Business Law and Contract Essentials

This assignment delves into the core principles of business law, with a particular emphasis on contracts. Students will analyze various aspects of contract law, such as formation, essential elements, and potential legal issues. The provided resources encompass scholarly articles, textbooks, and online legal guides that offer insights into different facets of business law and contract management.

ASPECTS OF
CONTRACT
AND
NEGLIGENCE

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Importance of essential elements require in forming a valid contract .................................1
1.2 Different types of contract and their impact ........................................................................2
1.3 Analyzing legal terms in contract with reference to their meaning and effect ....................3
2.1 Impact of different types of contract ....................................................................................4
2.2 Applying the law on terms ...................................................................................................5
2.3 Evaluating effect of different terms in contract ...................................................................5
TASK 2 ...........................................................................................................................................6
3.1 Difference between contractual liability and liability in tort ...............................................6
3.2 Nature of liability in negligence ...........................................................................................7
3.3 Explaining how business can be a vicariously liable ...........................................................7
4.1 & 4.2 Elements of tort of negligence and vicarious liability ...............................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Contract is treated as a legal agreement between two or more parties. A contract is only
valid when it contains all the necessary elements of agreements and these are offer and
acceptance, consideration which party need to paid in order to create binding relations, legal
capacity of parties to act, etc. Moreover, if agreement lacks one or more element which is listed
above then it will not be treated as a legal agreement (Palmer, 2014). On the contrary,
negotiation is considered as a process of discussing something with someone in order to make
agreement with individuals along with some major decisions.
In relation to the contract and negligence, this present report will focus on making a
better understanding about different aspects of contracts and also the lawfulness of business
terms. Further, different case scenarios are mentioned in the report which will help client in
developing a clear and extensive study regarding the aspect of contract and negligence.
TASK 1
1.1 Importance of essential elements require in forming a valid contract
The contract which is formed will be considered as valid if it constitutes all the major and
crucial elements of agreement in it. In relation to it, for making a valid contract, some important
principles which need to be followed are explained below:
 Offer- Offer is a crucial obligation for each and every contract. Further, an offer is
defined as a proposal that expresses the desire for the performance of duties and
obligations. It clearly defines the content of a contract and seeks the consent of the parties
in order to deliver the legal prospects of the contract. With reference to the case Harvey v
Facey (1893), offer can be understood in clear and precise manner. Further, an offer
generally describe the major content of a contract and also shows the involvement of
offeror in order to create a strong relationship with an offeree. Further, this shows that for
making a successful contract, involvement of minimum two parties is necessary
(Negligence. 2015). Moreover, this offer have a specific time period and it gets elapsed
when the time of the acceptance get expired or it is generally withdrawn before the
acceptance of offeree.
 Acceptance: Acceptance is the second stage of contract. Contract is considered as a valid
document if the offer made by offeror is accepted by the offeree in a same way (Jennings
and Twomey, 2010). Further, if both the parties of a contract are bounded into an
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agreement then major elements of acceptance will come into consideration and both the
parties need to follow them efficiently. These elements are:
◦ Terms of acceptance must actually match with the terms of the offer
◦ Agreement which is coming into force have to be certain for a particular thing or
event
◦ Acceptance should be communicated with the offeree. Moreover, with reference to
the case Felthouse Vs Bindley [1862], major components of acceptance will be
understood in clear form.
 Intention to bind into contractual relationship- With reference to the case of Jones v
Padavatton (1969), both the parties of contract must have an intention to enter into some
legal relationship. Further, under the legal consequences, parties should enter into an
agreement without any kind of fear and pressure. Consideration- Contract which is taking place should come into force by a valuable
consideration. Moreover, both the parties should get the equivalent benefit from the
contract either in the form of tangible or non-tangible gain (What is a contract? 2015).
 Capacity: Contract is treated as valid when both the parties of the contract are capable to
enter into a contract. Further, a person with a sound mind, stable memory and eligible age
of entering into a contract is said to be capable.
1.2 Different types of contract and their impact
Different types of contracts have been stated below in order to have proper and effective
understanding. Moreover, the type of contract is not same as per the English law because they
generally have varied meaning and effect. Bilateral and Unilateral Contract: Bilateral contracts are the contracts where parties of
agreement promise each other to do the certain acts within the legal boundation. As per
Brogden Vs Metropolitan railways (1877) case, contracts seek the mutual consent of both
the parties and frame the effective means in developing the contractual obligation. On the
contrary side, unilateral contracts are those where one party has promised to do
something, and now it depends upon the desire of other party that whether he/she wants
to act or perform according to the first party. Further, these are formed and developed on
open basis (Tvarnø, 2010).
