Paul's Compensation Claim: A Study of Liability and Vicarious Responsibility

The assignment content discusses the concept of compensation in case of injury caused by an employee's mistake while working for a company, Film Flops. The report highlights that Paul, who was injured due to the employee's mistake, has the right to claim compensation from the manager as per the law of vicarious liability. This means that the employer is liable to pay compensation on behalf of the employee if the employee's actions are within the scope of their employment and if the employer has full authority to control the employee's actions.

Aspects of Contract and
Negligence Act

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Essential elements of the valid contract.................................................................................1
1.2 Different types of contract.....................................................................................................3
1.3 Explain and analyses the different forms of contractual terms..............................................3
TASK 2............................................................................................................................................4
2.1 Essential elements of contract...............................................................................................4
2.2 Law of terms..........................................................................................................................5
2.3 Remedies available to the Mary............................................................................................5
TASK 3............................................................................................................................................5
3.1 Contrast liability in tort with contractual liability.................................................................6
3.2 Nature of liability in negligence............................................................................................6
3.3 Taking into consideration the Film Flops vicariously liability is explain.............................7
3.4 Elements of the tort of negligence.........................................................................................7
3.5 The law of vicarious liability to the scenario.........................................................................8
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................1

INTRODUCTION
Contract is a legal agreement between two or more parties or individuals. Contract is
said to be valid if both the elements of valid contract are present (i.e. offer and acceptance). If
any one element is missing then a valid contract cannot be formed. Henceforth, the present report
includes various essential elements which are required for the formation of a valid contract. It
also interprets different forms of the contractual terms. In this study, liability of tort, negligence
and defenses is also discussed. At last, various elements of the vicarious liability are also
discussed which get affected with the change in business situations.
TASK 1
1.1 Essential elements of the valid contract.
According to “India Contract Act, 1872” all contracts are agreements but all agreements are
not contract. According to section 10 of the Act, all contracts are agreement only when these are
made up of free consent, lawful consideration and many more as well as these are not declared to
be void by any means (Chalmers, Davies and Monti, 2010). Moreover, some of the essential
elements of the valid contract are discussed below:-
Element Meaning Related case study
Offer
An offer is the act of putting
something in front by the
offeror in order to accept,
reject, consider or something
proposed.
Harvey v Facey [1893] AC
552 Privy Council. According
to this case, Facey has
mentioned lowest price of the
Bumper Hall Pen in telegram
but he has not shown
intention to sale the pen at
£900.
Acceptance It is a promise made by the
offeree that indicates that he or
she is willing to accept the
proposal offered by the offeror
(Koffman and Macdonald,
Felthouse v Bindley [1862]
EWHC CP j35 Court of
Common Pleas. According to
the case, nephew has
discussed with his uncle to
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2010).
purchase the horse but uncle
did not reply and after some
time that horse was sold in the
auction. In this case there is
no contract because silence
cannot be considered as the
acceptance.
Intention to create legal
consideration
In order to create a legal
agreement, there must have
intention among the parties to
create legal relationship.
Balfour v Balfour [1919].
According to the case,
husband promises his wife to
pay her monthly charges for
the maintenance but he
stopped after the certain
period of time. Therefore, it
can be said that it is not the
legal contract. It is simply a
social or domestic agreement
between the both.
Consideration
Consideration is the concept in
which one party is promised to
another party to exchange
something when making the
contract (Cimino, 2010). It does
not include the promise of love,
affection, gifts and so on.
Re McArdle
[1951].According to the case,
the agreement is valid only
before the actual work has
been done. The promise of
payment does not stand valid
after the repairs are carried
out.
Moreover, these are some of the essential elements of valid contract. If any one of them is
missed then a valid contract cannot be formed.
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1.2 Different types of contract.
According in Indian Contract Act, 1872, various types of contracts are formed. Some of
them are valid contract and some of them are void. Hence, some of the contract is discussed
below on the basis of nature, formation, executive and validity.
Express Contract: - It can be defined as the exchange of promises in which parties are
bound to form the contract either orally or in writing, or a combination of both (Lando, 2006). In
other words, it can be said that express contract refers to the contract in which all the essential
elements of valid contract are stated i.e. there must be offer, acceptance and consideration.
