Aspects of Contract and Business: Elements, Terms, and Negligence

This report comprehensively examines the fundamental aspects of contracts and their significance in the business environment. It begins by defining the essential elements required for a valid contract, including offer and acceptance, consideration, capacity, and intention to create legal relations, along with the concept of privity. The report then delves into the impact of various contract types, such as written, face-to-face, unilateral, bilateral, and distance sale contracts, highlighting their distinct features and implications. Furthermore, it explores the different terms within a contract, including conditions, warranties, expressed terms, implied terms, and exclusion clauses, clarifying their meanings and effects on contractual obligations. The report also addresses the concept of negligence within a business context, differentiating between tort and contractual liability, and explaining the nature of liability in negligence and vicarious liability. Finally, it discusses the elements of the tort of negligence and vicarious liability, providing a complete overview of contract law and its practical application in business scenarios.

Aspects of Contract and
Business

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Importance of elements to form a valid contract..................................................................1
1.2 Impact of different types of contract.....................................................................................2
1.3 Terms in contract with reference to their meaning and effect...............................................3
TASK 2............................................................................................................................................5
2.1 Applying the elements of contract........................................................................................5
2.2 Applying the law on terms in different contracts..................................................................6
2.3 Evaluating the affect of different terms................................................................................7
TASK 3............................................................................................................................................8
3.1 Contrasting liability in tort and contractual liability.............................................................8
3.2 Nature of liability in negligence............................................................................................9
3.3 Explaining how business can be a vicariously liable .........................................................10
TASK 4..........................................................................................................................................11
4.1 Elements of tort of negligence ...........................................................................................11
4.2 Elements of vicarious liability ...........................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
A contract is basically called as a legally enforced document by law with some valid and
lawful consideration of binding the involving parties into it. It is thereby with a mutual set of
consent among both the parties where there are several predefined clauses of an agreement
between them. However, the stated clauses are being defined with a mutual deliberation of both
the parties with a sole discretion of determining the actual format of their contract (Andrews,
2015). It herby defines the assorted stipulations of an agreement with certainly dissimilar
constituents for each. The below report is with a similar demonstration of articulating a
prerequisite format of a contract with a prior existence of their varied sort of elements, terms and
their distinction formations. Negligence is yet another major constraint of a contract with an
equivalently countering effect on the parties. Therefore, the present report together concludes
some crucial requisition of duly eliminating this peculiar factor of neglecting a contract with
fewer case studies to briefly comprehend its essentialist role.
TASK 1
1.1 Importance of elements to form a valid contract
A legal contract attains a valid formation only after a prior inclusion of certain mandate
elements in it. Such components comprise with some definite specifications of their own that
primarily initiates the constitution of an agreement, as described below:
 Offer and Acceptance- An offer is however considered as a foremost element of initiating
the valid formation of a contract into which an offer enacts as a primary element of an
agreement. An offerer here makes a considerable offer to some interested parties with a
specific time period of accepting it (Iacobucci and Trebilcock, 2016). An offer can
however be dissolved at some major circumstances where-
1. Either an offerer dies before the acceptance of the offer.
2. The specified time of accepting an offer gets over.
3. The accepting party duly rejects the offer.
For example, one can duly refer to the case of Thornton v Shoe Lane Parking [1971]
where their was a prior inclusion of an “offer” made by the machine which was duly “accepted”
by the person who then inserted the money into it.
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 Invitation- It is generally seen as an offer of sale by the vendors into shops where their
offer is duly opened for the entire public. It is thereby with a slight distinguished
condition as compared to an offer. An invitation hereby has another facet where a
merchant has some prior right of negotiating the offer made by an interested party.
 Consideration- A consideration is yet another crucial element which plays a major role of
exhibiting the mutual consent of its involved parties. It can however be concluded either
as some dealing of monetary funds or an exchange of thoughts, etc. It thereby depends
upon the offerer to set a prior consideration of his offer with its illustrated
acknowledgement to the agreed party (Tan, 2015). An agreed party is thence assumed to
accept their inclusion into the contract. One can duly refer to the case of Re McArdle
[1951] to acquire a precise comprehension of consideration. A consideration together
comprises with its five major rules, as specified below-
◦ A consideration made in past does not hold any present validity.
◦ A consideration should possess a real and legitimate value.
◦ A consideration should not be imposed on the promiser where they acquire a judicial
restraint of executing it. Such sort of consideration is not assumed to be a valid
consideration into the eyes of law.
◦ A consideration should not conflict with any legal deliberations where they are in turn
supposed to hold an illegal reflection.
