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Distinction Between Tortious Liability and Contractual Liability

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Added on  2020-02-05

Distinction Between Tortious Liability and Contractual Liability

   Added on 2020-02-05

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ASPECTS OF CONTRACTAND NEGILIGENCE FORBUSINESS
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TABLE OF CONTENTSINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................31.1...........................................................................................................................................31.2...........................................................................................................................................41.3...........................................................................................................................................5TASK 2............................................................................................................................................62.1...........................................................................................................................................62.2...........................................................................................................................................72.3...........................................................................................................................................9TASK 3..........................................................................................................................................103.1.........................................................................................................................................103.2.........................................................................................................................................103.3.........................................................................................................................................11TASK 4..........................................................................................................................................114.1.........................................................................................................................................114.2.........................................................................................................................................12CONCLUSION..............................................................................................................................13REFERENCES .........................................................................................................................14
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INTRODUCTIONThe relationships prevalent in a business scenario are highly complex and require specificnorms and regulations for effective and smooth functioning. In pursuance to the same, Law ofContract has special application in corporate, to take assistance from the legal framework, forcreation of rights and duties of parties to the agreement (Bisso and Choi, 2008). In addition aspecific application of Law of Torts is also prevalent to regulate those relations which are devoidof any formal contract. To ensure a smooth functioning of business operations and adherence to the provisions ofapplicable laws, it is imperative for such units to understand the basic concepts of formation ofcontract and the liabilities imposed by the Law of Tort. In furtherance to this objective, theinstant study explains the importance of various elements of contract, modes of forming acontract and the terms/clauses of a contract. Further, with an aid of application in given factsvarious concepts such as consideration, exclusion clause and implied term have been discussed.The report establishes a distinction between Tortious liability and contractual liability and on thebasis of the same, it elaborates on the principles of vicarious liability and negligence. TASK 11.1A contract is formed when two or more parties enter into an agreement for a lawfulobjective and with free consent. It is a process wherein an offeror makes offer to offeree which isthen accepted on the basis of a reciprocal promise known as the consideration. It is imperativefor Peter Abhraham to understand the essential elements of a contract which has been illustratedbelow:Offer: This marks the commencement of formation of a contract. One of the parties to thecontract communicates his desire to enter into a contract with the intention to bind theparties by law. In the case of Harvey v. Facey (1893) it was opined by the court that thecommunication of the offer shall be effective enough to unambiguously communicate thetrue intention to the other party. Another critical factor which shall be considered byPeter Abhraham is that 'offer' and 'invitation to treat' are distinct to each other and thelatter cannot amount to be an offer in formation of a valid contract.
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Acceptance: In order to carry forward the process of formation, an offer shall beresponded with an unconditional acceptance which shall also be effectivelycommunicated to the offeror. It has been observed in the case of Felthouse v. Bindley(1862) that a mere silence in response to an offer cannot amount to an acceptance. Theofferee is required to either accept the offer verbally or act in a manner which implies theacceptance from his side.Intention to create legal relation: The parties while making the offer and accepting itshall intend to bind each other with legal obligations (Hillman, 2012). In the case ofJones v. Padavatton (1969) it was stated by the justices that in the case of domesticagreements, a presumption of not desiring to bind each other under legal obligations ismade. Consideration: An instrumental role is played by this element as in absence of a validconsideration; no contract can come into existence (Four Essential Elements of aContract,2014). The nature of reciprocity in a contract can be owed to payment ofconsideration (Deakin, Johnston and Markesinis, 2012). In the famous case of Chappel v.Nestle (1960), it was held that a consideration shall mandatorily be sufficient in nature.The fact that it is adequate or not does not hold any relevance. Capacity: It is also imperative to assure that the parties to the contract are legally capableto enter into a contract under the law of Contracts and are not minor, insolvents or ofunsound mind. 1.2Under the Common Law, a valid contract can be either in a verbal form or in the writtenform. The requirement of presence of essential elements of a contract is mandated under thissystem of law. A contract can consist of implied terms or express terms and the same isdependent on the nature of relationship shared between the parties. A mere exchange of promisesin a meeting can also bind the parties under the law, provided the intention to create a legalrelation existed, at the time of exchange of promises. Thus, Peter Abhraham shall understand thefact that a valid agreement can be formed through following modes as well:Face-to-face: It shall be noted by Peter Abhraham that verbal contract also holdsrelevance under Common Law, if supported by all the essential elements of a contract.
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