Business Law Report: Contract and Negligence Elements and Cases

This report delves into the core elements of contract law and negligence within a business context. It begins by defining contract formation, detailing essential components like offer, acceptance, consideration, and intention to create legal relations, and differentiates various contract types (face-to-face, written, distance selling). The analysis extends to contractual terms, including conditions, warranties, and exemption clauses, evaluating their effects through relevant case studies. The report then contrasts tort and contractual liability, explaining negligence and vicarious liability, with a focus on the conditions for proving negligence. Task 2 applies these contractual elements to given scenarios, implementing legal terms, and evaluating the impact of different terms in various cases. Task 3 clarifies the differences between tort and contractual liability, and examines the emergence of negligence and vicarious liability. Task 4 applies these legal principles to specific situations, including the tort of negligence and vicarious liability. Through case studies, the report illustrates how these legal principles apply in real-world business scenarios, offering a comprehensive understanding of contract and negligence in business law.

Aspects of Contract &
Negligence for Business

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
1.1 Explaining various elements that are highly required for contract formation.......................4
1.2 Discussing the impact of different types of contracts............................................................5
1.3 Analyzing different contractual terms with their effect.........................................................5
TASK 2............................................................................................................................................7
2.1 Applying the elements of contract in the context of given scenario......................................7
2.2 Implementing law terms in the context of following cases...................................................7
2.3 Evaluating the effect of different terms in the given cases....................................................7
TASK 3............................................................................................................................................8
3.1 Explaining the similarities and differences pertaining to liability in tort with contractual
liability.........................................................................................................................................8
3.2 Assessing the manner in which liability for negligence arises and the conditions needed to
be met by claimant for proving negligence.................................................................................8
3.3 Defining vicarious liability the manner in which organization becomes liable for the same9
TASK 4..........................................................................................................................................11
4.1 Applying the elements of the tort of negligence and defenses under present situation.......11
4.2 Application of the elements of vicarious liability................................................................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................16

INTRODUCTION
English contract law may be served as a body of law which is involved in the activities of
regulating legal bindings takes place in England and Wales. Contract refers to the legal binding
exists between the two parties and enforceable by law. Hence, contract occurs when two parties
agree to perform specific activities mentioned in agreement. Contract law is highly significant
which in turn offers protection to the innocent party in against to the undesirable activities
performed by other. Moreover, without having specific laws and legislation innocent parties can
claim or take action in against to the defendant party. The present report is based on different
case scenarios which will shed light on the essential elements that must be present in contract.
Besides this, report will develop understanding about the contractual terms and conditions.
Report also depicts the extent which liability in tort and contractual liability differs from each
other. Along with this, report also entails the elements associated with negligence and vicarious
liability.
1.1 Explaining various elements that are highly required for contract formation
Contract may be defined as a voluntary, deliberate and legal binding agreement which
take place between two or more parties. For the existence of contractual relationship, concerned
parties need to satisfy or fulfill following aspects:
 Offer and acceptance: As per contract law, offer and acceptance is the main
requirements that parties to a contract must meet. On the basis of such element, one party
such as offeror makes an offer in front of other, known as offeree, regarding purchasing
or selling aspect (Offer and acceptance, 2018). Hence, contractual relation is formed
when offeree accepts the offer made by offeror. However, referring the case of Fisher v
Bell, it can be said that offer and invitation to treat differs from each other significantly.
 Consideration: Lawful relationship can be developed when it contains legal
consideration that has some values in the eye of law as per the case of Thomas v Thomas
(1842) (Contract consideration,2018). However, consideration excludes promises
regarding love and affection, gaming and betting etc.
 Mutual consent of parties: For the legal binding and contractual relationship it is highly
required that both the parties agree upon the contractual terms and conditions.

