Comprehensive Analysis of Contracts and Negligence in Business Law

This report delves into the intricacies of contract law and negligence within a business context. It begins by outlining the essential elements required for a valid contract, including offer, acceptance, consideration, intention to create legal relations, capacity, and privity of contract. The report then explores different types of contracts, such as bilateral, written, face-to-face, and unilateral contracts, and analyzes their impact on both individuals and businesses. Key terms within contracts, including express terms, implied terms, conditions, warranties, and innominate terms, are defined and explained. The report applies these elements to business scenarios, examining how contracts are formed and the implications of breach. Furthermore, it contrasts liability in tort with contractual liability, explaining the nature of liability in negligence and vicarious liability, and applying the elements of the tort of negligence and defenses. The report concludes with a comprehensive overview of the legal principles involved in contract and negligence, making it a useful resource for students studying business law.

Aspects of contracts and
negligence for business

Table of Contents
Introduction......................................................................................................................................4
Task 1...............................................................................................................................................4
1.1 Importance of essential elements required for the formation of a valid contract .................4
1.2 Discussion on the different types of contract.........................................................................5
1.3 Analysing terms in contract ..................................................................................................6
Task 2...............................................................................................................................................8
2.1 and 2.2 Applying the elements of contract in given business scenarios................................8
2.3 Report to Mr Michael Hair ..................................................................................................9
Task 3.............................................................................................................................................11
3.1 Contrast liability in tort with contractual liability................................................................11
3.2 Explaining the nature of liability in negligence...................................................................11
3.3 Explaining the way a business can be vicariously liable.....................................................12
Task 4 ............................................................................................................................................13
4.1 Applying the elements of the tort of negligence and defences............................................13
4.2 Applying the elements of vicarious liability .......................................................................13
Conclusion.....................................................................................................................................14
References......................................................................................................................................15
Online.........................................................................................................................................16

Introduction
A contract is refer to agreement in which both the party who make offer and who accept
it need to agree with all terms and conditions. There are different types of contract which can be
created in different situations. The present report is based on different scenario which are based
on various case of negligence of contracts. In this report different elements of contract is discuss
in detail. Along with this, different types of contact and its impact on both business and
individual is explained. Apart from this different elements of tort of negligence has been discuss.
Task 1
1.1 Importance of essential elements required for the formation of a valid contract
There are some essential elements for forming a valid contract that are as follows:
 Offer: The offer is an agreement or a promise which needs to be made contract. In case if
offer is made by one party to other than the valid contract cannot be formed. As per
contract act 1950, the first element in a contract is offer. It is an important element for
making a contract valid and there should be at least two parties or more for making any
legal contract (Anson, Beatson and Cartwright 2010). Further, if offer is accepted by
other party with all terms and condition then it becomes a valid contract. For example, in
present case Freedy advertised on its websites for the sale of high definition TV for £145.
It is an original offer which is made by Lyala which was cancelled because it was not
accepted by any other party. On the other hand, Lyala responded to the advertisement and
made counter offer for buying high definition TV at £125.
 Acceptance: After making an offer by one party there should be acceptance from other
party. At the time when one party makes offer with clear terms and condition then make
acceptance once it clear with the rules and regulation being offer in the contract (Olander
and Norrman, 2012.). Apart from this, there cannot be any valid offer made if the parties
negotiate or discuss on above made offer. The offer can be valid if it is accepted by other
party on given terms and conditions (Liu, Cheng and Xie, 2012.). For instance, in given
scenario counter offer is made by Layala for buying a TV at £125 through email and it
was accepted by other Freddy. This reflect that, original offer was not created in place of
it counter offer made which is accepted with terms and condition by Freedy.

