Aspects of Contract and Negligence for Business : essential elements of a valid contract

ASPECTS OF CONTRACT
AND NEGLIGENCE IN
BUSINESS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1. Importance of essential elements of a valid contract..............................................................1
2. Impact of different types of contract.......................................................................................2
3. Analyzing Terms of Contract..................................................................................................3
TASK 2............................................................................................................................................4
4. Case Scenario..........................................................................................................................4
5. Impact of different terms of the contract.................................................................................4
6. Case Scenario..........................................................................................................................5
TASK 3............................................................................................................................................6
7. Contrast between liability in tort and contractual liability......................................................6
8. Nature of liability in negligence..............................................................................................7
9. Vicarious liability....................................................................................................................8
TASK 4............................................................................................................................................9
10. Elements of tort of negligence and defences in different business situations.......................9
11. Elements of vicarious liabilities in given business situation.................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
An agreement between two parties which is binding by law and intends to create legal
obligation is known as a contract. For an agreement to be a valid contract, it should constitute
some essential elements - offer and acceptance, consideration, legal capacity of parties,
contractual intention and consent. The first requisite is that parties should reach an agreement
and agreement will be reached when the offer made by one party is accepted by other. This
report explains the importance of essential elements in formation of contract and impact f
different types of contract.
Tort law is a set of laws that seeks to provide remedies to the person for wrong
committed against them (Vogenauer, 2013). It deals with the wrongful actions of a person or an
entity which causes injury to another individual, property or reputation. This report compares
and contrasts liability in tort with contractual liability. Further, it also focuses on the nature of
liability in negligence. Lastly, it explains vicarious liabilities of a business. In this report, we will
apply and understand impact of contract law and tort law in different business scenario.
TASK 1
1. Importance of essential elements of a valid contract
A contract is an agreement between two parties which is enforceable by law and intends
to create contractual obligations. An agreement becomes a valid contract when it contains
following essential elements :
1. Offer : An expression of willingness to enter into a contract is known as offer. It is made
with the intention to legally bound the person who has accepted the offer. Intention
should be clear at the time of making an offer as per case of Harvey v Facey, 1893. An
offer may be expressed or implied i.e. by conduct. It can be addressed to a single person,
specified group of persons, or to whole world at large. An offer should be distinguished
from an invitation to offer (Hondius and Grigoleit 2011). The intention at the time of
making offer determines whether it would be considered as an offer or an invitation to
offer. Examples of invitation to offer includes display of goods on a shelf in a self-service
store, advertisements etc.
2. Acceptance : An offer is said to be accepted when the party to whom offer was made
gives his assent. An offer must be accepted as per the terms of agreement and all the
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