Business Law: Contract and Negligence Analysis - Report

This report provides a comprehensive analysis of contract and negligence laws within a business context. It begins by outlining the essential elements of a valid contract, differentiating between various contract types (verbal, written, online, and implied), and clarifying the distinctions between terms and representations, as well as conditions and warranties. The report then delves into key areas of liability under tort and contract law, highlighting their differences and the concept of duty of care. Through case studies, the report illustrates the application of legal principles, including vicarious liability and the doctrine of res ipsa loquitur. The report concludes with an examination of how a company can be held vicariously liable and addresses case scenarios related to negligence and contract breaches. The report provides a detailed explanation of the law of negligence, including the duty of care and the implications of failing to meet this duty. The report also covers the doctrine of res ipsa loquitur and how it is applied to negligence cases, as well as vicarious liability. Overall, the report offers a thorough overview of contract and negligence, making it a valuable resource for students studying business law.

Aspects of Contract & Negligence
in Business
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TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................4
TASK 1............................................................................................................................................4
1.1 Elements of valid contract.....................................................................................................4
1.2 Different types of contract and their impacts.........................................................................5
1.3 Difference among the following terms..................................................................................5
TASK 2............................................................................................................................................6
2.1 Elements of contract.............................................................................................................6
2.3 'Implied terms' as regards to contract.....................................................................................6
TASK 3............................................................................................................................................6
3.1 Key areas of liability under tort and contract and their differences.......................................6
3.2 Nature of liability and 'Duty of care'......................................................................................7
TASK 4............................................................................................................................................8
3.3 How company can be vicarious liable...................................................................................8
4.1.................................................................................................................................................9
4.2 Case Scenario.........................................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
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INTRODUCTION
Government has imposed different contractual and negligence laws that focus on
providing standard guidelines to the business enterprise so that they can perform their activities
in an effective manner (Rose, 2009). Further, the guidelines provided by government are
mandatory for parties who are agreeing into the valid contract so that in the situation of injury or
damage, they can provide remedies to innocent parties. Present report focuses on highlighting the
essential elements that need to be focused by parties to formulate a valid contract. Further, report
will also focus on highlighting the key difference between the liability in contract with the
liability in tort.
TASK 1
Case Scenario,
The case scenario states that Luis asks his worker Peter to drive his pet dog, Tiger from
London to Paris but he has not given any reply to Luis. After three days, Peter drove Tiger from
London to Paris in car. While arriving in Paris, Tiger was dehydrated and had been taken to
animal hospital. This required Luis to pay £500 in the hospital.
1.1 Elements of valid contract
Through considering the above scenario, there has been no contract formed between Luis
and Peter. When Luis says to Peter for driving his pet from London to Paris, in such a situation,
Peter has said nothing. Therefore, according to law, silence of one party is not considered as
acceptance. There are different elements that result in formulating valid contract which are-
Offer- The key element for formulating a valid contract must ensure proper offer by one
party. As per the above case scenario, Luis offers Peter to pay £2000 if he takes his dog Tiger
from London to Paris.
Acceptance- Another element that is essential for a valid contract include proper
acceptance of offer by the other party. In the above case scenario, offer is provided by Luis but in
return, Peter has not said anything (Owen, 2007). Therefore, in the eyes of law, silence is not
considered as acceptance of offer.
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Consideration- On the other hand, consideration is also regarded as a key element while
formulating the contract. It is defined as something in return of the promises made by parties that
are agreeing to the contract.
Intention- Another element of valid contract is intention that is parties formulating the
contract must have legal intention to create a legal relationship. As per the case scenario, there
was no intention of Peter to formulate the contract with Luis.
1.2 Different types of contract and their impacts
There are different types of contract that can be entered in UK that is verbal, written and
online as well as contract by deed. Verbal contract is also known as face to face contract under
which both the parties orally formulate the contract. The impact of verbal contract is that it may
not consider as a valid proof for entering into the contract. Another type of contract include
written contract under which parties formulate proper written document that consists of mutually
agreed terms and conditions (McKendrick, 2015). The impact of written contract is that it may
be considered as a major evidence for the parties who are agreed in formulating the valid
contract. Another form of contract is online contract that is formulated through using electronic
source. For example, shopping through e-trading website is commonly considered as an example
of online contract. In addition to this, inferred contract is also termed as implied contract under
which offer and acceptance by the parties are provided through actions. Example of inferred
contract is taking lunch in the restaurant.
