Analyzing Contract and Tort Law: Business Liability Report

This report delves into the intricacies of contract and tort law within a business context. It begins by outlining the essential elements of a valid contract, including offer and acceptance, legal consideration, lawful object, legal relationship, legal formalities, free consent, and the capacity of parties, as well as the impact of different contract types. The report then explores the application of these elements through case scenarios, examining the role of exclusion clauses and implied terms. The analysis extends to tort law, contrasting it with contractual liabilities and focusing on the nature of negligence and vicarious liability. Specific business situations are used to illustrate the elements of the tort of negligence and defenses, alongside the application of vicarious liability. The report provides a detailed examination of legal principles and their practical application in business settings, offering valuable insights into legal responsibilities and potential liabilities.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Importance of the essential elements for the formation of the valid contract........................3
1.2 Impact of different types of the contract................................................................................4
1.3 Meaning and affects of different terms of the contract..........................................................4
TASK 2............................................................................................................................................5
2.1 Application of all essential elements of the contract in the given case scenario...................5
2.2 Application of different terms of Law in distinct contract:...................................................5
2.3 Meaning and affects of the of different terms in a given contract.........................................6
TASK 3............................................................................................................................................6
3.1 Contrast liability in Tort with contractual liabilities..............................................................7
3.2 Nature of Liability of Negligence..........................................................................................7
3.3 Explanation of how business can be vicarious liable.............................................................7
TASK 4............................................................................................................................................8
4.1 Elements of the tort of negligence and defences in different business situations..................8
4.2 Apply the elements of vicarious liability in given business situations..................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................11
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INTRODUCTION
The present report is about the Aspect of contract and negligence for the business. In the
present era every person has some problems even some people don’t know how to face the
certain situation but by the use of laws and rules it is much easier to deal with different types of
circumstances. By having at least a basic knowledge and awareness about the business law, no
one can play with other people. This research comprises different types of law which are helpful
for different type of situation and contract. The study includes different elements of the valid
contract, tort law and its liabilities. Along with this investigation discusses distinct case and their
situations legal issues on the basis of the tort law and valid contract. Including this various tort
liabilities and its principles are also describing in the following paragraph of the report.
TASK 1
1.1 Importance of the essential elements for the formation of the valid contract
All that agreements which are enforced by the law is called valid contract. The present
case is about the valid contract and its essential elements. Importance of some essential elements
for the formulation of the valid contact is given below:
 Offer and Acceptance: It is very crucial and important element for configuration of valid
contact without legal offer and acceptance a contract cannot be valid or applicable for
law. This constituent shows a legal offer by one party and an official acceptance by
another party (Brand and Davenport, 2012).
 Legal consideration: Legal consideration can define as one party is agreed on the same
price which is offered by the other party. Presence of lawful contemplation is very
essential for a valid contract.
 Lawful object: Object of the valid contact must be lawful and clear for both parties.
Without an authorized and apparent object a contract cannot be valid or official.
 Legal Relationship: for a valid contract both parties must have a legal and official
relationship by following various requirements of valid contract. Societal and familial
agreements do no not consider in legal relationship.
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 Legal Formalities: As per the contract law there are some legal formalities which are
essential for a valid contract, such as registration and money transaction with bill receipt,
etc (Tomprou and Nikolaou, 2011).
 Free consent: Free consent is very essential for a valid contract and for a free consent it
is required that both parties are agreed on the same thing in a same sense. But in some
cases such as scam and deception there is no free consent.
 Capacity of parties: In a valid contract both parties must be capable for a legal
agreement.
 Certain and meaningful agreement: A valid contract required a meaningful, clear,
certain and significant agreement which is attuned by both parties (Donohoe, 2009).
1.2 Impact of different types of the contract
There are different types of contract such as face to face contract, written, distance selling
and exchanging by email or fax. All this type of contract affects terms and validity of a valid
contract. As per the given case Bob is a person who wants to buy a book which is displayed in
the Sam’s book store. He collects that book from exhibit and go to counter for make payment.
But Sam says him that this book is already sold to the Carl but forget to remove it from display.
As per the given situation there is no essential element of valid contract between Bob and
Sam. There is no offer and acceptance, free consent, legal transaction and lawful consideration.
Thus, both parties cannot take any action regarding the agreement (Tikkanen and Kaleva, 2011).