Bilateral Contract:- Bilateral contract is the agreement between two or more parties
where both the parties promise to perform an act in the exchange of other party act (Lipshaw,
2011). In other words, it can be said that exchange of mutual and correlative promises between
two parties that entail to exchange something.
Butler Machine tool v Ex-cell O Corporation [1979]. According to the case Ex-Cell sends an
agreement to the Butler for the purchase of machine which cost is related to £75,535. This
agreement also includes a clause that if price of the machine changes after 10 months than also
Ex-Cell-O will purchase at the same rate. Butler simply signs that agreement showing his
intention to accept the proposal. Therefore, contract formed is a valid contract.
Impact: Butler is liable towards the contract once offer and acceptance have been made.
Unilateral Contract: - Unilateral contract is the contract in which only one party is
legally oblige to create the legal contract (Marks, Marks and Jackson, 2013). This type of
contract is also known as one-sided contract. This type of contract usually takes place through
the advertisement in newspaper or television.
Carlil v Carbolic Smoke Ball Company 1893. According to this case, company advertises in
the newspaper that whoever will get the flu by using their medicine will be awarded a £100.
Therefore, once the Carlil catch the flu company will be legally bound by their offer.
Impact: unilateral contract can be revoked at any time. But offer cannot be revoked once offeree
has started to begin the performance.
1.3 Explain and analyses the different forms of contractual terms.
Implied term: - Implied terms are the terms which are not expressed at the time of the
formation of contract but are included in the body of the contract (Murdoch and Hughes, 2002).
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In simple words, it can be said that it is a provision that is not directly expressed in written or
oral terms but it is included in the contract.
According to the case of Hutton v Warren [1836] EWHC Exch J61, if any implied term is not
satisfied than in that case contract is said to be void from the beginning.
Express term: - Express terms are the terms, provisions or conditions that are expressed
orally or in the written form in the contract (Orkuma and Ayla, 2015). In simple words, it can be
said that contract of employment which is expressed in written or orally is one of the best
examples of express term.
According to the case of Poussard v Spiers [1876] 1 QBD 410, innocent party can reject the
whole contract if performance of other party is not satisfactory. Therefore, if warranties are not
satisfied than claimant can ask for the damages caused.
In nominate term: - In nominate terms are the terms that are neither considered as a
condition nor as a warranty depending on the effect of the innocent party. These types of terms
are also known as intermediate terms.
TASK 2
In the given scenario it is seen that Mary a self employed girl entered into the shop
name “Sales Are us” in order to purchase the television. At the time of purchasing the television
she signed the contract provided by the store manager, which she signed without reading it. On
the same day when Mary switches on the television it exploded and she got a serious injury on
her arms. She went to the hospital and doctor says she can't work for 3 weeks. As she was a self
employed girl she faces loss of income for 3 weeks. Thus, after she recovered she went to the
store to claim for the new television set and compensation for his injury but the manager deny
paying anything to her. The reason behind this was that she signed a contract in which clause
says that no liability will be accepted by the store for the replacement or repair of the faulty
products and similarly other cause says that no compensation will be provided in the case of
death or injury to a person.
2.1 Essential elements of contract.
The essential elements that best fits in the following scenario are explained below:-
Certainty: - the following elements say that the terms and conditions mentioned in the
contract should be clearly stated and understood by the parties of the contract (Robertson, 2013).
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If the following agreement is not at all certain then in that case the contract is no longer said to
be the valid contract. Therefore, in the above case Mary is not knowing the actual terms and
conditions of the agreement. Thus in that case the agreement is no longer the valid contract.
Therefore, Mary is not entitled to claim the compensation for the same.
Free consent: - Consent means that both the parties have agreed upon the same thing in
the same sense. On the hand the consent is said to be free when it is not caused by the undue
influence, fraud, mistake, misrepresentation and coercion (Soled, 2012). Therefore, in the above
case the consent is not free because the contract is formed with an intention of doing a fraud.
Thus, Mary is not liable to claim for the damages caused to her by the manager.