1.3 Difference among the following terms
1. Terms and Representation
Terms are defined as implied and expressed terms that play a significant role in
formulating the contract. Expressed terms are considered as those terms that are mutually
inserted by parties in the contract (Smits, 2014). On the other hand, implied terms are considered
as those terms which are imposed by the government or law within contract. On the contrary,
representation is defined as action or statement that is provided by one party that claims for their
products.
2. Condition and Warranties
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Condition and Warranties both are the expressed terms within the contract on which
parties mutually agrees. Condition is the base of contract on which the contract has been formed.
Parties have to accomplish the condition terms in order to ensure valid contract (Wishart, 2010).
On the other hand, warranties are the secondary or ancillary terms that is beneficial for the
situation where a party fails to meet the terms therefore, they are accountable for providing
damages.
TASK 2
Case Scenario,
The case scenario states that Mike manufactures engine filters he advertise in the trade
magazine that is they would supply filters at £60 per filter. He received letter form the company
requesting to supply 1000 filters. Mike has replied to the offer that he would sell the filter to him
at the cost of £50. but the sideline car plc has responded to the offer by stating the they would
pay £45 per filter. Mike wrote back stating that they would sell filter at lower price than £60 but
this respond from the Mike was not considered by Sideline car plc and Mike supplied Filter to
him.
2.1 Elements of contract
From the above scenario, it can be stated that case possess different element of contract
that is they were engaged in valid offer and acceptance. As offer provided by Mike was accepted
by Sideline cars plc through written letter. In addition to this, both the parties also have legal
intention to create relationship among the parties (Frey and Frey, 2012). On the other hand, the
consideration is also possess that results in formulating the valid contract.
2.3 'Implied terms' as regards to contract
In regards with the contract implied terms are considered as key term that is impose by
governmental authorities that is mandatory for individual and businesses to follow so that they
can render proper services accordant with the law.
TASK 3
3.1 Key areas of liability under tort and contract and their differences
Tort is regarded as the legal term which states the violation when one individual causes
injury to another. Further, this type of violation can directly lead to intentional actions. Party
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which commit tort is called tortfeasor. Further, different type of liabilities are present under tort
which are as follows:1. Joint liability: In this type of liability tortfeasors are held responsible for tort against one
party. Tortfeasor are considered to be jointly liable for the harm.
2. Vicarious liability: In this type of liability superior is held responsible for the actions of
their subordinates (Elliott and Quinn, 2013).
3. Victim liability: This type of liability directly contributes to the injury but they may
actually share liability with the tortfeasor. It is also regarded as contributory negligence.
On the other hand contract is defined as the agreement between two or more parties.
Liability under contract law has been discussed below:1. Breach of contract: This liability states that when parties in the contract fails of perform
obligations under the specified terms and conditions (Kujala, Haarala and Nuottila,
2015). Then it leads to breach of contract and in case of every breach it is not possible
that injured party have right to sue for damages. Apart from this damages claim are
recoverable in case of breach of contract.
2. Contract defenses: It functions with the motive to prevent misrepresentation. In case if
court of law states the terms and condition of contract misrepresenting the facts then the
entire contract is considered to be invalid (Nystén-Haarala, 2010).
On the other hand major differences present between the tort and contract are as follows:
1. Tort is inflicted and a contract relies upon consent.
2. In case of tort no such privity is required but in contract it is necessarily implied.
3. Motive is undertaken in tort but it is immaterial in contract
4. Measure of damages in tort is limited but in breach of contract damages are determined
by the stipulations of the parties in the contract.
3.2 Nature of liability and 'Duty of care'
Law of negligence is regarded as the failure to use reasonable care that leads to harm to
another. Under negligence law two type of negligence are being present where in first one person
does something that reasonable person would not do and in another one individual is not able to
take action with the motive to prevent harm. In order to establish liability it is required for
plaintiff to establish that defendant owed a duty of care towards the plaintiff (Gray, 2010).
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Considering the present care Lilly has duty of care towards Tina where she suffered from allergic
reaction due to dye. Due to this reason Tina cancelled holiday which she was planning to take in
south France. Tina has to suffer loss due to actions of Lilly. Therefore, under law of negligence
Tina can claim for damages due to presence of economic loss. It is the duty of Lilly to provide
proper duty of care to Tina and she was unable to do the same. Therefore, as per this law Tina
has full right to claim for the damages and loss suffered.
