Comprehensive Analysis: Contracts and Negligence in Business

This report examines the core concepts of business law, specifically focusing on contracts and negligence. It begins by outlining the essential elements required for contract formation, such as offer, acceptance, consideration, and capacity, along with a discussion of different contract types like face-to-face, written, and distance selling contracts, and their respective impacts. The report then delves into various contract terms, including conditions, warranties, innominate terms, and exemption clauses, explaining their meanings and effects. Through case studies, the report applies legal principles to real-world scenarios, analyzing the elements of a contract and the application of law to contract terms. It also contrasts contractual liability with tort liability, exploring the nature of negligence and vicarious liability in business contexts. The report concludes with an analysis of the elements of the tort of negligence, along with defenses and vicarious liability in different business situations. The report aims to provide a comprehensive understanding of contracts and negligence within a business framework.

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Aspects of Contracts and Negligence
for Business
Table of Contents
1. INTRODUCTION.................................................................................................................3
Task 1....................................................................................................................................... 3

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1.1............................................................................................................................................ 3
1.2 Discussion on different type of contract and its impact.................................................4
1.3 The terms in contract with their meaning and effects...................................................4
Task 2....................................................................................................................................... 5
2.1 Elements of contract in case.......................................................................................... 5
2.2 Apply the law on terms in different contracts..............................................................5
2.3 Effect of different terms of law.....................................................................................6
3.1 Contrast contractual liability and tort liability..............................................................6
3.2 Explain the nature of liability in negligence..................................................................6
1. TASK 4............................................................................................................................... 8
1. 4.1 Apply the elements of the tort of negligence and defences in different business
situations............................................................................................................................. 8
2. 4.2 Apply the elements of vicarious liability in given business situations...................8
3. 3.3 Vicarious liability.....................................................................................................8
CONCLUSION............................................................................................................................9
References..............................................................................................................................10

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INTRODUCTION
Agreements are signed among parties and terms and conditions of business are
determined by them. Present report describes about different terms that needs to be included
while signing an agreement. Moreover importance of the essential elements required for
formation of contract has been mentioned. In addition to that impact of different types of
contract has been described. Furthermore evaluation of different terms of contract has been
done and nature of liability in negligence has been described. Vicarious liability of business
towards its employees has also been mentioned in the report.
Task 1
1.1
There are various elements which are covered under contract without those elements
contract cannot be formed. At the time of entering into contract it is important that people
between who contract has been made accept all the elements of contract. Some of the
essential elements of contract are as follows:
 Offer: when any party want to come in contract then it put offer in front of other
party. It is very significant element of contract without it contract cannot be formed
(Twomey and Jennings, 2010.). It shows the legal purpose of one party to invite other
in order to make valid contract. For instance from the case of Carlil V Crbolicsmoke
Ball co(1983) it is show that offer made by them it not same as invitation to treat.
 Acceptance: Acceptance is another second important element of contract in which
another party to whom offer is made is accepted. Further if offer is not accept by
second party then contract cannot be stated valid (Oliveira, Ruiz and Conejo, 2013).
Along with this both the party who make offer and who accept the offer need to sign
agreement agreement in order to come under the contract.
 Consideration: Consideration in contract can be called as promise which is made by
one party to another. Further it is important to make consideration at the time of
making offer to another party, so that if any party breach the contract then another
party can take legal action in against.
 Capacity: for entering into contract it is important that both party must be above the
age of 18 years and mentally fit. If any party is not above the age of 18 then valid
contract cannot be formed. Further if person is not mentally stable then it cannot enter
into a contract as per the law.

