Application of Vicarious Liability in Business Scenarios

The two cases discussed in this assignment are related to vicarious liability, where an employer is held responsible for the actions of their employee. In Case 8, a chauffeur company sent a driver to pick up a client at the airport, but he decided to have a few glasses of alcohol before driving. As a result, he crashed into a lamp post, causing severe injury to the client. The court ruled that vicarious liability applies in this case and the employer must pay damages because of their employee's negligence. In Case 9, a supermarket delivery driver was unloading pallets when his leg slipped on a gate and fell on another colleague, severely injuring him. The court applied the Occupier's Liability Act, which holds employers responsible for ensuring proper health arrangements within their premises to avoid injuries. Since the employer failed to do so, they are liable for damages.

ASPECT OF CONTRACT
AND
NEGLIGIENCE

TABLE OF CONTENTS
INTRODUCTION............................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Importance of essential elements required for formation of valid contract ..........................3
1.2 Impact of different types of contract ....................................................................................4
TASK 2............................................................................................................................................6
2.1 Elements of contract on case scenario ..................................................................................6
Case 1: Agreement......................................................................................................................6
Case 2: Consideration .................................................................................................................6
2.2 Applying the law on terms in different contracts .................................................................7
Case 3- Exclusion clause ............................................................................................................7
Case 4 Implied term ...................................................................................................................7
2.3 Evaluating effect of different terms in contract ....................................................................8
Case 5 .........................................................................................................................................8
Case 6 .........................................................................................................................................9
TASK 3............................................................................................................................................9
3.1 Contrasting tort liability with contractual liability ...............................................................9
3.2 Explaining the nature of liability in negligence .................................................................10
3.3 Explaining how business can be a vicariously liable .........................................................11
TASK 4..........................................................................................................................................11
4.1 Elements of the tort of negligence ......................................................................................11
Case 7 .......................................................................................................................................11
4.2 Elements of vicarious liability ............................................................................................12
Case 8 .......................................................................................................................................12
Case 9 .......................................................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES...............................................................................................................................14

INTRODUCTION
Aspect of contract and negligence plays an important role for people in order to get
justice from wrong practices which are followed by individuals and organizations. Contract is
termed as a legal agreement which takes place between two and more parties. It can be either in
form of written or verbal which creates a legal relationship between two or more parties
(Zamore, 2015). Further, a contract become legal when it binds all the essential elements of
agreement. These are offer and acceptance, consideration which party has to party and legal
capacity for parties to act for the same. On the contrary side, negligence is part of tort law which
comprises harm caused by one party to the another not intentionally.
This present document has been prepared on the case as per given in the case study for
Peter Abraham and others. This present report will also focus on giving reader better
understanding of different aspects of contract and legality of various business terms. This
document will also showcase the impact of breach of contract and provide necessary information
regarding remedies for negligence in functioning of business.
TASK 1
1.1 Importance of essential elements required for formation of valid contract
It is important for Peter Abraham to know all the necessary components of components
so that he can come into sound relationship with another party. To form a contract, it is necessary
that all the important elements of contract are fulfilled so that person gets in sound relationship
with the party (Wong and Deubert, 2010). Further, the elements of contract has its own
importance and the discussion for same has been given down under: Offer: Offer has its important role in each and every contract. Offer is treated as proposal
which expresses the will power of performing tasks, duties as well as obligations. By
reading the case of Harvey v Facey (1893), offer can be understood in the best manner.
Further, offer also elaborates the major content of contact and it basically involves active
participation of offeror who develops strong relationship with the offeree. However, offer
has specific time period and the same gets elapsed when not accepted within the specific
time period.
 Acceptance: This is the second stage of the contract where offer so made by offeror is
accepted in the same form by the offeree (Four Essential Elements of a Contract, 2015).

Moreover, acceptance can be understood in better way by referring to case of Brogden v.
Metropolitan railway Co. (1877). Further, if both the parties like to get into the contract
then they have to follow the important conditions of acceptance and these are:
◦ Terms of acceptance is similar with terms of offer
◦ Agreement have to be certain for particular event
◦ Acceptance need to be communicated clearly with offeree Contractual relationship: Both the parties in contact need to have certain intention so
that they can for am contractual relationship (Pathak, 2013). Furthermore, parties who are
getting into contract should not any kind of fear or pressure from other party. Moreover,
by referencing to case of Jones v Padavatton (1969), contractual relationship can be
understood in better way. Consideration: Contract which is taking place between the parties should have legal
consideration. Further, both the parties should get profit either in form of tangible or non-
tangible. Here, one's consideration is generally gets exchanged with another and the
promise for consideration is generally made in writing which is signed by both the parties
of the contract.
 Capacity: Contract takes place when both the parties are liable and also capable of getting
into contract (Revak, 2011). Person who are forming and getting into contract should
persist sound mind, legal age, etc.
1.2 Impact of different types of contract
There exist different types of contract and few of them have been discussed down under
to give reader better understanding for the same. These are:
 Verbal and written contract: In the written contract, contractual obligations for the
contract are given in written form and it develops an effective means of legal formalities.
In this offeror gives offer to offeree and tries to seek his/her acceptance in the written
form as well. It is treated as most effective way to get into the contract because it can be
shown as a proof in court when one party breach the contract (Ghazali, 2011). However,
it is considered as a lengthy process but it eventually meets the objectives of getting into
contract. On the other hand, verbal contracts are those which are done verbally. In this,
parties of contract works on the basis of trust and tries to meet the objectives of contract.
This process is also treated as fast way to execute contractual obligation.

