Aspects of Contract and Negligence for Business

This study material covers the essential elements required for forming a valid contract, types of contracts that may be entered in the UK by individuals and businesses, and the nature of liability in negligence. It also includes an evaluation of the effect of different terms in contracts and a contrast between liability in tort and contractual liability.

ASPECTS OF CONTRACT AND NEGLIGENCE FOR BUSINESS
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TABLE OF CONTENTS
Introduction......................................................................................................................................3
Task 1:LO1......................................................................................................................................3
1. Essential elements required for forming a valid contract (AC 1.1).............................................3
2. Identification and explanation of Types of contracts that may be entered in UK by individuals
and business (AC 1.2)......................................................................................................................4
3. Different terms that can be included in a valid contract (AC 1.3)...............................................4
Task 2: LO2.....................................................................................................................................5
1. Application of elements of contracts in the given business scenarios (AC 2.1)..........................5
2. Application of law on terms in different contracts (AC 2.2).......................................................5
3. Evaluation of effect of different terms in given contracts (AC 2.3)............................................6
Task 3: LO3.....................................................................................................................................7
1. Contrasting liability in tort with contractual liability (AC 3.1)...................................................7
2. Explaining the nature of liability in negligence (AC 3.2)...........................................................8
3. Explaining how a business can be vicariously liable (AC 3.3)...................................................8
Task 4: LO4.....................................................................................................................................9
1. Application of the elements of tort of negligence and defences in different business situation
(AC 4.1)...........................................................................................................................................9
2. Applying elements of vicarious liability in given business situation (AC 4.1).........................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12
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INTRODUCTION
The Civil law of UK covers the aspects of contracts in diverse form in books of law. The
agreement generally made between two or more parties enforced by laws with the legal bonds is
known as the contracts in the society. The negligence is the situation in whicvh one of the party
bonded in agreement fails to comply with the agreed terms and condition. Negligence of the
contracvt cvan be observed in the situation where there is situation of one not wiulling to
participate in terms of the agreement. The contract can be seen in negligence if there is chance of
perceiving injury. The present assignment deals with understanding different contracts and terms
of contracts for fulfilling legal aspects in the organisation.
TASK 1:LO1
1. Essential elements required for forming a valid contract (AC 1.1)
As mentioned by Featherstone et al. (2015, p.50), a legal agreement between two parties
enforced by law and accepted by two parties is called as contract. Every legal and valid contract
includes elements determining the viability and the contract of organisation or two parties.
Freddy can use the following below mentioned contract for forming the business along with
various terms.
Offer: It is essential to have a contract which needs to be legalised by government and
legal authority for the better fulfilment of the offer and the contract. Offers mean an invitation or
a proposal by an individual to another to show prime willingness of entering a legally bonded
contract (Smits, 2014, p.55). Freddy offered for the sale of the high definition TV for £145
through e commerce.
Acceptance: As inferred by Thomas and Wright (2016, p.67), a contract can be initiated
only after the acceptance of the offer properly by one party to another. The acceptance depends
upon consideration proposed by one party to another party. Therefore, there is a need for
similarity between offer and acceptance without modification. Layla responmded to th
advertisement and presented to buy to the high definition TV for £125
Consideration: As mentioned by Micklitz and Reich (2014, p.800), the consideration in
an agreement is one of the most important aspect, as the performance of the parties should be
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based on the consideration. The consideration term marks the agreement to have something in
return for the completion of the agreement. Freddy with no no other cjhoice in the offer, accepted
the reply offer of Layla and decided to sell the product at £125.
Intention: The term intention means that the every party need to have a common
intention of fulfilling the agreement maintain the consideration of the agreement. Since, the
agreement between the charitable factors includes love, bond and affection, there needs to be an
intention between two parties agreeing in one agreement. As per the contract there were no ill
intentions of Freddy and decided as he decided just to sell the product.
2. Identification and explanation of Types of contracts that may be entered in UK by individuals
and business (AC 1.2)
Written and Oral Contracts: As supported by Dowell et al. (2013, p.445), written
contracts are the agreement signed by two parties with mutual consent with signed paper for the
better chance of providing evidence of the agreement.. The documents provided are duly signed
by the parties on the consent of legal authorities. On the other hand, the oral contracts have no
such documents in the agreement. Verbal agreement has no documents for supporting agreement
in the future.
