Contract Law and its Elements

This assignment delves into the core principles of contract law. It examines essential elements like offer, acceptance, consideration, and intention to create legal relations. The document further discusses types of contracts, common provisions, and the legal implications of breaching contractual obligations. It utilizes scholarly sources and online resources to provide a comprehensive overview of contract law concepts.

Aspects of Contract and
Negligence for Business

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
AC 1.1 Element of contract.........................................................................................................3
AC 1.2 Type of contract..............................................................................................................5
1.3 Term of contract....................................................................................................................6
TASK 2............................................................................................................................................7
2.1 Element of contract...............................................................................................................7
2.2 law of term............................................................................................................................8
2.3 different term.........................................................................................................................9
6. Case related to term...............................................................................................................10
TASK 3..........................................................................................................................................11
AC 3.1 difference and similarities between contract liabilities and negligence liabilities.......11
AC 3.2 Negligence liabilities....................................................................................................11
AC 3.3 Doctrine of Vicarious Liability.....................................................................................12
TASK 4..........................................................................................................................................12
AC 4.1 Element of Tort Of Negligence....................................................................................12
4.2 Vicarious liabilities.............................................................................................................13
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
The contract and negligence act is very importance in every type of business because it
determines right and duty of each party in contractual relationships. Further, this legislation is
useful in every type of industries as it helps to maintain fair internal environment. Furthermore,
every commercial industry use contractual element and term for purpose of valid legal
relationships (Li, Zhou and Zhang, 2015). Along with, negligence act is obligated to parties if
anyone breaches standard of law in unintentional manner. In this, present report states about
contract and negligence provision link with business scenario. Further, all essential provisions
are exhibited and attached with legislations. Along with this, types of contract have also been
mentioned in this report, which shows parties option for contractual relationships (Vagts, Koh
and Buxbaum, 2015). At last, highlighted and pinpointed area is also mentioned which is
commonly applied across every industry.
TASK 1
Situations
Peter Abraham is looking to establish a self-employed business related to building
contractor. Further, he has little knowledge about contractual term and provision so he seeks
advice:
AC 1.1 Element of contract
 Offer – It is a beginning of every contract as is necessary for every contractual person to
from for legal contractual relationship (Fayezi, O'Loughlin and Zutshi, 2012). Further,
offer should be possible, moral and legal. On other hand, it a formal expression in front
of another person for specific work. Therefore, it must be noted that offer is different
from invitation. Therefore, consumers are required to make offer with Peter Abraham for
making contractual relationship.
◦ Offer to treat - The main purpose here is to invite offer from other parties (Dixon and
et. al., 2013). Further, offer for invitation is not obligated to Peter Abraham if any of
the consumer made it by seeing offer to treat.
◦ Impact – offer is necessary for every contract.
◦ Case - Carlill v Carbolic Smoke Ball co [1893] States that is offer is made with fair
intention, then it will not beliable to contractual parties.

 Acceptance – It is a second stage for formation of contractual relationship. Further, when
offeree agreed on all stated conditions and term which is made by offeror than it is called
acceptance but proper communication must be necessary to offeror for consent
(Checkland, McDonald and Harrison, 2009). So when Peter Abraham agreed on
consumer offer, then it becomes acceptance. But, contract provision states that
contractual communication acceptance must be same as offer communication. Apart from
this, Peter Abraham can be free from their contractual liability by making communication
to consumer.
◦ Impact – Offer become agreements if another party accepts it.
◦ Case - Entorres v Miles Far East [1955] state that acceptance become effective if it
is properly communicated.
 Consideration – It should be something in exchange of something (Haarala, Lee, and
Lehto, 2010). Further, as per the contract act states that consideration must be adequate in
eyes of law. In addition, it is not necessary for anything in exchange of something.
Moreover, it may be cash or kind as stated in contractual agreements. So that Peter
Abraham has right to decide construction contract price as their convenience and actual
cost. Where construction price is consideration for Abraham (Nystén-Haarala, Kujala and
Nuottila, 2015). On other hand, construction work is a consideration for consumer. But it
must be moral, legal and possible otherwise it is not formed as in legal relationship.
◦ Impact – Consideration is liable to both parties for enforcement of contract.
◦ Case - Chappell v Nestle [1960] case states that consideration must be sufficient, as
it is not treated to be anything.
 Capable – Parties of contract must be capable as mentioned in state provision of contract
legislation (Appleman, Appleman and Holmes, 2014). Further, they must not be minor,
alcohol drunk or incapable to understand each term and conditions. Otherwise, contract
will be treated as void ab-initio. So, Perter Abraham and consumer must be capable to
understand of whole contract and also be capable to fulfil terms and conditions.
◦ Impact – Contract cannot be enforced if parties are not capable to perform contractual
element.
◦ Case - Bank of Credit & Commerce International v Aboody [1990] case states
that contract become voidable if it consists of undue influences.

