Analysis of Contract and Negligence for Business Operations

This report delves into the fundamental aspects of contract and negligence within a business context. It begins with an introduction to contract law, defining key elements like offer, acceptance, and consideration, and how these elements contribute to forming a valid contract under English law. The report then explores different types of contracts, including face-to-face, written, and distance selling contracts, and their relevance to business operations. It also examines the different terms and conditions within a contract, such as conditions, warranties, innominate terms, and exclusion clauses. Through case studies, the report analyzes real-world scenarios involving contract formation, consideration, exclusion clauses, and implied terms. The cases illustrate the application of legal principles and the potential liabilities that businesses face. The report concludes by summarizing the key takeaways and the practical implications of contract and negligence law for businesses, providing a comprehensive understanding of how these legal concepts impact business practices and decision-making.

Aspects of Contract and
Negligence for Business

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1................................................................................................................................................1
1.2................................................................................................................................................2
1.3................................................................................................................................................3
TASK 2............................................................................................................................................4
2.1................................................................................................................................................4
2.2................................................................................................................................................5
2.3................................................................................................................................................6
TASK 3............................................................................................................................................7
3.1................................................................................................................................................7
3.2................................................................................................................................................8
3.3................................................................................................................................................9
TASK 4..........................................................................................................................................10
4.1..............................................................................................................................................10
4.2..............................................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Agreement is considered as the process through which two or more parties are bound to
form a contract based upon different legal terms and conditions as per the English Law. It
involves different set of elements such as offer, acceptance, consideration etc, in order to form a
valid contract. UK government formulates different civil laws that are made by the authorities in
regard to protect general public (Akhtar, Long and Nazir, 2015). Further, there are different
terms and conditions developed by the parties in regard to protect each other from any legal
action. Also elements should be beneficial for individuals under the contract. However, if any of
the party fails to fulfil the terms and conditions given within the contract which is enforceable by
law. Present report undertakes different cases and thus it aids in overcoming the issues faced by
parties. It also involves different elements which is essential to make a valid contract. It also
assesses the elements of vicarious liability which is discussed within the present case.
TASK 1
1.1
Here, the present scenario, assesses the Peter Abraham who is a contractor possess no or
little knowledge related to forming a contract. Moreover, Peter wants to enter into an agreement
and for that he requires understanding different elements for forming a valid contract. It is as
follows-
 Offer- Contract is formed within two or more parties when one party offers things to
another party. Thus, there are different ways through which contract could be formed
such as face to face, distance etc. It is essential to accept the offer within minimal time
frame otherwise it would consider as void. However, if the offer is not accepted on stated
time then it is not considered as valid contract (Alhajri, 2015).
 Acceptance- After the offer is made, it is essential for another parties to accept the same.
The party who gives the offer is known as offeror while the party who accepts the offer is
known as offeree. However, there should not physical or mental pressure provided to
offeree for accepting the offer. For instance, if such condition arises then it would be
considered as illegal contract (Graham, 2014).
 Consideration- It is essential for every party to undertake consideration for getting
benefit from the contract. However, it should not be for the betterment of one party only.
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Every contract formed needs to be enforceable by law and thus involves different set of
elements so that valid contract can be undertaken. Also, it is essential for parties involved
within contract aims to fulfil the terms and conditions so that best results can be carried
out. Further, if any party fails to fulfil the contract then not guilty party should be
provided with the claim for the damages (Haigh, 2015). As per the current scenario, Peter
Abraham which would be beneficial for all the parties.
 Intention of parties- At the time when the contract is made then there should be made a
legal intention. However, the parties involved within the contract needs to develop a
contractual relationship. For instance, contracts related to smuggling, kidnapping etc,
could not be formed and also the part entitled is not liable to force other to enter into such
type of agreement (Hovenkamp, 2014).
1.2
As per the case, Peter Abraham could formulate different types of contract and also
identifies the impact of the same. Here, relationship among parties are assessed and thus attain
desired results. Different types of contract which are as follows-
 Face to face contract- In such type of contract, parties enter through developing verbal
communication. However, such type of contract develops strong relationship with one
another. Here, no written deed is made while forming the contract. While, within the
normal agreement it is essential for party to make the contract and sign the same so that it
assess the acceptance of the offer (Weissenberger and McFarland, 2015). Here, Peter
Abraham could not make use of such contract as he is new in construction business and
does not possess close relationship with other party to form face to face contract.
