Tort Law and Contract Principles

This assignment delves into the relationship between tort law and contract principles. It examines key legal concepts such as negligence, strict liability, breach of contract, and consideration. Students are expected to analyze relevant case studies and apply these principles to real-world scenarios involving torts and contracts. The assignment also explores the impact of cloud computing on contract law and highlights the importance of lawful consideration in contractual agreements.

Aspects of Contract
and Negligence for
Business
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1. Importance of essential elements required for the formation of a valid contract....................3
2. Impact of different types of contract........................................................................................4
3. Terms in valid contract............................................................................................................5
4. Elements of contract in the given business scenario................................................................5
5. The consequences of classifying terms ...................................................................................6
6. The law on terms and exemption clause in contracts..............................................................7
TASK 2............................................................................................................................................7
1. Contrast liability in tort with contractual liability....................................................................7
2. The nature of liability in negligence........................................................................................8
3. How business can be vicariously liable...................................................................................9
4. Apply element of tort of negligence and defences...................................................................9
5. Element of vicarious liability in the given business situations..............................................10
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
Law is termed as legal document that is imposed by the governmental authorities which
possess different rules and regulations that are enforced to regulate the society (Zamore, 2014).
In order to formulate a valid contract, parties are abided to follow the laws that are imposed by
the government so that they may not harm each other by performing unethical activities. The
present report focuses on different aspects of the contract and negligence that negotiate the
contractual and non-contractual agreement among different parties. Furthermore, the report also
explains about the essential elements that are required to formulate a valid contract that are cited
by different cases. The report will also contrast the tort liability with contractual liability. While,
the report will also measures that it is the duty of employer to review and take care regarding the
activities of employees.
TASK 1
1. Importance of essential elements required for the formation of a valid contract
Valid contract is defined as an agreement between two or more parties that is legally
enforced by law. For the formation of a valid contract, it is essential for the parties entering into
the contract to focus on different essential elements so that contract can be termed as valid.
Different elements of valid contract are- Offer and acceptance- The foremost essential elements that are required for the
formation of a valid contract include valid offer and acceptance (Taylor, 2011). There
must be legal acceptance of offer by the party that is provided by another party. The party
who accepts the offer should enter into contract without making any condition or
modification in the offer. However, the offeror who is making an offer must have
intention to be in the contract. For example, Harvey v Facey [1893] AC 552, as per the
case while sending telegram to Harvey, Facey mentioned that the lowest price was £900
but he did not mention the intention to sale the pen for £900. Intention to create legal relations- Another element that is required for the formation of
a valid contract includes intention of both the parties to create legal and lawful
relationship (Emerson, 2009). Therefore, social agreement or charitable agreement
between the parties are not regarded as a valid contract. In accordance with the case of
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Balfour v Balfour [1919] husband promised his wife to send money for the maintenance
but after sometimes, he stopped sending money to his wife.
 Capacity of parties- Another key element that is required for the formation of a valid
contract is that parties who are agreeing to form the contract must be competent enough
to enter into it (Emerson, 2009). For instance, parties must have the age of 18 while
forming the contract. However, parties or people with unsound mind, lunatic, minor or
alcoholic are not entitled to form a valid contract.
2. Impact of different types of contract
There are various types of contract under which parties agree to follow certain terms as
well as conditions and form a contractual relationship (Frey and Frey, 2001). Diverse kinds of
contracts are classified as follows- Unilateral contract- It is a form of contract under which one party makes general offer to
another party they are entitled to reciprocate towards the offer provided by the party. In
accordance with the case scenario of Carlil vs Carolic Sml Ball Company 1893, the
company advertised the reward of £100 for the one who has got flu by taking their
medicine. Carlil saw the ad and used the medicine. Due to such action, he had got flu. In
accordance to the company's advertisement, they were bound to pay reward to Carlil. The
impact of unilateral contract is that offeror can revoke offer at any time before it has been
accepted or completed by another party. But, it cannot be revoked if offree has started or
begun to reciprocate the offer.
 Bilateral contract- Another type of contract includes bilateral contract under which both
the parties who have formulated the contract mutually exchange the promises and
perform their actions (Lawful consideration, 2011). This type of contract is also termed
as two sided contract as both the parties exchange their promises to accomplish their
requirement. For example, as per the case of Brogden v Metropolitan Railway (1877),
suspect prepared a draft and sent to applicant but the applicant to whom draft was sent
revised and sent back to the party. The amended draft was kept by the defendant and not
communicated with claimant regarding it. Therefore, claimant Brogden was sending coal
to Metropolitan Railway that result in raising dispute. Thus, the impact of this contract is
that Metropolitan Railway was liable to pay Brogden for their services.