 Parties must be competent: Contractual parties also need to ensure that they are major,
having sound mind and not disqualified by any law.
 Intention to create legal obligations: This is one of the main requirements of valid
contract that must fulfill for the development of a valid contract (Ayres, 2012). On the
basis of such element both the concerned parties must have an intention in relation to
conduct legal proceedings if one party makes default in performance.
1.2 Discussing the impact of different types of contracts
 Face to face: It may be served as a verbal contract in which legal bindings or agreements
are created by the parties through face to face communication. In other words, it can be
mentioned that under face to face contract all the conditions are discussed and agreed by
the parties verbally (Marks, Marks and Jackson, 2013). However, such type of contract
lacking evidence and thereby creates difficulty in front of innocent party in relation to
proving the fault of defendant.
 Written contract: Such type of contract implies for the one on which all the terms and
conditions are mentioned in written format. Along with this, written contracts are signed
by the concerned involved in the same. Written contracts are highly prominent which in
turn provides security or protection to the innocent party over defendant (Hagenhoff and
et.al., 2014). Moreover, in this, plaintiff has proof to present the condition of breach and
others in front of judiciary authority.
 Distance selling: It refers to the one that are formed through the means of telephone,
video conferencing, fax, e-mail etc. Distance selling contracts occur when concerned
parties reside in varied cities. Under distance selling contract, concerned parties have to
depend on effectualness of electronic equipments. Hence, any breakdown or fault in the
equipment will closely impact the aspects of offer or acceptance and thereby overall
bindings.
1.3 Analyzing different contractual terms with their effect
 Condition: UK contract law presents that condition is the major term of legal binding or
agreement. By taking into account the case of Poussard v Spiers (1876) it can be
mentioned that when breach of condition occurs then innocent party can claim for the
damages and repudiate the contract.

 Warranty: In contract, warranties may be presented as minor terms as it is not central to
the existence of legal relationship. Unlike condition, in warranties innocent party can
only claim for the damages or loss suffered. As per the judgment found in the case of
Bettini V Gye (1876) innocent parties is not entitled to repudiate the contract.
 Innominate terms: Such term was established and introduced in the case of Hong Kong
Fir Shipping v Kawasaki Kisen Kaisha (1962). Innominate terms do classify themselves
in terms of condition and warranties. Hence, on the basis of innominate terms there is a
need to prove whether default of defendant substantially deprived the whole benefit of
contract associated with innocent party or not (Conditions, warranties & innominate
terms, 2018).
 Exemption clauses (including legality): In contract, exemption clauses are undertaken by
the parties to a contract for limiting their liability. Considering the case of Chapelton V
Barry (1940) it can be said that by inserting exemption clauses one cannot free from the
reasonable duty of care.

TASK 2
2.1 Applying the elements of contract in the context of given scenario
Case 1: Agreement
In accordance with the given case situation, Carol’s student apartment was unfurnished.
Further, Carol read carefully an online classified ad and advertisement given by Gumtree for a
nice brown leather couch. Price presented in the advertisement of such couch accounted for £600
respectively. In the advertisement, information regarding e-mail and photo of couch was also
included. Hence, Carol contracted Gumtree for purchasing couch via e-mail. In this, issue is to
ascertain whether Carol has a contract with the seller or not. Referring the case of Fisher V Bell
it can be depicted that advertisement placed by Gumtree considered as an invitation to treat.
Further, mail which was sent by Carol to Gumtree recognized as offer. In the case of invitation to
treat, seller has right to either accept or reject the offer made by other party. Hence, in this, due
to the absence of essential element such as acceptance it can be mentioned that there was no
contract between Carol and Gumtree.
Case 2
As it has been identified from the given scenario that Devi has joined the company without
informing his father. Unaware about the fact and rather communicating about the fact has
decided to develop proposal for the organisation stating that he will pay specific amount, if the
organisation hires his child. As per the contract law, in order to enter into a valid agreement ,
both the parties should be aware about the terms and condition in the contract.
According to the contract act, George cannot terminate the contract and cancel the hiring of
Devi. As pert the priority element in the contract law which states that the parties can not
terminate the agreement by getting influenced through involvement of third party. According to
the several elements in the contract act, third person doest not have any role to play in contract
between two parties. So the party in contract cannot terminate agreement due to the unethical act
conducted by third person. The George cannot enforce the contract as the recruitment has already
done by the company. Another reason is in order to enforce contract mutual consideration of the
parties are required which has not been given by Devi in the given case scenario. Consideration