TASK 4
Case Scenario
a. Define Res ipsa loquitur concerning the driver's alleged negligence
Res ipsa loquitur is regarded as the doctorine that infers negligence from the nature of
the accident in the absence of evidence regarding how defendant behaved (Owen, 2007). In res
ipsa loquitur all the elements of duty of care, breach and causation are undertaken. Main
elements of res ipsa loquitur are:
 Injury is caused by the agency within exclusive control
 Damages is of nature which does not takes place without negligence
 Injury causing accident does not takes place due to voluntary action
Under doctrine of res ipsa loquitur the pedestrian can suit for damages concerning the
dirver’s alleged negligence. Further, in case of pedestrian it is necessary for individual to prove
that damages have been occurred. Employer owns duty of care of driver and in such case direct
legal action can be taken in case of employer (Clarkson, 2010). Apart from this Medic is also
involved into this practice as individual omitted the important information and it was not
informed to employer in relation with the sleep disorder. Further, it is the responsibility of
employer to look after all the actions of the driver and in case if driver commits any wrong action
then direct action can be taken against him which is applicable in this case also.
3.3 How company can be vicarious liable
Vicarious liability is regarded as the situation where any individual is held responsible for
the actions of another. In any organization employer can be held responsible for the act of its
employees. Further, such actions must be taken in the course of employment (Haarala, Lee and
Lehto, 2010). Considering the present scenario Maintenance Ltd and Goodyear Plc cannot claim
against Trust Engineering plc for vicarious liability as individual is not acting as an employee
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and this law is not applicable in the present scenario. Apart from this it represents the
relationship between employer and employee which is not applicable in this case.
4.1
Case A
Did Matthew have claim against the owner of Royal park?
In the present case Mathew was staying in Royal park hotel and while climbing fence individual
fell down (Rose, 2009). Therefore in this condition it is not possible for Mathew to claim
damages from the owners of Royal park as in such kind of acts individual himself is responsible
and it is not possible for claim for damages. Mana gement of hotel is not at all responsible for
such kind of act as individual himself took decision to climb fence into wooded area.
Case B
Did council owe a duty of care to Peter?
In the present case peter was went to swimming in harbor late and was injured by an
underwater obstacle. Therefore, in the present case council does not owe duty of care to peter as
peter himself took decision to swim and it is not at all responsibility of council to look after the
actions of peter.
4.2 Case Scenario
Accordant with the case scenario, Mrs. Carol ask friend to drive vintage bus from
Cambrigeshire so that he can take part in the bus rally but the friend drove car negligently and
result in damaging the Carol car. However, the friend of Carol was not employed within the
company and owner has given vintage bus to drove to Cambridgeshire. In such situation the
owner is liable for the negligent behavior of the friend.
CONCLUSION
From the above report it can be concluded that contractual law plays vital role in
formulating the valid contract. In addition to this, the report has also concluded that there are
different elements that is required by the parties in order to formulate valid contract.
Furthermore, it has also summarizes that there is different among the liability in tort with the
contractual liability.
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REFERENCES
Books and Journals
Clarkson, K.W., 2010. Business law. Text and Cases: Legal. Cengage learning.
Elliott, C. and Quinn, F., 2013. Contract law. Pearson Education Limited.
Frey, P. and Frey, M., 2012. Essential of contract law. Cengage Learning,
Gray, J., 2010. Legal commentary. Journal of Financial Regulation and Compliance. 18(3).
pp.293-300.
Haarala, S., Lee, N. and Lehto, J., 2010. Flexibility in contract terms and contracting processes.
International Journal of Managing Projects in Business. 3(3). pp.462 – 478.
Kujala, J., Haarala, S., Nuottila, J., 2015. Flexible contracting in project business. International
Journal of Managing Projects in Business. 8(1). pp.92 – 106.
McKendrick, E., 2015. Contract law. Palgrave Macmillan.
Nystén-Haarala, S., 2010. Flexibility in contract terms and contracting processes. International
Journal of Managing Projects in Business. 3(3). pp.462 – 478.
Wishart, M., 2010. Contract law. Oxford University Press.
Smits, J., 2014. Contract Law: A Comparative Introduction. Edward Elgar Publishing.
Online
Owen, G. D., 2007. The five elements of negligence. [Online]. Available through:
<http://law.hofstra.edu/pdf/academics/journals/lawreview/lrv_issues_v35n04_i01.pdf>.
[Accessed on 1st April 2016].
Rose, T. P., 2009. Vicarious liability in tort. [Pdf.] Available through: <
http://www.oldsquare.co.uk/pdf_articles/3100178.pdf>. [Accessed on 1st April 2016].
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