Elements of Contract and Negligence for Business
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Added on 2020-01-21
Elements of Contract and Negligence for Business
Added on 2020-01-21
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ASPECTS OF CONTRACT ANDNEGLIGENCE FOR BUSINESS
TABLE OF CONTENTSIntroduction................................................................................................................................3Task 1.........................................................................................................................................31.1 Importance of the essential elements required for the formation of a valid contract......31.2 Main types of contracts that may be entered in the UK by individuals and businesses..41.3 Important terms required in a valid contract...................................................................4Task 2.........................................................................................................................................52.1 and 2.2 Applying the elements of contract in given business scenario...........................52.3 Evaluation of contractual terms.......................................................................................6Task 3 ........................................................................................................................................73.1 Differences between contract and tort liability................................................................73.2 Concept of duty of care and neighbour principle in reference to case of Donoghue vStevenson-.............................................................................................................................73.3 How a business can be vicariously liable........................................................................8Task 4.........................................................................................................................................94.1 Advice to Brad for his loss recovery from Charles.........................................................94.2 Elements of vicarious liability in given business situations...........................................9Conclusion................................................................................................................................10REFERENCES.........................................................................................................................11
INTRODUCTIONContractual law has great impact on the business transaction. It is an officialagreement which consists of legal aspects and provisions implied on entities involved incontract (Andrews, 2015). The parties involved in the contract are bound to comply with allbusiness contractual legislations. While formulating a contract, there are essential contractualterms and principles of tort and negligence which should be imposed on the agreement. Thereport herewith provides a complete understanding of aspects of the contractual law andnegligence in the business. Further, it will also explain that how a business can be vicariouslyliable.TASK 11.1 Importance oftheessential elementsrequiredfor theformation ofavalid contractFor a valid contract in business transaction, there are substantial elements which arerequired to be followed by the parties involved. In context to the case study, some of thecontractual terms are explained below:Offer: An offer is a promise or kind of proposal made by one company to another. Anoffer is always different from an 'invitation to treat'. With reference to the scenario, theadvertisement (made by James on an e-commerce website for the sale of HD web cameraworth £55) was just an invitation to treat (McKendrick, 2014). The concept of offer is furtherexplained with Harvey v Facey case in which there was no contract formed. In this case, itwas not proved whether the telegram sent by Facey was to be an offer or not.Acceptance: There is no valid contract unless the offer is accepted by the party towhom the proposal is made. Acceptance should be undertaken by the lawful acts andregulations. In the above stated case, Maria accepted the treat as if it was an offer.And shefurther made a 'counter offer' to James that she was willing to buy that camera only for £45.But he expressed that he would accept the camera on original price only to which Maria didnot respond. So, the offer made by James got cancelled (Beever, 2013). It depicts that aconditional acceptance is considered as a counter offer, not valid contract.Consideration:Consideration is something of value given by both parties accordingto the terms of a contract such as it makes them allow exchanging their mutual performances.According to case study, James left with no option so he had to accept her offer whichcompelled him to sell that camera worth £45 only. Here, there are no contractual relations
between James and Maria so consideration is not enforceable by law. James is responsible forhis exchange of treat.Lawful object: In order to make contractual relations, the contract should be valid andenforceable by law. In the above stated case, James did not make valid contract with Maria.So there must be legal relation between both parties while formulating a valid agreement.1.2 Maintypes ofcontracts thatmaybeenteredintheUK by individuals andbusinessesMain types of contracts according to forming, binding and enforceable by law in UKare stated below:Face-to-face contact: Face-to-face contract are those contracts which are formed byverbal conversations between two parties. This is an oral contract in which partydeclare all legal terms and provisions of agreement face-to-face. Both the parties leftwith no evident documents, moreover this contract is not considered as a conventionalcontract. Like, selling a mutual fund scheme or any insurance policy to the customeris best example of face-to-face contract. Written contract: The contract which is expressed in written form within thecontractual parties is known as a written contract. This contract should be endorsedwith all personalised documents of entities.A well drafted written contract is formedin order to minimize the risk associated with it. Moreover, it reduces the risk ofambiguity and outlined the rights and obligations of contracts clearly.Verbal contract: Verbal contracts and arguments are legally binding if an agreementis made to perform the services. It can be executed by a verbal communication viatelephones and emails. For instance, sale of property and copyright transfer are someverbal agreements.Inferred contract: A contract is said to be implied if two parties entered in anagreement from their own conduct or it may also be possible that there is existence ofmutual consent between them. There is no written record or verbal communicationbetween parties.1.3 Important terms required in a valid contractOnce the contract has been formed then it is necessary to identify important terms ofthe contract which imposed obligations on both parties (Singhvi, 2014). Some of them arestated following below:
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