Sample Assignment on Commercial Law (pdf)
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Added on 2021-06-17
Sample Assignment on Commercial Law (pdf)
Added on 2021-06-17
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Running head: COMMERCIAL LAW0Commercial LawContract of Service and Contract for Service
COMMERCIAL LAW1Table of ContentsIntroduction................................................................................................................................2Contract of Services vs. Contract for Services...........................................................................3Difference between the Contacts...............................................................................................3Importance of Difference...........................................................................................................4How to determine the type of contract.......................................................................................6Conclusion..................................................................................................................................7References..................................................................................................................................8
COMMERCIAL LAW2IntroductionA contract is a legal agreement which binds two or more parties to its terms. The parties canenforce each other legally to perform the terms of the contract. In today’s fast pacing businessworlds, the impact of economic crises has increased issues for enterprises, and they face anumber of risks relating with a change in virtual technologies and increasing demand forskilled workers. Organisations rely on legal contracts In order to keep up with the ever-changing technologies and retaining skilled employees in the workplace. An effectiveunderstanding of the different types of contracts between contractors, clients, agencies andemployees is crucial for a business. Whenever a party gives his/her consent to do any workfor another party in return for specific remuneration the potential of two different types ofcontracts arises based on the specific terms and conditions based on which the work will beperformed (McKendrick, 2014). The two different types of contracts include contract ofservices or contract for services. This report will analyse the difference between contract ofservice and contract for service and evaluate why it is important for organisations todifferentiate between them.
COMMERCIAL LAW3Contract of Services vs. Contract for ServicesContract of ServicesIt is defined as an agreement which is constructed between two or more parties in which aparty hire another to perform different duties. The Employment Rights Act (1996) providesprovisions regarding rights and duties of a contract. The section 230 (1) defines an employeewho perform different duties for an employer based on an employment contract (Legislation,2018). As per section 230 (3), a person agree to give his/her services to another party as perthe terms of the employment contract. Contract for ServicesA contract for services is referred to a contract which is constructed between a party and anindependent contractor which is strictly based on business-to-business contract between twoorganisations. The parties in this contract include an independent contractor and engager(buyer and supplier). The section 230 (2) of the act provides that a contract of employment isreferred to a contract of service whether it is given in writing or orally. The contract forservices is not created as an employment contract (Thomas Reuters, 2018).Difference between the ContactsIn contract of services (employment contract), the employee agreed to give his services to theemployer in return for agreed wages or salary. There are two crucial elements of a contract ofemployment which include contract and mutuality of obligation. In this contract, theemployer can control the actions of the employee, and he/she can tell the employee what todo, how to do and when to do a specific task. However, mutuality of obligation is the mostimportant part of an employment contract which provides that the employer is bound by theterms of employment and he/she is obligated to provide work to employee within the scopeof his/her job description (Wade, 2015). The employee has to complete such work, and incase of a failure, the employer can take actions against the employee which ultimately resultin dismissal of the employee. Similarly, the employee can take action against the employer aswell.On the other hand, a contractor or self-employed person hired under the contract for servicesowes no loyalty to the person who hires him. A contract is established between both the
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