Business Law: Contractual and Negligence Liability Report

This report delves into the crucial aspects of contract and negligence within a business context. It begins by defining contracts and emphasizing the essential elements required for a valid agreement, such as offer, acceptance, and consideration. The report then explores different types of contracts, including those under seal, express, and implied contracts, highlighting their impacts on business operations. Furthermore, it analyzes the terms of contracts, differentiating between express and implied terms, and providing relevant case law examples. The report also contrasts tort and contractual liability, examining the nature of liability in negligence and vicarious liability. It investigates the elements of tort negligence and vicarious liability, providing a comprehensive overview of legal principles. The analysis covers various business scenarios, rules, and regulations related to negligence and liability, offering valuable insights for understanding and managing legal risks in business.

Aspects of Contract and
Negligence for Business

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Importance of necessary elements for a valid contract ........................................................1
1.2 Impacts of different types of contract...................................................................................2
1.3 Analysing terms of contract .................................................................................................4
TASK 2 ...........................................................................................................................................5
2.1 Elements of contract according to the given business scenario ...........................................5
2.2 Law on terms in different contracts......................................................................................6
2.3 Effects of different terms of laws .........................................................................................7
TASK 3............................................................................................................................................8
3.1 Contrast between tort and contractual liability ....................................................................8
3.2 Nature of liability in negligence............................................................................................9
3.3 Vicarious liability by a business...........................................................................................9
TASK 4............................................................................................................................................9
4.1 Elements of tort negligence...................................................................................................9
4.2 Elements of vicarious liability ...........................................................................................10
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Contracts are defined as agreements which are bounded by law between two persons in
order to make healthy relations. The contracts should be legal and parties which are involved in
this should be considered. If this is not accepted by any of the firms then they are not called as
contracts. If all the above factors are combined then proper definitions are formulated that
contracts are termed as written prof of evidences which satisfies the will of parties as they accept
the proposal of another party (Appleman, 2015). In this process proper agreements are made and
the elements are having capacity to fulfil all the needs and desires of customers this is done in
relation to paying some amount for this process. This report is based on analysing essential
elements of a contract to become valid, applying elements in business situations,rules and
regulations in negligence of organisational activities, principle of liabilities in neglecting
business concern.
TASK 1
1.1 Importance of necessary elements for a valid contract
Contracts are reflected as the agreements which are bounded by laws between two or
more parties. The contract to become valid requires offer. Legal approvals are must for making
an offer. It will not result in becoming contract if any of the party rejects this offer. This is
enforced by the law of land if they are accepted by both the parties (Decock, 2012).
An offer can also be legal if they are dealing in drugs as these are not considered as the
lawful acts. This act is treated as illegal thus they should not be counted under any terms of laws.
Thus it can be evaluated that all types of contracts are termed as agreements but all agreements
are not classified under contracts. The agreements can be described as:
 It is always made with approval of both the parties.
 They are in written documents and not in the verbal formats.
 This is classified under the act which are made with the help of any legal bodies or
government authorities
If all the above elements are considered then agreements can be called as a contract. All
steps and plans have to be followed which are essential for making contracts which are enforced
by the laws. The elements which are needed for making a lawful binding agreements are
described as:
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 Offer: When one party makes an appeal to another then it is called as an offer.
 Acceptance: It is when both the parties who are involved in the contract accept terms and
conditions of the offer.
 Two Parties: There must be two parties who can accept or reject the offer as deal is
made between the two groups.
 Free Consent: It implies that the decision taken by the party should be according to their
will. They should not be forcefully taken under any pressure.
 The agreements should not be be declared void by the law of land.
 Lawful Consideration: It states that something should be generated in return. It implies
that both the parties which are involved in the contract are liable to get anything in return
for the promises they had made with each other. These objects should be real and lawful.
All the above elements are needed in order to turn agreements into a valid contract. This
is valuable in promotion of all the activities which are classified under laws in relation to
movable and non-movable elements. If these are not achieved then there will a situation in which
one person will sue another. This is meaningful in making promotion of compensatory activities.
Thus, it can be evaluated that all the things should be complied in a lawful way in order to make
a contract valid (Rawash, 2012).
Example: If two parties are involved in purchasing of a car then they will make free
agreements with there mutual consideration. If any one of the parties found that the papers of the
cars were incomplete in this case it lead to situations where the valid contacts are turned into
illegal formats. In this case, one party can sue another one.
From the above illustration, it can be implied that if any one of the conditions are not
fulfilled then it can make a contract void. This is helpful in analysing all the illegal activities in
respect of cars.
