Analysis of Contract and Negligence for Business: A Detailed Report

This report analyzes the fundamental aspects of contract law and negligence within a business context. It begins by outlining the essential elements of a valid contract, including offer and acceptance, certainty, consideration, intention to create legal relations, legal capacity, and completeness. The report then delves into different types of contracts, such as unilateral and bilateral contracts, contracts under seal and simple contracts, and written versus verbal contracts, along with their respective impacts. Furthermore, it explores express and implied terms, conditions, warranties, and exclusion clauses. The report also presents case studies to illustrate the application of contract law principles, including scenarios involving advertisements, sales of goods, and the remedies available for breach of contract. A comparison of liability in tort and contractual liability is also provided, offering a comprehensive overview of these legal concepts.

Aspects of Contract and
Negligence for Business
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TABLE OF CONTENTS
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................3
1.1.................................................................................................................................................3
1.2.................................................................................................................................................4
1.3.................................................................................................................................................4
Task 2...............................................................................................................................................5
2.1.................................................................................................................................................5
2.2.................................................................................................................................................6
2.3.................................................................................................................................................7
Task 3...............................................................................................................................................7
3.1.................................................................................................................................................7
3.2.................................................................................................................................................8
3.3.................................................................................................................................................8
Task 4...............................................................................................................................................9
4.1 ................................................................................................................................................9
4.2...............................................................................................................................................10
Conclusion ....................................................................................................................................10
References .....................................................................................................................................11
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INTRODUCTION
A valid agreement and Legally binding between two parties that is ofere and ofree is
know as contract. The present report is based on various cases which are based on negligence of
contract. The report covers various essential elements of valid contract is explained. Along with
this, the impact of different type of contract is discussed. Apart form that, the nature of liability
in negligence is explained.
TASK 1
1.1
The essential elements required for the formation of a valid contract that are as follow
 Offer and acceptance: In order to create a valid contract there must be offer made by
one party and it should be accepted by other party. There is party make a offer which
should be accepted by other party ofree then a valid contract can be made. In a case if
other party reject the offer then no contract can be made.
 Certainty: It is required that contract which is made should be clear and have some
certainty. Then only it will be enforceable by law (Olugasa, 2015). All the information
which are mentioned in a contract should be correct and valid in short it should valid.
 Consideration: A consideration is that which a party paid a price for the contract which
is made. The price is something that have a value because it have a some Benefits or
interest for forebear.
 Intention to create a legal relationship; Both the party which bind in to a contract must
have some legal intention. It means that all formalities which are need to completed
legally. There must by some intention that is necessary for the legal relationship.
 Legal capacity: A valid contract can be made between those party which are above the
age of 128 or mentally stable. That is a person who is below the age of 18 cannot make a
valid contract, or a person suffering form mental problem or bankrupt.
 Completeness: In a valid contract it is necessary that all the terms and condition should
be completed first before starting any activity. Both should agree with the terms and
condition and complete it then can start the activity.
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1.2
There are different type of contract which have a great impact that are as follow
 Unilateral contract and bilateral contractual: In a unilateral contract in one which
party make a offer and promise to fulfilled after completing a task. While in the Bilateral
contract there is two party required to is required to make a contract and one party take a
obliged action.
 Contract under seal and simple contract: Contract under seal is that in which there is
no consideration and contract is sealed and signed by both the party (Lipshaw, 2016). On
the other hand in a simple contract it is in a written formal or in oral form and
considerations is required. In the both contract there is different limitation period.
Positive impact of contract under seal is that one party can sue other party in the court.
 Written contract and verbal contractual:
Written contract is that contract in which both the party agree on terms and condition in a
written form. In this both the party signed the contract then start performing it activity. While in
verbal contract agreements is made between both the party in oral form not in written form. Such
as offer and ofree can enter into a agreement that is personally binding.
Impact: There is a positive impact of the written contract that is company if any party breach the
contract then other party can sue it in a court (O’Leary-Kelly and et.al., 2014). On the other hand
there is negative impact of verbal contract that is if any party break the rule, then other party
have no proof to claim in the contract.
 Face to face contract and distance selling contractual:
Face to face contract is that contract in which agreement made in verbal or in a written
form by sitting together and both the party agree upon the terms of contract. It has a positive
impact that is if any confusion create it can be solved on the spot. On the other hand distance
contract is that made on phone call or ion written form. It have many positive impact that is in
case of delay or any confusion contract can be canceled.