 Intention – Intention of contractual parties must be legal and shows both parties consent.
Otherwise, it does not form legal relationship (Bharath and et. al. 2011). Further,
intention of parties must not consist undue influence, mistake, misrepresentation etc.
Concerning this, Peter Abraham and consumer intention must be legal for formation of
contract.
◦ Impact – Legal intention must be necessary for enforcement of contract.
◦ Case - Jones v Padavatton [1969] States that domestic contract can not be enforced
in court because it does not form legal relationship.
 Privity – It is a doctrine, which states that only contractual parties has right to claim for
enforcement of contract (Segerson and Miceli, 2007). Further, third parties cannot claim
for enforcement of legal agreement. In concern with case, only Peter Abraham and
consumer can claim on each other for performance of contract in legal manner.
AC 1.2 Type of contract
 Face to face contract – When contractual parties made offer and acceptance as well as
decided contractual term at similar place and time-period then, this type of contract is
treated as face-to-face contract. There is physical existence, which is required for forming
contractual relationship (Ayoubi and Massoud, 2012). This type of contract is commonly
performed at marketplace. Furthermore, this type of contract either may be written or
verbal in nature.
◦ Impact – Contractual relationship has been made fair because parties physically exist
with each other.
 Written contract – Both parties made offer and acceptance in written mode by using
paper or electronic medium (Li, Zhou and Zhang, 2015). Moreover, this type of contract
is the best as evidence for prove will be in front of court if any dispute arises.
Furthermore, parties can easily enforce whole contract as all term and conditions are
written properly in contractual agreements and signed on agreement letter as well. This
can be used as strong evidence and enforced easily in court.
◦ Impact – It is a strong evidence for enforcement of contract.
 Distance contract – Parties made their contractual relationship at different place. Further,
they completed these formalities either by using electronic or postal mode. Moreover, it
is regulated by selling and distance rules and regulations (Vagts, Koh and Buxbaum,

2015). Further, in UK verbal contract is not valid so that if parties made contractual
relationship by using verbal communication mode than they are required to convert in
written form within specific time period. In concern to this, Peter Abraham makes
contract with consumer by using electronic mode or postal mode. It also validates by
regulating selling and distance regulations.
◦ Impact – contract can be formed by maintained distance.
1.3 Term of contract
 Condition – It is stated in contract agreement expressly and signed by both contractual
parties. It is an importance part as whole contract is based on conditions (Fayezi,
O'Loughlin and Zutshi, 2012). Moreover, condition is treated as major term because it
influences whole contract. Furthermore, in case of breach of conditions, it gives right to
innocent parties to breach whole relationship. Along with this, it entitles to demand
compensation to injured party.
◦ Impact – Injured party has right to breach whole contract as well as demand
compensation.
◦ Cases - Poussard v Spiers (1876) this case supported above term fairly.
 Warranty – It is not state expressly in contractual agreements because of which less
importance prevails in legal relationship (Dixon and et. al., 2013).It is not the influence of
contract relationship because is covered in minor term category. Thus, it does not give
right to parties for breach of whole relationship in case minor term has been breached.
◦ Impact – Injured parties has right to demand only compensation in case of breach of
this term.
◦ Cases - The case of Bettini v Gye 1876 supported above statement.
 Innominate term - Sometime it is hard to determine that which term is a condition and
which is warranty (Checkland, McDonald and Harrison, 2009). Further, contract act
gives right to court for determined term by analysis of actual situations. Thus, court
examines each term stated in contract agreement (Haarala, Lee and Lehto, 2010) and link
with parties interest. Further, if interest of party is affected in higher degree then it is
treated as condition. On other hand, if any term is less affected to any parties’ interest,
then court states it as warranty even it is near to condition term.

