Aspects of Contract and Negligence

This report analyzes aspects of contract and negligence in business law through four case studies. It examines the elements of a valid contract (agreement, offer, acceptance, consideration, legality), different contract types (implied, express, executed, executory, unilateral, bilateral, valid, void, voidable, illegal, unenforceable), and the consequences of misrepresentation. The report also delves into negligence, defining it as a lack of reasonable care causing harm, outlining its elements (duty of care, breach of duty, causation, damages), and exploring relevant defenses (contributory negligence, voluntary assumption of risk, inevitable accident). Case studies illustrate the application of these principles, including scenarios involving misguiding advertisements, faulty products, train collisions, and workplace accidents. The report concludes by summarizing the key findings and emphasizing the importance of understanding contract law and the potential for vicarious liability in negligence cases.

Aspects of Contract
and Negligence in
Business

TABLE OF CONTENTS
Introduction................................................................................................................................3
Task 1 (LO1)..............................................................................................................................3
Task 2 (LO2)..............................................................................................................................4
Task 3 (LO3) .............................................................................................................................7
Task 4 (LO4) .............................................................................................................................8
Conclusion..................................................................................................................................9
References................................................................................................................................10

INTRODUCTION
This report is all about contract and its usage. How to deal with a contract, elements
of contract, what can be done in case of negligence, vicarious liability, elements of
negligence is briefly discussed in this report. This report is based on the analysis made out of
four case studies as given in the question. All the case laws are studied well and then the
findings related to the respective case laws are discussed in this report. In this report all the
cases given deals about different aspects of contract and negligence in business (What Is
Negligence and How Do I Defend against a Negligence Claim? 2014). It has discussed the
elements, nature, and type of contract. Here the case describes about how contract and mere
carelessness can affect the parties involved.
It is stated in the cases that how non reading of contract can cause trouble for the
parties and how can we get over it. This report explains about the options available in law in
case of misrepresentation and what are the provisions which protect the persons in the
contract. All the measures the plaintiff can take in case of fraud, misrepresentation, or any
undue influence. This report gives a brief idea about how to deal a contract and what a
contact actually is.
TASK 1 (LO1)
All the contracts are based on some main elements and they are to be fulfilled to
complete the contract and bind it legally. Main elements of a contract are Agreement, Offer
narrates willingness, Acceptance which is unconditional adoption of the agreement offered.
Contract is also based on consideration and it is presumed that it contains the elements of
legality. Contract can be in any form simple written or any deed. Every agreement is a valid
contract and its validity can be challenged due to several factors such as misrepresentation, it
makes the contract voidable and can be accessed future only if the acceptor wishes. Mistakes
make the contract void and cannot be accessed; duress and undue influence make the contract
voidable. If the contact consists of any illegal issues then the contract is considered void
(Occupiers Liability. n.d).
In the given situation advertisement given by “XP Word” will be considered as
unilateral offer by them which can be accepted by any one. On the basis of advertisement
James wait outside the shop for whole night to avail the offer given by “XP Word”. In the
morning “XP Word” deny to perform by saying to James that you should be sensible enough
to not to rely on such kind of advertisement.
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This is a clear case of misrepresentation as the company just in order to increase their
profits cannot misguide the public and are not allowed to publish such fake advertisements
(Defences to Negligence. 2014). Customers are the liability of business and misguiding them
or cheating them is considered to be unethical and is against the law and thus in this case
James has the right against the company as the offer is voidable he can file a suit against XP
Word for publishing such misguiding and fake advertisements (Negligence. 2014).
An offer is a statement showing willingness. Any statement which is definite and
capable of being accepted by offeree is considered as offer. An offer may be implied or
express, may be made to a single person, group or the entire world. It is communicated well
and effectively then it is an offer. In the above case company gave a statement which was
effectively communicated and was capable of being accepted and hence was offer and XP
World cannot deny on this fact (Weiss, 2003).