 Written contract- Further, it is another type of contract in which all the conditions are
involved which the offerer requires imposing upon the offeree. Thus, it is essential for
offeree to read all the terms and conditions in order to show their acceptance and thus
sign is done when accepting the offer. It is used as the type of evidence in the court of
law when either party denies to carry out the contract (Wernette Jr and Rogers, 2014).
Here, Peter Abraham is able to enter into such type of contract with its suppliers so that
construction business could be carried out
 Distance selling- Such type of contract involves parties who undertakes different
distance selling tool such as e-mail, letter and video conferences etc. All such tools helps
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in involving the parties to enter into the contract and thus provides option to the party
who could not be physically present when forming the contract. It is an effective type of
agreement and develops contractual relationship so that valid contract can be made
(Witting, 2015).
1.3
In order to form a valid contract, there are different types of terms and conditions
undertaken so that best results can be attained. However, it is beneficial for the parties entering
into contract. Here, offerer develops the contract under terms and conditions and offeree possess
the right to make changes within the conditions that are imposed by offerer. It involves different
types of terms involved to form a contract such as-
 Conditions- It is considered as the main terms of the contract in order to form a valid
agreement. However, parties involved within such contract are required to follow the
conditions otherwise they have to face legal consequences. For instance, if any of the
terms or conditions are breached then it is essential for party to provide claim for the
damages that are occurred by innocent party (Karagonlar, Eisenberger and Aselage,
2015). Here, in the case of Peter Abraham different terms and conditions could be made
on contract with their suppliers and thus provide 25 tons of steel within 10 days.
However, of suppliers fails to fulfil the demand then they are liable to pay the damages
that are caused to Peter.
 Warranties- Further, it is considered as the minor terms involved within contract.
However, if such terms are not followed properly then the innocent party aims to claim
the damages in order to fulfil the terms. Thus, as per the case, suppliers are required to
deliver 25 tons of steel within 10 days and if there is a breach of contract then Peter
Abraham could demand for claim from the suppliers (Kodilinye, 2014).
 Innominate terms- It is known as intermediary terms of contract and thus such terms do
not fall under conditions or warranties. Initially such terms were not involved within the
contract but after the case of Hong Kong Fir Shipping, innominate terms were started to
be included. While, if any of the parties fails to fulfil these terms then innocent party aims
to obtain remedy (Koppelman, 2014).
 Exclusion clause- In such type of terms it is helpful for the parties present within
contract as ti enables to minimize of limit the liability which is involved within contract.
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In regard to minimize the consequences of contract, exclusion clause in involved. It also
involves parties to make the contract in a legal form. However, in relation to the case,
Peter Abraham requires developing exclusion clause by stating that if workers get hurt
while constructing the building then it will become a void contract as it is not possible to
predict the death (McKendrick, 2014).
TASK 2
2.1
Case 1- Agreement
Agreement involves both offer and acceptance and thus it is enforceable under law to
make a valid contract. Carol student apartment was not furnished and she saw an advertisement
upon online classified Gumtree for “Moving for sale of brown couch”. Thus, after that Carol
contact to classified gumtree to purchase brown couch. In such type of situation, Gumtree is
involved in online advertisement agency and offers goods for sale to consumers. Through
viewing the advertisement, Carol contact gumtree to purchase the brown couch. However, just
making a contact to purchase the couch is not termed as contract. While, they need to make
proper offer and acceptance to each other in order to carry out the contract. As per the scenario,
Gumtree provided classified advertisement and thus it is just invitation to treat rather than
proposal. Thus, Carol after seeing the advertisement contacted the Gumtree for purchasing the
brown couch and Gumtree does not accept the proposal of Carol and thus no contract is formed.
Case 2- Consideration
As per the given scenario, Preston's son Devi was hired by an IT firm on April 12th 2015
but it was not known to Preston and thus he made a promise to the firm to given them Pound
150000 if they would hire his son. On April 13 2015 an offer was accepted by George the partner
of IT business and the firm wishes to enforce against Preston. Firm is not liable to enforce such
contract in the first point because intention of Preston was not clear that why he is giving money
to business. It would be considered as bribe which is a criminal offence in against for hiring his
son within firm. But his son was already selected by IT firm one day before and such news was
not disclosed to Preston. Thus, the offer made was abiding the law in condition of hiring Devi
within firm who has been already hired. Here, the condition was to pay money to the firm in
relation to hie the son but made after the time which has already been expired. Hence,
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consideration made was not legal and valid and thus elements involved within contract is not in
existence to enforceable by law and is considered as void-ab-initio.