◦ A valid consideration is not required to be competent in nature. Capacity- Capacity is referred to the competent ability of both the involved parties to take
part into a contract with a prior mutual consent among them. It is due to a major cause of
having some other sort of obligations to handle the mentally incompetent participants for
involving them into a valid contract. Intention to create legal term- It is regarded to be the most essential determination of
both the involved parties where they should priorly possess an optimistic intention of
involving into a contract with its all predefined specifications (Wills and Napier-Munn,
2015). The case of Balfour v Balfour [1919] can be remarked to clearly acknowledge
about this foremost element of legal intention among the solicitous parties of an
agreement.
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 Privity- It is referred to the basic right of the participants of an agreement where only the
involved parties have a prior right of claiming the suspected party on breaching any
predefined stipulations of their contract. It is therefore with no such existence of any third
party into it is crucially defined as another essential element of privity.
1.2 Impact of different types of contract
A contract can be formed in assorted structures with their distinct roles and obligations,
as described below:
 Written contract- A written contract is the most recommended form into which all the
conditions and clauses are priorly mentioned into the contract. It is therefore considered
to be the most effectual format of an agreement which largely comes at the retrieval
period to sough out any raised concern or conflicts among the involved parties of a
contract. An employment letter is the best example of a written contract with all its
prerequisite clauses for the employees. For example, one can consider a case of ESSO
PETROLEUM V MARDON (1976) where their was a written formation of agreement
among the involved parties that was later evoked at the time of resolving the raised
concern of the parties in court (Tennant, Garmory and Winsch, 2015).
 Face to face contract- The oral or verbal formation of a contract is yet another facet of a
valid contract into which the involved parties are duly liable to consider each other's
mandate presence at the time of structuring the essential clauses of their agreement. A
face to face contract is however taken into consideration when at times their arise some
sort of urgency in constructing a contract. Therefore, it is important for both parties to
mutually acknowledge about the mandate clauses of one other's in such formation of an
agreement. A face to face contract therefore represents an oral formation of the contract
into which the involved parties are equivalently responsible for precisely declaring their
major stipulations to each other.
 Unilateral and Bilateral contract-- A unilateral contract is basically a single sided
contract with a prior involvement of an offerer into it. An offerer here addresses a
considerable and open offer to the entire public and on whose acceptance, there exists a
unilateral contract among them (Kaveny, 2015). A bilateral contract on other hand is a
two sided contract with an equivalent involvement of two or more interested parties in it.
It therefore consists of an offer by one party which is intentionally made to address some
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known interest of another party. For example, one can duly consider the case of Carlill v
Carbolic Smoke Ball co [1893] where their was a prior inclusion of a unilateral offer. It
was primarily made by the carbolic smoke ball company to the entire public which was
subsequently accepted by an individual named Carlill.
 Distance sale contract- A distance sale contract is largely seen into the online booking of
railway or flight tickets or a pre-booking for hotel rooms where a there is a major
involvement of telephonic sales or purchase. However, it is with a due consideration for
the accepting parties to exists with a prior evidence of their booking. Distance sale
contract is day by day rising with a huge commencement of online activities. It however
consists of another counter approach by the trader where they can terminate the entire
booking. It is prior to a period of 15 days on non arrival of any valid evidence by the
client.
1.3 Terms in contract with reference to their meaning and effect
A contract is made up of some assorted terms and conditions of it along with a mandate
recommendation of adherence to both its involved parties. These terms are thereby based upon
certain prerequisite clauses which are strictly needed to be followed by the parties. However, a
genuine party has some lawful rights to file a charge-sheet against the destructive party on
breach of these terms (Martin and Van Linden, 2015). This section thus elaborates the varied
deliberation of some stated terms, as described below:
 Conditions- It is the foremost term of a contract which directly signifies the validity of an
agreement with a major reflection of its do and don't s for the involved parties. It thence
consists of some fundamentally laid down principles of an agreement with a strict
recommendation of adhering to those. A breach in the condition terms of a contract can
directly terminate the overall agreement between the parties with a rigorous action
against the destructive party. For example, one can consider the case of Poussard v
Spiers (1876) where the opera singer Madame Poussard has breached the condition terms
of their contract (Voinarevich, 2015). It was however due to some uncertain health issues
of her for which she couldn't perform at the opening night of the concert. This later
resulted into the dis-solvency of the entire contract where the owner named Spiers duly
appointed another singer at her place.
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 Warranty- A warranty is referred as another term of a contract with a less significant role
and obligation as compared to the primary term of condition. Therefore, the destructive
party on breaking the warranty term of a contract is only liable to make a valid payment
for the occurred devastation. However, it is also among a pre-specified terms of a
contract where both the parties are assumed to be familiar about the same clause of
payment. For example, one can duly consider the case of Bettini v Gye (1876) where
Bettini as an opera singer has only breached the warranty terms of their contract by not
participating into the practice sessions of their performance. It was however with a
similar cause of sudden health issues with a wrongful act of the owner named Gye who
incorrectly replaced him with another singer for the actual night of the performance.
