Contract and Negligence in Business Assignment
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Added on 2019-12-17
Contract and Negligence in Business Assignment
Added on 2019-12-17
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ASPECTS OF CONTRACTAND NEGLIGENCE INBUSINESS
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 Importance of various elements of contract.....................................................................11.2 Impact of different forms of contract...............................................................................21.3 Terms of Contract.............................................................................................................3TASK 2............................................................................................................................................42.1 Application of essential elements.....................................................................................42.2 Application of Terms of contract.....................................................................................52.3 Effects of various Terms..................................................................................................5TASK 3............................................................................................................................................63.1 Contract Liability against Tortious Liability....................................................................63.2 Negligence and its elements.............................................................................................63.3 Vicarious Liability...........................................................................................................7TASK 4............................................................................................................................................84.1 Application of elements of Tort.......................................................................................84.2 Application of elements of Vicarious Liability................................................................8CONCLUSION ...............................................................................................................................9REFERECNES..............................................................................................................................10
INTRODUCTIONOne of the major components of a business environment is the contracts which areentered into between the business organizations and different entrepreneurs. These agreementscan be either in the form of oral or written agreements, however, the business community prefersto use the written form of contracts. In this manner the parties are provided with a legaldocument containing rights and duties arising out of the said relationship. Moreover, it alsocovers the contingencies which may arise during the course of time. Hence, business enterprisesoften use contracts as a means to safeguard their resources. The instant report is an effort toenhance the understanding in relation to formation of contracts, elements and types of contract.This shall be followed by introduction of another important concept of Law of Torts, and thespecific principle of Negligence as well as Vicarious Liability. Furthermore, all these conceptsshall also be illustrated on the basis of different scenarios which may arise in a business context. TASK 11.1 Importance of various elements of contractFormation of a contract begins with the process of making a proposal by one party toanother, and is validated on receipt of acceptance from the other party in relation to the specificproposal made. This entire process is inclusive of all the negotiations which are undertakenbetween the parties, and determine the exact conditions on the basis of which the relation shallfunction. However, in order to form a valid contract it is essential to include the followingelements:Offer: If one of the parties signifies to the other his/her willingness to undertake an act orabstain from undertaking an act, with the intention to obtain the other persons consent inrespect to the same, an offer is said to have made. In the case of Harvey v. Facey (1893)it was ruled by the court that it is highly imperative for the offeror to clearlycommunicate his precise intentions. In the decision of Fisher v. Bell (1961) the courtfurther differentiated the concept of 'offer' from 'invitation to offer' (ContractualAgreements – Offer and Acceptance, 2017). It was held that acceptance of the formerleads to formation of a enforceable contract, while in the case of latter there there is nopossibility of accepting the same, as it is merely an invitation to make an offer. 1
Acceptance: Communication of an unqualified and unconditioned acceptance can onlylead to formation of a valid contract. In the case of Entorres v. Miles Far East (1955), thecourt upheld the following three rules for a valid acceptance – effective communication,acceptance shall be on the same terms as contained in the offer and it shall be certain. Inthe case of Brogden v. Metropolitan Railway Co. (1877) it was reiterated by the court thatacceptance can also be made through conduct. Consideration: It represents the attribute of exchange of promises between the parties. Inrespect to the same, each of the parties ought to either gain a benefit or undergo adetriment, which can be characterized as consideration attached to the contract(Furmston, Cheshire and Fifoot, 2012). Further, in the case of Thomas v. Thomas (1842),it was laid down by the court that a consideration can be held valid only if it holds somevalue in law. Moreover, it has been mandated that it cannot be past as well as in thenature of persisting public duty. Consensus ad idem: In order to form a valid contract it is essential for the parties toformulate the relationship on a mutual consent. It is highly essential for the minds to meeton the common subject. Moreover, in the case of Balfour v. Balfour (1919) it was heldthat the parties shall necessarily intend to form a legally enforceable relation. Capacity of parties: It is also essential that the parties entering into a contract arecompetent to formulate the same under law. The capacity or competency is determinedon the basis of age, soundness of mind and the status under law (Posner, 2011). Forinstance an insolvent person is not eligible to formulate an agreement. 1.2 Impact of different forms of contractContract can be bifurcated into different types on the basis of the manner in which theparties formulated the agreement, or interacted in pursuance to entering into a contract.Moreover, with a variation in the type of contract, there is a variance in the impact which is laidon the parties. Face to Face Contract: These are the agreements which are entered into by the parties,after orally negotiating with each other, while being present before each other. Thesecontracts bring certainty to the relationship, and reduces the scope of mistake of identity.The oral negotiations and determinations shall be equally enforceable on the parties, asare the explicitly written conditions (Trakman, 2010). 2
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