1.2 Impacts of different types of contract
Various contracts are useful in the promotion of legal activities of business. The rights of
different class of people can be protected with the help of these contracts and they are saved
from getting cheated by any person. These can be achieved with the help of various activities
which are related with court room. Contract can become void if there are any type of illegal
elements found in the act. It is helpful in the reducing chances of fraud. This results in leading a
safe and healthy life of people.
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If contracts are made between both the parties then they cannot be cancelled by any one.
If it is made by the will of the parties then they both to compensate for the same. Thus, the
agreements are made with faith and mutual understanding of both the parties which are involved
in contract. All the parties have freedom to take their own decisions and they cannot be forced to
take a particular decision. If parties are not agreed on the elements of contracts then they have
the right to modify it. This helps in building trust and develops healthy relations between both
the parties involved (Bochicchio, 2011).
Various types of contract are described as: Contract under seal: According to the new forms of the contract, it can be enforced by
the law of lands when they are having stamp which contains a seal. It helps in analysing
that both the parties are entitled under law. Seal signifies that the documents have been
accepted by court. Sealed contracts are valid in the eyes of both the parties who are
involved in contract. Express contract: This type of contract implies that all the elements of contracts should
be specific and they should be known to both the parties. It can be in written or oral
format. In oral form, all the terms are read loudly so that they can be clear in the minds
of both the parties.
 Implied contract: These contracts are not made in written or oral form. and these are
operating under some cases. These are made with mutual consent of both the parties and
elements which are not expressible in words are considered under this act. If there is a
situation when the agreements are expired and both the parties want to continue their
business activities then they are given with the rights to reissue their older meeting. Executed contract: In this type of contract no elements are kept aside which can be
completed in the future time frame. Thus, all the important formalities are executed at
initial time when contracts are being formulated. Bilateral and Unilateral: In bilateral contract, two parties are involved and they carry out
the working with mutual trust and coordination. It reflects that promise is made by any
one party then both parties have to agree on the same aspects. In unilateral contract, only
one party is involved in the agreement.
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 Unconscionable: In this type of contract party have the advantage to bargain over the
another party which is involved in contract. In this situation one party is giving there
superior performance over the other party.
 Adhesion: In this form of contract, one party has the advantage to make plans and
policies according to their will and others have to follow it so that particular people
having the authority to accept of reject their own will. Aleatory contract: In this case, one of the parties or even both of them can assume the
risk The result of this is loss which is generated from the risk factor had to be bear by
both of them in relation to uncertain events.
 Void and Voidable contract: If the contracts are void then they do not have any legal
obligations and duties. It does not have any effect on the contracts.
Voidable contract implies that one of the parties is suffering from any type of fraudulent
activity. They cannot be classified as voidable contract till the party feels that contracts are void.
All these contracts have made a positive impact on both the parties who are involved
which can be enforced by the law of lands. This is a vital factor to be considered. It is beneficial
in promoting the interest of parties. Thus, it results in the development of interest and welfare of
people who are considered in this act (Mansueto, 2011).
The seal is used as a proof in order to evaluate that the contract is legal in the eyes of law.
It assures that the rules of court are followed in a proper way. Express contracts are used to
reduce the burden of understanding elements of contract. With respect to this, implied contracts
are useful in maintaining better relations. Thus, it can be said that all contracts are useful
according to the laws which are enforced by courts.
1.3 Analysing terms of contract
The different terms which are used in contract can be expressed or implied according to
there legality. These elements play a vital role in the agreements. The terms which are valuable
in making a binding contract are offer, acceptance and proposal. All these terms are useful in
making a lawful agreement. All the terms have to be analysed in a proper way in order to enter
into agreements. These terms should be verified by the offerer in order to maintain mutual trust
and relations among both the parties who are involved in the contract.
Terms of treaty can be composed in verbal formats in which expression of mouth is used
for the contracts. After this task, the expressions are noted down on papers. Both the parties are
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involved in negotiation methods which are useful in bargaining process in order to consider the
products.
When no parties are involved in the contracts then they are called as Inferred terms but
there are legal documents prepared among both the parties in relation to legal act and duties.
Express contract implies that both the parties involved in contract can express the terms on oral
basis. This is valuable in understanding about what they actually want to say. After all, the
conditions have been analysed and fulfilled they are putting them on the legal documentations
thus the contracts are developed which are enforceable by the law of land (Bochicchio, 2012).
All the terms which have been used by both the parties have to be mentioned in the
documents. Otherwise, it can become void in which one party has to suffer due to its
consequences. The agreements can be made under any status and this is valuable in making more
realistic and valid. These contracts are then made to be enforceable by the law of land.