 Bilateral and Unilateral contract: Bilateral contracts are those where parties get into legal
relationship and promises each other to perform certain acts. The acts performed while
being into contract need to be legal and contractual obligations should be taken into
consideration (Chetwin, 2011). On the contrary side, unilateral contracts are formed on
open basis. In this type of contracts, offeror makes a contract by giving open offer to
offeree and waits for his/her consent on same.
 Face to face and distant contact: These are the contracts which are formed in the
existence of all the parties and parties who are part of contact accepts the terms and
conditions in order to get into the contract. On the other side, distant contracts are those
where parties are not physically present to get into the contract. Here, the consent of
offeree takes more time and it comes into play when both offer and acceptance gets
satisfied. For making this distant contract successful, tools like email, telephones, etc. are
taken into consideration (Giliker, 2010).
1.3 Analysing terms in contract with their meaning and impact
There are some expressed therms and conditions which is normally discussed by the
parties before getting into contract. These terms of contract can be either in form of written or
verbal and has sure impact on growth of contract. Expressed terms of contract are stated down
under:
 Conditions: Conditions are considered as significant term which is used as a principle
reason for agreement. In this, harmed party can deny the contract and sue the party who
has harmed in contract. The damages will be paid by the party who has breached the
contract.
 Warranties: These are less essential terms and does not lead into the foundation of
agreement. Further, they also do not have any relation with the existence of contract.
Further, if any of the party breaches the contract then one party can claim for damages on
another but cannot leave the contract (Sykes, 2011).
 Innominate terms: These are the terms who are not considered either as conditions or
warranty. These terms come into play by considering the situations which exists in
contract.
Exemption clause is an agreement in contract which qualify that party is limited or
excluded from liability. These clauses can also be used unfairly which might act as a

disadvantage for other party. In relation to this, there need to be made some changes in the law so
that more fairness should exist in order to limit the use of clause.
TASK 2
2.1 Elements of contract on case scenario
Case 1: Agreement
As per the case scenario, Carol's flat was not furnished and therefore she approached an
online classified and saw the advertisement for a very nice leather couch which is of almost
£600. Carol after seeing, mailed the contract saying that she want to purchase the couch.
Applicability of legal provisions
Under the above case scenario, there exist invitation of treat which is accepted by the
offeree (Petrin, 2010). Therefore, there exist offer, acceptance but there is no evaluation of the
legal consideration moreover, there was not response of seller that whether the acceptance is
made is agreed or not.
Decision
Only few elements of contracts are considered in the above scenario and therefore, the
contract will not take place. There are various elements which need to be fulfilled and in the
above case, only offer and acceptance is done. Other elements like contractual relationship,
consideration and capability of party are not taken into consideration and therefore agreement
will not take place.
Case 2: Consideration
As per the given case, Preston's son devil was planning to seek cyber-security position
with George, Smith and Fogarty, Inc. Devi wants to work independent and does not want any
interference from his father. Organization also decide to hire Devi and made him offer which is
accepted by Devi. Devi's dad was unaware that his son was hire and on the next day of actual
hire, Pretson was planning to give IT firm £150,000 if they hire his son.
Applicability of legal provisions:
Under this case scenario, all the elements of contract has been fulfilled and the contract
has formed between Devi and the organization. However, Devi's dad unaware that his son was
hired and he planned to give organization £150,000. Now this will not be possible as revocation
of contract will not take place.

