Contract Liability vs. Tort Liability

The assignment delves into the comparison between contractual liability and tort liability. It requires a thorough analysis of the distinct characteristics, legal frameworks, and practical implications of each type of liability. Students are expected to demonstrate an understanding of key concepts such as breach of contract, negligence, and vicarious liability, while highlighting the differences and potential overlaps between these areas of law.

Aspects of Contracts and
Negligence for Business
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Essential elements for the formation of contract and their importance.................................3
1.2 The main types of contracts and their impact........................................................................3
2.1 Apply various elements of contracts......................................................................................4
TASK 2............................................................................................................................................4
1.3 / 2.2 Terms on contracts their meaning and impact of such terms reference to the case
above............................................................................................................................................5
2.3 The effect of expressed and implied terms using the above case..........................................5
TASK 3 ...........................................................................................................................................5
4.1 Applying elements of tort of negligence and possible defences from different cases...........6
3.1 Contrast nature of liability in tort and contract......................................................................6
3.2 Nature of liability in negligence with reference of Donoghuw v Stevenson 1932................6
TASK 4............................................................................................................................................7
4.2 Discuss whether Bill is liable for negligence and if XYZ dairies can be held vicariously
liable.............................................................................................................................................8
3.3 ...............................................................................................................................................8
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9
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INTRODUCTION
In order to formulate a valid contract among the parties government enforce different
laws and regulation that need to be abide by parties (Blum, 2007). In case if parties are not
following the rules and regulations that are abide by the government then parties are not in the
position to formulate the valid contract. Presently, the report focuses on different case scenarios
that will support in understanding the essential elements that are required in the business to
formulate a valid contract. In addition to this, report will also highlight the principles of liability
in negligence in business activities.
TASK 1
1.1 Essential elements for the formation of contract and their importance
For the constitution of valid and enforceable written agreement there are various aspects
as well as elements that are mandatory to be satisfied that is- Offer- Offer is consider as proposal of commitment that is provided by party to other. It
must be specific and achievable to execute. However accordant with the case of
Pharmaceutical Society of Great Britain v Boots, invitation to treat does not have legal
status of offer because it is merely a way of showing intention to create contractual
relationship (Elements of Law of Contracts, 2012).
 Acceptance- It is consent given by the party to whom offer was made. It must not be
supported by significant modification or condition else it will consider as counter offer
instead of acceptance.
On the other hand, as per the case scenario invitation to treat is different from the offer as
offer that is accepted by the parties will results in biding contract on the other hand, invitation to
treat in the scenario is that offer is not been accepted (Cross and Miller, 2011).
1.2 The main types of contracts and their impact
Face to face contract
This kind of contract is mainly selected by the individual or business to achieve the day
to day requirement and activities. This type of contract is merely formed through verbal
communication (Giliker, 2010). Thus, all the parties in face to face contract is physically present
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while discussing or negotiating the contractual terms. The impact of face to face contract is that
parties quickly respond to the offer provided by the party that results in taking quick decisions.
Written contract
This is almost formal agreement that is commonly used by business enterprise. Under this
type of contract business prepares the written deed and agreement that define the specific
condition and terms that must be performed by the agreeing parties (Haarala and et.al., 2010). In
addition to this, in the situation if party has not delivered the satisfactory performance then the
party is liable to pay damages and remedies to aggrieved party.
2.1 Apply various elements of contracts
From the above scenario, there are various elements of a contracts that is there is offer
provided by Bill to Cathy and the valid acceptance of the offer by Cathy. However, in return Bill
has provided counter offer that he would accept offer in £90000. but Cathy has not replied to the
offer provided by Bill.
Thus, from the above situation it can be consider that the contract between the Bill and
Cathy is not valid because first Bill has offer to Cathy but she counter offer it by another terms
(Hodgson and Lewthwaite, 2001). Thus, the first offer provide by Bill has been revoked and it is
not being considered as valid contract.
TASK 2
Case Scenario,
The case scenario states that opera singer Joyce DiDonoto entered into an contract that
states that she will perform for 3 months for the reputed hall company. But she become ill before
the opening night and was unable to perform for the four days. Thus, company replaces the opera
singer. Afterwards, she enters into the contract for the another company and become ill and
missed the rehearsal. Thus, again company replaces the signer with another and Joyce sued for
the breach of contract.
