Can an Innocent Party Claim for Damages in Case of Contractual Breach?

An innocent party can claim damages in case of a breach of contract terms. The company must enter into a written contract to provide evidence in case of a breach. If the company fails to perform their duty of care, they must pay off the damages to the injured party. Several defenses are available to mitigate liability.

ASPECTS OF
CONTRACT AND
NEGLIGENCE FOR
BUSINESS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Importance of essential elements required for the formation of valid contract.....................3
1.2 Impact of different types of contract......................................................................................4
1.3 Terms within contract and their effect...................................................................................5
TASK 2............................................................................................................................................6
4. Case Scenario...........................................................................................................................6
5. Consequence of classifying the terms......................................................................................6
6. Case Scenario...........................................................................................................................7
TASK 3............................................................................................................................................8
7. Contrasting liability in tort with contractual liability..............................................................8
8. Explaining the nature of a liability in negligence....................................................................9
9. Explaining the vicarious liability of a business.....................................................................11
TASK 4..........................................................................................................................................12
10. Case Scenario.......................................................................................................................12
11. Case Scenario.......................................................................................................................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15
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INTRODUCTION
UK government mainly focuses on imposing different laws that is contractual law as well
as tort law whose key objective is to encourage fairness and equality while performing the
commercial transaction as well as to secure the interest of individual (Bar-Gill and Ben-Shahar,
2012). Moreover, the contract law is relevant in the condition when parties reciprocally agrees to
formulate the contractual deed with the key aim to accomplish the promise. Thus, another law
that is negligence law is applicable when there is no contractual agreement among the parties and
it results in injury to the other party.
Presently, the report focuses on understanding both the law as it focuses on different
provisions related with the damages and injury as in the situation if parties are unable to perform
their duty with care they are entitled to pay compensation for the injury and damages that is
occurred to the innocent party.
TASK 1
1.1 Importance of essential elements required for the formation of valid contract
Contract is considered as the binding or written statement among the different parties that
is enforced judicially (Bix and Bix, 2012). The valid contract constitutes different terms as well
as conditions that is abided on both the parties that they have to perform accordant with the terms
and conditions. For formulating the valid contract among the different parties there are different
elements that need to be focused on (Main Elements constituting A Valid Contract, 2016). These
elements basically include-
1. Offer and acceptance- The foremost element that is required for developing the valid
contract is related with valid offer and acceptance. Offer is termed as the proposal that is
given by the parties to the other parties or to the general public that need to accepted by
the parties in order to perform the activity (Hall, Howells and Watson, 2012). While,
acceptance is the response that is provided by party in regards with the offer provided by
the party. Moreover, it has been stated that while accepting the offer party may not
present condition. The element is further explained as the offer that is offered by the party
and other accepts the offer then it constitute he valid contract among those parties.
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2. Competencies of parties- Another essential element that is required for formulation of
valid contract include that the parties those who are entering into the valid contract must
be competent enough for formulating the contract. Accordant with he judicial system
individual or party must have attain the age limit of 18 years or they may not be of
unsound mind, lunatic or alcoholic person (Lewis and Morris, 2012). The parties must
have attain the age of 18 as well as must be sound mind are in the condition to engage
within the contractual relationship.
3. Intention to create legal relationship- Furthermore, for formulating the valid contract
another significant element is related with the intention of the parties. Therefore, the
parties those who are entering into the contractual deed have fair and ethical intention to
enter within the valid contract (Loos and et.al., 2011). For instance, if the parties may not
have fair purpose for creating legal relationship in such situation there is not valid
contract formulated among the parties.
1.2 Impact of different types of contract
Parties those who are willing to enter into the contract are needed to select suitable types
or form of contract accordant with the need and requirement (Oliphant, 2013). Thus it is because
different types of contract have assorted impact on the performance of contractual parties. The
different types of contract and their impact are measured as follows-
Written contract
One of the most effectual kind of contracts that is used within the business include
written contract. As, in the written agreement parties mainly focuses on different terms and
conditions and mutually agrees to put into the agreement (Van Dam, 2013). Furthermore, parties
are abide to follow and enact accordant with the condition and terms. The effect of written
contract is that it act as the proof to parties that they have been entered into the contractual
relationship. Moreover, they are also liable for performing and executing the activities according
to the conditions mentioned within the written contract (Weinbaum, 2011).