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3. Terms in valid contract
In order to formulate a valid contract among different parties, several terms and
conditions are necessary to be included so that both the parties may render proper services in the
exchange of their promises (Ramanathan, 2014). However, to make the contract valid and legally
enforced by the law, there are different contractual terms that need to be followed by both the
parties. Different terms of contract are bifurcated as follows- Expressed terms- These are the terms that are expressly agreed by all the parties who are
entering into the valid contract (Bishop, 2005). While, examining the contract law is
generally focused on the mutually agreed terms that are entered into the contract by the
parties. As per the law, expressed terms are valid if they are specified properly. In
accordance with the case of Scammell v Ouston 1941, the defendant wished to purchase
motor-van on the hire-purchase by claimant over the period of two years. Such terms
between claimant and defendant were never specified. Implied terms- These are the terms that are expressed within the contract by the statute or
the governmental authorities (Adams, 2010). Parties within the valid contract need to
follow all the rules and regulations as well as terms that are entered by the legal
authorities. For instance, terms related with the Custom Act, Sales of Goods Act etc. as
they are enforced by the government. In addition to this, implied terms are not expressly
declared within the contractual deed formed by the parties.
 Exclusion clause- These are also consider as essential terms that are inserted within the
agreement to reduce the responsibility when the parties have rendered inappropriate
performance (Blum, 2007). If the clause is inserted properly and it also covers the
stipulation of occurring loss then it is considered as the part of a valid contract.
According to case of Chapleton v Barry, The defendant council has inserted the clause in
ticket it cannot consider as part of contract. Therefore, chair collapse and claimant get
inured. In such situation the clause or statement entered in the ticket is not consider as
valid and they are liable to pay for the damages.
4. Elements of contract in the given business scenario
Case scenario- According to the case scenario, Todor has displayed HND law book for
the sale. Ivan takes the book from shelf and proceed forward to the counter for buying the book
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for £50.00. but Todor tells that it is the last copy and he has already sold the book to Carl
yesterday and forgot to remove from the shelf. Ivan assert to buy that book and get upset.
In the above case scenario there was invitation to treat by the Todor to sell the book as he
has displayed the book. The invitation to treat is not consider as an offer by Todor. However,
considering the above case there is verbal agreement not written agreement between the parties.
Thus, in such situation Todor is entiled to refuse Ivan for selling the book as he has already sold
the book to Carl. Another element of contract in the given scenario is that there is no written
agreement between Todor and Carl so in such situation Todor is duty-bound to accept the offer
that is been rendered by Ivan (Zamore, 2014).
5. The consequences of classifying terms
(a) A condition
These are key terms within the contract as parties while agreeing to form valid contract
will mutually agreed to the certain terms that will followed within the contract. However, parties
are abide to focus on the condition while rendering services as breach of conditions by one party
will outcome in failure of the valid contract. The consequences of reach of conditions y the
contractual parties will result in breach or dismissal of the valid contract among the parties. As,
conditions are the key expressed terms on the basis of which contract among the parties have
been formulated (Nystén-Haarala, 2010).
(b) A warranty
These are consider as subsidiary or supplement terms that result in providing indemnity
to the parties if they are unable to satisfy the terms have not been satisfied. The parties within the
contract are not eligible to reject or decline the contract if the party reaches the warranty. In such
cases, innocent party or the weaker section is liable to claim for the damages and remedies.
Breach of warranty by the defendant will result in providing remedies or indemnity to the
claimant or innocent party in case of breaching warranty (Oughton, Marston and Harvey, 2007).
(c) An Innominate term
These are the terms that are not consider as warranty nor they are consider as condition.
As per the case precedents of Hong Kong Fir Shipping v Kawasaki Kisen Kaisha they have
introduced Innominate terms within the contract.
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6. The law on terms and exemption clause in contracts
Case scenario, John has hired the chair for 50p per hour within the park that is managed
by the local council. He pays the amount and local council has given the ticket in consideration
with chair (Ramanathan, 2014). Mean while after sometime, chair got collapsed that result in
injuring him badly and also result in damaging their clothes. When John claim compensation
from local council regarding their damaged clothes and injury local council attendant clearly
state the exemption clause that was mentioned on the ticket that clearly depicts that “no liability
will be accepted for occurring any damages and injury that is being caused by failure of hired
equipment.”
After considering the above scenario there were existence of bilateral contract among
both the parties as their were mutually exchange of promises in form of providing price for
purchasing the ticket for hiring the chair (Adams, 2010). However, the exclusion clause was
inserted on the ticket this states that exchanging ticket is not consider as part of contract it is
simply just a receipt. In such aspect local council are liable to pay for the John injury and
damages that is caused due to collapse of chair in the park.