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1.2 Discussion on different type of contract and its impact
There are different type of contract which can be made by individual who want to enter into
contract. Some of contract and their type are discussed below
 Face to face contract: In face to face contract both the party offeror and offree sit
together and accept all the terms and condition which are mentioned in contract.
There are some positive impact of this faced to face contract that is, there is less
chance of getting cheated by any party. Along with this if any confusion take place
then it can solved out on the spot.
 Written contract: It is one of the another type of contract in which both the party who
make offer and another who accept the offer need to signed written contract. This
contract have some positive impact (Liu and Aron, 2014.). If any party cheated, then
another party can sue in court with proof.
 Distance selling contract: In a distance selling contract, one party make offer on
phone or through mail. This contract is mainly signed with different suppliers in order
to get raw material. Further there are some negative impact of this contract that is
there is high chance of being cheated by another party, along with this if due to
confusion any can party can cancel the contract.
1.3 The terms in contract with their meaning and effects
There are various terms in contract which are need to include at the time of making any
contract. This all terms are explained below:
Condition: Condition is one of the important term of contract and is must be mentioned at the
time of entering into a contract. all the condtion before signing the contract hould be written
in contract. Further it any party breach the contract, then other party have right to sue on
court for damages. Another party can take legal action and claim for compensation. Further it
have right to breach the contact if one party break any condition.
Warranty: Warranty is also important term of contract and it should be mentioned in contract,
however this term is not much important as compare to condition. For instance, if any party
breach the contract then another party have right to claim for compensation but it cannot
breach the contract. It show that warranty is also term of contract but not much important as
compare to condition.
Inominate term : Inomimate term does not have importance in contract as compared to other
terms such as warranty and condition, further it is not much useful in contract but it should
be mentioned in contract

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Exemption clause: according to exemption clause is term which is included in contract
appropriately. Along with this if any parties breach the contract then other party can claim for
damage in front of court. Along with this, it can be stated there are some party who avoid
exemption clause due to which other party cannot sue in court for mistakes.
Task 2
2.1 Elements of contract in case
According to the case, Todors bookshop and sees a HND Law book which was on display on’
shop for sale. Ivan want to buy that book which was on sale for 50.00 further Ivant take that
book to the counter for the purpose of buying,. Todor the shopkeeper refues to sale book to
Ivan because it was the single copy which was already sold to Carl yesterday. The
shopkeeper forget to remove book from display. On the other hand Ivan insist to but that
book but shopkeeper do not have more copy to sale to Ivan.
From the above case it show that there are 3 elements of contract which are as follows:
Offer: as per the given case, Todor make offer for selling the book at discounted price. For
this purpose it kept book on display, so that people came to know about its offer.
Acceptance; As per the given scenario Ivan see a HND law Book and ready to buy it. This
show that offer is accepted by Ivan. But Shopkeeper refuse to sale book because its offer was
already accepted by Carl.
Hence it show that proper contract was not made because one case offer was made but it was
broken at the time of acceptance, there was no agreement signed between any party.
2.2 Apply the law on terms in different contracts
As per the present case, it can be said that Ivan goes into Toders bookshop to buy a’
book which was placed on display. However, the book was already sold to someone; instead
of that Ivan gave counter offer on that sold book (Zamore, 2016). This states that there
exists no condition in the case, because Ivan and Todor both did not enter into any sort of
contract. Condition does not exist in the case as Ivan did not promise for the book;
therefore in this case Ivan can not claim for any sort of agreement.
In this respect it can also be said that conditions are applied in such case wherein
parties have agreed for the situations that exist in the contract (Wijaya, 2017). Thus,
typically a condition is major term of the contract which frames the base of actual contract.
If a condition is breached, the innocent party is entitled to end the contract and can also
claim for the damages and injuries caused. However, this is not applicable in the present
case (Weber, 2016). On the other hand, warranties are regarded as minor terms of the
contract which are not central aspects of the contract and which does not specify its root
cause.
It is also mentioned in Bettini v Gye case that, if warranty is breached then the party
can breach the claim for the damage; however they cannot end the contract. Furthermore,
under innominate terms, the party is held liable for the wrongful acts. The party shall also
be held liable in the case if they consider the contract at an end while ascertaining the