1.3 Meaning and affects of different terms of the contract
A valid contract includes different terms such as conditions, warranty, expressed and
implied terms and exclusion clauses. Expressed terms are those terms on which both parties are
agreed at the time of contract formation. In the expressed term there is no obligation on both
parties to agree on all conditions. On other hand implied terms are those terms which are
included in the agreement as per the rules of contract. In the implied term as per the agreement
both parties are obliged to agreed on such terms. Conditions and warranties are included by both
parties on some specific situation and it focuses on the restriction of liabilities in any time of
damages and injury on these situations. Exclusion clauses help in excluding the liabilities of the
parties in some specific situations. Due to the absence of the different essential elements of the
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valid contract for example, offer and acceptance, transaction of money, legal acceptance and
offer, Bob and Sam did not have a valid contract. As per the implied term book seller has right to
refuse to sales that book to that person. This case includes the implied terms because all these
elements are not included in their agreements so it is not a valid contact and as per the rule of
contract Bob can decline to sales the book to Sam.
TASK 2
Case scenario states that Barry is a client of that park which is supervised by the local
council. In this park he hired a chair with the payment of 50p per hour and after the payment he
collected a ticket for the ticket counter. But when he seated on that chair and chair collapsed
under him and damaged his cloths. After this accident Barry claims on local council for the
compensation of his damaged cloths (Edwards, Edwards and Wells, 2008).
2.1 Application of all essential elements of the contract in the given case scenario
According to the case both parties Barry and Local council have all essential elements of
the valid contract in their agreement of chair. Legal issue in this case was that one party has
provided all information about the contract to another party after the implementation of the
contract. As per the issue Barry has no information that local council will not responsible for any
physical injury and damage of customer due to the problem in hired equipments. It comprises a
valid offer of chair by Local Council and proper acceptance of offer by Barry; lawful object of
this contract is getting compensation for the loss of Berry; legal formalities for this case includes
the money transfer for the service of local council, ticket etc; free consent means both parties
local council and Berry are agreed on the same thing and in the same sense; official relationship
and transaction is also exist in this case because local council and berry had transferred the
money and ticket for a particular service. Thus, this case is relevant to the valid contract because
existence of all essential elements.
2.2 Application of different terms of Law in distinct contract:
As per the given information Barry purchase a ticket for their chair by exchanging some
amount of money. Ticket of the chair includes a law term and the statement of term states that
“No liability is accepted for any damage or injury caused by the failure of any hired equipment ”.
This statement is also known as exclusion clauses for a valid contract (Tomprou and Nikolaou,
2011).
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In this valid contract express term is missing because, both parties have no information
about the all conditions of the contract at the time of formation of valid contract. As per this term
Barry should know about the condition of Local council but council has provided information
after the monetary transaction. Thus, it is the against the contract law and terms of the contract.
Exclusion clause is the most important term of the contract law which help in removing
and declining the responsibilities of both parties for various losses and damages. In this case
local council has been used this clause for reducing their liabilities towards the physical injury of
different customers by different products and services. There are three types of exclusion
clauses; Time, true and limitations. True exclusion clauses comprise different liabilities and
duties of both parties. Time exclusion clause includes the limitation and validity of contract for
use of different clauses and Limitation clauses includes some restrictions towards the legal
agreement (Gillies, 2004).
2.3 Meaning and affects of the of different terms in a given contract
As per the above discussion this case is relevant to the legal term which is known as
exclusion clause. Avoidance of the express term can dismiss the contract and in this case local
council does not provide all information to Barry at the time of contract. so, as per the law of
express term local council is liable for the damages of Barry. According to law terms
management of the local council has a responsibility towards their products and services so, they
are responsible for the Berry. Along with this all they should provide the information about the
exclusion clauses before the valid contract but in the case of Barry, information regarding the
exclusion clauses is written on the ticket which has been given to him after entering in the valid
contract with council. Thus, both parties were not free consent means both did not agree on the
same things with the same sense. So, according to the contract law, Management of the local
council are accountable for compensating the damage of the Berry’s losses and physical injury
(Rush and Ottley, 2006).
TASK 3
According to the case scenario Brain and Adam both comes in a valid contract when
Brain notices that advertisement in the news paper which is published by Adam. It is about the
various information of a contest which is organized by Adam. Along with this it comprises a
prize of £1000 as a winning amount for paddle across English Channel in a bath from Dover to
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Calais. After seeing this advertisement Brain decides to take part in this contest. After the
completion of this contest Brain claim to Adam for his reward.
3.1 Contrast liability in Tort with contractual liabilities
Case of Adam and Smith are related to the Tort law which focuses on the negligence and
vicarious liabilities. There are various difference between contractual and contrast liabilities.
Contractual liabilities are applied in the contract by the obligation of the both parties. On other
hand contrast liabilities are applied by the contract law which should be followed by both parties
during the contract.