Business to Business contracts: Agreements between two commercial units or bodies in
the society is called as business to business contract. The Business to business contracts are
bound by law and generally deal with support of maintain the price and the quality of the
product.
Business to consumer contract: These contracts takes place between consumers and the
seller of a product, where the seller agree to sell the object and the consumer who is willing
accepts the proposal; depending on satisfactory level of the consideration. In the above case
scenario, Freddy and Layla were bided in a written contract as Freddy advertised, Layla accepted
and the consideration was accepted by both Layla and Freddy via mail, which is in written and
can be used in case of proof.
3. Different terms that are included in a valid contract (AC 1.3)
Implied terms: As supported by Turner (2014, p.78), the terms or the facts which are
taken as default in making any of the contract are viable. The implied terms refers to the values
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and the assumption that ae not recorded but are implied by the provider. The Court of law can
define implied terms in the contract between the tenant and the landlord.
Expressed terms: As mentioned by Warren (2014, p.43), the terms which are included
mutually agreed by both the parties constituting the agreement into a valid one. The obligation
and the implication along with the ground rules are written in the contract with mutual consent.
Consents and the conditions written are the primary terms used in the contracts.
Innominate terms: As supported by Norta et al. (2015, p.8), the terms which are not
mentioned as warranties or guarantees are called the innominate clause. This cause was first
described at the situation of Hong Kong Fir Shipping. The breach in contract with Innominate
terms is judged by understanding the situation in which the innocent party is restrained from any
grant is done or not.
Exclusion clause: As mentioned by Clarkson et al. (2014, p.56), the legal; terms that
reduces chance of bearing the risk of liability is called as the exclusion clause. The exclusion
clause is only applicable if the deed of agreement includes the exclusion clause clearly. In
words of Kiss et al. (2015, p.2660), the exclusion clause needs to be well informed beforehand
for the proper applicability of the clause
Task 2: LO2
1. Application of elements of contracts in the given business scenarios (AC 2.1)
In terms of the case study given, there has not been a proper form of contract because
there has been a simple by small negligence in the contract. In most general and elementary case,
there has been a seller and consumer contract where Hair 4 U proposed Bella UK in showing
intention to buy product known as the miracle oil with a proper consideration. The support of
the contract provided by the organisation was most common and had offer, acceptance in the
elementary situation (Arrow and Lind, 2014, p.40). The elementary situation was successful as
there the offer was offered by Bella UK and Hair 4 U accepted the offer marking the initiation of
the offer. The third requirement which is consideration was also settle as Hair 4 U agreed on the
consideration of 10 boxes for 5. However, there was intention which can be termed as negative
as Bella UK said they would not be accountable for any effect on the hair.
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2. Application of law on terms in different contracts (AC 2.2)
Implied Terms: There has been an implied term in between Bella UK and Hair 4 U as
they both agreed for better understanding between them in buying one product and
understanding the entire situation proposed by Bella UK. The Bella UK and Hair 4 U need to
follow all consequences in the organisation and contracts.
Expressed term: In terms of the expressed terms, the Bella UK and Hair 4 U have
agreed on the quantity and the rate of shampoo.
Exclusion Clause:
Definition: The exclusion of clause helps in lowering down the chance of acquiring of
risk and loss.
Timing: The exclusion clause needs to be included in forming of the agreement between
two parties. The option if interested from beforehand the objective of the organisation is set as
valid contract if any issue is raised against the viability of the contract.
Criteria of validity: The objective will be considered in proper relief; the issue is
properly included in the beginning of the contract. However, as argued by Glover and Kusterer
(2016, p.46), exclusion clause is applicable only in terms of item and not in any contradiction to
law.
Legality in terms of the law: Exclusion as inserted by Bella UK needs to be in terms of
the public policy. It must not be in disadvantage of hair 4 U. It is to be evidently supported that
exclusion clause should be entered in the agreement with the prior notice.
The Bella UK will not be liable to any consequences and effect the shampoo and will also
not be liable to pay any amount if the product delivered is not as per described.