◦ Impact – Court is not obligated to give their decision on parties stated term. Further, it
has right to change their decision on the basis of parties injury.
◦ Cases - Lombard North Central v Butterworth [1987] case supported above statement
fairly.
 Exemption clause – known as exclusion clause, which is stated in contract agreement
with terms (Nystén-Haarala, Kujala and Nuottila, 2015). Further, main purpose of
exemption clause is to reduce the liability, which arise from breach of contractual term.
◦ Impact – It reduces the legal liabilities of one of the contractual parties by non-
compliance of term in contract.
◦ Cases – The case of Thornton v Shoe Lane Parking [1971] supports above statement.
TASK 2
2.1 Element of contract
Case scenario related to Agreement
Carol sees an advertisement which states “For sale: a very nice brown leather couch,
almost new, £600”. Along with the advertisement, there was a photo and whole contract
information. So Carol dropped an email to online company to buy such posted item.
In this case, carol sees an advertisement in Gumtree and decided to buy. There is no
contractual relationship been made. It is because of state information are invitation to treat in
tread of offer. On other hand, intention of online company has not expressly declared..
 Invitation to treat – In this case carol see an advertisement on internet which consist term
conditions and photo of product (Bharath and et. al. 2011). So that it is to be noted that
advertisement is cover in to invitation to treat which main purpose is to invite offer from
another person. Thus, if any person reply positive by seeing invitation to treat. Then such
reply is treated as offer instead of acceptance. So that carol gives their consent by
dropping mail is just offer (Segerson and Miceli, 2007). Which is not obligated to online
company.
 Intention – In this case, online enterprise not shows their willingness to sells item to
carol. So that there is not contractual relation has been made.
Case related to consideration
Preston son Devi wants to hold position as cyber security with George, Smith and Fogrty
inc. Which is a large IT enterprise. Further, company decided to appoint to Devi on 12 April

2015. But his father is unaware about that so that he offer to George for £150,000 if they hire
Devi as cyber security post. On other hand, firm see mail on 13 April. So that firm decided to
enforce such offer.
Legal Terminology
Consideration must be moral and legal which is easily enforced in court with fair manner
(Ayoubi and Massoud, 2012). Further, consideration related to unfair practice like bribe are
cover in illegal consideration which not possible to enforced by any party.
Judgements
In this case amount offer by Preston is immoral and illegal because he offers to George
£150,000 which is related to unfair appointed to Devi on cyber post so that such consideration is
treated as bribe which is illegal under UK legislation (Different element of contract. 2015).
Further, Gorge cannot be enforce Preston mails in court.
2.2 law of term
3. Case scenario related to Exclusion clause
One of Couple book table at famous London restaurant and at the entrance he gives their
coat to employee of hotel for purpose of care along with they forgot to remove £500 from
pocket. He received a receipt, which back side state that all valuables must be removed from the
jacket pockets as the restaurant will not be held responsible for items missing or stolen. At the
time of payment the couple relies that wallet has been stolen from coat so that they demand
stolen amount from restaurant but Hotel refused to payment by showing exempted clause which
state behind receipt.
Legal terminology
Exclusion clause reduced contractual liability arising from non-compliance of any term
with fair manner (Appleman, Appleman and Holmes, 2014). Further, it provides exemption to
trader from liabilities. But, it must be justified and legal as according to legislation provision. On
other hand, seller cannot add term, which is being free from legal liabilities to seller.
Judgements
In this case, exclusion clause states behind receipt which is not obligated to hotel for
performing their duty as manner. Further, when hotel received coat from couple then it’s the duty