TASK 2
1. Contrast liability in tort with contractual liability
Basis Tort Liability Contractual Liability
Meaning Tort liability originate while the
parties into contractual agreement
breaches their duty and
responsibilities.
While, the contractual liability arises when
the parties into an agreement breaches the
terms and condition of the contractual deed
(Blum, 2007).
Ground of
occurrence
However, the tort liability arises
when the suspect or defendant fails
to meet the general requirement.
Dahlia v Four Millank [1978] ch 231
This liability is generally impose by the
law or governmental authorities if the
parties to a contract are not rendering
proper services in the appropriate manner.
Relationship
of the
parties
In tort liability responsibilities on the
parties are enforced by the law or
government. Hence, parties are
Under contractual liability parties are
known to each other. There is some
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forced to entered into a relationship
(Introduction to Tort Law, 2012).
relationship between the parties.
Case
precedents
Pussard v spiers Donogue vs Stevenson (Ramanathan,
2014) (Adams, 2010)(Blum, 2007)
(Emerson, 2009)
2. The nature of liability in negligence
Negligence is the situation under which parties agreeing into the contract fails or neglect
the their duties in the operations and result in causing injury or damage to the weaker party. It is
mainly considered as the part of tort law as parties reaches their duty of care (DiMatteo, 2012).
The nature of liability in negligence generally focuses on four principles that is- Duty of care: Under tort law the foremost principle of negligence include duty of care
that is termed as legal responsibility that is imposed by the government on the individual
that they must adhere some standard and care while performing their activities (Hua-xing,
2004). Thus, it result in reducing the harm to innocent party by ensuring proper duty of
care. In case if the defendant fails to take care of their duty then he will be susceptible to
pay for the damages and injuries to the innocent party. Breach of duty: Another principle of negligence include breach of duty it arises when
defendant or suspect disappoint in meet the standard guidelines that are imposed by law.
As per the case precedents Vaughan v Menlove (1837) the defendant has been warned by
the claimant numerous of time regarding the haystack that is it will caught fire due to
poor ventilation but the defendant argues that he has used best judgement and would not
able to anticipate the danger of fire (Emerson, 2009). Causation: Another principle of negligence include causation that ensure that claimant
must claim if the activities of defendant has result in causing serious injury (Krauss,
2012). In the situation if the claimant has not gained the injury or damages through the
actions of defendant then claimant is not liable to claim for the damages or remedies for
the injury .
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 Foreseeability: The last principle of negligence include foreseeability that is the injury or
damages caused to the party must occur due to the neglectful or negligent actions of the
parties within the contract (Rohrmann, Cunha and Falci, 2015).
3. How business can be vicariously liable
Doctrine of Vicarious liability generally focuses on imposing liability or obligation on the
employers for reducing wrongdoing that overall impact on their employees (Frey and Frey,
2001). Basically employer are susceptible for all the duties and activities that are performed by
their employees. As per this this law, employer are likely to held liable for the neglectful actions
of the employees. Under the respondeat superior doctrine employer are secondary liable for their
own neglectful actions, mistake of their employees within the employment period.
According to case precedents Lister v Hesley Hall Ltd. [2001] here employers are
susceptible liable for the torts or neglectful actions by their employees. It has been found the
employees engaged in the sexually abuse activities with the other individual at the workplace
within the employment time period. Thus, this such situation employer are liable for the actions
and activity of the employees (Frey and Frey, 2000).
4. Apply element of tort of negligence and defences
Case scenario, David is driving the car at the speed of 35MPH on the four lane street
where children were playing. One children Kevin runs to four lane street to snatch the soccer ball
and John looking over his shoulder swerves into the other lane so that he can avoid Kevin. In the
process to avoid Kevin he hits the telephone pole of TeleCo. that snaps into two pieces. Thus, it
also result in injuring Kevin who was still in the street and to David resulting in permanent
injuries. In such situation TeleCo is liable to pay for the damages and injury to Kevin and David.
Element of defences1. Volenti non fit injuria- This element of defence is applicable when the claimant
voluntarily result in wrong activities that results in increasing the possibility of gaining
injury or damages (Lawful consideration, 2011). According to the case scenario, David
drive the car in four lane street at the speed of 35 MPH that is higher than the standard or
required speed that is 25 MPH.2. Contributory negligence- This element of defence is applicable in the situation when the
negligence action arises from the effort of both suspect and claimant. As per the case
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scenario, claimant that is David is also driving the car above the standard speed of zone
that result in hitting the pole. While, the Telephone pole was also made up of low quality
that result in snapping into two pieces.
3. Ex turpi causa- However, the last element of defence include Ex turpi causa that refers to
the reality that actions of defendant and claimant is not immoral neither unjust in nature
(Levinson, 2005).