 Consideration: It is another important element for creating a valid contract. Consideration
in a contract means that one person give something back to other in return. Further, it is
an exchange which is made between other two parties that is promise and promissor. The
consideration is also giving something to other party in return which can be money or
ever payment (Hou, Zeng and Zhao, 2010). For instance, in given case layala make offer
to buy TV at £125 and Freedy. For buying TV Layala agree to pay £125 as consideration.
 Intention to create legal relations: For making a valid contract, it is necessary to create a
legal relationship. In this, common intention of the parties which should be legally
enforceable (Forstenlechner, And Lettice, 2008). Further, if any party do not have any
intention of creating a legal relation in a contract then it would be subject to a lawsuit.
For instance, in given case both party offrer and offree are legally agreed to make
contract on given terms and condition.
 Capacity: Capacity in contract means both party ofrer and ofree must have the legal
capacity to do so (Berger and Lester, 2015). This means person who make offer and other
person who accepts the contract must be above the age of 18 and should be mentally fit
(Connolly and Hoar, 2014). For example, in the given case both parties are above the age
of 18 and have the legal capacity to enter into a contract.
 Privity of contract: In a privity of contract, the relation between the parties in a contract
which have right to sue each other in court but forbid third party from sue (Connolly and
Hoar, 2014). For instance, in given scenario if contract is breached by any party then it
can claim in contract. However, third party have no right to sue in the court
1.2 Discussion on the different types of contract
There are different types of contract and each contract have some impact which are discussed
below
Bilateral contract: It is a contract in which both the party offerer and offree need to make
contract and one party take obliged action which comes under bilateral contract. It is type of
agreement which is enforceable in the court (Carter and Courtney, 2016..). For example, if one
party sale house and both parties agree with given terms and condition at the time of formation
of contracts.
Written contract: In the written contract, both parties make contract in the written form
and agree with all terms and condition provided in the written contract. For example, one party

make offer to sell house to other party in written form and other party accept and sign the
contract on given terms and condition written contracts.
Face to face contract: In face to face contract, both party sit together and agree with terms
and condition (Marks, Marks and Jackson, 2013). This contract is beneficial because if any
misunderstanding takes place then it can be resolved on time. For example, one party sell the
goods the other party can inspect the quality of goods and then make decision to enter into a
contract or not.
Unilateral contract: In a unilateral contract, only one part makes agreement and fulfils the
promise. Further, in this one party give proposals and acceptance in the contract (Martin, and
Van Linden, 2015). For example, Mr Z promise to pay £500 for cook and does not act on return
of performance.
Impact of contract on individual and business: Any agreement made by two individual or
business parties to follow the rules with loyalty. There are some positive and negative impact of
contract on individual and business (McInnes, Kerr and VanDuzer, 2013.). It any party breach
the contract then other party can sue in court. Further, in this one party give proposals and
acceptance in contract. For example Mr Z promise to pay £500 for cook and does not act on
return of performance.
Impact of contract on individual and business: Any agreement made by two individual or
business parties to follow the rules with loyalty. There are some positive and negative impact of
contract on individual and business (Oni-Ojo and Iyiola, 2014). It any party breach the contract
then other party can sue in court. Further, there is legal approval which mean both the party who
enter into contract have fear to pay fine if them breach any rules.
1.3 Analysing terms in contract
The different terms that can be included in a valid contract is as follows
Key terms definition Further explanation
Express term Express term is a term which
is specifically mentioned in
contract and must be agreed by
both parties who enter into a
contract.
Express term is a express in a
contract a written for or in a
oral forms. If one party unable
to fulfil this term of after
entering into a contract then

other party can sue in court. In
this all terms and condition
clearly mentioned in contract
which both party need to
follow it strictly.
Implied term Implied term refer to the words
of condition which court
assumes and intended to be
include in contract (Berger and
Lester, 2015).
Implied term is made by legal
authority and government in a
contract. Further this term is
not mentioned in contract but
need to adopt legally and
followed by both party who
enter into contract.
Condition In a contract condition refer to
each parties which is duty or
required to perform by both
the party under contract.
Further it is an act which
affects party's contractual duty.
Condition is very important
term in contract such as it is a
root of contract (Connolly and
Hoar, 2014.). If, any party
breach the condition
mentioned in contract then it
other party can claim in court
for damage. And other party is
liable to pay for a damage in
the contract.
Warranties Warranty in a contract is a
promise which provide
sureness by one party to
another party for any specific
fact which will be happen
(Carter and Courtney, 2016).
Warranties is not much
important as compare to
condition. In this if one party
breach the warranty then
innocents party can claim in
court for only damage. It
cannot end the contract.
Innominate term It is a term which link This term is not much