of hotel is to take care in a reasonable manner (Thomas and Hollinrake, 2015). Therefore, hotel
cannot be safe from clause state in contract agreements. It is because of state clause that it is
unfair and unjustified which denial the right of couple interest so restaurant will be liable to pay
compensation.
4.Case related to implied term
Aaron rented warehouse to Zehphra. Further, he repairs premises so Aaron promises to
not raise rent for next 5 years. Unfortunately, owner died before completing 5 years and his son
Yeti decided to increase rent value and indicated him for such changes. Furthermore, Aaron
refused to accept increased amount and requested for amount which he has spent.
Legal terminology
Implied term is not part of contractual agreement. Further, it assumed to be a part of
contract (Types of Conteract Law. 2015). Therefore, it is made by court where contractual parties
has to be applied properly as court decision.
Judgements
It is implied by statue that increasing in value of assets gives right to land owners to raise
rent value immediately. Further, tenancy agreement stated about not increasing the value for 5
years. On the other hand, expenses made by Aaron is treated as his own comfort and which is not
made on owner’s consent. Therefore, Aaron cannot be successful in this case.
2.3 different term
5.Case related to term
Policyholder filled application for motor insurance. Further, he filled “NO” on one of
clause, which stated that "Have you or anyone who will drive been involved in any motor
accidents or made a claim (fault or non-fault including thefts) during the last five years"
Thus, company knows that statement given by policyholder was wrong because motor
owner already got claim from previous policy. So company rejected to pay policy amount on the
basis of breach of term.
Legal Terminology

Insurance contract totally depends on belief between insurer and insure where insurance
enterprise promises to protect policyholder from future tragedy. On other hand, policyholders are
liable to provide right information while filling form. Therefore, if client fails to make available
right information then it gives right to insurer to breach whole relationship. Such term is treated
as condition of contract which is major part of contractual relationship.
Judgements
In this case, company has right to breach whole relationship because there is client found
in breach of term during contract made. Further, it fails to exhibit information, which influence
main contract, so such term also treated as condition. And breach of condition gives right to
breach whole contract as well as demand compensation. Apart from this, other person
suggestions are not considerable.
6. Case related to term
Case scenario
The client also states “NO” for another question state in application form. Questions are
as mentioned below:
"Has the car been altered/modified from the maker's specification (including the addition of
optional fit accessories such as spoilers, skirts, alloy wheels etc.)"
"Have YOU or ANY PERSON who will drive ... during the past five years been involved in any
accident or loss (irrespective of blame and of whether a claim resulted)"
Therefore, insurance Enterprise found during investigation that above term stated are
wrong and not related to actuality. She did modification in car without intimation to her so she
mentioned in application without known actuality.
Legal terminology
Warranties are treated as minor term in contract because it does not influences major on
contract. Further, breach of warranties does not give right to innocent parties to terminated whole
contract, so affected parties only can demand compensation.
Judgements

Policyholder mentions wrong information because she is actually not aware about actual
situations. Further, husband of policyholder modified motorcar without her intimation.
Therefore, information provided by her is not intentional manner. Apart from this, it must be
noted that changes of part are not major term. Also, it is a minor term because it is not main part
of contract and not related to reason of accident. Hence, company cannot breach whole contract
relationship.
TASK 3
AC 3.1 difference and similarities between contract liabilities and negligence liabilities.
Difference
 Contract liabilities arise by breach of contract term while negligence liabilities arise from
breach of legislation standard, which is necessary to comply for all citizens.
 Court applied various tests to determine actual situations in contract liability while court
analysis principles to determine actual situations in tort liabilities.
 Remote area of breach of term is treated, as contractual liabilities while remote areas are
not covered in tort area.
 Relationship of contract parties are made at the time when they enter in contract
agreements while in tort liabilities relationship has made when actual injury arise.
Similarities
 Both legislation applied civil law standard.
 Both are not covered in serious nature of crime part.
 Parties have right to claim in court by showing evidence related to injury.
AC 3.2 Negligence liabilities
In the negligence liabilities, plaintiff is required to prove in front of court with showing
evidence. Further, plaintiff must required to fulfilled following principles which are as under:
 Duty of care – This doctrine is referred to complied with legislation standard within UK
territory. Further, every citizen of England is liable to comply with provision of tort
legislation. And breach of any rules and regulations arise liabilities towards him. So
plaintiff must prove that defendant was not duty of care during injury arisen. The case of
Topp v London Country Bus [1993] supported the above statements.