Distance selling
Another types of contract for parties who are present at the distant places and want to
enter into the contract must focuses on distance selling contract (Wei, 2011). Under this contract
parties are not in the condition to meet with each other at the common place in order to negotiate
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or discuss on the contractual terms that need to be included within the contractual deed. The
effect of distance selling contract is that parties residing at the distant place may easily formulate
the contract with the other party with the help of distance selling contract. The common type of
distance selling contract is telephonic contract. It is an effective form of contract under which
parties are not physically present while framing the contract. Over the telephone or other
communication medium they formulate the contract (Carson Chung and Day, 2012). For
instance; over the telephone contract one party will order the car products to the another party
over the telephone.
Oral contract
Another type of contract under which parties may agreed is oral contract or verbal
contract. This is also considered as the commonly used form of contract in the business for the
short time period. This form of contract is mainly suitable in the condition when parties are
physically present at the place (Middlemiss, 2012). The effect of oral contract is that it lacks the
evidence of entering into a valid contract. However, oral form of contract may not be
advantageous in the situation where one party does fraud with the other party and the defended
party has no right to sue them as due to lack of evidence.
1.3 Terms within contract and their effect
There are different terms as well as conditions that are required to be mentioned within
the contractual agreement so that parties can easily perform and render services accordant with
the mentioned terms within contract (Ng and Nudurupati, 2010). It is essential for the parties to
meet the terms and conditions in the case if parties are unable to perform accordant with the
terms then aggrieved party is in the condition to terminate the contract. The different terms that
are mentioned within the contract are-1. Expressed terms: These are the key terms that are entered while formulating the contract
among the different parties. The terms are expressly stated within the contract as the
parties has been mutually agrees to all the terms and conditions within the contract
(Geistfeld, 2011). The expressed terms mainly include condition, warranties and
Innominate terms. Conditions are the base of formulating the contract. In the situation
when party breaches the condition in such situation party is liable to spay compensation
for the damages.
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2. Implied terms: These are also considered as the significant terms within the valid
contract. These terms are not clearly stated within the contractual deed as these terms are
enforced by the customers or governmental authorities (Wei, 2011). Therefore, it is
essential to meet the implied term by the parties those have been in the contractual
relationship. The key aim of imposing implied term within the contract is to protect the
interest of parties from the unethical or unfair activities performed by the other party.
TASK 2
4. Case Scenario
Jacob goes to the bookshop of Edward because he sees the HND book of Law which was
displayed at his bookshop for sale which was priced for £50. Jacob took the book and took it to
cash counter to pay for it. However, Edward refused and said that it is the last copy remaining
and it has been already sold to Bella but he forgot to remove it from the display. Jacob insist for
that book and is upset now. There are several elements mentioned which have been mentioned
below to describe this case:
 Face-to-face Contract: There was a face-to-face or verbal form of contract through
which both the parties could have entered into a contract. The reason is that they both
were physically present in front of each other and also discussed all the terms and
conditions when Edward went to pay the amount for the book (Lewis and Morris, 2012).
 Invitation to Treat: The book which was displayed in the shelf at book store does not
create offer for the visitors. Instead they are termed as the invitation to treat. Therefore,
according to the case of Pharmaceutical Society of Great Britain v Boots [1953] 1 QB
401, the good which are displayed in the shelf are for inviting the party to give offer to
the shopkeeper (Van Dam, 2013). Whereas, this depends upon the seller whether to
accept or reject the offer given by the offerer. Thus, the Jacob cannot force the Edward to
accept the offer as it was mere an invitation to treat.
5. Consequence of classifying the terms
In a general term, there are three terms of the contract which comes under the major term
of express term and those terms are classified as conditions, warranties and innominate terms.
The classification of these terms also includes some of the consequences and they are described
as follows:
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 Conditions: It is the major term of the contract and it exist in the centre of the contract
that creates the root of the deed. Furthermore, this term has been classified in order to
determine the outcomes of the breach of the term (Bix and Bix, 2012). Whereas, the
breach of this term result in the termination of the contract by the innocent party and
payment of damages to them as well by the defendant. This term can be cited with the
case of Poussard v Spiers (1876). Warranties: These are considered as the minor term of the contract because it does not
exist in the centre of the contract (Oliphant, 2013). During the breach of this term,
innocent party is not entitled to repudiate the contract instead they can only demand for
the payment of damages. Therefore, this term has little consequence on the parties. The
case of Bettini v Gye (1876) can best describe such kind of term.
