Assignment- Elements & Their Importance For Formation Of Valid Contract

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By submitting this form and signing below, I declare that:I am the author of this assignment and that any assistance I received in its preparation is fully disclosed and acknowledged in this assignmentI also certify that this assignment was prepared by me specifically for this courseI certify that I have taken all reasonable precautions to make sure that my work has not been copied by other studentsI confirm that I have understood the College’s regulations on plagiarismI confirm that research resources are fully acknowledgedAspects of Contract andNegligence for BusinessPlagiarism is presenting somebody else’s work as your own. It includes: copying informationdirectly from the Web or books without referencing the material; submitting joint courseworkas an individual effort; copying another student’s coursework; stealing coursework fromanother student and submitting it as your own work. Suspected plagiarism will be investigatedand if found to have occurred will be dealt with according to the procedures set down by the
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 ..........................................................................................................................................11.2 ..........................................................................................................................................21.3 Analysis of term in contract.............................................................................................3TASK 2............................................................................................................................................52.1 Case scenario....................................................................................................................52.2a Case scenario..................................................................................................................52.2b Case scenario..................................................................................................................62.3 Case scenario....................................................................................................................7TASK 3...........................................................................................................................................73.1 ..........................................................................................................................................73.2 ..........................................................................................................................................8TASK 4............................................................................................................................................94.1b Case scenario..................................................................................................................93.3 ..........................................................................................................................................94.1b 1....................................................................................................................................104.1b 2. Case Study................................................................................................................104.2 ........................................................................................................................................11CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................13
INTRODUCTIONA contract can be determined as an agreement between two parties intended to createlegal obligations. The present report throws a light on the essential elements and their importancefor formation of a valid contract (Wilkinson-Ryan and Hoffman, 2010). These essential elementsare, acceptance, consideration, offer, competency and intention of parties to create legalrelationship. Further, it explains the impact of different types of contract and analyse the terms incontract in different business scenario.Tort is defined as a wrongful action by one party which causes harm or injury to otherparty. Tort law is a set of laws which seeks to establish remedies to the bonafide party when anyinjury or damage is caused due to wrongful acts of other party. According to tort of negligence, aparty will be held liable even if his act was not intentional i.e. when a party fails to exercisereasonable care which he owes to other party and due to his negligent actions, other partysuffered loss. This report provides an understanding on nature of liability of tort of professionalnegligence misstatement. Lastly, it explains the applicability of legal principles of tort ofprofessional negligence and vicarious liability in the given cases.TASK 11.1 A contract is an agreement which bounds the parties legally and is enforceable by law.For the formation of a valid contract, an agreement must contain essential elements - offer,acceptance, consideration, competency and intention of parties to create legal relationship.Offer: The foremost requisite for the formation of a valid contract is making an offer(Elements of a Contract, 2016). It can be defined as the expression of willingness of aparty to enter into a contract. It was held in the case of Harvey v Facey, 1893 that theparty making an offer should have an intention to legally bind the other party.An offer isdifferent from an invitation to treat as in invitation to treat the acceptance does not boundthe offeror. 1.It was held in the case of Partiden v Critenden, 1968 that advertisements normallyamount to invitation to offer and are not offer. But as per the case of Carlill v CarbolicSmoke Ball co., in some cases, an advert can amount to offer. 2.Further, in Fisher v. Bell (1961) it was held by the court that goods displayed in shopamounts to invitation to offer. 1
3.In Spencer v. Harding, contracts by tender was upheld to be an invitation to offer.4.Healthcote Ball v, Barry (2000) held that auction is also an invitation to offer. Thus, eachbid in itself is an offer, which is required to be approved by auctioneer.5.Thorntone v. Shoe Lane Parking (1971) established that dealing with machine is also aninvitation to offer. Thus, offer is made by the machine which is then accepted throughinserting money.Acceptance: When the offeree gives his assent to offeror, the offer is said to be accepted.It is essential that terms of acceptance exactly match the terms of offer as per Hyde vWrench, 1840 case.Acceptance would not be effective until it is communicated to theofferor. According to the Entorres v Miles Far East, 1955, acceptance would be effectiveonly when it is communicated to the offeror. It was held in the case of Adams v Lindsell,1818 that an acceptance would be effective when the letter is posted provided it isproperly addressed and stamped.Intention to create legal relations: Contractual intention is essential for the formation ofa legal contract. The contract must be entered with the intent to create legal obligationsamong both the parties. 1.As per Balfour v Balfour 1919, domestic agreements are entered into between familymembers or relatives, whereas social agreements are entered by parties to fulfil theirsocial commitments. In Jones v Padavatton, 1969 it was stated that there is a presumptionthat social agreements and domestic agreements does not intend to create legalobligations. 2.It was held in the case of Esso Petroleum v Commissioner of Excise and Custom, 1976that commercial agreements are generally formed with the intention to create legalrelations and thus, such a presumption shall persist. These agreements are generallyentered into for business transactions.Consideration: Consideration means something in return of performance of promise. Itwas held in the case of Thomas v Thomas, 1842 that consideration is 'something of value'in the eyes of law which is given in lieu of a promise (Middlemiss, 2011). It was held inthe case of Re McArdle, 1615 that past consideration is not valid. According to the caseof Chappel v Nestle, 1960, it is not necessary that consideration is adequate, sufficiencyis enough. As per Tweddle v Atkinson, 1861 case, the contract cannot be enforced by the2

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