Major differences between contractual and torts liabilities include that contractual
liabilities are included in the contract as per the mutual understanding of both parties but tort
liabilities are included as per the law of contract. In the contractual liabilities both parties must
be fulfilled the all standards of valid contract but in the tort liabilities only defended needs to
follow all standards of duty of care.
3.2 Nature of Liability of Negligence
Negligence and Vicarious liabilities are major liabilities of the tort law. Duty of care,
breach of duty and remoteness of damage are major principles of the Negligence liability of a
contract. Negligence liability shows that Adam cannot refuse to give the reward amount to Brain
because he did not follow the principles of Negligence. Brain and Adam came into the valid
contract before the second advertisement and Brain did not aware about the second
advertisement of Adam (Goldman, 2013). Adam has a responsibility towards their participants
and has duty of care but he did not follow his duty towards them. So this case is relevant to the
breach of duty principle of negligence liability.
3.3 Explanation of how business can be vicarious liable
Vicarious liability
Vicarious liability can be termed as a situation where someone is held responsible for the
actions and/or omissions of another person. This liability is transferred because liable person was
in position to control the misconduct. Further, if they had acted cautiously then they will be in
position to prevent negligent action. However, this liability does not eradicate obligation of
original tortfeasor.
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Vicarious liability of employer
By considering this aspect, employer is said to be vicariously liable for the misconduct of
employee. It is because; they are in position to control their actions. Negligent individual must be
have status of employee. Provision of part time or full time employment will not affect the
employment status. In this aspect, individuals who are self employed are not covered. It is
because, they are not in control of business. Misconduct by employee should be conducted in
course of employment in the provided roles and responsibilities by employer. However,
vicarious liability will not be applied in situation of criminal actions.
Prevention of vicarious liability
In order to prevent vicarious liability, employer is required to make sure that provisions
of Occupier’s Liability Act and Health And Safety Act are properly applied in work environment
in order to make reduction in the possibility of injury of individual.
Case study
Considering the present case, Adam had provided unilateral offer to the public to provide
performance in against of reward through advertisement. By considering this offer, performance
was given by Brian. In the mid of the performance Adam had provided another advertisement for
cancellation of previous offer. This will be considered as revocation of offer but it was not in
reasonable time. Brian had completed his performance and now he is claiming for reward but
Adam is not ready to pay due to revocation of offer. In this case situation case study of Carlill V
Carbolic smoke ball company can be considered. In this case similar case situation was occurred
and company refused to pay reward. Court held that defendant is liable to provide damages. By
considering this case, Adam is liable to provide amount of reward as revocation was not in
reasonable time period.
TASK 4
4.1 Elements of the tort of negligence and defences in different business situations
The present case states that Neil is a gardener, Roger is a dishwasher and Ben is the
owner and Mark is the customer of the Poshplace hotel. Neil has stolen the master key of all
hotel rooms and entered into the Mark’s room and threatened to hurt him and taken away all his
unique jewellery. Along with this Colin was a head chef and Roger was a dishwasher in the
Poshplace hotel. Roger has a problem of skin rash due to the long time washing so he was
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complaining to the Colin about this. Colin gets fed up on Roger’s complain and strike him by a
frying pan with irritation (Introduction to Tort Law, 2012).
Statement A
As per this situation Statement A is explain some responsibilities of Neil towards the Neil
and roger. On other hand tort law states that it is not an accurate statement and it is not truthful.
As per the non-delegable duty employer of the organization is responsible for any harm of
employee. So, Neil is not an employer he is an employee of the Poshplace hotel. Ben is liable to
provide a safe working environment for all employees.
Statement B
This statement states that Neil is liable for the Colin’s action on roger. But as per the tort
law Colin’s action was very intentional towards the Roger and which does not consider in the
tort liabilities. Therefore, this case does not satisfy the all principles and rules of the tort law and
liabilities, so, roger cannot bring claim against Neil for Colin’s action. As per the vicarious
liabilities both parties required an employee and employer relationship but Neil and roger does
not have employer and employee relationship both are employee of the hotel. Thus, Neil is not
liable for Colin’s action on Roger; so Roger cannot bring a claim on him (Marsh and Soulsby,
2002).
Statement C
For the Neil action towards the Mark’s does not consider by civil law because it was an
intentional and criminal action and tort law does not judge intentional actions. As per the
Occupier’s Liability Act 1957 which shows that employer has a responsibility towards the
employee for their protection and safety and safe working environment. Considering this Ben is
responsible for safety and security of Mark, Roger and Neil. Present statement says that
Poshplace hotel is responsible for the jewellery losses of Mark but it is not accurate because
Neil’s action was intentional and criminal which could not be forecasted by hotel. So under the
Occupiers’ Liability Act 1957, Poshplace hotel is not responsible for the losses of Mark
(Employer Vicarious Liability, 2013).