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 Face to face and distant contract: Face to face contract is the one which is developed in
the presence of all the parties at the same place and parties of the contract accepts the
terms and conditions in front of each other to develop the final outline of contract. Unider
this type of contract, consent required is immediate and with the help of it final contract
is prepared and developed quickly. On the other side, distant contract is the one where
parties are not existing physically to form a contract and consent requires lot more time
and contract comes into force when offer and acceptance of the same is completed
accurately (Caiado and Salgado, 2010). In order to make these distant contracts
successful, parties use letters, e-mails, telephone for preparing the offer and acceptance.
 Written and verbal contract: A written contract is a contract where the contractual
obligations are efficiently written in order to create a legal obligation between two
parties. However, in case of breaching the contracts or party is unable to fulfill the
purpose of the contract, then the written proof is represented by the party about all the
give liabilities. On the contrary side, verbal contract is the one which is developed
between the two parties on verbal basis.
1.3 Analyzing legal terms in contract with reference to their meaning and effect
The different terms of contract are not that easy to be identified and also to be
distinguished as it is generally because each and every term having varied implication on the
contract (McKendrick, 2014). Some legal terms in contracts have been studied below:
 Express terms: Expressed terms of the contracts are the terms and conditions which are
discussed by both the parties efficiently before entering into a contract. These terms and
conditions are communicated both in oral and in written form. Further, there are some
basic terms on the basis of that whole contract is prepared. Some of them are:-
◦ Conditions- Conditions are considered as a major part of contract as it goes to the
base of the contract. However, if any party breaches the condition, then one person
will be on dominating side to end the contract and he/she can also claim the damages
which have been done (Torriani and et. al., 2008).
◦ Warranty- Warranty are minor terms of contract and these are not related to the
existence of the contract. Further, if warranty is breached by an of the party then
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person is entitled to claim for the damages but in this party cannot end the contract
(Zoll, 2012). Implied terms: This term automatically gets implement when parties make decision in
order to form a legal relationship. Case of Huton vs Warren (1836) 167 EG 196 is a good
example of understanding the implied term. Under this, landlord of the farm has given 6
months of notice of leaving his farm to the tenant. But tenant has requested the landlord
that till the time of 6 months he will continue his work (Faure, 2009). Here, landlord has
not given any kind of hint or sudden wordict that he will pay him allowance for the work
he will be doing but it is universally implied that person who perform work will get
rewarded.
 Innominate terms: Innominate terms are those which are neither counted among the
category of condition nor warranty. Thus, these innovative terms are majorly depend on
situations. Further, innovative terms make an effective impact on the contract and are
treated by viewing up the impact of the same.
2.1 Impact of different types of contract
Case
In the given case scenario, Ivan goes to the Todor's bookshop and there he sees a HND
books which he wants to buy. The cost of the book was £50.00. Ivan takes that particular book to
the counter for paying but Todor tells him that it is already sold to the Carl and the copy which is
in his hand is the last copy of the book. Todor said sorry to Ivan because he forgot to remove that
book from the display.
Applicability of legal provisions
A contract comes into existence when there is an offer, acceptance and consideration.
Invitation to treat is only an invitation made by seller for customers to submit their offer. From
the case point of view, the book which was kept on shelf attracted Ivan in order to have a
purchase and for that Ivan made a counter offer to purchase but this time Todor denied accepting
that offer (Warren, 2012). This situation tells that there was offer, acceptance but the counter
offer was not accepted by the seller.
Decision
In the mentioned case, there is a contractual relationship being identified between Todor's
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bookshop and Ivan. It is generally because the case showcase the presence of different elements
of contract. In this case, Todor's bookshop has placed the HND book at the display which
indicates that seller is giving offer to buyer in order to make purchase of that book. In this case,
Todor can refuse to sell that book to Ivan because display of book was just an open treat for
buyers. There was no contractual obligation from Todor side and he generally denied being in
any type of agreement just because he has already sold that book to Carl. However, if Carl
denied to purchase that book then at that time Todor can come into an agreement with Ivan and
at that time all the conditions of valid agreement would come into force.
2.2 Applying the law on terms
Case
In the given case scenario, Adam advertises a reward of £1000 for the first person for
swimming across the English Channel from Dover in UK to the Calais in France. Brian saw that
advertisement in newspaper and set himself to swim from Dover. Eventually, on the same day
when Brian was at mid channel swimming, Adam places another advertisement in the newspaper
stating that the reward is now withdrawn with immediate effect. Brian was not aware of all these
things and he continued his voyage and reached Calais.
Applicability of legal provisions
On given case study Performance of contract term is implied as each party is bound to
perform their promises according to the stipulated terms (Best and Banes, 2007). Under this, a
payment is usually made after the successful performance of the contract.