is defined as a benefit that is needed to be bargained or negotiated between the parties in
contract. This is the important element that are required for enforcing contract. Consideration
must be both legally sufficient and bargained-for by the receiving party
2.2 Implementing law terms in the context of following cases
Case 3
It has been identified from the given case scenario that the money was missing from the
wallet that has been handover by guest to hotel staff. This is the case of negligence in which the
guest has to suffered loss of money due to carelessnes of hotel staff. Exclusion clause is refers to
as the provision that define the liability of person or party in certain situation. In given case
study, the hotel staff has provided guest with a slip that contain an exclusion clause according to
which the hotel staff will not to be held responsible for any loss or damages suffered by guest.
This slip has been provided to guest by hotel staff with the intention to exclude them from the
liability to specific listed conditions, circumstances, or situations. Yes, the restaurant can rely on
the exclusion clause contained on the receipt. But according to the exclusion law , hotel staff is
accountable for providing the compensation to customer for losses suffered by him. As the loss
has beret suffered by the guest when staying at hotel and due to the carelessness or negligence of
restaurant staff. If in case , the hotel staff denies from their liability or paying the amount to guest
than in such situation an individual has right to file law suit against the hotel. The exclusion
clause can be inserted into a contract which aims to exclude or limit one's liability for breach of
contract or negligence.
Case 4
The case is about renting a warehouse which is rented by Aaron from Zehphra. Aaron rent the
warehouse for the purpose of improvement and development. In order to do that, Zehphra
promised Aaron that he will not increase the rent for the next five years. One day Zehphra dies
and the property value becomes high than the past. The main reason behind that was repairing
done by Aaron. Yeti who is the son of Zehphra immediately increases the rent that Aaron refused
to pay the rent as it was concerned with Zehphra early. The Implied law and Compensation law
will be applicable for the situation in order to provide proper compensation to Aaron. Yeti should

pay the compensation to Aaron that there was an agreement made by both Zephra nd Aaron.
2.3 Evaluating the effect of different terms in the given cases
Case 5
In this case, a policy holder made a claim to motor insurance that his car was stolen. The motor
insurance firm refused to pay the amount by saying that he provided them the wrong information
about claims,. In the proposal form a question is asked by insurance firm to policy holder that
weather he has made any claim including thefts during the last five years and he said no but
actually he has made a claim within 5 years towards his previous motor. Thus, it can be said that
the motor insurance firm is able to bear the losses because of providing wrong information.
Case 6
In this case, the policy holder answer no to the two questions asked by motor insurance. The first
one is weather the car has been modified after making the policy agreement and the second one
is weather a another person drive the car and make claim for the loss of accident within previous
five years. It can be said that the motor insurance firm will not bear the losses as per the
agreement that the car has been modified after making the claim and also the husband made two
claims for the loss of car accident within previous five years. The provided information is wrong
according to the agreement that the insurer is able to cancel the policy from its starting date.

TASK 3
3.1 Explaining the similarities and differences pertaining to liability in tort with contractual
liability
From evaluation, it has assessed that both similarities and differences take place between
liability of tort and contractual obligation.
Similarities: Innocent party has right to sue on defendant for the loss or injury suffered in
the case of both contractual and tort liability. This is one of the main aspects that ensure
similarity between such two aspects. In addition to this, remedies available in the case of tort and
contractual liability are also highly similar to a great extent. Moreover, in both such cases,
plaintiff needs to satisfy that breach of duty occurs. In accordance with such aspect, contractual
and tort liability arises when defendant party fails to comply with the standard duty of care
(Frank and Colarusso, 2016). Hence, on the failure of one party in relation to compliance with
duty of care other has right to make sue in against to the same.
Differences: Under contractual liability, obligations arise when parties to a contract failed
to perform activities in accordance with the terms and conditions. On the other side, tort liability
implies for civil wrong or violation where one person causes damage, injury or harm to others
(What Is Tort Law Liability, 2018). Hence, it can be depicted that tort liability is the result of
breach of duty whether done intentionally or unintentionally. Along with this, in contractual
liability, legal relationship takes place between the parties who are well known to each other. In
contrast to this, under tort liability, legal relations and found and takes place between unknown
parties (Radin, 2016). In addition to this, under contractual liability innocent parties are not
compelled to prove the situation of negligence. However, under tort liability claimant needs to
prove that due to breach of duty of care, causation and foreseeability loss suffered. By taking into
account all the above depicted aspects it can be stated that both tort and contractual liability
differs significantly.
3.2 Assessing the manner in which liability for negligence arises and the conditions needed to be
met by claimant for proving negligence
Negligence implies for the condition where loss or injury is suffered by others or
personnel due to the failure of manufacturer / employer in relation to performing standard duty