 Innominate Terms: This term has been originated after the case of Hong Kong Fir
Shipping v Kawasaki Kaisha Han (1952). These terms are based on the seriousness of the
consequence. If the consequence are serious then the parties have the right to repudiate
the contract and claim for the damages. If the consequence is not serious then the injured
party can only claim for the damages. That is why this term is known as the intermediary
term between condition and warranty (Van Dam, 2013).
6. Case Scenario
The case describes that Sophie went to the park where she saw that local council provides
chair on hire at 50p. She paid the amount and got the ticket in return. Over that ticket a clause
was written which says that there is no liability of council if hired document get damaged.
Unfortunately, Sophie's chair collapsed and she got damages on her body and clothes.
Verbal & Bilateral Contract: As per the given case, Sophie and local council have created
verbal and Bilateral contract. It is because the agreement was formed after the mutual consent of
both the parties. Condition: The condition in the given case is the price of the chair services in the
contract. Express Term: Chair hired for 50p is the express term in the given case scenario of
Sophie and Local council.
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Exclusion Clause: Clause written on the back of the ticket was the exclusion clause as per the
local council. It has been written in order to mitigate the obligation of the park council. However,
according to the case of Chapleton v Barry, ticket is merely a receipt and clause written over
there is not considered as exclusion clause. Also the ticket is not a part of contract as it is formed
after the formation of contract. Along with that, exclusion clause does not include the reduction
of liability of death and personal injury of the individual. In addition to this, all the terms must be
cleared before the formation of contract. Therefore, the exclusion clause of the local council will
not be considered valid.
TASK 3
7. Contrasting liability in tort with contractual liability
Tortuous liability and contractual liability has several similarities as well as
dissimilarities. They are similar because both kind of liability is governed by civil law and they
are regulated by this law in order to safeguard the interest of the weaker party (Ng and
Nudurupati, 2010). Along with that, the regulations of these contracts are decided by the civil
law. Along with these similarities, both kind of liabilities have several dissimilarities and they
have been discussed below:
Basis Contractual Liability Tort Liability
Meaning This liability can be defined as the
obligations which are assumed by
any contracting party within the
terms of a contract.
This can be defined as the legal
obligation of one party to that
victim due to the result of a civil
wrong or injury (Geistfeld,
2011).
Parties Relationship There is an existing relationship
between contractual parties. The
reason is that contract has been
formed with the consensus of all
the parties to the contract.
Here, in this case the relationship
between the parties get formed
with an imposition by the court
of law. It is because, one party
fails to perform the duty of care
which have been defined by
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statute.
Nature of Obligation The obligation in this case is that
the parties are require to comply
with the terms of the contract.
Within this liability, parties need
to take care of duty which have
been established by the English
Law (Tort Law, 2016). This
obligation is expected from the
reasonable man which must be
performed by them.
Claim for Damages The damages caused by the
plaintiff can be claimed by the
innocent party and this must be
offset by the culprit party in order
to indemnify the impact of the loss.
Furthermore, by paying off the
damages, the claimant should be
brought back ti that position if
satisfactory performance have
provided (Loos and et.al., 2011).
Claim for damages can be made
if the injured party successfully
prove the elements of negligence.
In addition to this, the plaintiff is
in a position to pay off the
damages by considering the
injury of the injured party.
Case Example The case example of Tesco v
Constable can be used for
supporting the case of contractual
liability.
In this case, references of the
case of Donoghue v Stevenson
can be taken in order to
understand the tortuous liability.
8. Explaining the nature of a liability in negligence
Definition
In a general term, negligence can be defined as the inability of an individual or business
entity to conduct the reasonable care which a reasonable man must take in a particular situation.
Otherwise, a certain area of tort that is generally known as negligence and this includes harm.
Further, this has been caused because of the carelessness and which is not an intentional harm.
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Moreover, the negligence can be defined by gaining the insight of the case of Nettleship v
Weston where plaintiff agreed to teach the defendant how to drive in her husband's car.
However, during the lesson defendant lost the control which resulted in an accident where
plaintiff got injured. The plaintiff claimed on the defendant for this injury. Thus, the case of
negligence occurred in this situation (Weinbaum, 2011).
Furthermore, it can be understood that the innocent party can claim for the damages by
proving the negligence.
