Aspects of Contract and Negligence for Business

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.