between both condition and
warranties
important in contract as like
other term
Task 2
2.1 and 2.2 Applying the elements of contract in given business scenarios
.
Different elements of contract in given business scenario is as follows
Offer and acceptances: According to the given scenario, Bell UK make offer for selling it
Miracle shampoo at half price. This offer is for limited time which was accepted by Hair 4 U a
small local businessman. In this scenario one party make offer and other party accept the offer
with the given terms and condition (Marks, Marks and Jackson, 2013.). Offer and acceptance
element of valid contract is reflected from the given scenario.
Consideration: It is another element of valid contract. As per the given scenario Bella UK made
offer for selling its Miracle shampoo at half price. While other party Hair 4 U accept the offer
and ready to pay in return money.
Purchase Agreement
Party 1: Bella UK
Party 2: Hair 4 U.
Based on the follow position:
(Expressed term)
Party 1 will agreed to
As per the given scenario, Bella UK mentioned in contract that it sale 10 boxes of miracle oil at
half price and this offer it for limited period of time. It is mentioned in a contract which cannot
be breach by Bell UK.
Party 2 will agreed
According to the given scenario, Hair 4 U is a local small business which saw the
advertisement and place order for 10 boxes of miracle oil. So it cannot a cancel the order after

placing it beucase it is limited time offers.
(Implied terms)
As per the sale of goods act 1979, if one party sold goods to other party then it should sale as
per the contract and it should not be defectives. In accordance to given scenario, it is mentioned
in contract that Bell UK is not responsible for the any adverse result because it gain only 20%
success. According to the law of contract if any party sale goods which are defective then party
who sold the good is liable for paying damage as it mentioned in contract or not.
(Exclusion clause) Pick 2
In a given scenario Bella UK is a fictitious company who makes different beauty products.
Recently Bella UK make miracle shampoo for hair growth. Further for selling the product Bella
UK mentioned in contract that she is not liable for any adverse impact of Miracle oil. It is an
exclusion clause which is mentioned in contract
Second party: Hair 4 U ……………….… ………………
Full name Mr Michael Hair Signature
Date
First party: Bell UK ……………….… ……………
Full name Bellas Signature Date
2.3 Report to Mr Michael Hair
To Mr Michael Hair
RE: Report on key terms
 Define breach of a contract, explain this further
A breach of contract is a legal cause of action in which any party can breach the contract if
other party breach any condition then innocent party can sue in court. In this if any party fail to
perform contracts terms and condition. Further breaking a contract is a common causes of law

suits for any harm or damages. On the other hand breach of condition is if any party fail to fulfil
the condition provided in contract is known as breach of condition. For example if any party
breach the condition then innocent party can breach the contract or claim in court for damage.
Condition is very important term in contract which need to follow by both the party at the time
of entering the contracts.
In a contract exemption clause seeks to restrict the liabilities which may arise at the time of
making legal relations. This clause is generally included in contract for protecting for bing sued
in a contract by the other party of damage, or losses. Along with this, if any court think that
exemption clause used in contract is not make any sense then court have right to declared it
void.
What does this mean for Hair4U and their contract with Bella UK. Explain these points of their
contract.
For Hair UK this means that if any contract signed by him with Bella UK, it need to read all the
terms and condition of contract. Further, it is necessary that it not breach any condition as Bell
can sue in courts. Apart from this, as mentioned in contract that Bella is not responsible for any
adverse affect then it cannot sue in court for any accident which cause after enterings into a
contract
Sincerely

Task 3
3.1 Contrast liability in tort with contractual liability
There is some difference between liability of tort and contractual liability. This both
liability is belonged to diverse filed of condition and responsibility which are mentioned in both
are different from each other. There is involvement of both parties as manual consent in a
contractual liability (Martin, and Van Linden, 2015). While in tort liabilities it is imposed by
law and all the instruction which are mentioned in law need to be followed by party who are
involved in contract. In addition to this if any mistake is made by any party then it is responsible
for paying damages. In a business partners who are involved in trade of goods and services or
involved in partnership business. Then it any tort is committed than by any business then other
partners who work with them are also responsible for any mistake.
At a time when two parties are involved in making a contract then both party offerer and
ofree need to accept all the terms and condition which are mentioned in contract. Whenever any
party breach the condition of contract the it declared as a void. In a tort liability if a person
breach a duty which is done by them (Martin, and Van Linden, 2015.). Then government is
responsible to punished for mistake which is committed by person. On the other hand any party
under the contractual liability breacher the condition which are mentioned in contract then it
covers under the contractual liabilities. Tort is imposed by government which means that if any
wrong action taken by person it will be represent as unlawful action as per the government law.
For example if any person unable to perform its duty and it cause harm to defendant, then
defendant have right to sue in court. It can take legal action and court it liable to punish for
wrong doing.
3.2 Explaining the nature of liability in negligence
According to the case of Donoghue v Stevenson. Mrs Donoghue went to cage with a
friend where they order a bottle of ginger beer and ice creams. The ginger beer and ice cream is
an opaque bottle which unable to see content (Thampapillai, Tan. and Bozzi, 2012). There Mrs