3. Evaluation of effect of different terms in given contracts (AC 2.3)
Breach of condition: As mentioned by Ayres and Schwartz (2014, p.545), condition
describing the situation of non satisfaction by Bella UK then hair 4 U can claim for the damages
for the same amount and hw quality. If the warranty of the perfect is not properly satisfied by
the Bella UK then the innocent party can claim for the product which is not received in time.
Exclusion clause legality: In terms of the exclusion clause, the Bella UK is not liable of
paying any amount for not delivering the product according to the description. The exclusion
clause as per the case study has proper consent of both the parties, here the Bella UK and the
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Hair 4 U. Since, the clause is placed in beginning and both the parties had mutual consent over
the clause, there has been no confliction to legal norms. Thus, the Bella UK has effective relief.
Remedy outline: Remedy online means the mitigation form which can be accessed to
make the issue situation all right (Drechsler et al. 2017, p.75). The actual situation may not be
clarified but the innocent party can ask for the mitigation methods. Hair 4 U is clearly eligible in
repudiating the contract if the contract is not in terms of deeds implemented in the beginning of
the contract.
Task 3: LO3
1. Contrasting liability in tort with contractual liability (AC 3.1)
Contractual liability: This type of liability occurs in the situation where one of the
parties does not fulfil the views and promise made to another. As per the notions of Twigg-
Flesner (2013, p.76), breaching and none performing of situation can be termed as the failure of
the party to meet contractual obligations as per the deed or contract signed.
Tort liability: This particular liability arises from a breach of duty which is fixed by law
and negligent or tortuous act refer to the situation where any individual typically fail to
undertake optimum duty of care during the performance of contract.
Contrasting both tort liability and contractual liability, it could be stated that both come
under the perspectives of civil law. According to the views of Gilson et al. (2013, p.170),
damages that are incurred under both liabilities are supposed to be recovered on behalf of the
party for whom the innocent party has suffered. The origin of the tortuous liability has been
observed to form the act of negligence whereas the contractual liability has risen from non-
fulfilment of obligation of signed contract.
Under the liability of tort, relationship among parties is said to be imposed by any
effective law without any ultimate consent of parties whereas referring to the contractual
liability, parties entered into their mutual relationship on their willingness. As per the statements
of Bakos et al. (2014, p.34), objective of the tortuous liability is to bring the claimant in the
position when the act of tort was eventually not committed by the defendant or the innocent
party. Under the notions of contractual liability, if the obligations are fulfilled by the specific
party supporting acts of tort, the objective of this specific kind of liability lies in bringing the
claimant into the position due to cause of damages to the party. Referring to the tort liability, un-
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liquidated damages have the probability to take place whereas under the contractual liability,
liquidated damages occur very frequently.
2. Explaining the nature of liability in negligence (AC 3.2)
In the views of Morgan (2015, p.120), liability could be defined as the obligation that
might arise through unjustified and unreasonable act by the particular party accidently or
deliberately. It is regarded as the comprehensive legal term which describes a specific situation
by being actually or potentially subjected to the lawful compulsion. On the other hand,
negligence could be considered to be the situation of not achieving success in taking care of
something. It is referred to as the act which does not go according to behavioural standards
which are established by the law for protecting the public against unreasonable or unjustifiable
risk concerned with harm or damage.
As per the suggestions of VerSteeg (2015, p.73), for claiming liability under the
negligence that follows principles are supposed to be satisfied. This could be illustrated through
the case of Donoghue v Stevenson n [1932] AC 562. The element of ‘duty of care could be
understood through the demonstration of the case while elaborating element of negligence.
As per the duty of care, it could be evidently stated that plaintiff is supposed to prove that
the defendant possesses duty to justifiable and reasonable care of actions. Relating to the case of
Donoghue v Stevenson, when the plaintiff who is Donoghue visited the cafe, she ordered cream
along with the ginger beer. The beer turned out to be harmful since decomposed snail has
emerged out of the beer and she claimed the Stevenson to be completely liable for such a
discrepancy in his action. Hence, for avoiding the negligence factor, duty of care must be present
in order about the tortuous action.
3. Explaining how a business can be vicariously liable (AC 3.3)
The origin of a vicarious liability is from the fact when any innocent party is held liable
for any kind of the tortuous act. As per the observations of Aguir et al. (2014, p.585), those
obligations are imposed by law as a result of the influential relationship as the liable party is in
position of controlling act of the party which had committed mistake. Thus, it could be evidently
stated that as a result of the negligence, the liable party is charged of committing the tort and that
particular individual is held vicariously liable for such sincere mistake. Any negligence caused
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on behalf of a party amongst the two in any contract are deed which would be held responsible
for causing any act of tort which makes the party vicariously liable who performs the tortuous
act.
