the duty of care if employer fails to build and maintain safe working
environment to prevent accidents (Tadros, 2014). In this case, employer would be liable
to give compensation to their employees.
 Further, if defendant party breaches their duties then they are liable to give compensation
to the innocent party to the extent to which loss suffered by them.
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 If the loss suffered by the damaged party is foreseeable that may cause of the actions of
defendant party.
As per the case of Nettleship v Weston standard care of the needs to be applied by the
learner driver as similar as he is experienced driver. On the basis of the above case Ben
performed his duty of care. In this case, employees intentionally neglect the health and safety
aspect. Therefore, due to the negligence of Roger, Ben would not be accountable for the skin
rashes of the employees.
3.3 Ways through which business can be vicariously liable
Vicarious liability states the condition in which employer's are held liable towards the
third party for the undesirable or illegal act of their employees. It happens because contractual
relationship exists between employer and employee. As per the concept of vicarious liability
employers of an organization have control upon the actions of their employees (Lim, 2014).
Therefore, they would be liable to compensate the damaged party due to the unlawful actions of
their employees.
It is cited in the case scenario that Colin who is the head chef of the hotel got fed up with
the Roger and his attitude. In order to reduce the frustration Colin had attacked on Roger with the
frying pan. Due to this, Roger got heavily injured and refused to go to the hospital. As per the
case of Lister v Hesley hall employers are vicariously liable for the unlawful act of their
employees. In this, act of the Colin is recognized as illegal so Ben is liable for the act of his
employee. On the basis of this aspect, Roger possesses the right to claim for the damages in
against to Ben. In order to prevent such kind of practices employer is required to evolve the strict
system of punishment so employees are hesitate to do this. Bedsides this, employees needs to
monitor the activities of their employees on a regular basis which facilitates peaceful and safe
working environment.
4.1 And 4.2 Elements of tort of negligence, vicarious liability and defenses
Volenti-non Fit injuria: According to this term innocent party can claim for the damages
only when defendant party fails to perform their duties and responsibilities. In contrary to this,
negligence act states that if employees intentionally neglect the health and safety aspect then they
are not able to claim for the damages in against to the defendant party.
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Necessity: When employees of an organization perform the illegal activities to restrict the
immoral activities of the other person then third party is not in the position to claim for the
damages.
Justification: If defendant party has the evidence to justify the allegation which is imposed
by the claimant upon the defendant party (Miceli, TSegerson and Wang, 2015). Then defendant
party would not be held accountable to give compensation and for loss suffered by the claimant.
Illegal: If damaged party suffered loss due to the immoral act of the defendant party then
damaged part can ask for the compensation (Overgoor and et.al, 2015).
According to the case of Robert Addie & Sons v Dumbreck the loss is suffered by the
innocent party because employer fails to make proper safety arrangements in order to prevent
accidents. Thus, claimant party possesses the right to claim for the compensation. On the basis of
the given scenario Mark is the guest of the frequent hotel. He decided to enter in the pool by
neglecting the sign board which states that pool is closed between the 7pm to 7am. Due to his
own negligence Mark is got injured and his expensive sunglasses were broken down. According
to the Occupiers liability act 1957 employer or hotel has the responsibility to take care of their
guest and make proper safety arrangements to prevent accidents (Nijem and Galpin, 2014). On
the basis of this aspect Ben is liable for the injury for the damages. In contrary to this, Occupiers
liability act 1984 provides more relief to the defendant party in against to the claimant party. As
per the case of McGeown V Northern Ireland defendant party would not be liable to compensate
the claimant for the damages if the knowingly neglect the health and safety arrangement
(Occupiers Liability Act. 1984, 2015). In this case, Ben had clearly mentioned in sign board that
if anybody entered into the pool between the 7pm to 7am then it proves to be disastrous for him.
Thus, Ben would not be responsible to give compensation to Mark according to the Occupiers
liability act 1984.
CONCLUSION
From this project report it has been concluded that contracting parties needs to be taken
into consideration all the essentials when contract is made. It can be seen in the report that if
employee intentionally neglects the health and safety then they are not able to make sue upon the
employer or claim for the compensation. Concept of vicarious liability states that employer
would be responsible for the undesirable act of their employees.
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REFERENCES
Books and Journals
Brack, G., 2014. Nurse prescribing and vicarious liability. Nurse prescribing. 12(3). pp. 147-
149.
Chamallas, M., 2014. Two Very Different Stories: Vicarious Liability Under Tort and Title VII
Law. Ohio St. LJ. 75. pp. 1315.
Horsey, K. and Rackley, E., 2013. Tort Law. Oxford University Press.
Jennings, M. 2010. Business: it’s Legal. Cengage learnings.
Kelly, D. and et.al., 2013. Business Law. Taylor & Francis.
Lim, E., 2014. Directors' duties: improper purposes or implied terms?. Legal Studies. 34(3). pp.
395-418.
Miceli, T. J., Segerson, K. and Wang, S., 2015. Products Liability When Consumers Vary in
Their Susceptibility to Harm and May Misperceive Risk. Contemporary Economic
Policy. 33(3). pp. 468-476.
Nijem, R. M. and Galpin, A. J., 2014. Unilateral Versus Bilateral Exercise and the Role of the
Bilateral Force Deficit. Strength & Conditioning Journal. 36(5). pp. 113-118.
Overgoor, M. L. and et.al., 2015. Restoring penis sensation in patients with low spinal cord
lesions: The role of the remaining function of the dorsal nerve in a unilateral or bilateral
TOMAX procedure. Neurourology and urodynamics. 34(4). pp. 343-348.
Platz, L., 2007. Defining the most desirable outsourcing contract between customer and vendor.
Management Decision. 45(10).pp. 1656-1666.
Steele, J., 2007. Tort law: Text Cases and Materials. Oxford University Press.
Tadros, V., 2014. Orwell's battle with Brittain: vicarious liability for unjust aggression.
Philosophy & Public Affairs. 42(1). pp. 42-77.
Twomey, D., and Jennings, M., 2010. Business Law: Principles for Today's Commercial
Environment. Cengage Learning.
Online
Lawful consideration, 2011. [Online] Available through: < http://www.bms.co.in/explain-lawful-
consideration-sec-23-to-25/>. [Accessed on 27th November, 2015].
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