Elements:
There are basically four elements of negligence which should be proved by the plaintiff
in order to prove the occurrence of negligence. These elements have been described below: Duty of Care: There are distinctive standard duty of care that have been defined by the
court of law within the English Law. This inferred that a reasonable individual and
business entity is needed to take duty of care at the time of carrying out their own
performance (Hall, Howells and Watson, 2012). Breach of Duty: When the established standard duty is not carried out in a satisfactory
way by the prudent man and organization then breach of duty occurs. Moreover, the test
of breach of duty is done basically in objective manner however there might be slight
variations to this. Damages Caused: In order to demonstrate the causation in tort law, it is important that
the claimant must establish the loss which have been caused to him is occurred due to the
negligence by the defendant. Further, there is an issue if there is an existence of more
than one possible cause. Thus, this can be cited with the case of Baker v Willoughby
[1970] AC 467.
 Remoteness: For proving the negligence, this element of negligence should be satisfied.
It is necessary that the injury or loss caused to the defendant must be of foreseeable type.
That means, the injury must be visible to prove the negligence.
Furthermore, after proving the negligence through these elements, a claimant can easily
claim for the damages. However, there are three defenses available for the plaintiff under which
they can mitigate their liability (Carson, Chung and Day,2012).
Defenses
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There are basically three defenses which can be used by the plaintiff in order to mitigate
the liability in tort. Three defenses have been described below: Volenti Non Fit Injuria: Herein, plaintiff can reduce their liability if the injured party has
put themselves into that situation where he is aware about the existence of risk.
Therefore, the mistake is not of plaintiff if all the elements of negligence get satisfied and
this way plaintiff can be exempted from the liability. Contributory Negligence: Within this the innocent party and defendant have contributed
togetherly for the occurrence of negligence. This is why contributory then can pay off the
liability and this is how plaintiff can reduce their liabilities.
 Ex Turpi Causa: The claimant cannot claim legal remedy if it causes from the their own
illegal act. This way the liabilities of plaintiff get eliminated and claimant is no longer in
a position to claim for the damages due to the negligence caused by the defendant is not
effective (Wei, 2011).
9. Explaining the vicarious liability of a business
The vicarious liability can be defined as that liability in which a third person is held liable
for the negligent action carried out by another person. For instance, in case of parenthood, when
the child conduct wrongs and the liability is borne by the parents. Along with that, the person
who did wrong is also liable for the wrongs he carried out. Moreover, the vicarious liability
occur when someone is in-charge of another person and the control of one person is in hands of
another.
In a similar manner, business also held vicariously liable in case when there employees
carried out wrong doings. There are several illegal act which can be conducted by the employees
at workplace. For instance, conducting mental and physical harassment with other co-workers.
Also the employee can carry out the fraudulent and hoarding activities (Bar-Gill and Ben-Shahar,
2012). Furthermore, employee can also come at workplace with intoxication and also they can
cheat or mislead the customers. Therefore, for all these wrong activities, company or employer
will be held vicariously liable as they have the complete control over their employees. If they
carry out these wrongs then employer is held liable because they are not properly guided. Along
with the vicarious liability, employee itself is liable for their part of share.
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Moreover, in order to prove the vicariously liability, it is important that elements or
principles of vicarious liability get satisfied. Therefore, elements of vicarious liability have been
described below:
 The tort must be carried out within the employment period and at workplace.
 The tort must happened during the working hours.
 Tortfeasor must be an employee of the company.
TASK 4
10. Case Scenario
In the given case, John was driving at 35 MPH speed in a 25 MPH zone. There were
some children playing and a nine year old boy Charlie was chasing a soccer ball. While
defending, John hit the telephone pole which was put by the TeleCo in the middle of the road.
Due to this, pole fall over Charlie after hitting John. Due to this, both of them got serious injury.
John wanted to sue the TeleCo for putting the pole in the middle of the road. Thus, these are
some of the elements which get applied on this case:
 Duty of Care: As per the given case, telephone company has to perform a duty of taking
reasonable care by not digging the pole in the middle of the lane. In addition to this, John
has the duty of care to drive in the lane at the defined speed of 25 MPH and not at 35
MPH.
 Breach of Duty: There is a breach of duty because the Tele company breach the duty of
care by digging the pole in middle of the lane. Further, at the same time John failed to
perform the duty of care by driving at high speed in 25 MPH speed lane.
 Damages Caused: The tort was carried out by the defendant party as the company put
the pole at wrong side and John drove at higher speed. It can be easily proved that there is
a tort of negligence (Carson, Chung and Day,2012).
 Remoteness: This element is proved because the injury caused to the John and Charlie
was of foreseeable type because both the parties were hospitalised as they cause serious
injury.
 Contributory Negligence: The John claimed for the damages to be paid off because
there was an existence of negligence which was occurred by the TeleCo. but the
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organization can take the defence under contributory negligence as company and John
both have contributed together for this negligent action.