Donoghue poured its drink content on ice cream and also drank from the bottle. After, eating ice
cream the decompose sail from the bottle and as a result Mrs Donoghue suffer from personal
injury. Then it successfully also claim against the show owner in court.
From the above case some element of negligence shown which are discussed below
 Duty of care:In this a legal duty of care of one person toward the other person. In case if
any person fail to perform its duty and due to its action if other person get injured.
Therefore, the person who get harmed from other party can claimed in courts. If law
recognized the mistake of defendant then responsibility of taking cares arrives. As in the
case of Donoghue v Stevenson Mrs Donoghue can harmed by eating ice cream from ice
cream parlour. It show that owner of ice cream shop is unable to perform its duty of care,
so Mrs Donoghue can claim in court for compensation.
 Breach of duty: it any individual who take responsibility of providing duty of care for
plaintiff and then unable to fulfilled it. Then it show the breach of duty the element of
negligence. Further as in case of Donoghue v Stevenson, it is a responiliyt of owner of
ice cream parlour to serve Mrs Donoghue a healthy drink instead of decomposed which
injured her badly. This show that Owner of ice cream parlour breach its duty and Mrs
Donoghue can sue in court for claims.
 Causes in facts: In this negligence, plaintiff who got injured by defendant action need to
proof in court that it got harmed by action of defendants (Sweet and Schneier, 2012.). As
in case of Donoghue v Stevenson, Mrs Donoghue have no proof to sue in court.
3.3 Explaining the way a business can be vicariously liable
According to the given case Bob a local milkman hired Matt a 13 years old boy for
helping in delivering the milk on Wednesdays. As Matt is below 18 years and as per law it
cannot hire for job. Further Bob told Matt that it was not supposed to hire and they should kept
in between themselves. Unfortunately on Wednesday morning as Matt was helping Bob to
deliver the milk it reversed the van and Matt wan injured badly.
Yes Matt can sue in court because action of Bob injured him badly. As it is against the law to
hire people below the 18 years.
Yes, Norfolk farms be held vicariously liable in this situation because Matt was injured in
accident at the time of delivering the milk. Vicarious of liability is known as a business group in

if any employee perform wrong in company, then owner of business is liable for its. There are
responsibility of the staff members to not do anything wrong within the organization. Many of
the staff member are not aware of their responsibility toward the organization which lead to
suffer by owner of company. In the given case Bob hired Matt who is below 18 for delivering
purpose without taking permission from owners. Further accident occur by Bob in which Matt
injured. Now it become responsibility of owner to pay compensation for injury from which Matt
is suffering as because it harmed at time of working his work. As it can supported from the case
of Lister v. Hesley Hall Ltd 2001.
Task 4
4.1 Applying the elements of the tort of negligence and defences
According to the given case , Albert had decided to rent a flat from Brad. He filled an
application form and also provided his accountant detail to Charles D lois who is a refree. Brand
want Charles financial situation information so that it can make decision whether it need to give
rent on not, to Alberts. Charles who was accountant was get confused and without checking
information properly it provide wrong information to Brad. He replied to Brad that Albert is an
excellent client with high income and savings and it will be best to give him rent Further, it
looked the account detail of Albert in which it is overdraft and has been serious debt with
various bank. After some month it Albert disappear have run up wroth several thousand of
pounds worth of rent arrears.
In accordance to the case Brad can recover his losses from Charles because it provides a
wrong information in concern to Alberts. Charless D Lois is a referee of Albert and it know the
financial detail of Albert but after knowing that he is suffering from debt it ignored it and give
wrong detail to landlord. This cover the element of breach of duty from Charles side. It is a
responsibility of Charles to provide right information to Brad instead of ignoring it. This action
make Brad to suffer from loss. Now, Brad have right to claim in court and ask for compensation
as it suffer from loss due to action of plaintiff.
4.2 Applying the elements of vicarious liability
a.)