Aspects of Contract and Negligence for Business

Aspects of Contract and Negligence for
Business

TABLE OF CONTENTS
Introduction......................................................................................................................................1
Task 1...............................................................................................................................................1
1. Importance of essential elements required for the formation of a valid contract....................1
2. Impact of different types of contract.......................................................................................2
3. Analysis of the terms in contract with reference to their meaning and effect.........................3
4. Application of elements of contract in given business scenario..............................................3
5. Consequences of classifying terms..........................................................................................4
6. Case scenario...........................................................................................................................4
Task 2...............................................................................................................................................5
1. Contrast liability in tort with contractual liability and clear explanation of legal principle...5
2. Explaining the nature of liability in Negligence......................................................................5
3. Explaining how a business can be vicariously liable...............................................................6
4. Application of the elements of the tort of negligence and defences in different business
situations of case Scenario...........................................................................................................6
5. Application of the elements of vicarious liability in given business situations of case
Scenario.......................................................................................................................................7
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

INTRODUCTION
Aspect of contract plays an important role in the current business scenario. A contract can
be defined as an agreement between two or more parties which binds them legally and they have
to carry out the duties assigned. It can be developed in different forms that are written and oral.
Current research project is based on the aspect of contract and negligence. It will focus on
different elements which are required for developing a contract. Along with this, study will apply
these elements in different cases and business scenarios (Hylton, Lin and Chu, 2015). Further, it
will also focus on different principles of liability in negligence in business activities. For
analysing the given cases in an effective manner, study will apply all these liabilities in case
scenarios. Therefore, different tort liabilities and their application in business are also described
in the following paragraphs of research.
TASK 1
1. Importance of essential elements required for the formation of a valid contract
There are number of elements which are required for developing a new and valid contract
between two parties. For example, a standard case Balfour vs. Balfour, 1919 could not be
considered as a valid contract because there was no presence of the required elements which are
described as under:
 Offer and acceptance: Lawful offer from one party is required for developing a valid
contract. It is necessary for making lawful acceptance of another party. Without
consideration of these elements, a contract cannot be considered to be valid and known as
a simple agreement (Laurence, 2016).
 Legal relationship: For showing official concerns and responsibilities, both parties need
to develop legal relations in between them. Social and family relation is not considered as
important elements in a valid contract. In case of Balfour vs. Balfour 1919, both parties
have social association with each other. So, it is not considered to be a valid contract.
 Capacity of both parties: For completing the contract in a lawful manner, both parties
need to be capable enough to perform it. So, this is also known as an essential element for
a valid contract.
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 Lawful considerations: Both the parties of a valid contract need to be agreed on all
considerations and absence of this element results in making contract to be invalid
(Hylton and Lin, 2013).
 Lawful objects: A valid contract must be based on legal and convincing purpose, only
then it will be considered as a valid contract.
 Free consent: According to this element, both parties need to be agreed on same things in
the same sense. Any kind of fraud, influence, mis-presentation and mistakes should not
be a part of valid contract.
 Legal formalities: A valid contract requires many legal formalities such as registration,
license, etc. Thus; both parties need to fulfil all these formalities at the time of developing
contract (Kenkel, 2011).
2. Impact of different types of contracts
As per the English law, there are different types of contracts which can be developed by
the parties as per their requirements and situation. Impact of these types of contract is described
as under:
 Written contract: As per the English law, both parties write their promises, roles and
responsibilities on a paper as a proof of agreement and it is known as written contract.
These types of contract are required for any kind of long term and important agreement
between two or more parties. In case of any circumstance, both parties can take
appropriate actions against each other on the basis of written agreement. Generally, these
types of contracts are formulated by both parties at the time of buying land, automobile
and buildings (Lohse and Murphy, 2013).
 Oral contract: Verbal communication is the most important channel for developing oral
contract between two or more parties. In this type of contract, both parties can write their
promises on paper but it is not necessary in each and every case. For example, purchasing
of goods and services on retail shop is a verbal contract.
 Face to face contract: In this type of contract, presence of both the parties is necessary.
Mutual concern, trust and understanding are the major attributes which create a base for
face to face contract. This kind of contract is formulated at the time of purchasing
products from the grocery shop.
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