 Breach of duty – Claimant must be proved in front of court that offender was in breach of
duty during injury arise. Further, he was failed to follow as according to legislation
provision. Furthermore, such failure injured him seriously.
 Causation – Applicant is also mandatory to prove in front of court that breach of legal
standard actually will harm to plaintiff. Further, injury may be related to anything like
financial injury, physical injury etc. the case of Barnett v Chelsea & Kensington Hospital
[1969] supported the above statement. The case of Vaughan v Menlove (1837) supported
above statements fairly.
 Remoteness - Plaintiff is required to prove in front of judicial body that causation must be
directly affected to him. On other words, breach of duty and causation must be directly
related to plaintiff injury. Otherwise, there is applied occupier liabilities legislation. The
case of Re Polemis & Furness Withy & Company ltd. [1921] supported above statements.
AC 3.3 Doctrine of Vicarious Liability
As a general statement “every person is liable for their own action and activities so that
others' action are not affected to anyone.” but this doctrine contrasts this general statement and is
liable to dominant person for action of their sub-ordinate action.
In a business context, employer is liable for the action and omission of their employees. It
is because that there is an assumption that in course of employment, employer has right to be
dominant in the position and action of their sub-ordinate. Further, he can totally influence the
action of workers so that every omission and action are also treated as order of higher authority.
TASK 4
AC 4.1 Element of Tort Of Negligence
Case scenario
Mr brown was not feeling well because he was facing problem related to chest pain so he
went to Hospital for complaining. Further, on initial stage nurse checked and called doctor who
was on duty that time. Therefore, doctor just gave some medicine, which made Mr Brown die.
So, the main cause of his death was due to wrong toxics taken.
Legal Terminology

Negligence liabilities arise by breach of legislation duty with untintentional manner
(Thomas and Hollinrake, 2015). Further, plaintiff is required to prove principles in front of court
for being successful in court proceeding.
A) Judgments
In this case, Hospital is vicariously liable for mistake of their employee. As when Mr
Brown came in Hospital then Doctor was liable to take proper care of their consumer. Further,
the four doctrine of negligence was also satisfied so hospital will be liable.
B) Judgement
On other hand, Hospital protected itself by showing medical report, which stated that
main cause of death of Mr Brown was due to intake of toxics in high quantity (Bharath and et. al.
2011). Further, toxics he took were not prescribed by any doctor.
4.2 Vicarious liabilities
Case scenario
One of the driver was working for pick-up client at the airport. One day he takes alcohol
during waiting time period resulting in accident and injury to client. To this, client claimed the
organization for compensation. Upon investigation, the medical report exhibited that chauffer
consumed too much of alcohol.
Legal Terminology
The doctrine of vicarious liabilities is in context with business, which states that
employer is liable for omission of their employee (Types of Conteract Law. 2015). Further, it is
presumed that employer has right to control every action of their employee in course of
employment.
Judgements
The client can demand compensation from company because in this case vicarious
liabilities arise. Chauffeur who takes alcohol is treated as order of employer as he drives motor
during course of employment. Therefore, Client can be successful in court proceeding because
vicarious liabilities arise.

9. Case Scenario
Mr Jones work as delivery driver for supermarket. Once he slipped on tail fate and pallet
fell over and injured to another employee. Further, injured employee required few months for
again be fit for work. So the affected person sued super market but he argued that during loading
of truck controlled of employer has been changed.
Legal Terminology
When it is hard to determine that who has actual control over subordinate then court
mentions question mark on situations “who is general employer” (Thomas and Hollinrake,
2015). Therefore, latter will be treated as actual employer.
There are also occupier liabilities applicable where landowner will be liable for any
injury of another person arising in owner’s premises. Therefore, ownership is not necessary and
controlling is most required.
Judgements
In this case, supermarket will be liable for Jones injury. It is because in this case
supermarket is treated as general employer (Different element of contract. 2015). Further, Jones
work with supermarket, therefore latter is liable under vicariously liable for Jones omission
which harms to another worker.
On other hand, there is also applied occupier liabilities because another worker is injured
on supermarket premises. Further, occupier liabilities oblige to employer for such injury.
CONCLUSION
Summary of report states that contract and tort legislation plays a vital role in every type
of business. Further, it helps to determine right and duties of each person in business scenario so
that operation of business becomes easy for every entity. On other hand, breach of provision of
contract arise contract liabilities while breach of standard of negligence arise negligence
liabilities. Further, both laws are cover in civil legislation. Therefore, judicial body gives
punishment on the basis of civil act provision. Apart from this, vicarious liabilities' doctrine
clarify that employer is liable for every action of his employee in course of employment.

REFERENCES
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