Report on Types of Contracts- Salvatore

Added on -2020-02-05

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Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
1. Standard form of contract which is suitable to the smaller garages........................................1
2. Stating the elements which are required to create legal relationship......................................3
3. Applying elements of contract in different business situation................................................4
4. Applying contractual terms in the different business scenario...............................................5
TASK 2............................................................................................................................................6
TASK 3............................................................................................................................................8
TASK 4 .........................................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
INTRODUCTION
Offer, acceptance, valid consideration and intention for the creation of legal obligations
are the main aspects of contract. All the parties to a contract must fulfill all these elements while
making a lawful relationship. Moreover, contract is voluntary, deliberate and legal binding which
takes place between two or more competent parties. There are mainly two types of contract
including written and oral contract which competent parties prefer to make with an intention to
create a legal relationship (Ayres, 2012). Different contracts place varied impact upon both the
parties. Thus, competent parties need to be taken into consideration all the implications and
remedies while making contract. In addition to this, company has liability to make proper health
and safety arrangements for their employees which prevent accident. Further, as per the laws and
legislation, employer is liable to pay remedy for the undesirable act which is performed by their
employees.
The present report is based upon the case scenario of Salvatore who is an owner of
garage such as MotorRus. In this report, different types of contracts will be discussed. In addition
to this, it will also shed light on the offer and acceptance aspects which are required to form a
legal contract. It will also examine different terms of contract as well as develop understanding
about the concept of negligence and vicarious liability.
TASK 1
On the basis of cited case scenario, owner of the company namely Salvatore is not able to
make effectual business decisions due to his old age. Thus, Motor RUS has appointed skilled
personnel who is able to give better advice to the business entity.
1. Standard form of contract which is suitable to the smaller garages
According to the given case study, Salvatore wants to invest in Spare parts upto £7,500
with the intention to selling it to the potential customers. Nevertheless, he is facing problem in
identifying the most suitable type of contract which he needs to undertake. There are different
types of contracts which garage company can undertake which help them in providing
information about the spare parts to both the existing as well as potential customers. These
contracts are:
Express contract: The contracts that are explicitly created and need to be entered into are
termed as express contracts. In these kinds of contracts, it is essential to explicitly cite all
1
terms and conditions for both the parties. Further, parties are liable by all terms that are
stated into the contract (Friedman, 2011). However, the liability in case of breach of
contract depends on type of the contract. It may be defined as those which may make
either in oral or written form.
a. Oral contract: In oral contract, all the terms and conditions are discussed by the parties through
verbal means such as telephone etc. In this, both offer and acceptance take place in oral form. In
case of any disputes, judiciary party is unable to give fair judgment or decisions due to absence
of any evidence (Furmston, Cheshire and Fifoot, 2012). It is through verbal agreement between
parties that the contract has been established. Further, trust is considered to be an important
factor in case of oral contract. It is difficult for any parties to establish evidence in case of breach
of contract.
b. Written contract: Under this, all the terms and conditions which are agreed by the competent
parties are mentioned in the written format. It is the most effectual contract which offers relief to
the claimant in against to the defendant party if any dispute arises between them. Moreover, in
written contract, innocent party has proof which he can represent in front of judiciary. Thus,
written contract provides assistance to the innocent part if defendant party makes any default in
his performance (McKendrick, 2014). In these kinds of contracts, it is easy for parties to
establish evidence. The written proof is developed at the time of signing of contract. The
agreement entered into contains all kinds of clauses to be abided by law. In case of breach of
contract, the liability can easily be established on the basis of written terms and agreements. It
can be therefore said that the written contracts prove to be more viable in nature on the basis of
legal regulations. It is essential for parties to understand all legal terms and conditions before
entering into any kind of written contract.
Unilateral contract: In unilateral contract, one party makes promise to another party that
he will perform certain act or duty within the specified time period. It is also known as
one sided contract because one party makes promise to another without taking consent of
him. In this situation, offeror is obliged to perform the duty when offeree performs
according to the promise which is made by other party. It can be termed as a contract
where single party has made some offer (Beale and et.al., 2010). However, it is not
necessary that another party has accepted the offer. Unilateral contract is majorly
established majorly by businesses when they offer some discounts and privileges.
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