Contract Law and Damages for Negligence

This assignment delves into the complexities of contract law, specifically analyzing a scenario involving damages claimed against a local council due to negligence. It highlights the importance of proving all elements of tort in such cases, referencing relevant legal precedents like David and Kevin. The discussion extends to vicarious liability, where responsibility is imposed on individuals not directly at fault for the actions of others. Exemption clauses mentioned on tickets are also examined within the context of this legal dispute.

Aspects of Contract
And
Negligence for Business

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1...........................................................................................................................................1
1.2...........................................................................................................................................2
1.3...........................................................................................................................................3
TASK 2............................................................................................................................................3
2.1...........................................................................................................................................3
2.2...........................................................................................................................................4
2.3...........................................................................................................................................4
TASK 3............................................................................................................................................5
3.1...........................................................................................................................................5
3.2...........................................................................................................................................6
3.3...........................................................................................................................................7
TASK 4............................................................................................................................................7
4.1...........................................................................................................................................7
4.2...........................................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Contract plays crucial role to build up judicial relationship between business parties .It is
the agreement which are legally enforceable by law. It gives the right to parties to sue the other
party to contract, if they fails to fulfil the promises of an agreement. Business Organization
enters into the formal written agreement to legally bind the other party. This report is based on
different case studies to understand the essential elements of a valid contract and apply these
elements of a contract in the business situations. It explains about the principles of liability in
negligence in the organisation activities and its practical application in the Company.
TASK 1
1.1
The legal enforceability of agreements is known as the contracts. An agreement should
consist of essentials elements to be legally enforceable by law which are depicted below: Offer and acceptance: It is the integral element of a contract which depicts the intention
of the offerer and its acceptance by the other party. There must be free consent of another
party without any pressure or force. It is very important that offerer gives offer to the
other party or public and the other party agrees to the offer with free consent. This was
proved in the decisions of following cases as (Gibson V Manchester City Council WLR
294 HL and Hyde V Wrench 1840). For instance, a person makes offer to another person
to sell the car. If any person accepts that offer, it fulfils one of the elements of a contract. Intention to create legal relations: The agreement depends upon the intention of the
party; the purpose of the individuals is to take the help of court when the other party fails
to fulfils its promises. The social agreements do not fulfil this element of contract. It
invalidates the contract if the parties do not intend to create legal relations. Lawful consideration: The promise of a payment or value is known as the consideration,
there should be valuable consideration. In the contract, one party fulfils the promise in
exchange of the valid consideration (What is contract. 2015). It was discussed and
decided in the Dunlop pneumatic tyre Co. Ltd V Selfridge and Co. Ltd. For instance, if
the person offers to sell the car at £2000 and another person agrees to pay that amount
against the car then it fulfils the element of lawful consideration. (Chappel & Co. v
Nestle 1960 AC)
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 Capacity of parties: The parties must have the capacity to enter into the contract. law
have defined the capacity of party to enter into the contract in the following ways as
should attain the age of majority, should be sound mind and not disqualified by any law.
If any of the conditions are not fulfilled by the party, then he/she cannot enter into the
contract.
 Lawful object: The parties to contract must enter into an agreement for lawful object.
The statement means that the object of the contract must not be fraudulent, illegal,
opposed to public policy, immoral or not cause injury to the person (Hall, 2013). For
instance, a landlord rents a house to carry on drugs business, so she/he cannot recover the
rent through court or any legal process.
1.2
There are types of contract entered by parties on the basis of various factors which are
given below:
On the basis of Validity Valid agreements: It is a type of agreements which are enforceable by law and fulfils all
the element of contract. It gives the right to the party to file suit against another person, if
any person fails to fulfil the promises mentioned in the agreement (Marks, Marks and
Jackson, 2013.). For instance, there is a contract between X and Y and it fulfils all the
features of the contract, then the parties have the right to take legal action against another
one, if they fail to perform the terms and condition of contract. Void Contract: A contract which lacks one or more of the elements except free consent is
considered as Void Contract and cannot be enforceable by law. For instance, Y enters
into contract with the Y, who is the minor and is considered as incapable to enter into
contract. Voidable Contract: It is a type of written agreement which lacks the essential element of
free consent in the declaration. This contract is basically entered by the party under
coercion, fraud, misrepresentation (Bellamy, 2013). But the voidable contract can be
turned as valid or void in the future. For instance, a binding agreement was entered
between X and Y where Y forcibly made X engaged in the contract. So it is voidable at
the option of A.