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breach (Stanton, 2016). Hong Kong Fir Shipping v Kawasaki Kisen Kaisha [1962] 2 QB 26 is a
major example of this case.
2.3 Effect of different terms of law
In the present case, it is being mentioned that John goes into a park and hires a chair
for 50 pounds. However, while using it, the chair collapsed and injured him badly which
damaged his clothes as well. While claiming, the local council refused it by saying that no
liability is accepted for any damage or injury that is caused by the failure of any hired
equipment (Ortiz, 2016). This case depicts the requirements of expressed and implied
terms. Expressed terms includes all the elements of the contract such as offer, acceptance
and consideration and while operating the contract, all such aspects are required to be
considered.
Thus, it was clearly mentioned in the back side of the ticket that council will not be
held liable for any sort of damage; therefore in this case John could have to see that note
placed in the ticket (Kollár and Poór, 2016). It was his negligence and because of that he
cannot claim for the damage. However, on the other hand, ticket is merely a receipt; it
cannot limit the liabilities of the council. The council is working for public; hence they are
liable to deliver quality services in all areas (Henry, 2016).
On the other hand, according to implied terms, specific aspects are not being
included in the contract; still they are apparent to be considered while playing the roles and
duties. Implied terms are typically not based on the intention of the parties; however it
includes several provisions in a contract that makes the conditions automatically implied
(Hasani, 2016). This does not exclude the liability of local council even if there is valid
implication of implied and expressed contracts.
3.1 Contrast contractual liability and tort liability
In order to specify the difference between tort liability and contractual liabilities, it
can be said that contractual liabilities are quite implied in the contract and they are also
helpful in meeting the interest of the parties (Folladori, Rescigno and Sacchi 2016). Thus,
contractual liability consists of all basic liabilities which a party posses over other party.
However, on the other hand, a tort is an act that defines that one party in the contract fails
to meet the defined standards; hence this gives right to the other party to claim for the
damages and injuries. Tortious liability arises from the breach of a duty that is defined by
the law and that is also essential to be followed towards the other person entered into the
contract (Bäumer, von Oelffen and Keil, 2017).
The breach is also redressible by the action for unliquidated damages. Therefore, it
can be said contractual liability and tort liability are different with each other chiefly on the
basis of nature of duty (Babu, 2017). Stating about the duties in torts that are fixed by the
law, it is essential for the parties to meet it; however on the other hand contractual
liabilities are fixed by the contractual parties according to the preferred terms and
conditions. Thus, it can be said that tortuous liability is much more stern as compared to the
contractual liabilities as that requires several legal aspects to be followed while formulating
the roles and duties (Henry, 2016).
3.2 Explain the nature of liability in negligence
The nature of liability states that contractual parties have legal liabilities towards
each other and in this context, they have to maintain the interest of each other. The party

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who fails to meet the interest of other party becomes liable to pay for the debts and
damages (Ortiz, 2016). In terms of law, there are several defenses against civil negligence.
This includes the doctrine of contributory negligence which states that a person cannot
claim opposite party if his own actions are based on negligence.
Before claiming, the parties must ensure that no damage is done on their part. It also
includes gross negligence which is different from ordinary negligence. Thus, in order to meet
the liability of negligence, the defendant must owe a duty of care to other party. Apart from
this, the defendant was in breach of that duty as then only the claim is held liable ( Hasani,
2016). The major dimension of negligence states that the loss or damage must be the result
of breach of duty.
Thus, the actual loss should be caused for breach of duty. Donoghue v Stevenson
[1932] AC 562 is the major example of liabilities in negligence. Besides this, the parties are
also required to specify that the damage was not too remote. This contends that the
defendant is only liable for loss which was foreseeable (Zamore, 2016). When the
foreseeable loss is occurred, then only the party can claim for the loss. The Wagon Mound
no 1 [1961] AC 388 case shows the liability of negligence.