In the above case James understood the option accepted it and communicated well his
intentions hence, the acceptance was made. Thus this was a contact between XP world and
James. And thus in the given case study James has full right to take legal action against the
company for misrepresenting the facts and giving wrong information to public (Zoll, 2012).
James can file a suit against the company relating to fraud and misrepresentation. In this case
it is presumed that the parties are intended to get into the legal aspects of the contract unless
stated otherwise. “XP Word” has given unilateral offer which was accepted by James has
their legal obligation on the parties to give performance. “XP Word” cannot deny doing so.
In order to make a valid contract parties to a contract must fulfil all the essentials
which are required to form a valid contract. As per the case scenario XP world had made
advertisement in the newspaper in relation to selling of computers. On the basis of this
aspect, XP world had made offer to the general public at large. Thus, it is recognized as
unilateral kind of offer in which one party make promise to another without taking consent of
him. By going through such advertisement James had made decision about the purchasing of
computer for £ 2.00. James was from one of the five customers who expressed their feelings
in relation to the purchase of computers.
Thus, there is both offer and acceptance are available so it is considered as a contract.
Besides this, on the basis of unilateral offer XP world has the obligation to fulfil the promise
which is made by him. In addition to this, consideration is also present in this contract in
terms of money such as £2.00. Along with it, both the parties having the intention to create
the legal obligation. Offer and acceptance clearly reflects such aspects. Thus, all the
essentials are present in the contract so it is termed as a valid contract. Thus, James has the
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right to make sue upon XP world for the computer. Further, as per the laws and legislation
XP wold is also held liable to perform the promise which is made by him.
TASK 2 (LO2)
There are different types of contracts such as
 Implied contract: These types of contract are those contracts which are not
accepted by written or spoken words. It is assumed on the circumstances and
conditions. These contracts are created by code of conduct or expression of
parties. It is also known as Tactic contract.
 Express contract: These are said in written or by way of words. These are more
specific and create legal binding for the contract. For example contract of sale of
property, lease deed, induction document etc.
 Executed contract: Under this type both the parties have performed their
respective task related to agreement made. Such contracts are completed as there
is no remaining obligation of parties.
 Executory contract: Under this type the parties are still to perform their
obligations. Such contracts are uncompleted contract in partial performance is
provided. In this parties are still liable to perform their duty. They are required
to give satisfactory performance by fulfilling terms of the contract.
 Partly Executed Contract: Under this any one party have performed their part
of task. These contracts are part of the executory contract.
 Unilateral Contracts: it is a one sided contract and thus only one party is liable
to perform this type of contract. These offers are in general which can be
accepted by anyone. In this there is single promise rather than exchange of
promises between the parties. In unilateral contracts second party is obliged for
performance, it is optional for them.
 Bilateral Contract: Under this type both the parties have to fulfil their part of
the obligation or contract such contracts are made by exchange of promises. In
this both parties are obliged to give performance else they can be sued for
breach of contract and required to pay damages to aggrieved party.
 Valid Contracts: these are the contracts which are enforceable by law. In this all
the essential elements of contracts are present. Agreements which are able to
create legal binding for parties are considered as valid contract.
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 Void Agreement: This type of contract is void- ab- initio hence cannot be
performed at any cost. Such agreements are restricted by law to perform. In the
situation of breach of contract there is no legal liability permissible. Along with
this both parties will obliged to face legal penalty to do actions which are
contradictory to law.
 Voidable: these agreements can be enforceable only at the option of the
aggrieved party. If contract are create by misrepresentation, mistake, coercion,
undue influence then such contracts are voidable at the option of innocent party.
If aggrieved party chooses to terminate the contract than it will be converted in
void contract.
 Illegal contracts: This type of contracts can never be enforced. In such contract
objective is contradict to law or against the public policy. For example contracts
of murder, sexual assault etc.
 Unenforceable: These contracts are valid but are not enforceable due to any
technical fault. For example contract with bilateral mistake.