Case Law
Collins v/s Godefrey
Collians were having the responsibility to visit court in the separate cases which are held
at court. Godefery have filed a case for malpractice thus collians were required by the courts in
order to attend the advice of witness. He was never involved in giving evidences but he had to
stand there for six days in order to handle the case. After they had spend time in courts an
invoice is generated in which they have to pay the amount by next day. He was not given
payment of full day thus actions were enforced in order to make payment.
Held:
Collins were having duty to go to the court in order to case of subpoena. There were
public duties imposed and this cant be used in relation to adopting new promise. Thus Godefery
were not needed to pay the amount.
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TASK 2
2.1 Elements of contract according to the given business scenario
Ivan went to Toder’s shop as he wants to purchase book of law which is seen by him at
the shop. Than he want to the cashier window to pay the money there he found that the book was
already purchased by another person. This was the final copy which the shop have. He forced the
seller to give the book to him but that was not at all manageable by the book seller.
In this case of book, there was no offer made by any party but by mistake to seller was
that he forget to remove the book from the display board. In this situation, no contract was
possible as Carl had already purchased the book. Now, if the book seller agrees to give the book
to Ivan then the contract which was made between Toder and Carl will be declared as void. The
result of this will be that it will harm the faithfulness of Carl on the part of owner (Decock,
2013).
The forcing factor of Ivan was completely wrong on this part and if he was interested in
purchasing the book then he should made contact with the right owner who wrote this book. If
the situation arises where offer made by Ivan is accepted by the owner then it may result in
following consequences as:
 The interest of Carl will be harmed if the book is sold because at this time he is declared
as the real owner of the book.
 There cannot be any arrangements of book because there is no special offering made for
the same products.
 The book will be sold with free consent of the owner.
 If no conditions are satisfied so there is no possibility to carry out this contract.
Hence, it can be said that the offering made by Ivan is wrong as there were no rights
given to Toder that he can sell the book. This can be applied in one situation when there is direct
dealing between both the persons who want to purchase the book that is Carl and Ivan. If Carl
does not accept offer by mutual understanding then the contract carry forward thus book cannot
be given to Ivan (Napier-Munn, 2015).
2.2 Law on terms in different contracts
According to laws, all the legal obligations which are mentioned in the contract have to
accomplish all the terms and conditions which are enforced in an agreement. These have to be
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completed in the ways in which they were framed and organised. If any of the person are in
contractual relations then they all have to follow breaching of contracts. If the contract of breach
is broken down by any of the party and the other party who is involved in this contract have right
to sue them. All the terms and policies of a contract should be fulfilled in order to make it a valid
written agreement (Hagla, 2012).
If one party is not agreeing with any of the terms or policies of contract then they have
the right to breach legal agreement at time. All the terms which are to be mentioned in contract
should be clear to both the parties in order to maintain mutual trust and healthy relationship.
All terms and conditions have to be mentioned in the written contract in order to get the
rights secure of both the parties. If this is not achieved then it can result in court case and in
many of the cases compensation have to be made in case of fraudulent act (Bakr, 2012).
If there is any breach of contract, warranty does not play an important role. It is linked
with the use of products which are related with offer. In the situation where offerer is not able to
provide right products, they are given rights to give appropriate products against the default one
under the legal obligations. It can be done for limited period of time.
The description of two important terms is evaluated as:
Condition: It is the vital term which is included in contracts and they have a huge impact
on breaching of contracts. If the parties are very innocent by nature then they can repudiate
against the legal agreements and can sue another party for the damages in relation to breach of
contracts. These are properly made clear to both the parties and then also, if there is breach of
any contracts, then they affect the working of another party involved in this case. It is important
to mark all policies and terms in agreements and the courts have to consider the views of two
parties which are involved in it. Thus, all the terms have to be fulfilled in an appropriate manner.
Warranty: This is not a vital task in all the conditions. It implies the good life for
number of years. Compensation can be derived in the form of replacement but they are not
measured in monetary values. If Carl wants to purchase television from John then they have to
give warranties in relation to the television. If TV is developing problems then Carl is having
rights to sue against John and he has to replace the Television with another as it is in the
warranty period (Sweet, 2012).
Innominate term: It can be related with the form of conditions and warranty. If
any one of the parties get failed in performing any terms of the written agreement then party has
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liability to pay for those circumstances. All promises which are made by the parties are not
having same implication. In some of the cases, party which has been injured cannot only claim
for all their damages but they can also finish the contract which was made between them at any
time. If all terms are not accomplished by the party then it can be classified under breach of
contracts but they are not failure under warranty. These terms are classified as innovative status
which results in braking the contracts at any time in the situation of crises.
2.3 Effects of different terms of laws
Exemption cases are the clauses which are mentioned in the written agreements which
state that party is limited or they are exempted from any liability. It is an unfair trade practice in
the eyes of laws. Thus, plans have to be made in order to generate fairness for all the clauses.