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 Illegal Contract: It is the contract that has unlawful object involved. The subject matter
of the contract is not illegal in the eyes of law (Fried, 2015). For instance, A and B have
entered into the contract for supplying of drugs in the nation. Further, A and B does not
have right to enforce these agreements lawfully.
1.3
The parties are bound by the terms and conditions of the contract and are liable to fulfil
their promises otherwise they would face legal actions. There are various terms in the contract
which have different meaning and impact: Exclusion clause: It is the clause that restricts the right of the breaching party to claim
for the damages (Willes, 2015). It is important to interact with the other party when they
are entering into the contract. It was further bifurcated into True, limitation and time. Express term: These are the terms which are exclusively mentioned in the contract and
parties have the knowledge of terms and conditions. Parties have the option to either
enter into the contract in written or in the oral forms. It expresses about the rights and
duties of the parties to the contract in the written form and are specifically stated in the
agreement. For instance, the employment agreement mentions the terms and conditions
related to pay, main duties of employees,fulltime or part-time job.
 Implied terms: These are the terms which are not mentioned in the agreements but are
enforceable by law and have the same affect and rights on the party which are given in
the express term. It is dependent on the court's ability to give proper interpretation of the
meaning of these terms (Implied term, 2015). For instance, in the employment
agreements it includes statutory rights such as right to equal pay and duties. If the
employee is indulged in fraudulent activities then, employer has the right to terminate the
employment agreements. These all form part of the implied terms.
TASK 2
2.1
In a given business Scenario, Todor manages the book store and has displayed various
books in the shelf and one of them was HND law book and Ivan wants to purchase that book
from the book store for £50.00. Here, displaying the book in the shelf for sale is considered as
offer by the Todor and Ivan response the invitation of offer by taking the book to the counter and
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asks the owner to pack that book and £50.00 is the valid consideration for the contract. Till now
the elements of contract are fulfilled by the parties. But, still the contract has not been entered by
Ivan and Todor as Todor have already promises to sell that book to someone else and he forgot
to remove it from the display shelf. The same contract was entered previously by Todor and
Carl. So same is not possible with Ivan.
2.2
There are different terms and conditions in the contract which binds parties to the contract and
give right to take legal action. A contract includes terms and conditions of the contract that have
different consequences which are as given below: Conditions Term: These are the terms that prescribe the conditions of the contract which
are required to be performed or not to be performed by the parties. It forms the base of an
agreement (Trosborg, 2015). If any party breach these conditional parties, then the
aggrieved party has the right to file suit against the other party and can claim for the loss
suffered. Warranties: These are the terms that form the essentials part but not as much as the
condition terms. It gives the aggrieved party the right to claim damages, but he/she
cannot revoke the contract.
 Innominate terms: It is the conditions and warranties term which are applicable by the
parties in the past, but does not have its effect at the time of dispute in the court and law
maker deemed these terms as an Innominate term (McKendrick, 2014)
2.3
Under the given case scenario, local council allows the customers to hire the chair at 50p
per hour and John accepts the offer by purchasing that ticket. The contract was entered between
local council and John that fulfils the essential elements of contract. So both the parties are given
the right to sue if any person fails to fulfil the terms and condition. The chair which was hired by
John collapsed and caused injury and damages (Fried, 2015). John desires to claim compensation
from the council, in return local council depicts that the ticket mentions the exemption term that
they are not going to be responsible for damages or injury due to the hired equipment. The court
has given decision that the terms and conditions are not required to be mentioned on the ticket
payment receipt as most of the person does not read the terms and conditions on the ticket.
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TASK 3
3.1
There is a comparison exit between liability in tort and contractual liability. The detailed
description about the same is depicted in below given table:
Basis of
difference
Contractual liability Liability in tort
Meaning It is a legal agreement which exist
between two or more parties and
it binds the party under contract
with regard to act according to the
specific terms and conditions.