Another case state express and implied terms that is parties entered into an agreement
hwere Scammell supply van for £286 on hire purchase for the 2 years and Ouston was to trade in
his olf van £100. with the certain disagreement Scammel refuses to supply the old van. On the
other hand another case state that claimant has planted corn and barely on the field. Before the
field was harvested he was terminated from the field. Thus, the claimant has propose bill to
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defendant for their services and cost of seeds spent on the farm. Therefore defendant refuses to
pay as nothing was stated in the tenancy agreement.
1.3 / 2.2 Terms on contracts their meaning and impact of such terms reference to the case above
There are different terms that are imposed within the contract so that parties to the
contract must fulfill the terms to render adequate performance (Nysten-Haarala, Lee and Lehto,
2010). Basically there are two terms within the contract that is- Expressed terms- These are considered as those terms on which parties to the contract
mutually agrees upon and parties are required to perform activities accordant with the
impose terms in the written agreement. The expressed terms mainly include condition,
warranties as well as Innominate terms.
 Implied terms- These are the terms that are impose by the court of law or legislation that
need to be abide by the parties who are agreeing to formulate the valid contract (Palmer,
2014). The implied terms are not expressly stated they are inserted by the customers.
2.3 The effect of expressed and implied terms using the above case
From assessing the above cases there were expressed and implied terms in the contract
that is Scammel has entered into the contract for supplying the van to Ouston thus, due to
disagreement Scammel refuse to supply van. Thus, it has been clearly stated that both the parties
have entered into the contract.
On the other hand, there were implied terms entered into the tenancy agreement by the
customs and court of law that is claimant is being eligible to claim for their services that they
renders on the farm by planting corn and Barley seeds in the field (Sweet and Schneier, 2012).
TASK 3
Case Scenario,
As per the case scenario Albert wishes to rent flat from Brad and has provided all the
accountant's detail. Brad has provided the information to Charles with reference to Albert's
financial position. However, Charles got confused Albert with the other client and has provided
positive review regarding their financial position. As, in the situation Albert was heavily
indebted. On the statement provided by Charles, Brad has rented his flat to Albert. After
sometimes he escaped by making arrear.
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4.1 Applying elements of tort of negligence and possible defences from different cases
From the above statement Brad is in the position to sue Charles for their neglectful
misstatement. As, accountant has recommended Albert as tenant by mistaken with the other
client (Appleman, Appleman and Holmes, 2014). However, its the duty of Charles to take care
regarding their duties that he must review the financial position of Albert so that landlord can
take effective decisions. Therefore, the careless attitude results in breach of duty. There are
following defenses that support the defendant not to provide damages for any problem that is-1. Volenti non fit injuria- It is situation where applicant by their own is in the situation that
results in arising risk of harm.2. Contributory negligence- This defense is applicable in the situation where parties
contributes to the neglectful action (Collins, 2003).
3. Ex trupi causa- This defense states that negligent action performed by tortfeasor is
justified in nature.
3.1 Contrast nature of liability in tort and contract
Key Basis Contractual liability Tort liability
Reason for liability The contractual liability arises
when the performance of
parties are not accordant with
the contractual agreement.
The nature of Tort liability
arises when the duty is not
performed by the parties and
results in causing injury to any
of the party.
Decisions Under contractual liability all
the decisions are taken on the
basis of reviewing contractual
agreement and terms
(Ramanathan, 2014).
In tort liability the decisions
are taken by the court through
reviewing the injury that is is
caused to the party.
3.2 Nature of liability in negligence with reference of Donoghuw v Stevenson 1932
Liability is termed as social control that is enforced by the court in the condition where
party has not rendered the adequate performance accordant to the contractual terms that results in
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occurring injury or harm to the innocent parties (Scott, 2007). On the other hand, negligence is
being defined as misconduct or wrong doing under which parties are unable to take care
regarding their duties and outcome in injury. In order to understand the nature of liability in
negligence the case of Donghue v Stevenson [1932] AC 562 is being referred. Under the nature
of liability there are different principles that is-
 Duty of care: The foremost principle is that individual while performing their duty must
take care so that it may not results in any kind of injury (Spindler, 2011). As per the case
precedents of Donghue v Stevenson, Donoghue went to cafe with friend and have ordered
ice-cream with beer. After completing the half beer she poured rest of the beer and find
decomposed snail emerging out of the beer. Thus, in such situation Stevenson
manufacturer of beer must take care regarding their activities while producing beer to
avoid the negligence.
