Contract Law and Vicarious Liability

This assignment delves into the intricacies of contract law and vicarious liability. It examines the elements required for a valid contract, drawing on legal texts and cases. Furthermore, it analyzes the concept of vicarious liability, exploring its application in various scenarios, particularly focusing on employer responsibility for employee actions. The analysis incorporates relevant case studies and legislation to provide a comprehensive understanding of these key legal concepts.

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Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
1. Stating the suitable form of contract to MotorRus..................................................................1
2. Essential elements of valid contract........................................................................................2
3. Applying elements of the contract in different business situation or scenario.......................4
4. Stating the effect of terms of the contract upon competent parties.........................................4
TASK 2............................................................................................................................................5
TASK 3............................................................................................................................................7
Comparing contractual likability and tort liability......................................................................7
Stating the principles of liability in the context of negligence....................................................7
Stating the provisions of vicarious liability................................................................................8
TASK 4..........................................................................................................................................10
Defenses in the case of tort of negligence.................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
In law, there are four essential elements which each and every person needs to follow in
order to convert agreement into contract. It includes offer, acceptance, valid consideration and
intention to create legal obligations. According to the contract act, parties to a contact must
follow all these aspects for making valid contract (Chen-Wishart, 2012). In addition to this,
employer has the liability to make proper health and safety arrangements for their employees to
prevent accidents. If employer fails to make such arrangements then he is liable to give
compensation to the damaged party. Besides this, vicarious liability refers to the situation in
which employer is held accountable for the undesirable act of their employees. This report is
based on case scenario of Salvatore who is the owner of garage namely MotorRus.
In this report, essential elements of the contract will be examined. Further, it will also
depict the extent to which different types and terms of the contract will impact competent parties
of a contract. Furthermore, it also provides information about extent or aspects to which
Salvatore is liable to compensation to the damaged party due to the undesirable act of their
personnel. Along with it, such report will also develop understanding about occupier's liability
act and its impact on the competent parties.
TASK 1
1. Stating the suitable form of contract to MotorRus
According to the case scenario Salvatore is unable to make sensible business decision
because of his old age. In this, he has employed an individual who is able to give advice about
the standard form which business organization is required to take into consideration for the
business purpose. There are different types of contract which are available to MotorRus. It
includes, express, unilateral, bilateral and distance contract which helps the enterprise in
fulfilling its business objectives. Unilateral contract: It is also termed as one sided contract in which one party give
promise to another party in relation to the performance of specific act. In unilateral
contract, there is absence of the consent of offeree to whom offer is made (Nijem and
Galpin, 2014). Thus, if offeree performs the same then offereor is obliged to act as same
within the predetermined time period.
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 Bilateral contract: In this, terms and conditions of the contracts are discussed as well as
agreed by the both parties to a contract. Thus, if one party makes default in his
performance then another party has the right to sue for compensation. Express contract: Under this contract, terms and conditions are clearly mentioned and
agreed by the competent parties either in oral or in the written format. In this, parties to
contract are obliged to perform their duties and responsibilities. If one party makes
default in his performance then damaged party has the right to sue him. Usually, written
contract are more effective rather than oral form (Laverty and et,al., 2015). Moreover, in
written contract claimant party has evidence which he can present in front of the judicial
authority in the case of dispute. Whereas, in oral contract damaged party has no proof in
against to the defendant party.
 Distance contract: In this, contracts are formed by the competent parties through the
means of internet, e-mail, telephone etc. This type of contract does not require physical
presence of the competent parties.
On the basis of all the above mentioned aspects, Salvatore is required to adopt distance
contract through which he is able to provide information about spare parts to the existing and
potential customers. For this purpose, Salvatore needs to create websites to convey information
about car parts and accessories. Through website, Salvatore is able to upload pictures of spare
parts with the price. It helps the owner of MotorRus in attracting large number of buyers who
have desire to purchase such parts. Besides this, Salvatore is required to undertake written form
of contract who offers protection to both the parties in against to the defendant party. On the
basis of the case of Brogden v Metropolitan Railway (1877) Salvatore needs to undertake
distance and oral form to make standard contract. According to such case, competent parties can
give acceptance in either oral, written or any other means of communication to form a legal
relationship.
2. Essential elements of valid contract
Four essentials which competent parties of a contract must follow are enumerated below:
Elements Features Related cases
Offer In offer, one party expresses
his feeling in relation to the
Fisher v Bell
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sales and purchase of product
or services. Whereas, in
invitation to offer seller invites
buyer to make an offer for the
legal bindings or relationship.