of care. In order to prove that defendant was negligent and liable for the injuries innocent party
or plaintiff needs to prove below mentioned elements:
 Duty of care: As per this, innocent party needs to prove that defendant owes duty of care
due to relationship exist between them (Backof, 2015).
 Breach of duty: It represents failure in relation to performing or exercising reasonable
care in fulfilling duty (Elements of a Negligence Case, 2018).
 Causation: On the basis of such element, plaintiff must prove that legal cause of harm is
the occurrence of breach pertaining to duty of care. Aspects of causation can further be
distinguished in terms of actual and proximate.
 Foreseeability: Such element of negligence entails that plaintiff can demand for
compensation by proving that injury suffered is foreseeable to defendant.
Donoghue v Stevenson (1932) case is highly effectual that state the aspects of negligence
appropriately. In such case, snail was found in the bottle of ginger beer due to which Mrs.
Donoghue fell ill. In this, House of lord gave judgment that manufacturer owed duty of care
towards Stevenson that was breached in such case. The rationale behind giving such decision
was foreseeability which in turn ensures that failures pertaining to product safety would lead
harm to others. On the basis of such, in the case of breach regarding duty of care defendant will
be held accountable towards innocent party.
3.3 Defining vicarious liability the manner in which organization becomes liable for the same
English law imposes strict obligations on employers for the wrongdoings of their
employees which in turn referred as vicarious liability. Hence, as per Vicarious Liability Act,
employer will be obliged for any tort committed by an employee while performing duties
(Cameron, 2015). Aspects of vicarious liability can be seen in the case of Lister v Hesley Hall
Ltd. In such case, an employer is held vicariously accountable for the undesirable acts performed
by employees. Moreover, from investigation, it has found that employees of the hostel were
involved in illegal act such as sexual abuse of students during the course of employment.
Referring all such aspects, it can be stated that employers are liable vicariously when below
mentioned conditions are proved:

 Existence of lawful relations: On the basis of this, employer is liable for the tort of
employees when legal relationship takes place between such two parties.
 Occurrence of undesirable event during the course of employment: Further, vicarious
liability occurs when undesirable events or activities occurred during employment period
and official hours (Chamallas, 2014).

TASK 4
4.1 Applying the elements of the tort of negligence and defenses under present situation
Defenses under tort of negligence are as follows:
 Volenti-non-fit-injuria: It entails that defendant is held liable only when undesirable act
performed by them intentionally. Hence, when claimant fails to prove such undesirable
intention then defendant would not be liable to give compensation. Such aspects can
esiluy be supported with the case of Nettleship v Weston [1971] and White v
Blackmore [1972].
 Necessity: Considering the case of Surroco v. Geary, it can be depicted that defendant
would not be liable to give compensation when he proves that unlawful act was necessity
(General Defenses in tort, 2018). In other words, when one perform undesirable acts to
restrict illegal activities of others then no liability pertaining to giving compensation to
plaintiff occurs.
 Justification: Third element of defenses show that by justifying allegation imposed by
claimant protection can be ensured significantly (Low, 2013).
 Unlawful: Defendant part can defend himself by entailing that action or activities was not
illegal.
Case 7
Given case situation presents that Mr. Brown was feeling unwell due to chest pains and
breathing problem. Hence, for resolving such issue he went to Goodmayes hospital and seen by a
nurse as per the guidance provided by doctor. Referring the instructions given by the doctor
counter pain killers were given to Mr. Brown. However, day after treatment due to the toxic
mould in the house death of Mr. Brown was occurred. In this, there is a need to respond two
aspects such as:
a. When hospital is held for negligence
From evaluation, it has identified that duty of care is a legal obligation that needs to be
adhere while performing acts. In the case of Mr. Brown guidance was provided by the doctor
only through telephone which is not appropriate. Moreover, as per the duty of care element it is