As per the opinions of Ding (2014, p.90), the party committing actions of torts would be
obliged to undertake complete liability for causing any harm or damage to other party. If being
vicariously liable, any party rejects undertaking the liability of causing the damage or harm, and
then sincere actions are supposed to be taken against the offending party. Referring to the case
study, Bob is vicariously liable to undertake complete liability of 13 year old boy, named Matt
due to him the injury had been caused to him. Hence, justifying the above case, it could be stated
that Norfolk farms could be held vicariously liable since, due to Bob’s negligence, Matt has been
injured which was completely unfair and an act of tort as well.
Task 4: LO4
1. Application of the elements of tort of negligence and defences in different business situation
(AC 4.1)
Referring to the case scenario, it could be evidently observed that a tort of negligence had
occurred with Brad through Charles as he informed wrong about the client Albert who had
turned out to be a fraud. The elements of tort of negligence involve breach of duty, property
damage and contributory negligence.
Breach of duty: Breach of duty could be stated as any mis-happening that is not
supposed to occur while the duration of a contract. As suggested by Morgan (2015, p.121),
violating any rules and regulations and breaking up of a contract without meeting the contractual
terms would be even considered as the breach of duty. In the mentioned case study, it could be
stated that Charles is obliged to pay compensation to Brad for this loss since his negligence has
resulted in the action of tort committed by the Albert. Since, Brad has faced serious issues and a
breach of duty due to the negligence in act shown by Charles; hence it could be referred to as a
breach of duty.
Damage to the Property: Property damages could be regarded as the specific injury
caused to the real and personal property of opposite party through the wilful destruction. Due to
the damage caused to Brad as a result of wrong information provided by Charles, he would be
completely obliged to pay off the compensation charges by paying off the flat’s net worth since
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Brad had been suffering through it due to such act of negligence. Contributory negligence: As
per the norms of tort of negligence, the defendant would not be liable to pay for the
compensation since; the party had been digressed by the offendant party. If in any case, the
defendant would pay for the compensation, it would not be liable to claim for the compensation
charges.
Dear Brad,
The contract had been formed between Brad and Albert who had been appointed as a doorman.
Address: 221 B Becker street
City: London
State: United Kingdom
Telephone: [phone]
Risk: Albert had already disappeared after taking the flat without paying the full money and
hence, he is not receiving the probability of receiving the payment back.
Suggestions to overcome risk consequences: Brad is liable to ask for compensation from
Charles since; he provided the wrong information for which Brad had to trust Albert. Hence, it
is suggestible to hold a legal position for claiming the compensation as the net worth of house
without paying which, Albert ran off. Due to the act of negligence, Charles could be easily
asked for paying off the compensation by Brad.
2. Applying elements of vicarious liability in given business situation (AC 4.1)
a) Yes, Macho men plc is liable for such offences made by Graham but if on the grounds
of such act, Graham is prohibited from working in the pub as a doorman then the company might
not be vicariously liable for paying for the damage made to the customer. Despite being the
intentions of Graham being pure and vital, the company is obliged to pay for the charges due to
Graham's negligent act. b) Carla is completely liable for damages made to the car due to her
negligence in the basis of which, she could be charged to pay off the compensation. Links Ltd.
could not be held responsible since Carla used the car at the time of her week off. Hence, the
company would not be responsible for compensation. Carla would be completely responsible for
it.
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CONCLUSION
Through the study, it could be concluded that a valid contract contains few essential
elements such as offer, acceptance, mutual consent, consideration and intention. Referring to the
study, it could be evaluated that the elements of a valid contract justify validity and reliability of
the contract. It could be eventually deduced that a significant distinction exists between the tort
liability and the contractual liability. There are few particular elements of tort of negligence
which are applicable in various situations of business and a business could be stated as
vicariously liable under certain terms and conditions. The terms of a contract must be read
through before signing up or accepting any contract which might be implied terms, express
terms, innominate terms and exclusion clauses.
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