In the given situation there is unilateral contract between the parties. Offer given
through the advertisement was general offer which can be accepted by anyone. If
performance is given by other party then it will obliged primary party to give performance.
Thus these are the contracts which are applicable at different agreements with different
aspects. Contracts bind the parties to perform their part of contract and unless it is not
performed duly the contract is not considered to be accomplished. The contract act is
specially designed by the government in different countries. This act is applicable to duly
regulate all the agreement proceedings done by the companies.
If a contract is signed it is presumed that the contract must be read by the persons
signing it. This comes under doctrine of indoor management. Every buyer before getting into
any contract must read the contract before signing it.
In the given case Peter is buyer who wishes to purchase a new I pad and had a little
information about it (Abdullah, 2010). He went to the XP World and after having a few
words with him decided to buy the product on a 24 month contract basis. Assistant of the
shop tells him that it was a standard contract and thus Peter sign the contract without reading
it. When he reached back home he found that the product was not working properly and after
contacting the shop back its assistance said that it was clearly mentioned in the contract that
the product will not be replaced and the repair cost will be beard by the customer himself. In
spite of faulty product whole amount must be paid by the person (Hall, 2003).
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Above case shows two aspects
1) Buyer not reading the contract.
2) Seller manipulating the contract.
This was the duty of the buyer to read the contract before signing it even if it was a
standard contract. He cannot sign a contract on presumption basis. Thus his presumption
about the agreement bound Peter and the HX World in a contract.
Sale of goods act clearly states that no seller can add any clause which exploits the
customer. Further the contract also mentions that it is the responsibility of the seller to replace
or repair the faulty product. The buyer is not liable to bear the cost of repairs and the concern
cannot add any such clause in the contract (Wishart 2012).
Thus in the given case law, XP World has added certain conditions which are against
the Sale of Goods act and cannot be added by the concern and hence Peter being the buyer
who is suffering loss and being exploited can file a suit against XP World in reference to the
Sale of Goods act to the court and can get a valid judgement in this respect (Kuney, 2011).
In order to protect the customers from the malpractices of business Consumer Protect
Act comes into consideration. It entails several rights of the consumer which they possess in
relation to the purchase of goods or services. Customer has the right to get all the information
about the product or service which they going to purchase. On the basis of the case scenario,
Peter possesses the right to get information about all the clauses which are mentioned by XP
world in the oral form. In addition to this, he also has the right to get information about the
replacement and repair of I pad. In the present case, XP world had not informed to Peter
about the terms of condition and warranty in oral form. He directly added clause in the
standard form which is considered act undesirable act.
TASK 3 (LO3)
Negligence means lack of reasonable care which results in damaged and harm to other
person or its property. It can be of two type one, a thing done by one person which will never
be done by a reasonable person. Second, a person fails to take action against any failure
which a reasonable person will not do. Both these type of negligence will result in a
negligence lawsuit (Gilies, 2004).
Negligence law is generally applicable to the organisation or any person if it has caused
any injury to others. If the injured party is able to prove that if the responsible party had
provided due care and protection the injury and loss could have been protected then the law
will apply. The responsible person is liable to compensate for physical or emotional injury
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suffered by the person. Negligence is connected with legality and thus if the carelessness has
caused any accident or harm then the person suffered can appeal in the court against that
person. It is a tort and thus will be handled by the private law. Tort is legal obligation
between two parties without any actual contract between them. Negligence is generally dealt
in civil law but in certain cases it is dealt in criminal law also (Stapleton and Williams, 2004).
The lawsuit can be filed but has certain important elements and they are.
1) The defendant had some duty towards the plaintiff or the public.
2) The defendant has violated his duty.
3) Due to violation the plaintiff suffered any injury or harm.