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1. TASK 4
1. 4.1 Apply the elements of the tort of negligence and defences in different business
situations
According to the given case study it has been mentioned that David has been driving
the vehicle at the speed of 35MPH in 25MPH zone down the line around a four lane street
where children were playing. It has been explained in the case scenario that one nine year
old child Kevin runs into the street chasing a soccer ball. While children were playing in the
lane David without looking at over his shoulders swerves into the other lane to avoid Kevin.
During the whole process David hits a telephone lane and Kevin got seriously injured and
severe injuries are sustained by the child.
Moreover the telephone pole is owned by the company and it was a local phone
company and naming as TeleCO. The telephone pole easily get snaps into two pieces. Child
Kevion who is playing in the street also gets several injured and the situation makes him
knocking in unconscious and resulting into permanent injuries. Elements of tort and
negligence get applies to this situation and it is critical that innocent party should take legal
action against the defendant party. From the case of Cattle v Stockton Waterworks (1875)
LR 10 QB 453 it has been referred that negligence and carelessness shown by individual
which lead towards creating damages is considered as illegal. In the present case due to
Negligence shown by David injuries and damages have been sustained by Kevin. In this case
David is liable for the damages that are sustained by the child. In addition to that local
telephone company also needs to situate their poles at appropriate locations so that no
damages should be sustained by them. Telephone company is also responsible for this
incident and so liable to pay for the damages.
2. 4.2 Apply the elements of vicarious liability in given business situations
According to the case scenario it has been defined that Colin is working as the Head
Chef of the Regent hotel and he face difficulties with Roger who works as the head chef with
the restaurant. Roger who works as a dishwasher creates difficulty for Colin who work as
head chef of the restaurant. One day Colin knocks Roger being unconscious with the frying
pan and in this incident Roger gets several injured. Roger refuses to go to the hospital and
due to that more damages are sustained by the Roger. Along with this Roger refuses for
taking any kind of medical aid and going to the hospital and it creates difficulty for her.
Moreover, legal actions are claimed by Roger Against Colin in the vicarious liability. In the
present case it has been observed that Colin is responsible for the damages and injuries that
are sustained by Roger.
As per vicarious liability owner of the firm is accountable for the damages and harm
sustained by staff members while working. Along with this vicarious liability imposes
responsibility on the owner of the company and makes them accountable for the injuries
and losses that are sustained by the employees while working at the work place. Moreover
from the case of Haynes v Harwood [1935] 1 KB 146, CA it has been referred that employer
of the firm is liable to pay for the damages and injuries that have been sustained by the
employees. In the present case Roger gets injured while working and due to this injuries are
faced by him. In this case employer Colin is accountable for the damages sustained by the
Roger and being owner of the restaurant he is liable to pay for the damages sustained by his
staff member. Vicarious liability imposes responsibility on the owner of the company.
3. 3.3 Vicarious liability
Vicarious liability is defined as responsibility of a business firm towards the losses
and damages that are sustained by the business. Employer of the company is accountable

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for the mistakes and wrongdoing done by their staff members and it is critical that
employers should take proper initiatives so that better care should be provided to the
individuals that are working in the organization (Sweet and Schneier, 2012). It is critical that
employers should provide adequate safety and secure working environment to the
employees so that they can work with out facing much challenges and difficulties.
If any injuries and damages are sustained by any employee that owner of the
company can be held accountable for the wrongdoing of the employee (Oni-Ojo and Iyiola,
2014). Many initiatives can be taken by employers so that better and protective work
environment can be provided to the employers. Training program can be organized and in
which better competence and capabilities can be imparted to the employees so that they
can perform their assigned work in effective way without facing much challenges. It is
critical that proper directions and commands should be given to the employees. It is also
required that proper monitoring of work performed by them should by them so that risk
and challenges at the work place can be avoided.
CONCLUSION
Summing up the present report it can be concluded that it is vital that elements of
contract should be included while signing a contract. Different important elements that
needs to be included while signing the contract are offer, acceptance, consideration and
capacity.
In face to face contract both the party offeror and offree sit together and accept all the
terms and condition which are mentioned in contract. It is critical that all the parties that
are involved for signing the agreement should agree on the terms and conditions of
contract. There are three different types of contracts that are signed by parties and it
includes face to face contract, written contract and distance selling contract. Some specific
terms that needs to be included while making agreements includes conditions, warranty and
innominate terms. It is critical that all the terms should be included while making the
contract. Vicarious liability is defined as responsibility of owner of the company towards the
mistakes and wrongdoing committed by the employees. Employers of the firm are liable to
pay for the damages and injuries that are sustained by the employees. Further each and
every elements of contract is important for making valid agreement.

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