Acceptance This is also the most essential
elements of the contract
without which competent
parties are unable to form a
legal relationship. When party
is agreed on the terms and
condition which is offered by
another person then it is
recognized as an acceptance
(McKendrick, 2014).
Brogden v. Metropolitan
railway Co. (1877)
Legal considerations For the legal and voluntary
bindings, there must be legal
consideration in the form of
monetary value rather than in
kind. In legal relationship,
each party is required to give
and get something.
Thomas v Thomas (1842)
Intention to create legal
relationship
In order to convert agreement
into contract, there must be an
intention between the parties
in relation to the performance
of certain act, roles and
responsibilities (Four
Essential Elements of a
Contract, 2015).
Balfour v Balfour (1919)
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3. Applying elements of the contract in different business situation or scenario
On the basis of the case scenario Salvatore and his son Markus often visit auctions with
the aim to find good deal. In auction, Salvatore and his son found most profitable spare parts
which they can use in their workshops. With the intention to sell these parts to the existing and
potential customers Salvatore make either make use of e-mail or telephone to provide
information to the large number of buyers about the spare parts. In the fist case situation
Salvatore received telephoner from Danny that he will come on office before the closing time.
In this, there is offer but no acceptance from the side of the owner of MotorRus. Thus, there is
contract took place between Salvatore and Danny. Along with it, in the second situation Markus
received mail from Suzie who deals from the side of safe garage that she is interested in the spare
parts which offered by MotorRus and thereby they will send money to the firm by 3pm. Due to
the technical errors Salvatore was unable to saw the e-mail. Thus, there is absence of the
acceptance in this condition.
In the third scenario, Salvatore had received cheque from European spare parts worth of
£8,000 with the aim to purchase parts of the car which are offered by MotorRus. In this, He hold
his Secretary to returned back the cheque which clearly shows that there is no acceptance from
the side of garage. In the fourth case situation Markus accepted £7500 from Mike in return of
spare parts. In this, all the essential aspects of the contract are present which may cause of
contractual relationship between the Markus and Mike. After forming of such contract Salvatore
has responsibility to communicate the information in relation to selling of spare parts to Danny.
Moreover, Salvatore had accepted the offer of Danny through phone call thus, he needs to give
information to him about the spare parts. Otherwise, Salvatore is liable for the loss or damages
which is suffered by Danny.
4. Stating the effect of terms of the contract upon competent parties
Express, implied and innominate terms are the main aspects of contract which places
different impact on the parties of a contract. Express terms are those which are decided by the
contractual parties with the mutual consent (Wade, 2015). Whereas, Implied terms refer those
which is imposed by the law. On the basis of the cited case scenario, after making purchase of
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parts buyer has found that some parts were rusty. By considering this aspect, buyer demanded for
refund. Condition and warranty are the main elements of innominate terms. In this condition,
buyer has the right to either repudiate the contract or sue the defendant party for the loss which is
suffered by them. Whereas, in warranty buyer can only demand for the compensation to which
loss is suffered by him (Whitmore, 2015). Nevertheless, he has no right in relation to the
repudiation of the contract.
According to the case scenario, if some of the spare parts were rusty then buyer can
demand for refund or compensation depending on him. Moreover, if spare parts of the car is not
in line with the contractual aspect then it considered as a breach of terms and aspects of the
contract. In this, buyer of the parts possess right in terms of repudiate the contract. Nevertheless,
if color of some parts were slightly different from others then the buyer cannot repudiate the
contract. By considering the innominate terms innocent party can only claim on the defendant
party for the compensation to the extent to which loss is suffered by him.
TASK 2
A. As per the cited case scenario, Salvatore repairs and maintains the vehicles. Mrs. Pratt's gave
her Mercedes to Salvatore because it is damaged due to an accident. For this, workshop ordered
metallic black color to paint the car. In this, Salvatore had ordered one of his apprenticeships to
paint the car with metallic black color. After this, trainee who works in MotorRus painted the car
with the different color irrespective of the Mrs. Pratt's order. According to the case, it is the
mistake of the trainee that he painted the car without checking the order and color. When Mrs
Pratts came to garage to collect the car she got totally shocked due to the worst job which is
performed by them. In this, Mrs. Pratt's can sue on the garage for the loss which is suffered by
her. According to the English contract law, contracting parties are obliged to perform their work
according to the terms and condition of the contract. If one party fails to perform according to
terms and condition then, innocent party has the right to claim for compensation. In the present
case, it is the mistake of the trainee of MotorRus that he painted car with wrong color. Thus,
Salvatore is liable to give compensation to the innocent party.