2.2
Case 3- Exclusion clause
Exemption clause is considered as the agreement made within the contract which
stipulates that the party is limited or excluded from any liability. However, such clause may be
used unfairly to take disadvantages against the suffered party (Miceli, 2014). By involving
exclusion clause a party must be avoided from the responsibility in regard to carry out good
business practices. It also helps to undertake a tool that aims to provide some time to the victim
person and certain time to defendant but usually the benefit is obtained by the defendant.
However, exemption clause is mentioned on the receipts of the restaurant which is not the
contractual term. Thus, just printing exemption clause is not a contractual term. Here, defendant
can demand the damage occurred to him and thus it is the duty of restaurant to provide the stolen
money from the pocket that was left in the coat while removing the overcoat at the entrance of
the restaurant. But at the time of paying the bill, he demanded to bring his overcoat he found that
his wallet was missing. Th\us, the manager pointed out that exemption clause is written on the
receipt that restaurant is not liable for the loss or damages occurred by the party. But the law of
court assesses that it is another case and thus receipts are not included within the contractual
terms. Hence, restaurant is liable for the loss occurred by couple arriving the restaurant.
Case 4- Implied terms
Implied terms are different from expressed terms and thus they are already present within
the contract or imbibe by the law. Here, Aaron took a warehouse on rent and carry out repair
work within warehouse. Thus, through carrying out such repairing, Zehphra promised Aaron that
he will not increase the rent of the warehouse for next five years. However, in the next years
Zehphra died and his property was undertaken by Yeti and thus he increased the rent of the
warehouse. But Aaron refused to pay increased rent and submitted the bill of repairing for
compensation. For instance, if Yeti agree to pay the bill of compensation then he is liable to
increase the amount of rent of warehouse. However, as per the agreement made between Aaron
and Zehphra they entered into a contract and decided to not increase the rent for next five years
because of the repairing expenses done by Aaron. Hence, if Yeti increase the rent than Aaron is
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eligible to obtain compensation for the expenses done on repairing of warehouse and undergo a
new agreement of rent by implementing both implied and expressed terms.
2.3
Case 5
Non- Disclosure involved within motor insurance contract states that in such type of
situation when a customer fails to reveal relevant or crucial information while applying for
insurance. However, insurance contract is considered as the contract of utmost good faith and
thus provide knowledge to insurer regarding the insurance policy. As per the case, policy holder
for insurance of his motor vehicle and thus at the time of application for insurance he was asked
that the person who will drive vehicle is involved in any motor vehicle accident earlier or made a
claim for any faults such as theft during last five years. While answering such question, policy
holder answer was no. But at the time when vehicle was stolen insurer came to know that policy
holder made claim his previous motor policy within five years of this policy at hat time insurer
voided the policy from start date. Hence, from the given case, it can be assessed that non-
disclosure of crucial facts regarding motor vehicle accident were not told at the time of applying
for policy. Thus, they misrepresented regarding the previous policy claim that was obtained
during the last 5 years. Hence, it could be assessed that actions of insurer to void the policy was
correct as per the conditions led down in the form and policy holder could be refused for the
claim made.
Case 6
According to the given case, it can be stated that policy holder applied for motor vehicle
insurance and within the application she had provided wrong answer to insurer. At the time when
policy holder demanded the claim, insurer rejected the same and revoked the policy from its start
date saying that policy holder provided wrong information regarding the alterations in the
vehicle and claim regarding accidents obtained within 5 years. Thus, policy holder argued that
she was not aware regarding the facts as well as alterations done within vehicle. Also, she knew
that all the accessories fitted in the vehicle. She was also not aware regarding the claim made her
husband within five years regarding accident. But at the time of asking, insurer denied her
statement and cancelled the policy stating the grounds of rejecting the offer.
 Non disclosure or misrepresentation
 Unaware regarding the fact
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 Fraud
 Failing to pay premium on time
TASK 3
3.1
Tort liability and contractual liability aims to carry out effective regulations and practices
so that desired results can be attained. Here, different similarities and differences have been
identified in relation to tort and contractual liability-
Contractual liability Tort liability
 Here, relationship is already developed
among parties.