2.2 Law of terms
From the above scenario it can be concluded that it is the case of express term and in
nominate term. Express term is the term in which both the parties enter into the contract with the
mutual concern and understanding. And in nominate terms are those terms in which neither
condition nor warranty are defined. Therefore, Mary is no longer liable to claim a sum of
compensation for the injury and damage caused to her. Because it was the Mary mistake that she
doesn't read the entire clause present in the agreement before signing it. Thus, according to
Indian Contract Act, 1872; Mary is no longer liable to claim a sum of compensation from the
store manager.
2.3 Remedies available to the Mary.
It was the Mary mistake that she signed a contract provided by the store manager without
reading. She needs to read each and every clause presented in the contract before signing it
(Stanberry, 2006). Therefore, in this case a contract is said to be a valid contract because in this
case both the elements of the valid contract are available (i.e. offer and acceptance). Therefore,
according to the Indian Contract Act, 1872; Mary is no longer liable to pay a sum of
compensation from the manager of the 'Sales Are Us' for the damage and injury caused to her.
TASK 3
In the given scenario it is seen that Paul went to watch the movie at the “Film Flops”
where he purchased the ticket and popcorn. But when he was purchasing the popcorn before the
movie started an employee of the cinema poured the hot coffee on his arm accidentally, causing
serious injury to the Paul. In lieu of which manager was called and he determined that the
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employee of drunk. Therefore, it can be concluded that it was the mistake of the Film Flops only.
They should take into consideration various safety measures in order to protect the customers.
Thus, Paul is liable to claim compensation from the Film Flop manager because it was the
manager mistake.
3.1 Contrast liability in tort with contractual liability
S.no Basis Liability in tort Contractual liability
1 Aim
It aims at compensating the
individual by placing him at the
place of negligence.
It aim at compensating the
individual by placing him at
the place where contract is
performed
2 Nature of obligation
In this case every individual need
to work according to the set
standards and care (Sweet and
Schneier, 2012).
In this case every individual
need to follow various terms
and conditions of the contract.
3
Relationship between
the parties
There is no relationship created
between both the parties with
mutual concern. It is obligatory
by the law.
In these parties enters into the
relationship with mutual
concern and understanding. In
this relation is managed and
control by the contract.
4 Reduction of damages
Damages are reduced by paying
relevant amount of percentage to
the injured person.
Damages are reduced by the
satisfactory amount when
applicant fails to claim (Wong
and Deubert, 2010).
3.2 Nature of liability in negligence
Liability in negligence:- It can be said as the failure of duty performed by the individual
which results in the injury or of health of the individual (Yana, 2015). It can be said as the failure
of the individual to perform the basis level of care. In other words, it can be said as the lack of
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tort between between the two persons. For example:-Doctor fails to inform his patience about the
side affects of the medicine which he is suggesting.
Thus, according to the Employee Liability act manager of the Film Flops is liable to pay
a sum of compensation to the Paul. Because it is the duty of the manager to see that every work
should be performed with care. In this case it was the mistake of the manager, manager need to
see in advance that no employee is drunk and no incompetent act is taking place. However, on
the other hand it is the duty of the Paul to walk with the safety. He should also see that no one
else is moving in between.
3.3 Taking into consideration the Film Flops vicariously liability is explain.
Vicariously liability is a liability which an individual person needs to assign to the
injured person, whether he has caused any injury to the person or not. It can also be said as the
legal doctrine that assigns liability for an injury caused to the person who does not cause any
injury but he has a legal relationship the person who has performed the act of negligence. In
simple words it can be said that every employer is liable to pay compensation to the injured
person if any sort of injury is caused by the employee of the company (Yiping, 2012). The
relationship between parent and child, husband and wife, employer and employee are considered
as the legal relation that led to input the negligence.
Therefore, taken into consideration the above case it can be said that vicariously liability
has taken place between Paul and the employee. Thus, according to the vicariously liability act,
manager of the Film Flops is completely liable to pay a sum of compensation to the Paul on
behalf of the employee. Because Paul doesn't have any mistake, he was simply standing in a
queue in order to purchase the popcorn.