B. In accordance with the given case scenario, Mr and Mrs Cooper had purchased a car which is
displayed as sold as seen with the warranty period of 3 months. After seeing the car and its price,
couple had made decision in relation to purchase the car. Two days before from the completion
of warranty period Mr and Mrs Cooper were complaining about several problems which are
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faced by them in relation to the cars. During the course of repairing, garage found that faults
occurred in car are very minor and they had resolved it. After the completion of the warranty
period couple had made compliant that there is an additional expenditure worth of £5000 on the
basis of another garage. As per the deed of the contract, MototRus is liable for any repairs only
for 3 months. After this period, MortorRus has no responsibility in relation to any damage or loss
which is suffered by Mr and Mrs Cooper. Thus, according to law and terms of the contract
MotorRus is not liable to give compensation to the couple because the warranty period is
expired.
C. Case scenario presents that Salvatore had rented his upstairs portion to the computer design
company. There is no electricity is available in the showroom. With the purpose of making
electricity arrangements tenant used some cables which may result into the cut off of the
electricity everywhere. In this, Salvatore had informed to the tenant that this work requires
supervision of specialist electrician who is not available for another 4 days. Due to this,
Salvatore had faced business loss due to the absence of electricity. In this, Salvatore is in position
to claim for the compensation which is suffered by him due to irresponsible act of his tenant. In
accordance with the law contractual party has responsibility to perform work with the high
caution which in turn helps in preventing the loss or injury to another person.
D. In accordance with the case situation, Salvatore had repaired car of Mr Dodsworth not in
appropriate manner. Mr Dodsworth claimed that garage had used wrong parts in the car. Beside
this, MotorRus has linked the wires in inappropriate manner. Due to this, windscreen wipers of
the car control the radio and the indicator button may on the wipers. In this, Mr Dodsworth faced
difficulty while drive the car. According to the laws and legislation contractual party needs to be
taking into consideration the standard performance of care. If parties to a contract fails to comply
with the terms and condition they are obliged to give compensation to the damaged party. In the
give situation, MotorRus is obliged to give compensation to the innocent party for the loss
suffered by him. In addition to this, garage is also responsible to repair the car and thereby
remove the defects which are present in the car.
E. Described case scenario entails that national news had announced that production of land
Rover car is stopped. During this time, Salvatore has one Land Rover in his garage. After this
announcement Salvatore is very happy that his car would generate lots of interest in consumer
market. This is turn, there are several buyers who were ready to purchase the car on high rates. In
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accordance with the English contract act offer can said to be valid only when its terms are
conditions are specific. As per the laws and legislation offeror is required to communicate all the
terms and conditions the contract in very clear and specific manner. Along with it, there must be
valid consideration in the contract. It is not necessary that contract must be supported with the
fair value. Thus, Salvatore requires to determine the specific price for Land rover. Through this,
Salvatore is able to attract large number of investors in relation to the making of an invitation to
offer. Through this, owner of MotorRus is able to select suitable buyer for the Defender Land
Rover by making comparison of several offer which is made to him from others.
TASK 3
Comparing contractual likability and tort liability
Significant differences take place between the contractual and tort liability. Contractual
liability occurs only when then innocent fails to perform as per the terms and conditions of the
contract. Whereas, tort liability occurs when loss is suffered by the innocent party due to the
negligence of innocent party. On the contrary to this, in contractual liability legal relationship is
formed with the mutual consent of the parties. In this, all the duties, roles and responsibilities are
determined by the parties to a contract with the mutual consent (Tan, 2015). In comparison to
this, tort liability is imposed by law. In the case of negligence, duties and responsibilities are
determined by the legal authority. On the basis of this aspect, it can be stated that contractual
liability high differs from tort liability.
Stating the principles of liability in the context of negligence
Negligence represents the situation of failure to take reasonable care by the em,ployee
due to which loss or injury is suffered by employees or another person. According to the
negligence act, employer has liability to make proper health and safety arrangements for their
employees which may help in preventing injury to another person. There are various aspect
which offers protection to the innocent party in against to the defendant are as under: Duty of care: According to this, employer needs to make safety arrangements for their
employees for the prevention of undesirable incidents. If employer fails to comply with
all these aspects then employees have right to make sue upon them for compensation
(Stevenson, Rowbotham and Lowther, 2015). Thus, according to the standard duty of
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care employer is liable to compensate the employees to the extent to which loss is
suffered by him. Breach of duty: In accordance with the case of Donoghue v Stevenson if employer does
not perform his act according to the terms of contract then it is recognized as breach of
duty. In this, employee can make sue of upon the employer for compensation (Raine,
2014) . Causation: according to this, innocent party needs to give evidence about that injury is
suffered by him due to negligence of defendant party. Forseeability: When loss or injury is foreseeable to the employer and then if he
intentionally neglects health and safety aspect then employees have right to make sue
upon him (Smit and Viviers, 2016).
