Business Law and Tort Law: A Comprehensive Analysis

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Contents
INTRODUCTION........................................................................................................................2
TASK 1...................................................................................................................................... 3
1.1 ESSENTIAL ELEMENTS OF THE VALID CONTRACT...........................................................3
1.2 IMPACT OF DIFFERENT TYPES OF CONTRACT.................................................................4
1.3 TERM IN CONTRACT WITH REFERENCE TO MEANING & EFFECT....................................6
TASK 2...................................................................................................................................... 7
2.1 APPLICATION OF VARIOUS ELEMENTS OF THE CONTRACT WITH RESPECT TO THE
BUSINESS SCENARIO.............................................................................................................7
2.2 APPLY THE LAW WITH RESPECT TO THE FOLLOWING TERMS........................................8
2.3 EVALUATE THE OUTCOME IN DIFFERENT CASES..........................................................10
TASK 3.................................................................................................................................... 11
3.1 PROVIDE SIMILARITIES & DIFFERENCES WITH RESPECT TO CONTRACTUAL LIABILITY
AND LIABILITY IN A TORT....................................................................................................11
3.2 EXPLAIN WITH EXAMPLE THE NATURE OF NEGLIGENCE AND ITS LIABILITY.................12
3.3 EXPLAIN THE MEANING OF VICARIOUS LIABILITY AND HOW IT MAKES THE BUSINESS
ORGANIZATION LIABLE.......................................................................................................13
TASK 4.................................................................................................................................... 15
4.1 APPLICATION OF THE ELEMENT OF TORT OF NEGLIGENCE..........................................15
4.2 CRITICALLY APPLY THE ELEMENT OF VICARIOUS LIABILITY WITH RESPECT TO THE
GIVEN BUSINESS SITUATION.............................................................................................. 16
CONCLUSION.......................................................................................................................... 18
REFERENCES........................................................................................................................... 19

INTRODUCTION
The purpose of the assignment is to highlight the aspect of highlight the essential element
of business and tort and thereby provide the knowledge to apply the skills in the relevant
business situation. The report discusses the law of tort and negligence with respect to the
business scenario. It provides learning outcome in the form of essential elements of the
business contract and application of those elements with respect to the business situation.
it also explains the liability in the case of negligence and legal principles in context to a
business scenario (McKendrick, 2014).
Law and order play a vital role with respect to the functioning of the business organization.
This report throws light on the law of contract and law of tort and provides insight on
breach of legal duty and other binding provisions.

TASK 1
As a friend of Peter Abraham, I will share my knowledge with regard to various elements of
the essential contract and discuss the impact of various types of contract. This will further
help Peter Abraham in terms of setting up the self - employed building contract business
(Friedman, 2011).
1.1 ESSENTIAL ELEMENTS OF THE VALID CONTRACT
Law of the contract is an essential part of the business law that contains the provision with
regard to the formation of a contract between two parties. There are some essential
elements to ensure the validity of the contract. Following are the basic elements of a
contract:
Offer There must be offer or proposal from for doing any act or refrain
from doing any act. This is the basic condition of the valid contract
that requires a declaration from each party and expression of such
compliances to be bound (Akram Laldin and Furqani, 2013).
Acceptance A mere offer does not form the legal contract; the other party must
lawfully accept it. Acceptance refers to the willingness with respect
to terms and condition of the proposal.
Consideration It refers to the price amount in consideration of the contract. This is
the most essential element that provides the legal effect on the
contract.
Intention Both the parties to the contract must have the intention to create a
legal relationship. This makes the contract legally binding on the
parties entering to the contract (Akram Laldin and Furqani, 2013).
Legal capacity The agreed parties entering to the contract must be capable and
sound to enter into an agreement. Incapability and mental illness do
not hold a valid contract.
Certainty A contract is said to legally enforceable in the court of law if it
contains certain terms and conditions in the offer document.
Consent A contract is said to be valid only if the consent of the agree parties

is free i.e. it has not been obtained by undue pressure or coercion.
1.2 IMPACT OF DIFFERENT TYPES OF CONTRACT
There are different types of contract that can influence the contract business of Peter
Abraham.
Unilateral contract A contract that is actionable on behalf of one party. In this
contract, the performance of one party is sufficient so as to
make the contract binding (Kim and Brown, 2012).
Bilateral contract In this contract, both the promisor and promise are involved in
order to make adherence to the terms of the contract. There is an
agreement with respect to doing or abstain from doing any act. it
came into existence at the time of formation of the contract.
Therefore, both the parties under the contract are committed to
performing their respective promises.
Oral contract This is also called a verbal contract that is formed based on trust
among the parties. This contract does not have a legal effect like a
written contract especially in the case of highly remarkable values
and uncertainty in the minds of either party (Abebe et al., 2013).
Written contract A contract that is formally formed and signed by the agreed
parties entering to the contract. All the terms and conditions of the
contract are in written form and it is easily enforceable in the court
of law.
Face to Face
contract
This contract is being entered at the presence of all the agreed
parties and terms 7 conditions are decided after face-to-face
contact. Thereby, terms & conditions are present in verbal form.
Distance selling
contract
This refers to the entering of the contract between the two parties
living at a distant place. They enter into contract either in verbal or
written form. For example- the company selling the product in the
online form (Ricci et al., 2014).