Decision:
Once the contract has been formed and all the parties in the contract accepts the terms and
conditions, then it will be considered as a contract. There was offer and same was accepted with
legal consideration and once benefit. Now George cannot revocate the contract and enforce the
same again.
2.2 Applying the law on terms in different contracts
Case 3- Exclusion clause
In the given case scenario, a couple booked table at restaurant in London. At the entrance
in hotel, man handed the coat which contained his wallet with £500. Porter gave him a receipt
stating “all valuables need to be removed from the pocket of jacket as hospitality will not be
liable for any item missing or stolen”. Man was about to make payment and he realized that
wallet was left in coat and he went to collect the same. He sees that the money is not there in
wallet and he sought to recover the same from the restaurant. Restaurant refused that they have
made clear notice on the back of receipt which excludes them from liability.
Applicability of legal provisions:
Under this scenario, conditions of exclusive clause has been fulfilled as organization have
stated clearly that they will not be responsible if anything has been stolen or missed. It was
generally the carelessness of person that he left the wallet inside the jacket. Organization has
fulfilled the conditions of exclusion clause and can rely on their decision of not paying the
damages (Geistfeld, 2011).
Decision:
Person was not aware of his wallet and therefore his carelessness lead into losses.
However, the person can be on positive side if he proves any of the drawback which organization
have made in creating this exclusive clause. If the size of receipt is small and person is not able
to read the same then the organization will be liable to pay the compensation to the party.
Case 4 Implied term
From the given case, it is evident that Zehphra rented warehouse to Aaron which was
vacant from long time period and this has fallen into disrepair. Due to this, Aaron has done
improvement in the warehouse. The owner stated that he will not increase the rent for coming 5
years. After an year, Zehphra died and since then the value of property have increased due to the

repairs carried out by the tenant. Yeti the nominee of died person increased the rent. Aaron
refused to accept the rent and stated that Zehphra promised that the rent will not increase for five
years.
Applicability of legal provisions:
Implied terms are those terms which one can clearly interprete and evaluate. In the above
case, it is clear that if price of property gets high then the rent will automatically get high ( Sterk,
2012). So it is necessary for Aaron to pay the rent at high price.
Decision:
As per the landlord act, party has to pay the rent or price for the same at increased ret.
Further, the improvement made in the warehouse is for the comfort of Aaron and this situation
has no relation with the increase rate of the place. Therefore, Aaron will not be liable for the
compensation and Yeti will get the increased rate of rent from Aaron.
2.3 Evaluating effect of different terms in contract
Case 5
From the given case, it is evident that policyholder has applied for motor insurance. The
proposal form states that have your or anyone who will drive has involved in any sort of motor
accidents or made claim for the same in the last five years. Policy holder said “no”. When the
policyholder car was stolen, the insurer come to know that he had made a theft claim earlier
under the previous motor policy within five year period. By considering that, insurer has voided
the policy from start date and has rejected the policyholder's claim
Applicability of legal provisions:
Under this, implied terms will come into play as these are the terms which are specified
and one have to follow specifically without being intimated regarding the same. In the above
case, when the insurer asked the person that whether he has taken any sort of claim or not, then it
is clear that the claim will cover the accident, theft and all other damages (Palmer, 2014).
Decision:
In the above case, the insurer has right to void the contract because the policyholder has
already taken the theft claim in the last five years and with this, he will not be able to take the
accident claim again. Person must have specific knowledge for the same and the terms which are
implied should be in one's mind before getting into any sort of contract.

Case 6
In the question, it is stated that the insurer has investigated new claim regarding the car
have been fitted with oversized alloy wheels, spoilers and chrome wheel arches. Further, the
policyholder stated that she had bought the car with all modifications fitted and assumed that it
was car's original part. Moreover, she was also not knowing regarding the two claims earlier
made by her husband.
Applicability of legal provisions:
By considering the above scenario, insurance company can reject the policy from the start
date. It is because one must have prior knowledge regarding their things and it is genuinely not
the insurer concern whether one knows that thing or not (Zoll, 2012). However, the insurer has
accepted that policyholder believed that the car was actually modified when she bought the same
Decision:
The question in the issue was clear and explicit the details regarding any loss which
irrespective of whether the claim was made. Further, the person was also not knowing regarding
the modifications so made. Moreover, one cannot claim many times on certain object. Therefore,
it is clear that insurer has right to avoid the policy from start date. Further, warranty can also
come into play as one party can claim for damages and cannot end the contract.
TASK 3
3.1 Contrasting tort liability with contractual liability
These liabilities generally arise when party is unable to fulfil conditions of agreement and
the same leads towards the point of breaching the contract. The similarity between both tort and
contractual liability is that they form of civil liability and have relative identical structure
(Ahmad, 2012).
There are difference few differences exist between tort and contractual liabilities and
some of them have been discussed down under:
 Meaning: Contractual liability is a liability which generally imposed on one party when
they do not perform duties as per the specified terms and conditions of contract. On the
contrary side, Tort liability generally formed due to act of negligence. Therefore, one can
say that given liability occur when a person get injured due to negligence act of person.