5. Element of vicarious liability in the given business situations
Case scenario, Colin working as head chef in the Regent hotel while Roger working as
dishwasher in the hotel (Twerski, 2006). Due to attitude and anger of Roger Colin knocks his
head with the frying pan. Thus, result in causing severely injury to Roger. In such circumstance,
Roger bring a claim in vicarious liability against the Regent hotel for Colin action under
vicarious liability employer are liable for all the actions.
Occupiers Liability Act 1957
According to the occupier liability act the responsibility of occupier is just restricted with
the hindrance of personal damages and injury. With the help of providing proper warning and
enabling notices employer can minimizes the damages and injury to the other party (Owen,
2007).
Accordant with the case scenario, Roger is also liable to directly sue the Colin for the
injury as it results in causing severely injury to Roger.
CONCLUSION
From the above report it can be concluded that there are different elements existing in the
contract that are required by the parties to focus on that so that they can perform their duty in the
effective manner. However, the different essential element that are required to formulate the
valid contract include valid offer and acceptance by the parties, competency of parties, intention
to create legal relationship between the parties etc. furthermore, the report has also contrast the
liability of tort with the contractual liability as these both the liability are distinct from each
other. Lastly, the report has also concluded that it is the duty of employer to review and take care
regarding the activities of employees. Otherwise employer will be held susceptible to
compensate or balance the loss gained by the weaker party.
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REFERENCES
Books & Journals
Adams, A., 2010. Law For Business Students. 6th ed. Pearson Education Ltd.
Bishop, C. G., 2005. Good Faith Revival of Duty of Care Liability in Business Organization
Law, A. Tulsa L. Rev. 41. pp. 477.
Blum, A. B., 2007. Contracts: Examples & Explanations. Aspen Publishers.
Cohen, G. M., 2009. The Fault that Lies Within Our Contract Law. Michigan Law Review, pp.
107.
Collins, H., 2003. The law of contract. Cambridge University Press.
DiMatteo, A. L., 2012. False dichotomies in commercial contract interpretation. Journal of
International Trade Law and Policy. 11(1). Pp.27-43.
Emerson, W. R., 2009. Business Law. Barron's Educational Series.
Frey, A. M. and Frey, H. P., 2001. Essentials of Contract Law. Cengage Learning.
Frey, P., and Frey, M., 2000. Essentials of Contract Law. Cengage Learning.
Hua-xing, L. K. B. X., 2004. Legislative Thoughts on the Concurrence between Contractual and
Tortious Liability. Journal of Peizheng Commercial College, 2. pp. 1009.
Krauss, M. I., 2012. Tort Law, Moral Accountability, and Efficiency: Reflections on the Current
Crisis. Journal of markets & morality. 2(1).
Nystén-Haarala, S., 2010. Flexibility in contract terms and contracting processes. International
Journal of Managing Projects in Business. 3(3). pp.462 – 478.
Oughton, D., Marston J. and Harvey B., 2007. Law of Torts. Oxford University Press.
Ramanathan, T., 2014. Law as a Tool to Promote Healthcare Safety. Clinical Governance: An
International Journal. 19 (2). pp. 21-25.
Rohrmann, C. A., Cunha, S. R. and Falci, J., 2015. Some Legal Aspects of Cloud Computing
Contracts. J. Int't Com. L. & Tech. 10. pp. 37.
Smith, S. A. and Atiyah, P. S., 2006. Atiyah's Introduction to the Law of Contract. Oxford
University Press.
Twerski, A. D., 2006. Chasing the Illusory Pot of Gold at the End of the Rainbow: Negligence
and Strict Liability in Design Defect Litigation. Marq. L. Rev. 7. pp. 90.
Zamore, J. D., 2014. Interference with Lawful Business. Business Torts.
Online
Introduction to Tort Law. 2012. [Online]. Available through: <
http://2012books.lardbucket.org/books/the-legal-environment-and-government-regulation-
of-business/s10-introduction-to-tort-law.html >. [Accessed on 16th February 2016].
Lawful consideration. 2011. [Online] Available through: < http://www.bms.co.in/explain-
lawful-consideration-sec-23-to-25/>. [Accessed on 16th February 2016].
Levinson, J., 2005. Vicarious liability for international torts. [Online]. Available through:
<http://www.1cor.com/1158/?form_1155.replyids=282>. [Accessed on 16th February
2016].
Owen, G. D., 2007. The five elements of negligence. [Online]. Available through:
<http://law.hofstra.edu/pdf/academics/journals/lawreview/lrv_issues_v35n04_i01.pdf>.
[Accessed on 16th February 2016].
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Taylor, A., 2011. Offer and acceptance online. [Online] Available through:
<http://www.seqlegal.com/blog/offer-and-acceptance-online>. [Accessed on 16th February
2016].
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