Report on Aspects of Contract and Negligence for Business

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Aspects of Contract and NegligenceforBusiness
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1LO 1.................................................................................................................................................11.1 Elements for a valid contract............................................................................................11.2 Different types of contract................................................................................................21.3 Terms in contract..............................................................................................................3LO 2.................................................................................................................................................32.1 Applying the elements of contract into the given scenario..............................................32.2 Consequences of the below classified terms....................................................................42.3 Effect of different terms in the given case study..............................................................5LO 3.................................................................................................................................................63.1 Liability in tort with contractual liability.........................................................................63.2 Nature of liability in negligence.......................................................................................63.3 Vicarious liability of a business.......................................................................................7LO 4.................................................................................................................................................74.1 Applying elements of tort and negligence into the given scenario..................................74.2 Elements of vicarious liability in the given case study....................................................8CONCLUSION................................................................................................................................8REFERENCES................................................................................................................................9
INTRODUCTIONThe present report is in regard to comprehensively brief out the needs and importance ofcontracts. It is in order to survive into today's dynamic environment of businesses where peopleare often adopting changes in their lifestyles with an equivalent alteration in needs. A contract insuch cases works as a formal agreement between the interested parties for binding theirundisputed deal. It is mostly utilised as a tool to defend the resources of a business firm with anagreement among two or more parties. It basically plays the role of a promissory note with aprior responsibility of handling any disputes or issues raised among the involved parties at times(Adamson and Morrison, 2011). A contract is made up of an agreement with a legalconsideration and a major involvement of law in it. Interested parties are required to strictlyfollow the bidden rules as well. The present report showcases certain essential components of avalid contract with its varied elements and their types. It later defines the negative outcome ofneglecting a contract with their various impacts on its concerned parties.LO 11.1 Elements for a valid contractA valid contract is held by certain crucial elements of constitution with a confinedstandard of considering those factors. It can exist for many reasons like either as a contract ofmarriage, due to any business purpose or it can be a contract of employment as well. Therefore,it is the simplified regime of involving two different parties to bind into a legal relationship withan equivalent intention of both the parties (Adriano, 2013). Thus, a valid contract is formed bythe below mentioned components of-Invitation-It is the foremost element of a valid contract which is slightly different frommaking offers. It can be usually seen into shops or market where the seller displays hisproducts for certain prospectus buyers. However, it should be an acceptable invitation forthe interested parties for getting involved into the specified contract.Offer-It is another facet of the previous term in which a definite offer is acknowledgedby the offerer for interested parties with some binding rules of his own. However, anoffer consists of a defined time period for another party to accept it. It can be diluted incertain circumstances like on decease of the offerer, it gets rejected by another party orthe time of acceptance gets over.1
Acceptance-It is the next stage where the offer or invitation has been accepted by anotherparty with an agreed consent of both the parties (Arumugam and et.al., 2010). Therefore,it is important for the agreed party to timely inform the offerer about his acceptance.Consideration-It works as an evidence of showing the mutual consideration of both theparties. It can be recognised either as an exchange of money for purchasing goods andservices of an enterprise or some other sort of dealing which relates to the transaction ofproperty, etc. Hence, it depends upon the nature of an offer and invitation whichshowcases various intents.Capacity-It defines the ability of both the parties to participate into a valid contract andthus refers to their age and mental capability to indulge into the agreement. It is becausethere are certain dissimilar legal procedures to tackle indifferent people who are mentallyincompetent and face challenges for entering into an ordinary contract.Case Study-Harvey v FaceyIn this particular scenario, Harvey made an “offer” with an intention of buying a penfrom Facey and asks her to telegram the lowest cost price to her. To which, Facey replies with a“consideration” amount of 900 dollars (Clauwaert and Schomann, 2012). Harvey thus; acceptedthe cost stated by Facey and as a result, both the “capable” parties bind into an agreed contract.1.2 Different types of contractA contract is made up of various constraints with a related approach of binding theinvolved parties by its intended rules and regulations. However, it is a modern form of contractwith a dissimilar concept of variations into its formation. Earlier, a legal token was mandatory tobe applied on the contract by its builder which is now totally revolved by the creation of bothoral and written forms of a contract (Colino, 2011). Therefore, below are some other specifiedkinds of contract-Unilateral and Bilateral contract-Unilateral contract is a single sided contract wherethere is a primary existence of an offerer. Therefore, it is basically an offer which isopenly made for the public with an individual's proposal comprising certain one sidedpromises. For example, an advertisement for sale of property which is primarily openedfor all interested parties with some of its definite terms and conditions. On contrary tothat, a bilateral contract is a binary sort of contract with an equal participation of both the2
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