In exemption, there are basically two laws, that is, limitation clauses which reflect that
parties are limited from liability and the exclusion clause state that party is excluded from
susceptibility.
Decisions of courts are based on whether the damages are linked with monetary value or
not. Judgement is taken by court on the basis of identification that whether activities are
enforceable by legal authorities or not.
According to the given case, John went to a part which was managed by the local
councils. There was a notice in which it was stated that chairs can be hired for 50p @ per hour.
He paid the same and in return got a ticket (Tuan, 2012). After this, his chair was collapsed and
clothes were toned. He went to complain for the same in demanded compensation from
authority. He said that there was a line mentioned in the ticket which state that ''There will be no
liability given for any of the damages if any of equipment get failed to work''. According to the
acts, it was clearly mentioned that parties involved can exclude themselves in order to pay
liability in context to the accidents. The other party can any time take advantage of this. But, in
fact, it became difficult for other party as there was injury caused to John and he was not able to
sue the council in courts as all the clauses were unfair. But John has a right to sue a case for
using acts which were related with equipments. He got benefit of this act as it implies that they
were using those equipments which were outdated (Wills, 2015).
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TASK 3
3.1 Contrast between tort and contractual liability
Tort is described as a wrongful act against a person and people who have faced injury
have a right to sue person for the damages. It is referred as civil acts in which one party fails in
performing their operations and they hurt the interest of opposite party. The liability in relation to
Tort is related with the person who made harm and thus, he had to compensate for same. The
vital case in Tort are negligence in which there is carelessness of one of the party.
In breaching of contract, it is stated that rights of persons towards another person. Contract law
states the act which should be included in legal agreements. All the parties who are involved in
legal agreements are having free consent to take their independent decisions otherwise, it is
declared as void. The contract liability arises where each party is having responsibility to make
binding with each other (Townley, 2012).
Every liability is different which are described as:
 In case of Tort, liabilities are non-contractual in nature and they are enforced by laws and
contractual liabilities in which mutual agreement is made between both the parties.
 In Tort, correspondence duty and interest are developed by laws on the other aspects they
are created with mutual trust between parties.
3.2 Nature of liability in negligence
In case of negligence, there is failure in performing the duty and parties are not concerned
for each other. It results in ignorance on the behalf of parties. This can be in any form like tort or
contractual. But negligence is described as harm which are caused mainly due to ignorance. If
the persons want to get claim for the harm in negligence then he had to prove various things like:
 The defendant had broken the contract.
 The defendant was the owner of duties of care.
 Braking of contract caused damage to all the claims.
If from the above factors any one is proven then person is liable to get compensation for
the same in relation to harm caused by them. Thus they have to prove that harms are caused due
to neglecting. Thus both the parties had to make themselves aware about various aspects.
3.3 Vicarious liability by a business
In case of vicarious liability, one person is made responsible for the cases and harms are
given by another persons towards the third party. There are three parties involved in this case and
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one person had injured to another person. The third person involved in this case is given with
compensation by another. The liabilities have occurred in employees and employer relations.
If any of the activities is done by employees which are harmful then it is a liability on the
employer. In terms of law, employers are made responsible for all the obligations which are done
by the worker (Napier-Munn, 2015).
Example: Cena was a delivery person who was working with smart telex company. He
was given with a letter to deliver near his grandfather house. He stopped at his places meeting his
father thus got late in delivering post. Then he run his bike in speed and meet with an accident
injuring a person. In this situation, owner has the liability to pay compensation and this is known
as vicarious liability (Conditions, warranties, and innominate terms, 2017).
Case Law
Cutter v/s Powell
The husband of claimants was agree to act as the second mate on the ships of the
governor parry when he was returning to Jamacia. This took eight weeks to complete and he had
to pay on completion. As it was stated in the contract.
After ten days the governor parry himself arrived at the Liverpool and thus agreed to pay
the sum amount to the party. After 6 months his husband died and he asked for the claims of his
working for the specified months.
Held
The actions of his wife were his failure. The payments were made on the conditions he
made the ship to Liverpool as all the conditions were not fulfilled and as the husband died widow
was entitled not to do anything.
TASK 4
4.1 Elements of tort negligence
Tort negligence occurred due to negligence of one party towards another. It is linked with
person had broke the contract and he was not concerned for other person. According to case of
Kelvin and David hitting case it was caused due to neglecting factors of driving at higher speed.
He was driving at the speed of 35 MPH in street where children were playing. There was a nine
years old child Kevin who was running to street for chasing a soccer ball. He run by hitting the
telephone pole and there was serious injuries. The pole was owner by the local cellphone firms
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