This liability occurs when the individual
who is in the duty of care position will
fail to perform its responsibilities towards
people who are under his/her care in an
effective way (Hunter, 2015.). Hence,
due to the negligence from the side, duty
of care injury is being caused to an
individual.
Parties
relationship
Here, the parties enter into in
relationship with each other
through mutual consent. Thus,
with an aim to develop
relationship between the
individual’s elements such as
offer and acceptance will be used.
Here, the relationship between the parties
is established by law. This will happen
when the person who resides in the
position of defendant tends to neglect
his/her duty of care. (This can be evident
from the Donoghue v Stevenson case in
which it is because of the negligence
from the side of defendant an injury is
caused to claimant on consuming faulty
product)
Obligation nature Here, in this case the terms of
contact tends to define the
obligation in contract (Bellamy,
2013).
Here parties to the contract do not
mutually agreed upon the terms of
contract and thus it is due to the presence
of given aspect it is imposed by legal
authorities (Case referance: Blyth v
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Birmingham Water Works (1856)
Damages upon
parties basis
Here, the claim of damage will be
imposed upon parties when any
member of contract fails to fulfil
the specified terms of contract in
an effective way. Case reference:
Payzu v Saunders (1919).
The individual will be held liable for the
damages when he/she will perform such
type of act which resides in the category
of negligence.
3.2
Negligence act came into existence when an injury or harm is being caused to an
innocent individual due to the negligent act of other who resides in the duty of care position
(Bellamy, 2013). In this regard, the person is liable to claim damages if the scenario fulfils the
conditions given below: Duty of care: This condition depicts about the responsibility of the person with respect to
providing protection and taking due and care towards the other party. For instance, the
responsibility of manufacturer is to have knowledge about the raw materials used in
manufacturing and considering the health and hygiene of the public (Bellamy, 2013). If
the manufacturer fails to consider the duty of care, then consumer can file the suit under
negligence of manufacturer. Breach of duty: Once aggrieved party have proved that the defendant owed a duty of
care towards the plaintiff, the next issue arises whether the party fails to fulfil his
responsibility or not by doing some negligence (Kehoe, 2013). As stated in the above
example, if the manufacturer fails to follow the standards of quality and do not take care
about the ingredients in the manufacturing of the product has resulted in breach of duty
by manufacturer. Causation: This principle states that aggrieved party can take legal action and claim for
the damages if it was found that the negligence of the person has caused damages to the
other person then that person can claim for the damages (Gergen, 2013.). The
continuation of the example in the breach of duty element is that, due to the carelessness
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of manufacturer if any consumer have suffered health issue or have negatively affected
(Marson and Ferris, 2016).
 Remoteness: The damage caused to the aggrieved party must be foreseeable one. Once
party have proved the above condition, he/she is required to demonstrate that the damage
was not too remote.
3.3
Vicarious liability is the liability of an innocent person that is held liable against the torts
to another person, even though that person is not responsible for that act. It is also known as
strict liability where the defendant is not at fault. The most common example of vicarious
liability is that the employer is responsible for the defaults of his employee during the course of
employment (Marson and Ferris, 2016). It is considered as unjust on the side of innocent party as
they are held liable without their fault. In this respect, court has given decision and held
different persons liable on diverse situations based on their relationship identified in which the
applicability of the aspect such as vicarious liability is being made. It includes professional,
marital and employment relationship etc.
TASK 4
4.1
Case study: In a four lane street, David is driving at a fast speed where children are playing. He
lost his control and hit the telephone pole in order to save the child (Boundy, 2016). But still his
efforts resulted into drained as the child got unconscious and has resulted in permanent injuries
due to the pieces of pole.
From the above case study, it was found that it is a contributory negligence of Telco who
have established the telephone pole on the 4 lane street. They have to cautiously embed the
telephone pole at the appropriate location (Pathak, 2013). The application of elements of tort of
negligence is:
Duty of care: It is the duty of care of david to not increase his speed of car above 25MPH,
then also he drove rashly and raised his speed to 35 MPH. He is required to drive in the speed
which he can control it (Willes, 2015.). The Telco is also responsible to put the telephone pole at
the right place.
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Breach of duty: David is responsible as he has exceeded the limit prescribed and drives
the car at 35 Mph.