 Limitations: Under contractual liabilities, parties who are in legal bonding will be
considered as liable for particular act (Palmer, 2014). In tort, every party who are linked
in contract even they are indirect will be treated as liable.
 Decisions: Decisions in contractual liability in case of damages are taken on the basis of
formed contracts. On the contrary side, decisions relating to damages in tort are made by
the court.
With reference to case Hochster v De la Tour (1853) 2 E & B 768, it can be linked in
which the claimant agreed to be courier for the defendant for 3 months.
3.2 Explaining the nature of liability in negligence
Negligence can be described as a situation where contract is voided because of lack in
efforts between the parties of contract. Further, the nature of liability which exist in negligence is
considered as tortuous act. Negligence is also treated as an action which cause injury or harm to
another person. These cases are normally based on contractual relationship between two or more
parties (Sutton, 2010). However, from last few years, cases for tort of carelessness has taken
place and many mischances has taken place even also when the consideration is paid by other
party. There exist different elements for law of negligence and these have been discussed down
under:
 Duty of care:
In duty of care, it is necessary for both the parties to have duty of care for one another. It is
further necessary for each and every party to have contractual relationship until the contract has
not completed (Negligence, 2015).
 Breach of duty:
If any of the party in contract is not able to fulfil their duty then it will be termed as breach of
duty in contract.
 Remote damages:
Innocent party can claim for the damages only when the injury cause to them is forseeable
(Kantarelis, 2008).
 Causation:
Prior reason behind the injury of innocent party is due to the negligence of the defendant. By
referencing to case of Donoghue v Stevenson, claimant has faced injury due to negligence of
manufacturer of beer bottle.

3.3 Explaining how business can be a vicariously liable
Vicarious liability can be termed as a situation in which innocent party is obligatory for
injuries or damages due to neglectful acts of other party. This is also considered as an alternative
liability which takes place within the doctrine of law. Vicarious liability describes that employer
will be liable for the wrong act which is done by their employee (Granger, 2015). Further, there
exist some conditions in this act. Employer-employee must fulfil certain criteria for this action
and these are:
 There should be a legal relationship between employer and employee
 Incident should have happened within the course of employment
 Action of employee should be in control of employer
For example, Colin who is the Chef of Regent hotel is not happy with Roger work
because of his attitude and anger. One day, Colin in anger knocks him with frying pan and due to
this Roger got unconscious and badly injured. However, Colin was taking him to the hospital But
Roger denied of going. In this case, condition for Vicarious liability is not satisfied because and
organization will not be liable for compensation. Further, Roger was hit is true but the Chef has
fulfilled his duty by taking him to hospital but Roger denied for the same. Therefore, in the given
case elements of vicarious liabilities is not satisfied.
TASK 4
4.1 Elements of the tort of negligence
Case 7
From the case given, Mr. Brown was feeling not well and due to this he went to hospital
complaining regarding the chest pains and breathing problems. Nurse sees him and call doctor
who was on duty. Doctor tells nurse to prescribe him some counter pain killers. Next day the
patient died due to the toxic mould at his place.
Applicability of legal provisions:
In this case, the hospital venture will not be liable as the doctor's failure to see the patient
is not the cause of patients death. The death caused due to the pneumonia caused from toxic
mould in his flat. From the given scenario, hospital will not be considered or responsible for the
same.
Decision:

However, if doctor was able to see patient and instead of giving pain killers would have
suggested for major tests. If due to this incident, death has taken place then the hospital venture
will be responsible for the above incident.
4.2 Elements of vicarious liability
Case 8
Scenario states that the driver is working for a chauffeur company and he was sent to pick
up the client at airport. The flight did not arrive on time and he decided to have few glasses of
alcohol. While coming to the hotel with client, car crashed with the lamp post which caused
severe injury to client.
Applicability of legal provisions:
Vicariously liability is present in the case and the Chauffeur company have to pay the
damages because of the negligence caused by employee (DeMitchell, 2006).
Decision:
In this liability, employer having prior responsibility to develop strict rules for their
employees so that they can perform their duty in effective manner. Further, driver in the case was
drunk and the act of drunk and drive also implement in the scenario. Therefore, mentioned
company has top pay the damages.
Case 9
Mr. Jones works as a delivery driver in supermarket. One day while loading pallets in
truck, his leg was slipped on gate and the pallet fall on another colleague and he was severely
injured.
Applicability of legal provisions:
As per occupier's liability act, employer is responsible to make proper health
arrangements within venture in order to avoid injuries. If employer is unable to fulfil the duty
then he will be responsible to pay the damages.
Decision:
Injured party has claimed for compensation but supermarket denied because at the time of
accident, responsibility of health and safety was shifted on another company. Thus, with this
incident, supermarket will not be responsible for the same and if claimant wants to claim for
compensation, then he must sue the other company.

CONCLUSION
From the above report, it is evident that parties have to follow all the essential elements
of contract before getting into any contractual obligation. This present showcase different
scenarios and the evidence for all the problems have been given with prior solution. This
document reveals the different contract term and give individual prior knowledge to enhance
their law terms.

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