 Remoteness of damages: Defendant party is also held accountable to give compensation
for the damages if claimant party has evidence that loss is occurred due to the negligence
of the employer.
Case 1: On the basis of the given case situation one of the non-permanent driver were reversing
the car and he had collided with the canister of petrol. Due to this collision there were small fire
spread in the premises and destroyed some important documents of the customers. In this, driver
of the garage has responsibility to drive the car in an appropriate manner which may help them in
preventing injury. In this case, important papers of the customers are lying on the floor rather
than at safe place. Due to this, important documents of the customers are damaged. It is
considered as breach of duty because Salvatore fails to make proper safety arrangements at
workplace. Moreover, this case situation satisfies all the aspect of negligence. Thus, Salvatore
will be held responsible to give compensation to the customers for the loss suffered by him.
Whereas, if more precious miniature painting of the customer had damaged then owner of
MotorRus is not required to give compensation to the customers for the loss of miniature
painting. On the basis of the element of remoteness of damages customer does not have right to
make sue upon Salvatore for the compensation due to the absence of evidence.
Stating the provisions of vicarious liability
According to the English law vicarious liability imposes strict liability upon employer
due to the undesirable act of their employees. Moreover, employer-employee relationship
provides right to the employer to make control over the wrongdoing of the personnel
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(Understanding what vicarious liability means for employers, 2016). During the course of
business employer can control the unwanted activities of the employees by inculcating strict
guideline and policies. Besides this, by guiding the employee of the firm employer can easily
motivate their personnel to act in an appropriate manner (Cameron, 2015). Due to this
relationship, employer is liable to give compensation to the third party for the less suffered by
them due to the unwanted activities of the human resources of firm (Willey, 2012). In the below
mentioned situation employer is not liable to give compensation to the damaged party which are
as follows:
 Claimant party is unable to demand for the compensation when he fails to give evidence
of such loss.
 In addition to this, if employees act in undesirable manner to restrict the ineligible duties
of the third party then employer is not liable to give compensation (Weissenberger and
McFarland, 2015).
Case 2: In the described business situation, driver of Salvatore had drove to another vehicle
because he was in hurry. Due to this aspect, several passenger are injured and rushed to the
hospital with severe neck and back injuries. After the six months, Sarah is not able to perform
her work in an efficient manner. Due to this, she also requires help for looking after her two
young children. According to the Vicarious liability act Salvatore is liable for the negligent of his
driver. Thus, owner of MotorRus will be required to give compensation to Sarah to the extent to
which loss is suffered by her. Nevertheless, Salvatore has no liability in relation to the recovery
of the claimant. Obligation of the owner of garage is only limited to the payment of damages
which is suffered by the defendant party. Nevertheless, if Sarah fails to give evidence that shes is
not able to recover within the six months then Salvatore is liable to give compensation for the
losses.
Case 3: It is cited in the case scenario that workshop is closed after 11 am on weekends.
Nevertheless, on the day of accident workshop of MotorRus opened still 3 pm. In this day, there
are number of families came into the showroom with the purpose of purchasing the vehicle.
During this, when parents of Little jhonny talked to sales representative then he wandered away.
In this, there was panic with everyone running because Jhonny had fallen down into inspection
pit. Due to this, 8 years little boy got heavily injured because someone left the door opened with
the sign board of ''No Entry''.
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According to the Occupier's liability act employer has responsibility to make proper
health and safety arrangements within the premises to prevent loss or injury to another person
(Ali and Kumar, 2015). On the basis of the Health and Safety act employer is required to keep
away hazardous equipment from the public places of garage. Besides this, Salvatore also needs
to make proper arrangements for the areas which are subject of high risk. By placing sign board
of No entry MotorRus is not free from the his liability. Thus, Salvatore is held liable for the
injury suffered by Johnny. Therefore, occupiers liability act compel Salvatore to give
compensation to the parents of Johnny for the loss suffered by the child.
TASK 4
Defenses in the case of tort of negligence
Contributory negligence: According to this, claimant party needs to undertake reasonable care
for the protection of himself/herself. In this, if defendant party also fails to make safety
arrangements then employer is held accountable for the injury of the person. This situation is
regraded as contributory negligence (Contributory and Comparative Negligence, 2016).