Decision
From the given case it has been evaluated that there is legal relationship between the parties
Adam and Brian. This is because, here Adam has given invitation to offer to the public by
placing the advertisement. In the given case, provisions of contractual obligations are applied
which depict that an individual cannot deny performing something if other individual has acted
as per his/her demand (Johnston, 2014). Thus, Brian is entitles to claim for the damage which is
being incur by it. However, if Brian had jumped after seeing the next advertisement of
withdrawal of reward, then Adam would have not been responsible to pay the reward.
2.3 Evaluating effect of different terms in contract
Exclusive Clause
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Exclusive clause are the clauses which are usually written down and they speak that one
part of the contract will not be responsible for certain happenings. Further, these clauses are valid
until and unless they have been properly included in the contract (Middlemiss, 2011). Further, if
there is a signed contract including the clause, this will usually have the effect of including it. On
the contrary, if there is no signed contract than there may be some printed documents or signals
posted stating the terms and conditions, then these can be included in the contract.
Applicability to the case
As per the case given in the scenario, Barry goes to the park and he sees a notice which
shows that chairs are for hire for 50p per hour. Barry pays the 50p to the local council and in
contrary he got the ticket and chair. Later, when he was sitting on to the chair, the chair collapsed
and his clothes were damaged. With the incident happened, Barry complains to the Local council
where attendant shows him a clause on a ticket which states “No liability is accepted for any
damage or injury caused by the failure of any hired equipment.”
Furthermore, there is a written contract has also being established between Local Council
and Barry. Exclusion clause are also applied to the given case as Barry has accepted the ticket
without reading the conditions which is written on same (Abbott, Pendlebury and Wardman,
2007). With the implementation of exclusive clause, Barry do not possess any authority to claim
the damage which is incurred from the local council.
TASK 2
3.1 Difference between contractual liability and liability in tort
The difference between the contract liability and tort liability has bee studied below:
Point of
difference
Contractual liability Tort Liability
Meaning
Contract law is the body of rules which
governs the contractual agreements
between different individuals and
companies. A contractual liability
outlines the duties and responsibilities
which one person has to follow in order
to enter in an agreement
Tort law governs the situations and
where one person has harmed or
injured by another person not
intentionally.
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Damage
relating
decisions
In contractual liability, the decision with
respect damages which is being incur by
parties is being taken on the basis of
formed contract (Hendy and et.al.,
2011).
In Tort Liability, decision with respect
to damage is taken by court of lord. It is
because in the particular liability, the
provisions of all implied terms are
given.
Restrictions
Contract liability occurs when any one
party of contact is unable to fulfil the
contract duty in effective manner.
Parties are also liable for their act.
Tort liability defined as a failure to use
reasonable care which results in harm
of another party. Here all those who are
associated direct or indirect is treated as
liable (Ahmad, 2012).
3.2 Nature of liability in negligence
Case-
By considering the case scenario, Ben is owner of Regent Hotel in Wembley. Roger a
dishwasher complaining regarding the skin rash which has formed for long periods of washing
the utensils. Ben the owner of Hotel has provided the rubber gloves but employees hardly uses
them.
Application of provision
In the past, the tort of carelessness has taken place just in restricted circumstances as
mischances were conducted from employees of their own even after getting so many facilities
from the hospitality (Millon, 2009). Further, some major elements of law of negligence are Duty
of care, damage and Breach of duty. If these are proven up by the party, then the negligence
claim will become successful.
Decision
By understanding case study precisely, it is evaluated that Ben is certainly not liable to
Roger under the law of negligence. Roger has not consummated his duty of care by wearing the
gloves provided by the Ben and he has breached up the duty due to his own fault.
3.3 Explaining how business can be a vicariously liable
Vicarious liability is treated as secondary liability which arises within doctrine of law.
This liability shows that employer will be liable for the act which is being done by their
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employees. However, there are various conditions are applied to given form of liability.
Case-
According to case study, Colin is head chef of Hotel and he is getting annoyed up with
Roger because of his attitude and anger. Due to this, Colin knocks him with a frying pan and he
gets unconscious by the incident. Further, Colin tried to take him to the hospital but he refused to
go.
Application of provision
As per the vicarious liability, employer is generally responsible for all the omissions and
faults of their employees. In business organizations, employers are generally liable for acts and
omission of their employees, as the incident took place within working hours in business
enterprise (Shaw and Shaw, 2010).
Decision
Roger has no liability to sue Colin because Colin and Ben tried their best to take him to
the hospital but Roger denied. As per vicarious liability, employer is responsible for the damage
so incurred. Therefore, Colin was compensating and correcting him with the treatment but Roger
did not accept. So, Roger having no chance to sue Colin.
