Report On Elements Of Contracts & Impact In Different Business Scenarios
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Added on 2020-01-28
Report On Elements Of Contracts & Impact In Different Business Scenarios
Added on 2020-01-28
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ASPECTS OFCONTRACT ANDNEGLIGENCE
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 Importance of essential elements of a contract.....................................................................11.2 Impact of different types of contract ....................................................................................21.3 Analysis of different terms in contract..................................................................................2TASK 2............................................................................................................................................32.1 Impact of different types of contract ....................................................................................32.2 Case Scenario........................................................................................................................42.3 Case Scenario........................................................................................................................5TASK 3............................................................................................................................................53.1 Contrast between liability in tort and contractual liability....................................................53.2 Case Scenario........................................................................................................................63.3 Case Scenario........................................................................................................................7TASK 4............................................................................................................................................74.1 & 4.2 Case Scenario..............................................................................................................7CONCLUSION................................................................................................................................8REFERENCES................................................................................................................................9Books and Journals.....................................................................................................................9
INTRODUCTIONAn agreement between two parties which is enforceable by law is known as a contract.All contracts are agreement but all agreements need not be contract. An agreement will be acontract in the eyes of law only when it contains essential elements of a contract – offer,acceptance, consideration, contractual intention and consideration. Tort means wrong done by a person or an entity which causes injury to other (Hunter2015). Tort law consists of laws and regulations which are intended to provide remedies toperson for the injury caused by the wrongful act of others.The present report explains importance of essential elements of contract and impact ofdifferent types of contract in different business scenario. Further, it contrasts contractualliabilities with liability in tort. Lastly, it explains elements of tort of negligence and vicariousliability in different business scenario.TASK 11.1 Importance of essential elements of a contractThe essential elements required for formation of a valid contract are as follows:Offer: It is first requisite for formation of a contract. It is an expression of willingness toenter into a contract. As per the case of Harvey v Facey, 1893, an offer must be madewith the intention to be legally binding on offeree. Offer is different from an invitation tooffer and this difference is based on the intention at the time of making offer.Acceptance: When the offeree gives his assent and agrees to all the terms of agreement,the offer is said to be accepted (Hillman, 2013). According to Hyde v Wrench, (1840)case, the terms of agreement must exactly match the terms of offer otherwise it wouldamount to counter offer and thus, no contract exist. Acceptance will be valid only if it iscommunicated to the offeror.Intention to create legal relations: An agreement will be enforceable by law only if it hasintention to create legal obligation. As per the case of Balfour v Balfour 1919, it iscontended that in case of domestic and social agreements, a presumption is raised by lawthat parties do not intend to create legal relations. Consideration: As per Thomas v Thomas, 1842 case, consideration is something of valuein the eyes of law. Some rules are to be followed for consideration – past consideration isno consideration, it must move from the promissee and it must be sufficient but not1
required to be adequate, any existing public duty or social duty would not amount to avalid consideration (Poole, 2012).Capacity : The parties to the contract must be contractually capable i.e. a person belowthe age of 18 years (minor) and a person of unsound mind cannot enter into a contract.Any contract entered by them will be void.1.2 Impact of different types of contract There are different types of contract – face to face contract, written contract, distanceselling contract. The type of contract to be entered is determined by the conditions prevalent atthat time.Face to face contract: Such type of contracts can be entered when both the parties arepresent in the same location. They can meet each other and discuss all facts and figuresrelated to the contract. Parties can inspect goods before entering into the contract andsatisfy themselves regarding its quality and fitness. This enables them to execute contractsmoothly and reduces the chances of breach of contract.Written contract: Usually, face to face contracts take form of written contracts as partiesare able to meet in person and decide the terms of agreement (Potter, 2016). All theterms, conditions and clauses are agreed, written and signed by the parties. In this type ofcontracts, there are reduced chances of any conflicts or disputes in the future. In case ofbreach of contract, written contract can be produced before court of law as evidence.Distance selling contract: Parties enter such type of contract when they are located indifferent areas. as they are not able to meet each other. Distance selling contracts arebased on trust and faith as parties cannot inspect goods before entering into the contract.For negotiating and agreeing the terms of contract, some organised means ofcommunication like post, phone or internet is used.1.3 Analysis of different terms in contractThe different terms of contract are expressed terms, implied terms and innominate terms.In case of breach of contract, it is important to know which type of term has been breached toprovide the remedy available (Lan and Pickles, 2011).Expressed terms: The terms which are clearly outlined in the contract and are specificallyagreed by the parties at the time and the contract which is made are known as expressedterms. Such terms may be expressed verbally or in writing. For example – price, time of2
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