4.2 Apply the elements of vicarious liability in given business situations.
As well as case also states that Poshplace hotel provides a clear warning about the danger
for the all visitors, which states that “pool closes between 7.00 pm to 7:00am. No entry to
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visitors during these hours; ‘Dangerous when unattended’’. Mark read this warning but ignores
this and jumps into the empty swimming pool and suffered from physical injury and losses of his
expensive.
Statement D
Statement shows that hotel is not liable for the safety and protection of the Mark’s and its
swim suit. It is absolutely true because of the warning session of the contract. According to the
Occupiers’ liability act 1984 occupiers has some liabilities for their trespassers but in some
situations they can exclude their liabilities by some exclusion clause or warning sections.
Therefore hotel has already restricted its accountability by the warning so hotel is not liable for
the safety and protection of the Mark (Middlemiss, 2012).
Statement E
Negligence liabilities of tort law have some principles; these are duty of care, breach of
duty and remoteness of damage. As per the above statement a discussion hotel is not liable for
the Mark’s losses of his jewellery and expensive swim suit. Thus, remoteness of damage
principle is not satisfied, so as per the tort law and negligence liabilities this statement E is not
accurate he cannot use ordinary negligence principle in his claim against Poshplace hotel.
Statement F
As per the exclusion clause and warning session hotel excludes its liability from some
situations. On the basis of the above arguments, tort law and Occupier’s liability act Marks is self
responsible for the loss of his expensive swim suit. Thus, Section F is not true, Mark will not
liable to claim for the charge of his fashionable swimming trunks (Rosly, 2010).
Statement G
Vicarious liabilities do not consider intentional and criminal case and Neil’s action was
very intentional and which cannot be estimated by the Poshplace hotel. So hotel is not
responsible for Mark’s loss Neil is liable towards this damage. Thus, statement G is not accurate;
it has no relevance with vicarious liability. So, Mark cannot bring a claim against the hotel for
loss of his jewellery.
Conclusion
The project concludes that all essential elements are very significant for a valid contract
because on the basis of these elements both parties can identify their responsibilities towards
each other. Along with this research also describes that tort law has various liabilities, such as
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negligence, contractual, contract and vicarious liabilities. Thus, this investigation includes
vicarious liability and negligence principle for examining the accurateness of each given
declaration.
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References
Books and Journals
Brand, C. M. and Davenport, P., 2012. Adjudication in Australia: An analysis of the amendments
introduced by the building and construction industry Security of Payment Amendment
Act 2010. International Journal of Law in the Built Environment. 4(3). pp.189–202.
Donohoe, S., 2009. The new Construction Act 2009: implications for building surveyors.
Structural Survey. 27(1). pp.20-22.
Edwards, S. J., Edwards, L. L. and Wells, K. P., 2008. Tort Law for Legal Assistants. Cengage
Learning publication.
Gillies, P., 2004. Business Law. Federation Press.
Goldman, A., 2013. Business law: Principles and Practices. Cengage.
Marsh, S. B., and Soulsby, J. 2002. Business law. Nelson Thornes.
Middlemiss, S., 2012. The legal impact on employers where there is a sham element in contracts
with their workers. International Journal of Law and Management. 54(3). pp.209–221.
Miller, R., 2011. Modern Principles of Business Law. Cengage.
Rosly, A. S., 2010. Shariah parameters reconsidered. International Journal of Islamic and
Middle Eastern Finance and Management. 3(2). pp.132-146.
Rush, J. and Ottley, M., 2006. Business Law. Cengage.
Tikkanen, I. and Kaleva, H., 2011. Contract award procedures and award criteria in the catering
services in Finland. British Food Journal. 113(8). pp.952-964.
Tomprou, M. and Nikolaou, I., 2011. A model of psychological contract creation upon
organizational entry. Career Development International. 16(4). pp.342–363.
Online
Employer Vicarious Liability. 2013. [Online]. Available Through:
<http://www.oxbridgenotes.co.uk/notes/oxbridge/2013/tort-law-notes/samples/employer-
vicarious-liability>. [Accessed on 23rd April 2014].
Introduction to Tort Law. 2012. [Online]. Available through: <
http://2012books.lardbucket.org/books/the-legal-environment-and-government-regulation-of-
business/s10-introduction-to-tort-law.html >. [Accessed on 23rd April 2014].
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