3.4 Elements of the tort of negligence
Following elements of tort of negligence (i.e. suspected party) are explained below:-
 Volenti-non fit injuria: - as per the following term injured party has the right to claim a
sum of compensation from the defendant party that he has accidentally commits the
illegal act. Therefore, the injured party has the right to sue the suspected party. Thus,
taking into consideration the following element it can be said that Paul is liable to claim
a sum of compensation from the employee of Film Flops. Alternatively if injured person
has committed the wrong act knowingly than in that case he is no longer liable to claim
the sum of compensation.
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 Justification:- According to the Occupier Liability act , no defended party is liable to pay
the compensation to the applicant who have been injured, if defendant party is able to
prove or justify themselves against the law for the claim imposed on them (Zaghloul and
Hartman, 2003). Thus, if in the above case, manager is able to justify himself in front of
the law than in that he does not required to pay any sum of compensation to the Paul.
 Necessity: - this element states that no defended party is liable to pay any sum of
compensation to the injured party if the injured party has himself performed any illegal
act in order to restrict the immoral act. But according to the above case, it can be
conclude that is not the mistake of the Paul, it was employee mistake itself. Therefore, in
that case Paul is liable to claim the sum of compensation from the manager for the
damage caused to him.
 Illegal: - According to this element every injured party has the right to claim the sum of
compensation from the defendant party if any type of loss or injury is faces by the
applicant due to any illegal act performed by the defendant party. Therefore, taking into
consideration this element Paul is completely liable to claim a sum of compensation
from the manager for the damage caused to him by the employee of Film Flops.
3.5 The law of vicarious liability to the scenario.
As per rule, this case comes under vicarious liability. This is because this law imposes a
responsibility on one person on failure of other person in respect to fulfillment of responsibility.
Employee is a part of an organization and due to this reason it is responsibility of an organization
to compensate Paul for his injury (Uddin, 2015). Vicarious liability has three elements. One of its
element state that an employer is liable to pay on behalf of an employee when employee actions
are within scope of employment. This means that if any employee commit any mistake that is not
related to job or his responsibility then employer is not liable to pay on behalf of employer.
Second element of this law is that employer must have full authority to control employee actions.
If same is not happen then this law is not applicable. Third element state that employee must
work under the direction of an employer. If an individual is not working under the direction of
employer then law will not applicable. In case of Paul, employee is under full control of
employer. Moreover, he commits a mistake that is related to job. Due to this reason law is
applicable in case of Paul and he is entitled to receive compensation from manager.
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CONCLUSION
The following report accent on the various aspects of the contract. In this report various
elements required for the formation of the contract are explained. In this report different types of
contract are also discussed. In this report comparison has also been between the liability in tort
and contractual liability in order to solve the various case studies. At last various types of case
studies are also solved out taking into consideration the various elements of a valid contract like
liability in tort, contractual liability and vicarious liability.
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REFERENCES
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Robertson, A., 2013. On the Function of the Law of Negligence. Oxford Journal of Legal
Studies. 33(1). pp.31-57.
Soled, J. A., 2012. Comparative Negligence Defense in Tax Return Preparation Malpractice
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Stanberry, B., 2006. Legal and ethical aspects of telemedicine. Journal of telemedicine and
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Sweet, J. and Schneier, M., 2012. Legal aspects of architecture, engineering and the
construction process. Cengage Learning.
Wong, G.M. and Deubert, C., 2010. The Legal & Business Aspects of Disability Insurance in
Professional and College Sports. Villanova Sports and Entertainment Law Journal. 17.
pp.473.
Yadav, A., 2015. Changing concept contract recent problems and issues.
Yiping, W. U., 2012. On the elements of liability for negligence in contracting. Journal of
Central South University (Social Science). 2. pp. 14.
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Zaghloul, R. and Hartman, F., 2003. Construction contracts: the cost of mistrust. International
Journal of Project Management. 21(6). pp. 419-424.
Online
Uddin, M., 2015. Aspect of Contract and Negligence for Business[Online]. Available
through:<http://www.lawteacher.net/free-law-essays/contract-law/aspect-of-contract-and-
negligence-for-business-contract-law-essay.php> [Accessed on 25h November 2015].
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