Causation: The child has suffered permanent injuries due to the reckless driving of
David. The car has broken the telephone pole into pieces and that piece has made the child
suffer.
Remoteness: The damages are not remote; they are foreseeable as caused permanent injuries to
the child.
So it can be concluded from the above case study that the child can claim damages from
David and teleco as it is contributory negligence and have successfully applied elements of tort
of negligence (Marks, Marks and Jackson, 2013).
There are various defences in different situations based on different parameters: Necessity: It is necessary for the person to act against his responsibilities to fulfil some
other genuine purpose, then that person will not be held responsible for tort of
negligence.
 Justification: Once aggrieved party have taken action against the person and he/she
justifies his situations and if found satisfactory. It will repudiate the claim of aggrieved
party.
4.2
Facts related to case: Colin knocks Roger with the prying pan and make him unconscious
as he was fed up with the attitude and anger. Both the employees are working under the
employment of Regent Hotel.
Interpretation: The owner of the Hotel is responsible for the acts and behaviour of the
employees and required to manage the working environment of an organisation.
Conclusion: From the above case study and justification, it can be concluded that it is the
case of vicarious liability. It is the liability of the person who is not at fault and is responsible for
the acts of other person (Zamore, 2015). In this case scenario, the vicarious liability lies to the
owner of the hotel and is required to compensate the Roger for the misconduct of Colin as the
owner is responsible for the acts and conduct of its employee. They are required to build the
system which can reduce these miss-happenings and create safe and healthy working
environment for the employees.
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CONCLUSION
It can be concluded from the above report that it is very important for the organization
and individual to fulfil all elements of contract to successfully enforce and implement the
contract as it gives the right to aggrieved party to take legal action against the person for not
complying the terms and conditions of contract. There are different types of contract as per the
fulfilment of elements of contract. The contract consists of terms and conditions which are
expressed in the agreements or are implied. In the Ivan and Todor case, it was found that after
fulfilling all the elements and then also they fail to enter into the contract as the same contract
was previously entered between Todor and Carl. John can claim for the damages against local
council as they cannot mention the exemption clause in the ticket. It was found out that in order
to claim for the damages, the aggrieved party is required to prove all the elements of tort of
negligence as given in David and child Kevin case. The person is held liable for the acts which
he/she is not actually responsible as the vicarious liability.
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REFERENCES
Books and Journals
Boundy, C., 2016. Business Contracts Handbook. CRC Press.
Bellamy, J., 2013. Exclusion and limitation clauses in business contracts.
Fried, C., 2015. Contract as promise: A theory of contractual obligation. Oxford University
Press, USA.
Gergen, M. P., 2013. Negligent Misrepresentation as Contract. California Law Review, 1, p.953.
Hall, K. T., 2013. The law. Resource.org
Hunter, H., 2015. Modern Law of Contracts. Thomson Reuters.
Kehoe, D. P., 2013. Law, agency and growth in the Roman economy. New Frontiers: Law and
Society in the Roman World. pp.177.
Marks, R. J., Marks, R. J. and Jackson, R. E., 2013. Aspects of civil engineering contract
procedure. Elsevier.
Marson, J. and Ferris, K., 2016. Business Law Concentrate: Law Revision and Study Guide.
Oxford University Press.
McKendrick, E., 2014. Contract law: text, cases, and materials. Oxford University Press (UK).
Pathak, A., 2013. Legal Aspects of Business. Tata McGraw-Hill Education.
Trosborg, A., 2015. An analysis of legal speech acts in English Contract Law.'It is hereby
performed'. HERMES-Journal of Language and Communication in Business, 4(6), pp.65-
90.
Willes, M. C., 2015. Caveat Venditor: The Consequences of Bagley v. Mt. Bachelor, Inc. for
Negligence Releases and Other Contract Provisions. OR. ST. BAR LITIG. J., 34. pp.12.
Zamore, J. D., 2015. Interference with Lawful Business (Vol. 2). Business Torts.
Online
Implied term. 2015. [Online]. Available through: <https://www.gov.uk/employment-contracts-
and-conditions/contract-terms>. [Accessed on 1st September 2016].
What is contract. 2015. [Online]. Available through:
<https://www.law.cornell.edu/wex/contract>. [Accessed on 1st September 2016].
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