1.3
Express terms and implied terms
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The obligations and responsibilities of contractor and contractee, calls as terms. Two
kinds of terms; express and implied are different in accordance to cases. Implied terms involves
provisions of any agreement that court suppose to be the case without proof. While, express
terms involves provisions and conditions in written of agreement that court faces experience to
meet unexpectedly. A case of Hutton and warren is the example of Implied term.
Conditions, warranties and innominate terms
Condition considers as a major contract term, in condition of breached, the innocent party
can claim on default party to end the contract and claim damages and warranties are minor terms
of contract, in case of breached, the innocent party can claim but cannot end the contract (Cobert,
2014). While, in innomative terms, innocent party can be responsible for incorrect repudiation if
it tries to end the contract, the breach of contract would not be able to take advantage of contract.
Bettini v Gye is the best example of warranties
Exclusion clauses
Exclusion clause is a term of contract remains bound the rights, rules and regulations of
both parties of the agreement. These clauses are of three kinds such as; true exclusion, limitation
clause and time limitation. True clause- identifies breach of agreement and shows accountability
regards breaches. Limitation clause- limits on amount that breaches the contract, while time
limitation- gives actions for claim within a fix time period.
TASK 2
2.1
According to the given scenario, Abel who is 22 year old boy which see the
advertisement in a newspaper of city car dealers. In advertisement it was written that three new
car will be given to the people who run up to the city mountain on 1st November. Then they need
to ticket form their representative at mountain and come back to the showroom in a three hours.
To show that this advertisement is real car dealer put three car at the forecourt of their showroom
so that public pass form their could inspect it (Hesselink, 2015). Abel was among three form
them, he fulfill the challenges and arrived at the showroom within a record time. However
manager of the city car dealer showroom refused to give car to him.
Yes Abel has completed the challenge within a given time and she can easily claim in the court
because she has completed all the terms and condition of the contract.
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Elements of Contract apply in Abel case that area as follow
 Offer and acceptance; In the above case car company made a offer and Abel accept the
challenges. In the contract all the term and condition have been fulfilled by the Abel. So
Able have right to sue him in a court and claim for a car. While company is liable to give
a car to Abel.
 Consideration; Company made a contract and put a price for fulfilling the promise and
Abel fulfill it without breaching any terms of contract.
Hence this both elements are applicable in this case.
2.2
According to the given scenario, Rani owns a business in selling car, she advertise in a
newspaper that she is selling a car at discount price 50% off at marked price. Eric a boy read the
newspaper and went to the showroom for buying a car. He buy a car and sign a contract in
without writing it. Int he contract it was written that there is no liability accepted for death,
personal injury, accident or any consequential loss arise from driving a car which they
purchased form showroom . Eric paid the money and purchase the car. At the time when Eric
start driving a car then he come across the traffic signal where he put his foot on break to stop the
car. But break was faulty and car was no stopped. Eric car was crashed with into a bus and his
car was damaged and he was badly injured. He was hospitalize for the several month and it was
unable to go for a job. Because of this he have to suffer form a lot of loss. After discharging form
a hospital he went o showroom for meeting a Rani. There he claim a compensation for hi
injuries and for losing a income form his employment. Further it also claim for damage of car
and cot of repairs. However Rani refused to pay the compensation by showing a signed contract
in which it was clearly written that company is not liable for any damage cause by driving a car.
In the above case, it is clear that there are two terms of Law applied that is implied and
exclusion. Implied term applied in this case because Rani liable to pay a compensation for the
damage caused by car which Eric purchase from its showroom. However, it is not written in a
contract but according to the government law company is liable to pay compensation.
On the other hand exclusion term also applied in this case. According to the term exclusion
company and Eric signed a contract and Rani is not liable to pay a any compensation(Eckerd and
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et.al., 2013). As it is clearly stated in the contract company is not liable for any damaged occur
by the accident.
Moreover, Rani should not sale the car which have some fault. Therefore she sold a car which
break is not working so company need avoid such kind of practices.
2.3
According to the given scenario that is Eric suffer a lot form the accident that is it loss the
employment income because he was hospitalized for a several month. Further its car also
damaged. Remedies available for to Eric is that according to the it is necessary for the Rani to
pay compensation for the losses Eric suffer (Shavell, 2013). While on the other hand Eric have
no proof to sue Rani car dealer in a court. Further according to the government law company
should not saol the faulty cat it is against the law.