11. Case Scenario
In this case, in a Regent Hotel, Colin who was a head chef hit the pan over the head of
Roger who is a dishwasher at this hotel. It is because, chef was irritated with the annoying
behvaiour of Roger as he was complaining about the rashes he developed by washing dishes. The
Roger was badly injured but he refused to go to hospital. Thus, Roger seek advice whether he
can bring claim against Regent hotel under vicarious liability or not? Or he can sue Colin as well
for this misconduct?. The advice has been provided to him in a below mentioned section: Vicarious Liability: As per the given case scenario, Roger can bring claim against the
Regent Hotel because the hotel will be held vicariously liable for the wrongful act
conducted by the Colin who is a head chef there. The reason is that the control of Colin is
in the hands of Regent Hotel or it can be said that Colin is an employee of Regent hotel.
And the wrings conducted by the employee puts the liability over employer. Furthermore,
Colin is the employee of the company so Roger can claim under the vicarious liability
against the organization.
 Principles/elements of Vicarious Liability: All the elements of the vicarious liability is
satisfied in this case. It is because the tortfeasor is the employee of the company as it is
clear that Colin is the head chef at the Regent Hotel. Along with that, the tort was carried
out during the course of employment and the act was regarded as the tort of negligence.
The reason is that Colin hit the Roger with the Pan and this was a violent action carried
out in the organization by the employee of the firm (Bix and Bix, 2012).
CONCLUSION
The aforementioned report concludes that it is important to gain knowledge about each
and every element of the contract law. This is because, the innocent party can claim for the
damages in case of any breach of terms. Furthermore, there are various of getting into contract so
that in a convenient manner contract could be formed. Furthermore, the company must enter into
contract using written contract so that company can provide evidence in case of breach of any
term. Furthermore, the report conclude the negligence in tort where business entity fails to
perform the duty of care. When the company fails to perform their duty that time they have to
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pay off the damages to the injured party. There are several defences available to them for
mitigating their liability.
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REFERENCES
Journals and Books
Bar-Gill, O. and Ben-Shahar, O., 2012. Regulatory techniques in consumer protection: a critique
of European consumer contract law. SAGE.
Bix, B. and Bix, B. H., 2012. Contract law: rules, theory, and context. Cambridge University
Press.
Carson, E. Chung, D. and Day, A., 2012. Distant relations: limits to relational contracting in
domestic violence programmes. International Journal of Public Sector
Management.25(2). pp.103-117.
Geistfeld, M. A., 2011. The Principle of Misalignment: Duty, Damages, and the Nature of Tort
Liability. The Yale Law Journal. pp.142-193.
Hall, E., Howells, G. and Watson, J., 2012. The Consumer Rights Directive–An Assessment of
its Contribution to the Development of European Consumer Contract Law. European
Review of Contract Law. 8(2). pp.139-166.
Lewis, R. and Morris, A., 2012. Tort law culture in the United Kingdom: image and reality in
personal injury compensation. Routledge.
Loos, M. B. M., Helberger, N., Guibault, L. and Mak, C., 2011. The regulation of digital content
contracts in the optional instrument of contract law. European Review of Private Law.
6. pp.729-758.
Middlemiss, S., 2012. The legal impact on employers where there is a sham element in contracts
with their workers. International Journal of Law and Management. 54(3). pp.209-221.
Ng, C. L. and Nudurupati, S. S., 2010. Outcome‐based service contracts in the defence industry –
mitigating the challenges. Journal of Service Management. 21(5). pp.656- 674.
Oliphant, K., 2013. Against Certainty in Tort Law. Tort Law: Challenging Orthodoxy Hart
Publishing. Oxford. pp.1-18.
Van Dam, C., 2013. European tort law. OUP Oxford.
Wei, W., 2011. Study on the Scope of Vicarious Liability. Journal of Pingxiang College. 2.
p.006.
Weinbaum, A., 2011. Unjust Enrichment: An Alternative to Tort Law and Human Rights in the
Climate Change Context. Pac. Rim L. & Pol'y J. 20. p.429.
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Online
Main Elements constituting A Valid Contract. 2016. [Online].Available through:
<http://www.lawteacher.net/free-law-essays/contract-law/main-elements-constituting-a-
valid-contract-contract-law-essay.php>. [Accessed on 17th June 2016].
Tort Law. 2016. [Online]. Available
through:<http://legal-dictionary.thefreedictionary.com/Tort+Law>. [ Accessed on 17th
June 2016].
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