Contract Law and its Applications

ASPECTS OF
CONTRACT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1. Importance of the essential elements required for the formation of a valid contract..............1
2. Impact of different types of contract.......................................................................................2
3. Terms in contracts with reference to their meaning and effect...............................................3
TASK 2............................................................................................................................................3
4. Elements of contract in given business scenario.....................................................................3
5. Law on terms in different contracts by explaining..................................................................4
6. Evaluation of different terms as per given case scenario........................................................5
TASK 3............................................................................................................................................5
7. Contrasting contractual liability with tort liability..................................................................5
8. Nature of liability in Negligence.............................................................................................7
9. Explaining that a business can be vicariously liable...............................................................7
10. Elements of the tort of negligence and defences in different business situations.................8
11. Elements of vicarious liability in given business situations..................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Around the world, there are different type of laws that are being followed by the
countries and it is essential to make sure that all type of rules and regulations are followed.
Contract can be determined as the process in which two or more parties get along with certain set
of conditions and this for the aim to get benefit for all the parties involved (Heine and Kerber,
2002). All the condition or terms included in the contract should be satisfied or else it is
enforceable by law. In accordance with the present report, it is based of different case scenarios.
More specifically, it covers different type of contract in which individuals can get into. Further, it
covers different type of terms applied in law and use of exemption clause in contract. Lastly, it
also includes nature of liability in Negligence.
TASK 1
1. Importance of the essential elements required for the formation of a valid contract
In order to form a legal contract, there are different type of elements that need to be
fulfilled (Middlemiss, 2011). When these elements are not satisfied, then it can be termed as a
valid contract. With this respect, below given are the importance of essential elements for
contract:
Offer: This can be determined as the expression of interest that is developed for the
contractual obligation that is helpful enough to describe conditions and terms in a contract.
Further, it is the intention of legal compliance and contractual liability. There are conditions in
which negotiation take place in the offer that is provided by the party (Zimmermann and
Whittaker, 2000). The party that provides offer to other is known as the offerer. This element can
be understood with the help from the case of Harvey v Facey [1983] . It is essential for the
offerer to show intention for forming a contract.
Acceptance: This shows the interest and willingness of the other party for the offer made
to them. In order words, it can be stated as the expression for all the terms and conditions that are
included in contract (Danzig and Watson, 2004). In accordance with the English Law, it is
important that counter offer should be made before the contract is accepted by the offeree. In
order to understand this element, Felthouse v Bindley [1862] is one of the examples. As per this
case, Nephew did not show intention to buy the horse and so no contract was formed.
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Legal intention: Parties who accept the contract should be free of any type of mental or
physical pressure. The contract formed under such circumstances can not be considered to be a
legal contract. In order words, contract that is formed with illegal activities or actions can not be
determined to be valid contract. Offeree should be mentally and physical stable before they get
into a contract (Bonell and Lando, 2013). With this respect, Balvour v Balvor [1919 ] is one of
the case in which emotional bounding was developed towards the wife but there was not any
type of intention shown and so not contract was formed.
Consideration: As per this element, all the parties under contract should get benefited
under contract that they have formed. This is helpful enough to develop a relationship in which
individuals get mutually get benefited.
2. Impact of different types of contract
There are different type of contract in which parties can form. All these contract have
their own set of benefits. With this respect, below given are type of contracts:
Bilateral contract: This can be determined as the contract that is formed among parties
with the help of mutual exchange of promises and it also enables to develop contractual liability.
Both non compliance of actions and requirement of parties enables to develop a valid contract
and also enables to obtain legal obligation (Hall, Howells and Watson, 2012). In accordance with
the case of Brogden v Metropolitian Railway [1877], it can be determined that performance
related obligation is formed when offer and acceptance is made in a contract. When any of the
promises that are set by parties are not satisfied, then damages need to be paid to innocent party.
Collateral contract: In this type of contract, in which another contract is made in
consideration of other contract. In this context, it is important to promise contractual obligation
in the contract (Backstrom and Cooper, 2014). With this respect, case that can state this type is of
Shankilin PierLtd v Detel Products [1951].
Unilateral contract: As per this contract one of the party need to carry out contractual
obligation and other parties can act in accordance with their needs. The offerer will make offer in
public and anyone can make accept it. With this process, revocation can be made any point of
time before it is completed (Kwock, James and Tsui, 2013 ). One of the cases that enable to
understand this type of contract is Carlil v Carbolic Smoke Ball Company [1893]. As per this
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