 Also, different terms and conditions
given within the contract needs to be
fulfilled (Araújo, Souza and Souza
Neto, 2012).
 Here, innocent party possess the right
to claim for damages that are caused to
them.
 Avery V Bowsden (1855).
 At the time of occurring negligence by
any one of the party, then such type of
liability is imposed by the court of law.
However, without any type of
interaction with the parties under
contract it is essential for them to
develop strong relationship (Bridgeman
and Goldberg, 2012).
 Also, there are different cases in which
parties does not undertake proper care
due to carelessness or damage caused
to society and individuals (Ma and
Deng, 2012). However, it is essential
for parties to follow proper duty of care
and thus carry out standard care so that
it does not affect others.
 At the time when damage is caused,
then their should be proof of it so that
claim against the damages can be
obtained. However, damages should be
of time that could be obtained
(McKendrick, 2014).
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 Here, innocent party possess the ability
to claim for damages only when all the
negligence elements are satisfied
(Molderez and Janssens, 2012).
 Nettleship V Weston.
3.2
Negligence is considered as the act when one party acts in a careless way and causes
injury or damages to other party. It also includes lack of care, lack of proper attention, non
performance of duty and also irresponsibility to allotted work. Here, negligence could also be
stated as the failure of any individual's act that needs to be done by them on time (O'Toole and
Prince, 2015). Following are certain conditions which needs to be fulfilled for arising negligence
such as-
 Duty of care- Through assessing the presence of negligence it could be noticed that duty
of care should be there or not. Also, it must be identified that the defendant party owes a
legal duty of care (Purdy, 2013).
 Breach of duty- It is also considered as a crucial element of negligence in which
defendant needs to give care towards plaintiff. Also, plaintiff party aims to prove that due
to negligence of defendant party he causes injury or damages (Qi and Chau, 2012).
 Causes- It is another element in which plaintiff suffers damages in which negligence of
defendant has been identified. Here, plaintiff also focuses upon proving that negligence
of defendant that causes injury to plaintiff party (Tan, Wu and Cao, 2014).
 Damages- It is one of the crucial element of negligence that shows the injury or loss
actually occurred by the party. Thus, in such type of situation, plaintiff aims to prove his
damage that actually occurred to him in monetary terms and thus claim compensation for
the same (SHEHU, 2014).
It can be assessed that if all such elements of negligence are fulfilled that it directly
showcases that individual will be held responsible for the injury occurred to other party.
However, at certain time results of negligence results in vicarious liability where principal is
responsible for action or omission of agents or subordinates (Twigg-Flesner, 2013). Through
carrying out the doctrine of “res ipsa loquitur” that could be assessed that “the things speaks for
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itself”. For instance, when any doctor carry out surgery of wrong parts of body other than stated
than in such case being defendant is must prove that he is not negligent for the action committed.
3.3
Vicarious liability is considered as the situation in which individual is liable for the action
of another party. However, doctrine of vicarious liability is generally used against business
enterprise who suffered any injury or damage due to negligence of person who worked as agent
within firm (Different types of contract. 2013). Further, a business is considered as vicariously
liable if it assists in satisfying the conditions listed below-
 Relationship between employee and employer
 Presence of negligence
 Wrongful act carried while the employment
Through carrying out such crucial elements present within firm it could be held liable for
the act or omission committed by its workers. Thus, it arises liability of the principal that possess
different essential elements such as-
 Act was committed by the employees or subordinates- Here, it assesses that employee
or agent who is working under another individual is required to direct or provide
guidance under his principal or employer. However, as per general role, principal is held
responsible for the omission of workers but he is not held responsible for the action of
committed independently out of employment rules and regulations (Elements of valid
contract. 2015). Further, if the plaintiff party proves that the action committed by the
person and thus they are employed by someone to carry out the act than they can be sued
for the loss occurred. Hence, in such case, vicarious liability is carried out upon both the
person upon whose behalf act is carried out.
 During the employment hours- Here, it could be assessed that if any of the act or
omission committed by the individual who is employed by someone and under whom the
direction that causes damages to another person. Thus, it assists in applying vicarious
liability and person jointly are held liable upon whose direction act committed or who
does not commit act or omission (Weissenberger and McFarland, 2015). However, if an
employee is employed by one party then they both are jointly held liable for the action.
Hence, above all the main responsibility is held liable upon principal or employer for the
act of their agent or subordinates.
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