Defenses which are provided to the defendant party in against to claimant are enumerated below:
Defenses Aspects
Volenti-non-fit ijuria In this, plaintiff can demand for the
compensation only when then employer fails to
perform his duties and responsibilities. Thus,
employer is required to liable for the injury
only when then he intentionally neglects health
and safety aspects.
Necessity Employer would not be held liable to the the
third party if unsuitable activities is performed
by the employees to restrict the illegal
activities of others.
Justification Defendant party does not requires to give any
compensation when he get success in proving
wrong the allegation which is imposed by the
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claimant on him (Twomey and Jennings,
2010).
Illegal In accordance to this, plaintiff can demand for
the compensation when they incur loss due to
the illegal activities of the defendant party.
Cases:
A. as per the case situation, one of the socket were left exposes which might cause of electricity
problem. In order to overcome such situation maintenance manager of the firm decided to fix this
without taking into consideration the appropriate tools. He was not an electrician irrespective the
aspect he operates electrical aspects. Due to this, he suffered from electric shock and
consequently he had kept in a hospital for a week. In addition to this, he will take few months
for recovery. Along with it, Salvatore mentioned in employment contract that personnel will not
be paid if they sick for more than a week. In this, owner of MotorRus is not liable for the injury
of maintenance manager. Volenti-non-Fit injuria employer is liable only when he fails to make
proper arrangements in relation to safety. Nevertheless, it the given case Salvatore had made
arrangements for the safety of workers. Maintenance manager of garage is suffered from injury
due to his own negligence. Thus, MotorRus is not held accountable for the injury which is
suffered by the manager.
B. According to the case scenario, Mr and Mrs Augustine arrived in showroom with the twins
namely Billy and Bella. Children of Augustine were running here and there in the playground.
Parents of the twins were advised from the garage that they needs to make control upon the
children to prevent the any injury or loss. The twins were opening and shutting the door in
showroom. Due to negligence of the parents the arm of the one of the twins had caught in the car
door. In this, Mrs Augustine shouted and said that she will make sue upon the company.
According to the aspects of defenses, Salvatore is not responsibly for the injury suffered
by the one of the twins of Mr Augustine. Moreover, company had informed couple of Augustine
to exert control upon the activities of their children. They had neglected such aspect which may
turn into injury to the child. Although, management of the garage is also required to make
arrangements in relation to the monitoring of the activities of guest in order to prevent accidents.
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Consequently, Salvatore is partially liable for the injury suffered by the child of Mr and Mrs
Augustine.
C. Given case situation states that Salvatore had habit to kept cash in the showroom in the more
safe manner on the basis of his past experience. On the day of accident, someone decided to take
entry in the property through drain pipes to access an open window. Unfortunately, drain pipes
gave away because they loosed from sometime. In this, Salvatore will be not held responsible for
the damages suffered by the theft. Moreover, the loss suffered by the theft is not foreseeable by
Salvatore. On the contrary to this, Salvatore can also claim for the damages from the insurance
company to the extent to which loss is suffered by him.
D. In accordance with the given case scenario personnel of the Salvatore had obliged builder for
moving the truck. Driver of Salvatore drove on the path of cyclist. Due to this cyclist was caught
into the spokes of bikes and because of this cyclist was thrown off his bike. Thus, according to
the provisions of vicarious liability Salvatore is held accountable for the unwanted performance
of their personnel. In addition to the negligence aspect of the employee is occurred during the
course of employment. Thus, employer is vicariously liable for the damages incurred by the
cyclist. On the contrary to this, if cyclist was started to make race with the another car then
Salvatore is not liable to pay compensation to the cyclist for the damages suffered by him.
Moreover, as a reasonable person cyclist requires to follow all the safety aspects while driving.
Hence, in this condition owner of garage is not liable for the any injury of cyclist.
CONCLUSION
From this report, it can be articulated that Salvatore needs to undertake distance as well
as written form of contract. Through this, Salvatore is able to make contact with the large
number of potential buyers and thereby be become able to make most profitable contract.
Besides this, it can be inferred that parties to a contract must follow all the essential aspect to
form a legal bindings and relationship. It is revealed from the present report that contractual
parties needs to perform their act in a responsible manner. If one of the party fails to perform
their duties and responsibilities then innocent party can make sue upon the defendant party due
to which is loss is incurred. In addition to this, it can be concluded that Salvatore needs to make
proper safety arrangements for their employees. In the case of any default in the performance the
Salvatore is liable for the injury of the employees. It can be seen in report that Salvatore is
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vicariously liable for the unwanted act for its employees. For this, he is required to compensate
the damaged party for the loss suffered by him.
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