If the plaintiff is able to prove the mistake of defendant then the plaintiff can file a
suit against the defendant (Burtor, 2008)
In the given case study, Alina was a passenger on “Great Northern Trains”. The train faced
a collision with another train and the main reason of the collision was the driver of the train
fell asleep. And due to this crash, Alina now have a broken Arm. According to the law of
negligence this is a case of inattention and Alina suffered injury thus she can file a suit
against the company for negligent act. For this she will have to prove that the crash happened
due to carelessness made by the driver. If driver of the train would have been awake then the
collision would not have taken place (Poole, 2012). Thus Alina can file a suit against Great
Northern Trains. Here the company cannot even give the excuse saying that the company
faced liquidation because the crash was a side effect of negligence and liquidation is not the
reason by which the company can get rescue. It is the vicarious liability of the company to
compensate and bear the loss for their negligence. The whole responsibility will be of the
company as due to the driver of the train it faced crashed and caused injury to the people
(McKendrick, 2012).
This is a clear case of negligence and the company will have to bear the vicarious
liability as the negligence is done by driver but the liability will be borne by the company.
According to the negligence act employer needs to make proper health and safety
arrangements for their employer or other person in order to prevent injury. As per the duty it
is the responsibility of the employer to take care of their employers. On the basis of cited case
study Great Northern Trains had not made arrangement for the health and safety of the bus
driver. If they make rules in relation to the taking break from the driving after each five or six
hours then they are able to prevent train accidents. In this Alina was heavily injured because
the train driver was asleep. The accident was occurred because Great Northern Train
neglected to perform duty of care. Train driver is under the control of the company as per the
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vicarious liability act. Thus, employer is liable to compensate the third party for the damages
which are occurred due to the undesirable act of their employees. Therefore, Alina possesses
the right to make sue upon Great Northern Train for the injury rather than on train driver.
Besides this, Great Northern Train is held liable to compensate Alina for the loss suffered by
her.
TASK 4 (LO4)
Negligence is a tort. Negligence can be defined as a careless act performed by any
person who has caused harm to other person. Negligence has become a most common tort
now days. Negligence cannot be intentional, planned but still created some sort of injury to
others (Blum, 2010).
Major elements in Negligence are: Duty of care: the plaintiff is required to proof that the defendant owes him a duty of
care and he cannot let harm him or his property. This is general rule of negligence
which is applied to the entire act in which there is absence of contractual relationship.
 Reasonable person involved: If it is found that the defendant has breached the duty of
care then this test is done. A reasonable person is any person who has no disability. Foresee ability: It is the person’s ability to anticipate the result of a particular action.
If the court feels that the result of this action would have been anticipated earlier then
he will be found guilty (Blum, 2007). Causation: When the defendant breaches any contract or defendant’s action will
directly cause harm to plaintiff then this may lead to cessation.
 Burden of proof: the plaintiff is responsible for proving that actually negligence has
occurred. Defendants do not have to actually prove anything but the evidence must be
presented in this regards. If the plaintiff is able to prove its part than the court will
give decision against the defendant.
Defences available in case of negligence are:
1) Contributory Negligence: If the negligence is occurred by both the plaintiff and the
defendant than the damages will be shared by them. This type of negligence generally
occurs when the plaintiff contributed to a very least part of harm which ends up
suffering by the plaintiff itself. Court divides the responsibility according to the
percentage of mistakes done by them.
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2) Voluntary Risk: if any event has occurred knowingly that it can cause damage then it
will be termed as voluntary risk. In this type of negligence persons are aware about
the risk involved.
3) Inevitable Accidents: Also termed as “Force Majeure or Act of God” Inevitable means
this cannot be prevented (Beale, 2002).
In this given case study, it is stated that Sue was invited for a job in “Delux Hotel”. She
slipped in the lobby because the floor was wet and no warning was written in that area. She
decided to bring a claim against the hotel but then she remembered that she was on
medication and she had to take medicines only after having food but that day she skipped her
food and took medicine this may also be one of the causes of her slip.