TASK 3
3.1
Comparison of liability in tort with contractual liability
Tort are generally illegal done by one party against another party. In this case, injured
person or party can take action against other party, which did wrong. Regards tort law, both
parties are unknown. While, contractual law refers an agreement of two or more parties enforced
by legal obligations, in this case both parties are known to each other and signed a contract with
different terms like implied-express terms, condition, warranties, guarantees etc. All terms
possess different rules and regulations that are valuable for both parties in case of breach of
contract, innocent party takes actions against default party.
Torts focuses on actionable wrong wrong remains as civil action on the basis of physical
injury due to accident or any violence. In this law, actions come to show as battery, intentional in
fiction of emotional distress etc. So, liability of harmed party is to take step action wrong party in
the court (Homer, 2016). While, in contractual liability, two parties accept conditions and binds
agreement to fulfill each other needs on behalf of legal proof. In case of breaches, court gives
punishment to default party in favor of innocent party which takes action against break or end the
contract.
Tort law considers duties to fellow members from relation between two parties such as
doctor-patient, drivers of two different vehicles during driving on the road etc. and remedies
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when responsibilities are breached. While, during breaching of contract, discussion on damages
and for other types of solutions court takes decision cause of contract remains valid.
3.2
Nature of liabilities in negligence
Negligence simply refers to carelessness over any contract or promise. Contract between
two or more parties remains agreement to take care of duties and obligations. Due to ignorance
of agreement, negligence occurs regards contract. Therefore, in such cases, there are some
liabilities remains to be careful towards fulfillment of promise. Characteristics of liabilities in
negligence can be express as
Duty of care – Duty of care occurs at the time period to make agreement and it introduces the
relationship between two parties of the contract (Chamallas, 2013). A party should take care of
its rules and regulations to be aware about each others liabilities in respectful manner.
Breach of duty – Duty regards breach of contract, innocent party has liability to take action
against default party and jury or court can decide result or punishment against fault party, which
damages or end the contract. It is also responsibility of default party to pay fine or accept
punishment to loss of innocent party.
Property right – contractual parties possess responsibility to take care of rights and obligations
they signed. An agreement between two or more parties regards property is lawful accountability
to focus upon (Kaplan, 2015). Therefore, property right is a feature of liability in negligence
during breach of contract, innocent party has right on property towards damaging of assets and
resources.
3.3
Vicarious liabilities of business
Vicarious liability or responsibility indicates to a situation where the third party remains
responsible for the actions or correction of another person's agreement. In this scenario, due to
agreement between two parties, third party present and takes accountability of action in case of
breach of contract.
This liability presents under doctrine of common law. It is responsible to follow duty of
control. The most essential of this relationship for employer and employee for practical targets.
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Regards tort law, court plays vicarious liability as third party interfere to take decision against
faults and also gives punishment according to carelessness or negligence or accident kind.
Vicarious liabilities uses in several employment laws. It indicates to employer responsibility
towards supervisor and managers' behavior and activities.
It creates needs for employers to provide facilities of extensive and ongoing training for
high level managers (Lankford and Blaze, 2015.). Training is one of the main proper form of
measurement that employers are able to undertake the prevents incidents. Managers of company
remains accountable for management of departments in departmental level. Supervisor's
performance reflects environment of employees.
TASK 4
4.1
According to the given scenario, Denis took his wife Emma to a restaurant who's name is
Fresh food to have dinner. They ordered a food while at the time of eating a food , Emma wife of
Denis start feeling sick and throwing up. Denis took him to a hospital where they came to know
that her wife is suffering from a food poisoning due to Carelessness of Chef. George a chef of
restaurant used a long expired food stuff for preparing a meal of Emma (Backof, 2015). However
he was warned several time by the restaurant management against this type of practices.
As per the case it is clear that due to negligence of the chef of restaurant Emma has suffer form
its as she got sick. There are four element of negligence is applicable in this case.
Element of negligence
 Duty of care: In this element it is a duty of a defendant that no harm cause to plaintiff
because of its action. This duty between both plaintiff and defendant arise when law
recognize the a relationship in both of them (Anand, Kirman and Marsili, 2013). The duty
is find under some circumstance that is in the case of Emma, a chef is defendant and it
course of action harmed the Emma and she suffered form a food poison.