 Expressed terms- These are the terms which are either specified into a written or an oral
formation of a contract with a sole discretion of the involved parties to participate into it.
However, the expressed terms together represents the above specified terms of conditions
and warranties with some other inclusion or exclusion of their major clauses (Rajapakse,
2015). It therefore depends upon the concerned parties to ultimately decide its fate of
reflection.
 Implied terms- An implied term is a binary formulation of a contract with a dual
existence of two assorted terms. The primary implied term is specified by the statutory
consideration and another are the terms evoked by the general impost of public. These are
thereby referred to some common yet requisite terms that are strictly advised to be
followed by the concerned parties. However, an implied term can be mostly observed
into the procedure of selling goods where there is a mandate consideration of
merchandising an apt level of products to the consumer.
 Exclusion clause- An exclusion clause is also known as an exemption clause where the
offerer or a manufacturer duly limits their obligation towards any uncertain occurrence of
their offerings (Hills, 2015). However, a lawful consideration together states the offerer
to primarily acknowledge the agreed party about their peculiar clause of any exemption.
 In nominate terms- An in nominate term mainly evolves at the time when there is a prior
existence of court to legally resolve the raised disputes among the concerned parties.
Therefore, in such situations, the court priorly dissolves the above specified terms of
condition and warranty among the parties with some new inclusion of clauses in it. For
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example, one can refer to the case of Hong Kong Fir Shipping v Kawasaki Kisen
Kaisha (1962) where there was a prior inclusion of in nominate terms by law at the court
premises yo resolve the raised conflict among the parties.
TASK 2
2.1 Applying the elements of contract
Case A: Carlill v Carbolic Smoke Ball Co (1893)
Facts and legal grounds:
As per law, Mrs Carlill was duly eligible to receive the reward of 100 pounds where the
company hereby made a “unilateral offer” which is usually opened for the entire world with no
prior requisition of notifying the offerer about it (Chamberlain, 2015). Along with that, a prior
inclusion of 1000 pounds as a depository amount into the bank has clearly shown the real
intentions of the company to reward a beneficiary rather than just creating a sales puff by them.
Case B: Hyde v Wrench (1840)
Facts and legal grounds:
On ascertaining the above case, their was no such formation of a valid contract among
both the parties. It was however due to a prior destruction of the original offer made by the
defendant to sell his farm at 1000 pounds (Jones, 2015). To which, the claimant duly asked the
defendant to sell it for 950 pounds which was later rejected by the defendant. This hereby
exhibited no “legal intentions” of the offerer to sell his farm to the claimant party.
Case C: Lampleigh v Braithwaite (1615)
Facts and legal grounds:
On considering the above case, the claimant was duly liable to attain the “consideration
amount” of 100 pounds by the defendant. However, the promise of making such payment by the
defendant was done after the performance by the claimant and thence reasoned to be a past
consideration (Mason, 2016). A past consideration is not always valid as in the present case,
where it was duly followed by a request made by the defendant.
Case D: Tweddle v Atkinson (1861)
Facts and legal grounds:
In the above case, both the fathers of the bride and groom respectively indulged into a
contract by consequently died without the completion of their stated consideration into it.
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However, the groom later claimed for it as another party who was not entitled to participate into
the stated agreement between the fathers (Owen, 2007). This resulted in the dis-solvency of their
overall contract due to no such movement of the consideration from the indulged parties to some
other party.
Case E: Chapple V Cooper (1844)
Facts and legal grounds:
The above case comprises with a contract with a definite age of the participants into it
with a non competence factor for the minor parties. Therefore, the case duly shows the
“capacity” of the concerned parties to get involved into the agreement where in case of breaching
any predefined terms of their contract, the adult party will be promptly liable to pay for the
considerate causation of impairment (Warren, 2012).
2.2 Applying the law on terms in different contracts
Case Study:
Present case is based upon a sales advertisement made by the company named Slick Car
Sales Ltd where they formulated a unilateral offer where the mainly dealt for a hundred used or
second hand cars. This particular advertisement also communicated about a one month offering
to the prospected parties into which the cars will duly regard some exclusive insertions of a radio
or a stereo with a full tank of petrol in it. As a result to which, Paul as a customer duly visited the
saleroom and chose a car with a consideration amount of 3495 sterling pounds with an inclusive
amount of road tax in it (Zamore, 2015). The assistance thereby addresses the car with its model
number of 2014 VW Polo with a single owner who droved it only for 25, 000 miles. Paul thence
signed an agreement with some similar specifications of that car that included its existent colour
of platinum grey and registration number as L784 NLP.
