Aspects of Contract and Negligence for Business - Assignment

Aspects of
contract

TABLE OF CONTENTS
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................3
1 Essential elements for the formation of valid contract.............................................................3
2 Description of main types of contract along with their examples............................................4
3 Description of contractual terms...............................................................................................5
Task 2...............................................................................................................................................6
1 Draft of contract and description of contractual terms.............................................................6
2 Report to Mr. Michael Hair .....................................................................................................6
Task 3...............................................................................................................................................7
1 Differences between contract and tort liability.........................................................................7
2 Conceptual description of duty of care and neighbor principle................................................7
3 Vicarious liability......................................................................................................................8
Task 4...............................................................................................................................................9
1 Applicability of liability in negligence.....................................................................................9
2 Applicability of vicarious liability in given situations..............................................................9
Conclusion.....................................................................................................................................11
References......................................................................................................................................12
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INTRODUCTION
Contract and negligence law is developed to provide description of standard obligations
to the individuals and commercial entities so they can act in an appropriate manner. These
guidelines are required to be complied by all person else they will be held obliged to provide
damages for the misconduct to the innocent party (Gardiner, 2006). Present study based on
evaluation of various aspect of contract and negligence legislation. By considering these
provisions, assessment of given case scenarios will be done in order to provide justified
recommendation to the cited parties. For this aspect, reference of previous case precedents will
also be considered for better reasoning of provided recommendation.
TASK 1
1 Essential elements for the formation of valid contract
Contract can be defined as a promise formed by consent of two or more parties by
entering into a legal relationship. For the formation of valid and enforceable contract following
aspects are required to be satisfied-
 Offer- Agreement between parties is created by appropriate offer and acceptance. Offer is
a proposal of promise given by one party to another. It must be specific and possible to
perform (Nysten-Haarala, Lee and Lehto, 2010). It can be provided in general or to a
specific person. However case of Pharmaceutical Society of Great Britain v Boots,
invitation to treat does not have legal status of offer because it is merely a way of
showing intention to create contractual relationship.
 Acceptance- It is consent given by the party to whom offer was made. It must not be
supported by significant modification or condition else it will consider as counter offer
instead of acceptance (lucy V Zehmer, 196 Va 493 84 S.E. 2D 516).
 Intention to create legal relationship- This element is assumed to be part of the contract
formed by parties (Types of Contracts, 2015). In accordance with this aspect, parties must
intend to form legal obligation for the fulfillment of promise (Jones v Padavatton [1969]
1 WLR 328).
 Consideration- In legal terminology consideration is known as pro-quo i.e. something in
return (Holmes., 2009). Agreement formed by parties must be supported by mutual
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benefit else it will not be valid. This benefit is not required to be at arm length price but it
must be supported by consent.
 Capacity- Parties forming contractual relationship should be able to do so. For this aspect
they must not have qualification of minor, unsound mind, lunatic or restriction imposed
by law.
 Privity of contract- In accordance with this doctrine, third party to the contract is not
entitled to sue contracting party for the fulfillment of promises made by them (Macneil
and Gudel, 2001).
Case scenario
In the described case situation, invitation to treat was given by James through
advertisement on website for the sale of camera for £55. By considering this advert, offer was
given by Maria for purchase of camera at £45. On this offer counter offer was given by James
that he will sell camera at £55. Maria did not responded on this offer. James did not have other
offer due to which he decided to provide acceptance on the previous offer given by Maria.
However, he is not entitled to do so because with the providing of counter offer previous offer is
said to be canceled. Henceforth, there is no contractual relationship between parties.
2 Description of main types of contract along with their examples
Face to face contract
This form is generally selected by individuals to enter into contractual relationship to
fulfill day to day needs. This contract is formed mostly in verbal manner. In this type of contract
all the parties are present at common place for the negotiation of contracting terms (Devenney
and Johnson, 2013). Further, offerree is required to provide quick acceptance else offer will be
lapsed due to passage of reasonable time. Example of face to face contract is travelling from bus.
Business to business contract
These kinds of agreements is formed among two commercial entities and public is not
involved in it. These contracts are supported by terms inserted by the entities in accordance with
their requirements. Example of business to business contract is sale of goods by wholesaler to the
retailer.
Business to consumer contract
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