4.1 & 4.2 Elements of tort of negligence and vicarious liability
Occupier liability is considered as a part of Tort Law as this liability shows that owner of
firm tend to reside in duty of care position wherein it plays the role of protector.
Case
Acceding ton the scenario, Mark who is permanent guest of Regent hotel decided to take
a swim. However, due to the lack of visibility at pool side, Mark has ignored the warning sign
which hospitality has placed and as the result of it he got injured and had broken down his
expensive designer glasses.
Application of provision
From the case it is identified that Occupier liability, 1957 represents that the owner of
hospitality will be held responsible for any type of injury which happens within the boundary
(Forstenlechner and Lettice, 2008). Thus, it is the duty of occupier that he/she should make all
kind of measures with an objective to ensure safety and security of clients who uses the services.
Decision
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Here Mark cannot put claim against the hotel in context of losses which is being incured.
It is due to the presence of exclusion clause. Thus, hotel will not be consider as liable for the
damage of Mark.
Apart from it, there are four different elements of tort of negligence and the detailed
explanation of the same has been discussed below:
 There need to be presence of duty of care
 Duty must be breached by the respective person
 Monetary losses must have been caused to the party
Apart from it, vicarious liability is also part of tort law and here the firm or individual
will be consider as vicariously liable for their act if following elements are satisfied:
 Must have employer and employee relationship
 Injury so happened must be within the course of employment (Krishnan, 2011).
CONCLUSION
This present report creates an effective impact on the contractual liabilities of the
contract. This report further showcase a clear analysis of various elements of contracts which
helps in developing a valid contract. Further, the in-depth analysis of terms of contracts helps in
evaluating the factors which helps in creating a wide impact on the legality factor of the contract.
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REFERENCES
Journals and Books
Abbott, K., Pendlebury, N. and Wardman, K., 2007. Business Law. Cengage Learning EMEA.
Ahmad, Z. S., 2012. Women, business and the law: measuring legal gender parity for
entrepreneurs and workers. Equality, Diversity and Inclusion: An International Journal.
31(7). pp.681 – 689.
Best, A. and Banes, W. D., 2007. Basic tort law: cases, statutes, ad problems. Aspen Publishers
Online.
Caiado, V. N. and Salgado, M. S., 2010. Contract Management and its Influence Over Design
Quality. Architectural Engineering and Design Management. 6. pp. 153-157.
Faure, M., 2009. Tort law and economics. Edward Elgar publishing.
Forstenlechner, I. and Lettice, F., 2008. Well paid but undervalued and overworked: The highs
and lows of being a junior lawyer in a leading law firm. Employee Relations. 30(6).
pp.640 – 652.
Hendy, J. and et.al., 2011. Business Law. Taylor & Francis.
Jennings, M. and Twomey, D., 2010. Business Law: Principles for Today's Commercial
Environment. 3rd ed. Cengage Learning.
Johnston, D., 2014. Peter Roberts, Petroleum Contracts, English Law and Practice. The Journal
of World Energy Law & Business. 7(2). pp.175-177.
Krishnan, T. N., 2011. Understanding employment relationship in Indian organizations through
the lens of psychological contracts. Employee Relations. 33(5). pp. 551–569.
McKendrick, E., 2014. Contract law: text, cases, and materials. Oxford University Press.
Middlemiss, S., 2011. The psychological contract and implied contractual terms: Synchronous or
asynchronous models?. International Journal of Law and Management. 53(1). pp.32-50.
Millon, D., 2009. The single constituency argument in the economic analysis of business law.
Emerald Group Publishing Limited. 24. pp.43 – 60.
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.
Shaw, J.A.J. and Shaw, J. H., 2010. Business education, aesthetics and the rule of law:
cultivating the moral manager. Social Responsibility Journal. 6(3). pp.469 – 486.
Torriani, D. S. and et. al., 2008. Hedging with weather derivatives to cope with climate
variability and change in grain maize production. Agricultural Finance Review. 68(1). pp. 67
–81.
Tvarnø, C. D., 2010. 10 Law and regulatory aspects of public–private partnerships: contract law
and public procurement law. International Handbook on Public-Private Partnership.
pp.216.
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Warren, J. M. C., 2012. Law and the Built Environment. Property Management. 30(2). pp.209-
210.
Zoll, F., 2012. The binding power of the contract: Protection of performance in the system of the
Common European Sales Law. Journal of International Trade Law and Policy. 11(3).
pp.259 – 265.
Online
Negligence. 2015. [Online] Available at: <http://e-lawresources.co.uk/Negligence.php>.
[Accessed on 15th December 2015].
What is a contract? 2015. [Online]. Available through:
<http://www.lawhandbook.org.au/07_01_01_what_is_a_contract/>. [Accessed on 15th December
2015].
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