 Breach of duty: Another principle is breach of duty under which party fails to meet their
duty and results in causing injury to the party. As per the case of Donghue v Stevenson
decompose snail from the beer represent that Stevenson has breaches their duty (Volokh,
2010).
 Causation: This principle of negligence states that the key reason for the harm or injury
must be the neglectful or wrong activities performed by the party. With reference to the
case of Donghue v Stevenson the injury occurred by the in taking the beer therefore the
Stevenson is duty-bound to pay for the injury.
 Forseeability: This principle states that the occurred damages must be predictable from
the activities that are performed by the tortfeasor.
TASK 4
Case scenario,
1. Bill a local milkman has engaged 14 year boy with him to deliver the milk. Bill has told the
boy that they could keep the secret with themselves that the boy works for Bill in delivering the
milk. XYZ dairies become aware of hiring 14 year old boy but have not done anythings. As, Bill
was delivering milk his careless driving has injured the boy.
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2. The owner of vintage vehicles museum has asked his friend to drove Vintage bus to
Barnstable where he was taking part in the bus rally. Friend drove the car negligently and result
in damaging the car.
4.2 Discuss whether Bill is liable for negligence and if XYZ dairies can be held vicariously liable
From the above case scenario, yes XYZ dairies is held vicariously liable in the situation
as they was aware that Bill has hired the under age boy in delivering the milk and they have not
been taken any action regarding the act (Vicarious Liability, 2013). On the hand, Bill is also
liable for the negligence action as he has hire a 14 year boy that is illegal in the eye of law.
3.3
As per the case scenario, friend who drove the vintage care was not employed at the
Vintage Vehicles Museums thus, in such situation owner who has allowed the friend to drove the
car is liable for paying the damages. By hiring the friend to rove the car they establish the
relationship of principal and agent thus, the owner is liable for the damages to the vintage car.
CONCLUSION
The aforementioned report has clearly concluded that for formulating the valid contract it
is essential for the parties to focus on various elements that support them in formulating valid
contractual agreement in the eyer of law. The report has also concluded that there are different
among the nature of contractual liability with the tort liability.
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REFERENCES
Books and Journals
Appleman, J. A., Appleman, J. and Holmes, E. M., 2014. Excuses for Nonpayment and Defenses
to Actions for Premiums. Appleman on Insurance Law and Practice.
Blum, A. B., 2007. Contracts: Examples & Explanations. Aspen Publishers.
Collins, H., 2003. The law of contract. Cambridge University Press.
Cross, F.B. and Miller, R.L., 2011. The Legal Environment of Business: Text and Cases: Ethical:
Text and Cases : Ethical, Regulatory, Global, and Corporate Issues. Cengage Learning.
Giliker, P., 2010. Vicarious liability in tort. Cambridge University Press.
Haarala, N. S. and et.al., 2010. Flexibility in contract terms and contracting processes.
International Journal of Managing Projects in Business. 3(3). pp. 462-478.
Hodgson, J. and Lewthwaite, J., 2001. Law of Torts. Blackstone.
Nysten-Haarala, S., Lee, N. and Lehto, J., 2010. Flexibility in contract terms and contracting
processes. International Journal of Managing Projects in Business. 3(3). pp.462 – 478.
Palmer, C. R., 2014. Common law environmental protection: the future of private nuisance, Part
I. International Journal of Law in the Built Environment. 6 (1/2). pp.21 – 42.
Ramanathan, T., 2014. Law as a Tool to Promote Healthcare Safety. Clinical Governance: An
International Journal. 19 (2).
Scott, M.D., 2007. Tort liability for vendors of insecure software: Has the time finally come. Md.
L. Rev., 67, p.425.
Spindler, J.C., 2011. Vicarious liability for bad corporate governance: Are we wrong about 10b-
5?. American law and economics review. pp. 026.
Sweet, J. and Schneier, M. 2012. Legal aspects of architecture, engineering and the construction
process. Cengage Learning.
Volokh, E., 2010. Tort Liability and the Original Meaning of the Freedom of Speech, Press, and
Petition. Iowa Law Review. pp. 10-15.
Online
Elements of Law of Contracts. 2012. [pdf]. Available Through:
<http://www.londoninternational.ac.uk/sites/default/files/programme_resources/laws/
ug_subject_guides/elements_law_contract-subjectguide4chapters.pdf>. [Accessed on 24th
April 2016].
Vicarious Liability. 2013. [Online]. Available Through: <http://legal-
dictionary.thefreedictionary.com/Vicarious+Liability>. [Accessed on 24th April 2016].
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