the accountability of hospital to provide patients with quality and satisfactory services. On the
basis of this, Goodmayes hospital also needs to employ enough full and part time doctors who
have ability to deal with the patients. In the current case situation, behavior of doctors considered
as undesirable because during the working hours patient was treated through phone. Under such
conditions, hospital will be vicariously liable for tort the tort act of doctors and Mr. Brown’s
death.
b. When hospital cannot be held for negligence
For avoiding liability in relation to doctor’s negligence there is a need to justify all the
below mentioned aspects such as:
 Absence of employer-employee relationship: In accordance with such aspect,
Goodmayes hospital needs to prove that doctor is not a permanent employee (McLaren,
2014). Hence, by satisfying that concerned hospital would not be held liable for the act
of doctor.
 In addition to this, hospital would not held vicariously liable if treatment was provided
by the doctor to Mr. Brown in his personal clinic.
Thus, by presenting all such aspects hospital unit can remove all the allegations associated
with death of Mr. Brown. In this, hospital will not be entitled to give compensation for the act
performed by doctor.
4.2 Application of the elements of vicarious liability
Case 8
The cited case presents that driver was sent by Chauffeur company for picking up client
at airport. However, driver had few glasses of alcohol while waiting for the client. While going
from airport to hotel car was collided with lamp post. Due to this, serious injury was suffered by
the client because diver drank over the driving limit. Hence, for getting compensation in against
to the injury or loss suffered client sued on Chauffer firm. In this regard, referring the case of
Lister V Hesley Hall Ltd it can be mentioned that Chauffer company is held liable for the
undesirable acts performed by his driver (Judgments - Lister and Others (AP) v Hesley Hall
Limited, 2018). Moreover, situation of accident was occurred because driver drank alcohol

beyond specific limit. In the context of present situation, two main elements or aspects of
vicarious liability are satisfied significantly such as employer-employee relation and happening
of undesirable conducts during official time. As, in such case within the working hours driver
had few glasses of alcohol due to which he was not able to drive appropriately. This is one of the
main aspects due to which accident occurred. Hence, referring such aspect it can be depicted that
Chauffer Company is vicariously liable for the injury suffered by the client. Thus, on the basis of
Occupiers or vicarious liability Act, Chauffer company is obliged to give compensation to the
client for the loss or damages suffered by him.
Case 9
Case scenario presents that Mr. Jones was working as a delivery driver in super market.
However, on one morning while loading pallets he slipped on tail gate due to which another
colleague injured. In addition to this, injury suffered by Mr Jones was severe for which surgery
and months of rehabilitation with a physiotherapist highly required. Under this situation,
colleague sued on supermarket for the damages of injury suffered. On argument, supermarket
stated that at the time of accident accountability pertaining to health & safety was transferred to
another company. By taking into account the case of Donoghue v Stevenson (1932), it is the
accountability of supermarket to make all the safety arrangements for personnel by identifying
the level of hazard. Moreover, act of supermarket comes under the category of breach pertaining
to duty of care. Thus, by taking into account all such aspects it can be mentioned that
supermarket is liable for the loss suffered by the innocent party.

CONCLUSION
By summing up this report, it has been concluded that offer, acceptance, consideration
and legal intention are the main aspects that must be met for doing a valid contract. Besides this,
it can be inferred that different types of contract have varied impact on the parties to a contract.
Thus, by keeping in mind the influence of each contractual type concerned parties should select
the one that offers protection to them in the near future. It can be seen in the report that
significant differences take place between tort liability and contractual obligations. Along with
this, it has been articulated that for proving the existence of negligence plaintiff must present
breach pertaining to duty of care, causation and foreseeability. It can be summarized from
vicarious liability Act that employer is held accountable for the irresponsible behavior performed
by employees with another. Further, it can be depicted that there are mainly four elements that
offer defenses such as volenti-non-fit-injuria, necessity, justification and unlawful.

REFERENCES
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Chamallas, M., 2014. Two Very Different Stories: Vicarious Liability Under Tort and Title VII
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Frank, M. J. and Colarusso, J. C., 2016. Vicarious Liability May Apply: TCPA-Compliant Text
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Contract Laboratory Setting. Microscopy and Microanalysis. 20(S3). pp.2098-2099.
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McLaren, W. M., 2014. Endangered Theory: Vicarious Liability under the Endangered Species
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Radin, M. J., 2016. Access to Justice and Abuses of Contract. Windsor Yearbook of Access to
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