In the given case, vicarious liability will be applicable. Vicarious liability is that
liability which occurs when a person is held liable or responsible for the actions taken by
others. This type of liability is generally found in workplace as employers are held liable
because of the mistake of the employees (Andrews, 2011).
In the given case law there is contributory negligence of both the parties as Sue did a
mistake of eating medicines without food which was a compulsion and floor was wet and
slippery. Still she can take action against the Delux Hotel for not keeping any warning stating
that the floor is wet and because of this Sue couldn’t see the wet floor and slipped. In this
situation hotel will be liable under occupier’s liability act. As hotel was obliged to take duty
of care for their customers in which they failed. The hotel will be vicarious liable for the
injury of Sue.
As per the occupiers liability act employers or organization is held accountable for the
injury or loss suffered by him if they fails to make proper safety arrangements. On the basis
of given case scenario the reception floor is very slippery. After knowing such aspect still
deluxe hotel had not placed warning notice to provide information about the slippery floor.
Due to the negligence of Deluxe hotel Sue was fallen down. In addition to this, due to stress
of interview Sue was taking medicine without food. It may also the cause due to which she
was fallen down. Nevertheless, deluxe hotel fails to make proper safety arrangement for their
guests. On the basis of occupier liability Act Company is entitled to give compensation to
Sue for the damages which are suffered by her.
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CONCLUSION
From the present project report it can be concluded that contract is legal agreement
which contains four major elements that are offer, acceptance, legal intentions and
consideration. Present project report gives a brief description about contract and tort law. Tort
liability arises in the absence of contractual relationship. According to occupier’s liability act
and vicarious liability business will be held liable for the negligent act of employees. Thus
they should provide safe and secure working environment and take care of act of their
employees. For such act defences are provided to business such as contributory negligence,
Inevitable Accidents, Volenti-non Fit injuria etc.
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REFERENCES
Books:
Andrews, N., 2011, Contract Law, Cambridge University Press.
Beale, H., 2002, Contract Law. Hart.
Blum, A. B., 2007, Contracts: Examples & Explanation. Aspen Publishers Online
Blum, S., 2010, Financial Elements of Contracts: Drafting, Monitoring and Compliance
Audits. Oxford University Press.
Burtor, J. S., 2008, Elements of Contract Interpretations. Oxford University Press.
Gilies, P. 2004, Business law. Federation Press.
Kuney, W. G., 2011, 3rd edition, The Elements of Contract Drafting With Questions and
Clauses for Consideration. West Publishing Company, College & School Division
Lieberman, D. R. and O’Brien, R. K., 2005, Elements of Government Contracting: Practical
Advice for Negotiating and Performing Government Contracts. CCH Incorporated.
McKendrick, E., 2012, Contract Law; Text, Cases, and Materials. Oxford University Press.
Poole, J., 2012, Textbook on Contract Law. Oxford University Press, 2012.
Stapleton, O. C. and Williams, R. M., 2004, California Real Estate Principles. Dearborn Real
Estate.
Wishart, C. M., 2012, Contract Law, Oxford University Press.
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Abdullah, I. N., 2010, Status and implications of promise (wa'd) in contemporary Islamic
banking. Humanomics. 26(2), pp. 84-98.
Bowyer, M. L., 2000, Insurance contract law and regulation and competition in the UK
insurance industry: The missing link. Journal of Financial Regulation and Compliance.
8(2), pp. 140-150.
Haarala, N. S. and et. al., 2010, Flexibility in contract terms and contracting processes.
International Journal of Managing Projects in Business.3(3), pp. 462-478.
Hall, C. J., 2003, The contractual nature of social law. Managerial Law. 45(3/4), pp. 23-107.
Milner, A., 2011, Contract interpretation: potential for relaxing the exclusionary rule.
International Journal of Law in the Built Environment. 3(3), pp. 205-221.
Sadah, A. M., 2010, International arbitration contract principles: analysis of Middle East
perceptions. Journal of International Trade Law and Policy, 9(2), pp. 148-174.
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