 Breach of duty: If defendant breach the duty due to which harmed cause to plaintiff then
party who duty is to care is liable for negligence. A defendant is liable for negligence.
As in the above case duty also exists of defendant that is any customer came in the
restaurant should served a healthy food not expired food.
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 Cause in fact: If any harmed caused to plaintiff form defendant action then. A party who
got harmed can claim in the court against the defendant with proof. Int he above case it is
clearly stated that all the harm caused to plaintiff because of defendant action and it can
sue him in court and compensate
 Proximate cause: Proximate cause is relates to the defendant responsibility in a
negligence case. If there is a duty of defendant then it should follow it properly. As in the
given case it is clearly Chef action harm the Emma. Chef severed a expired food after
knowing that it is not healthy for Emma.
All the element of negligence which have been discussed above prove that all fault of
Chef harmed the Emma.
4.2
Law of vicarious liability is that in that in which one fault id beard by other person. Is
applied in business or in any case. If any person do something wrong then owner the business is
accountable for the wrong . As in the above case it is clearly stated that Chef has done a wrong it
serves to the customer a expired food due to which Emma suffer form the health issues (Mathew,
Ferguson and Hingorani, 2013.). As it is clearly stated that owner of the restaurant will be liable
for the wrong doing of its employee. However management many time warned him to not use
such type of practices but ignored it and Emma suffered form its. Moreover, Emma can case in
the court against the Chef with proof but Owner of the restaurant is liable to pay a compensation
to a Emma and Denis.
Hence it is clearly show the law of negligence of the employee due to which owner bear a loss.
CONCLUSION
From the above report it is concluded that there are various elements of various valid
elements of contract which are need to be fulfilled by both the party. In the law of negligence if
any person fail to perform its duty then it will suffer form loss. Further it can be concluded that
in law of tort liability if any person do something wrong then government will punish them for
the wrong doing.
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References
Books and journals
Anand, K., Kirman, A. and Marsili, M., 2013. Epidemics of rules, rational negligence and market
crashes. The European Journal of Finance. 19(5). pp. 438-447.
Backof, A.G., 2015. The impact of audit evidence documentation on jurors' negligence verdicts
and damage awards. The Accounting Review. 90(6). pp. 2177-2204.
Chamallas, M., 2013. Exceptional Case of Parental Negligence, The. Jotwell: J. Things We Like,
p.413.
Cobert, E.O., 2014. Illusory Aspect of Corporate Contract to Repurchase Stock. St. John's Law
Review. 12(1). p.9.
Eckerd, S. and et.al., 2013. The relative impact of attribute, severity, and timing of psychological
contract breach on behavioral and attitudinal outcomes. Journal of Operations
Management. 31(7). pp.567-578.
Hesselink, M.W., 2015. Democratic contract law. European Review of Contract Law. 11(2).
pp.81-126.
Homer, P., 2016. Indivisible Injury Negligence and Nuisance Cases–Proving Causation Among
Multiple-Source Polluters: A State-by-State Survey of the Law for New England, and a
Proposal for a New Causation Framework. University of New Hampshire Law Review.
3(1). p.6.
Kaplan, A.I., 2015. Did negligence or nature cause this miscarriage? A patient sues, claiming an
ob consult could have saved her pregnancy. Contemporary OB/GYN. 60(7). pp. 48-51.
Lankford, J. and Blaze, D.A., 2015. The Law of Negligence in Arizona. LexisNexis.
Lipshaw, J.M., 2016. Lexical Opprotunism and the Limits of Contract Theory.U. Cin. L. Rev. 84.
p.217.
Mathew, R.G., Ferguson, V. and Hingorani, M., 2013. Clinical negligence in ophthalmology:
fifteen years of National Health Service litigation authority data. Ophthalmology. 120(4).
pp.859-864.
O’Leary-Kelly, A.M., and et.al., 2014. Psychological Contracts in a Nontraditional Industry
Exploring the Implications for Psychological Contract Development. Group &
Organization Management. 39(3). pp.326-360.
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Olugasa, O.A., 2015. Anticipating Privity in E-Contract in Nigeria. Available at SSRN.
Shavell, S., 2013. A Fundamental Enforcement Cost Advantage of the Negligence Rule over
Regulation. The Journal of Legal Studies. 42(2). pp. 275-302.
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