Aspects of Contract and Negligence for business TABLE OF CONTENTS

ASPECTS OF CONTRACT
AND
NEGLIGENCE FOR BUSINESS
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TABLE OF CONTENTS
Introduction .........................................................................................................................................3
Task 1 Understand the essential elements of a valid contract .............................................................3
1.1 Essential elements for the formation of a valid contract...........................................................3
1.2 Explain main types of contracts entered in the UK by individual and businesses....................4
1.3 Explain different terms that can be included in a valid contract................................................4
Task 2 Be able to apply the elements of a contract in business situations...........................................5
2.1 and 2.2 Elements of contract and apply the law on terms in different contracts ......................5
2.3 Explain breach of a condition and legality of exemption clause ..............................................6
Task 3 Understand principles of liability in negligence in business activities ....................................6
3.1 Explain the differences between contract and tort liability.......................................................6
3.2 Discuss the development of the concept of “duty of care” with reference to the case of
Donoghue v Stevenson....................................................................................................................7
3.3 Explain how business is vicariously liable in different situations.............................................7
Task 4 Be able to apply principles of liability in negligence in business situations.............................8
4.1 Advise to Brad whether he can recover his loss from Charles..................................................8
4.2 Apply the elements of vicarious liability...................................................................................8
Conclusion ...........................................................................................................................................9
References .........................................................................................................................................10
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INTRODUCTION
In order to develop legal contract, it is essential for the contractual parties to emphasize on
all the elements of the contract which are discussed in the below section (Dobson, 2013). The
present study has been discussing different case scenario; thus on such basis, aspects of contract
have been stated. In order to form a valid contract, the parties have to emphasize on all the related
terms that present under the contractual acts. Thus, for such aspect, types of contract have been
stated along with their purposes and their application to different scenario. The subsequent study
has been discussing the concept of contrast liability in tort with contractual liability. Moreover,
researcher had described the nature of liability in negligence and along with this, certain conditions
are also discussed where in business is held vicariously liable for different acts. Lastly, in the
research, elements of vicarious liability have been discussed respectively.
TASK 1 UNDERSTAND THE ESSENTIAL ELEMENTS OF A VALID CONTRACT
1.1 Essential elements for the formation of a valid contract
In order to develop a valid contract, it is essential for the contractual parties to emphasize on
these mentioned elements so that validity of the purpose can be fulfilled. The elements are
discussed as followed:
 Offer: Offer is one of the basic and significant elements under legal contract where in one
party has to give offer to other for any specific purpose. Offer should be clearly
communicated to the opposite party so that the purpose can be comprehended in adequate
manner. Offer must specify all the aspects for which the contract is being formed. Thus, in
order to create a valid contract, there must be lawful offer by one party (Four Essential
Elements of a Contract, n.d).
 Acceptance: Only offer can be accepted and this means that the offer must be accepted
exactly as offered without any conditions. If new terms are suggested, then they are
considered as counter offer which can be accepted or rejected. There can be many offers
and counter offers prior there is an agreement. Acceptance can be given verbally, writing or
through inferred action which clearly states that acceptance must confirm with the method
prescribed by the offerer.
 Intention of legal consequences: Valid contract requires that the entered parties should
intend to enter into a legally binding agreement (Wishart, 2012). The intention to create
legal relations is presumed; therefore the contract need not to be expressly stated, only
legal actions needs to be followed. Thus, while formulating the contract, it is essential for
the parties to include legal aspects in to that.
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 Consideration: Every contract should be formulated on the basis of valuable consideration
which specifies mutual agreement from both the parties. Thus, it can be said that one party
promises to do something in return for a promise to another party to provide a benefit of
value. Legal intention is must to specify so that the legal purpose of the contract can be
stated. Every entity has to perform legal actions so that to manage all the duties in adequate
way.
The present case is showcasing the concept of “Invitation to treat” where in James has
advertised sale of a high definition camera for £55. Maria responded for the same; however she
stated that she will buy the camera for £45. James replied to her that he will would accept it only
with the original price which reflects that he made counter offer (Whittaker and Zimmermann,
2000). Hence, after making counter offer, James did not get any reply from Maria and afterwards,
he wrote her that he is ready to accept her offer of £45. At this situation, James is not entitled for
any offer and contract because once he made counter offer, he cannot make other offer on the same.
couter off
1.2 Explain main types of contracts entered in the UK by individual and businesses
Different types of contract can be used for different situations; however all the contracts
should be integrated with legal aspects. The types are as follows:
 Face to face contract: Face to face contract is developed at the time when both the parties
are present in front of each other and when both make clear communication by meeting
directly. Face to face contract has the evidence of validity and reliability because parties
give their actual presence while developing the contract (Babb, 2001).
 Written contract: Written contract is developed with formal standards and this is most
widely used in business scenario for the purpose of specifying creditable aspects. Written
contract are formulated on the basis of conditions of the parties; hence they are most
preferred by the business entities. Oral contract is the one where in everything is verbally
stated and faith as well as confidence both the aspects matter a lot while framing this
contract. Oral contracts are not considered as evident and valid because it lacks credibility.
 Business to business contract: These contracts are made among two entities who work with
each other. Such contract does not have any involvement of customers and terms and
conditions are inserted as per organizational basis. Business entities have to form such
contract on written basis especially at the time of formation.
 Online contract: Online contracts are created through e-sources and these contracts are
chiefly useful for online trading and deals.
 Distance selling: Distance sales contract may not be binding if a copy is not provided to the
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