Applicability:
The above case thereby consists of certain lawful considerations of sales puff, conditions,
warranty and implied terms into the agreement signed by Paul, as described below:
 Sales puff- The company's foremost aspect was to make a sales puff by using the
specified statement of selling the cars into reasonable cost in entire Britain. However,
Paul cannot claim the company on such basis of inculcating a mere sales puff.
 Conditions- Car's model number of 2014 and its overall coverage of 25, 000 miles with a
single owner comes under the warranty terms of their agreement. However, Paul as an
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accepting party can hereby claim the offerer for an incorrect imposition of these terms
and he can thence terminate the overall contract by denying the purchase of car. Case:
Poussard v Spiers [1876] can be referred to precisely understand the accurate
consideration of a condition term where into this peculiar case, Madame Poussard was
rightly replaced by the owner named Spiers. It was basically due to her breach of
conditions terms of their contract into which Poussard as an opera singer was unable to
attend and perform at the crucial night of the event.
 Warranty- The condition terms of the above stated agreement was a prior inclusion of
certain attributes of road tax and radio or stereo with a full tank of petrol in it (Henry,
2016). However, Paul can either deny to purchase the car or he can ask for a liable
compensation by the seller in regard to breach the warranty terms of their contract. Case:
Bettini v Gye [1876] can be referred for the breach of warranty terms into which the
opera singer Bettini has only missed the rehearsal session of their event. However, he was
subsequently terminated from his allotted position with a wrong interpretation of
breaching terms.
 Implied terms- The implied term in this particular case states the existence of a statutory
implied term by law with some specified clauses under sale of goods. Into which, there
are some predefined conditions of selling a certified product to the users. The car should
therefore be with a valid registration number and model with its specified colour and a
liable date of manufacturing (Monaghan, 2015). The seller will be otherwise on a faulty
description of the product where the customer Paul can take some legal actions against
them. Case: Hong Kong Fir Shipping v Kawasaki Kisen Kaisha [1962] can be duly
considered comprehending the inclusion of an in nominate terms where the court has
enclosed certain new terms of conditions and warranty into their existent contract by
changing the preceding one's. It was basically done to resolve the raised conflict and
dispute among the involved parties.
2.3 Evaluating the affect of different terms
Case study:
The recent case about Jim is in regard to demonstrate a holiday experience with his
family where he decides to visit a fun park with them which was owned by the Leisure Ltd. On
reaching to the park, he pays a parking amount of 1 pound to park his car which was basically
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operated by the local authorities of strand council. There was a prior existent of a notice board
with a statement for the parking visitors to situate the car at their own risk. However, it was
covered with some major obstacles of covered bushes (Allen, P and et. al., 2016.). Later, Jim
also pays for the tickets to visit the park at 7 pounds with his entire family members. The ticket
also included a clause by the park authorities for not being liable for any caused damages and
any sort of decease event to the visitors. However, Jim and his wife suddenly met an accident by
the hit of a metal bar on them and duly gets admitted to the hospital for the purpose of treatment.
Soon after arriving at the park to obtain their parked car, they found that the car has been
damaged by the toeing van of strand council.
Applicability:
On concluding the above case, Jim has represented to be a customer where he duly agrees
to pay for the consideration amount of 1 pound and 7 pounds for two major purpose of parking
his car and purchasing the family admission tickets for visiting the park, respectively. However,
there was an existent clause of exemption by both the park authorities and their parking
assistants as well which was not previously mentioned to the client as per the legal consideration
of law (Coffey and Bernardi, 2015). Therefore, the maintenance bodies of strand council was
primarily at fault for their covered notice board due to which the visitors are not able to interpret
their specified terms. Similarly, the park authorities of Leisure Ltd are equivalently liable for not
specifying the prior existence of exclusion clause to Jim while he was buying the tickets. As a
result to which, Jim and his wife can take necessary legal actions against the respective
authorities.
For example, one can clearly link it to the case of Curtis v Chemical Cleaning Co
[1951] into which the existent exclusion clause was wrongly interpreted to the customer which
resulted into a destructive state of bridal dress.
TASK 3
3.1 Contrasting liability in tort and contractual liability
Negligence is priorly referred to be a major counter facet of a legal contract where the
negligent party can be legally admonished by a genuine party who has to bear certain sort of
losses due to an occurred carelessness. Therefore, it is a foremost recommendation to the
involved parties of a contract to duly eliminate the part of neglecting any predefined clauses of
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