1.3 TERM IN CONTRACT WITH REFERENCE TO MEANING & EFFECT
The important terms that are used in a valid contract are as follows:
Condition A condition is a significant and core term in the contract.
Any breach of the condition gives the right to the
aggrieved party to terminate the contract and claim for
any damages. This is the essential requirement that should
be fulfilled before the completion of the contract.
Moreover, the condition is directly associated with the
objective of the contract, any such violation of the
condition help the harmed party to claim for the remedy
(Toker et al., 2011).
Warranty A warranty is just a promise; it is not the foundation or root of
the contract. A warranty depends on the terms of the contract; it
can be implied or expressed. Thus, it is a subsidiary provision
related to the objective of the contract. Any breach of the
warranty provides a remedy to the aggrieved party to claim for
damages. In addition, it does not provide any right to the harmed
party so as to rescind the contract and any breach of it cannot be
treated as a breach of condition (Furmston et al., 2012).
Exemption clauses These are called as the exclusion clauses to the contract that
restricts the rights of parties entering to the contract. Thus, it
protects the party from with regard to the responsibility of a
specific event. For Example - Most companies put the exclusion
clause that states that the company will be responsible in the
event when product is used in a certain way that covers the
aspect of negligence and recklessness.
Innominate terms The innominate term can be referred to as intermediate term
that cannot be defined as either condition or warranty. Any
breach of that may provide the right to the innocent party so as to
terminate the contract. In the event of a breach of the contract,

the judge will declare the appropriate remedy (Hillman, 2012).
TASK 2
2.1 APPLICATION OF VARIOUS ELEMENTS OF THE CONTRACT WITH
RESPECT TO THE BUSINESS SCENARIO
CASE 1
As per the given business scenario, carol' student just forwards an e- mail to the Guntree
for buying the leather couch at £600. In the given case, carol' student just approaches the
party that shows his keen interest in buying the couch. As per the law of contract, an
agreement is said to be valid when it is mutually formed by the assent of both the parties.
The offer and acceptance are the two essential elements of agreements in order to form a
valid contract. In the given scenario, there is only an offer made by the one party but not
accepted by the other, therefore it will not be regarded as the valid agreement (Lawson,
2011).
CASE 2
In the given business scenario, George Smith and Incorporation already hired already hired
Mr. Preston’s Son Devi at Cyber security position but Mr. Preston was unaware of such fact
and already entered into a contract with the IT firm for the purpose of Devi’s hiring, the
contract was entered at £150,000. In the given case, the contract could only be enforceable
if it is a valid contract. To be a valid contract, consideration must be lawful and must not
defeat the intent of the law. According to the Indian contract act, George form cannot
enforce the contract in the court of law. Therefore, the said contract cannot be validated as
the company has already appointed Devi for the respective position and thereby cannot
accept any kind of consideration.

2.2 APPLY THE LAW WITH RESPECT TO THE FOLLOWING TERMS
Exclusion clause
The exclusion clause is a term in the contract that excludes the liability and limits it to a
certain extent in case of any loss or damage suffered by the entity (Lawson, 2011). In
addition, the clause is said to be valid when it forms the part of the contract actual
document. As per the law, mere receipt or acknowledgement of the payment will nit
deemed to as exclusion clauses. Furthermore, the validity of the exclusion clause depends
on the signature, previous dealings and notice.
CASE 3
In the given case, a couple already had the booking at the London restaurant and handed
over his overcoat to the porter, in return for that the porter handed over the slip with
exclusion clause on the back side that states that the restaurant will not be responsible in
case of an item are missing or stolen. Later on, it was found that the wallet was missing with
£500 inside it.
In the given case, there was clearly the negligence from the part of the couple, they failed
to read the exclusion clause on the back of the receipt and the man handed over his coat
without any checking. Therefore as per the provisions of the exclusion clause, the couple
cannot sue the restaurant and ask the claim as the restaurant gets protection because of the
exclusion clause. Therefore, a particular term is valid in nature (Schwartz et al., 2013).
Implied terms
The terms of the contract may be implied or express. Implied terms are common to the
transactions and are intend to be assumed by the court of law. These are not expressly
stated on the contract but the law implies the terms. For Example- There is an implied
warranty of merchantability in the contract of sales that assumes that goods will serve over
a reasonable period of time. Thus, implied terms are equally applicable to the contract
(Austen-Baker, 2017).

CASE 4
In the given case, there was a tenancy agreement between the Aaron and Zehphra that
states that rent of the warehouse that Aaron has acquired from Zehphra will not be
increased for the next 5 years due to major repair expense done by Aaron. Later on, after
the death of Zehphra, the warehouse was inherited by Yeti and increases the rent in the
next year. Therefore as per the provisions of the law, Mr Aaron can ask for compensation in
case of breach of contract as per the normal provisions of the law.
Also, the implied terns of the tenancy agreement include basic repair and installation to be
carried out by the landlord. Thereby, in this case, Mr Yeti is required to pay the
compensation to the amount of the repair expenses (Austen-Baker, 2017).

2.3 EVALUATE THE OUTCOME IN DIFFERENT CASES
CASE 5
The given business scenario provides that the policyholder has done breach to the insurance
terms and conditions. The insurance proposal clearly contains the provision regarding the
car accident and cases of theft in the previous 5 years (Schwartz et al., 2013).
In the given case, there was clear-cut negligence on the part of the policyholder that was
totally under the control of the insured. Hence as per the current scenario and provisions of
the insurance contract, the policyholder cannot make claims from the insurer and insurer
was correct on his part for not making the disbursal of the claim as there was clear cut
breach of contract as the information was not properly disclosed at the time of entering into
the contract.
The policy holder answered the question of motor vehicle previous claim as No despite the
fact that motor vehicle has already gone through two claims in the previous five years. This
leads to a violation of the condition of the contract. Therefore the condition is said to
breached and thereby the contract is declared as the void contract and thereby having its
null effect.
CASE 6
In the given case, the policyholder of the car makes a reasonable representation statement
according to his knowledge. The policyholder stated that she was unaware of the fact that
car has gone already gone through two major claims and other specification of the car. This
statement is personal in nature and hence cannot be regarded as the basis for getting the
claims. Henceforth, the terms of insurance are misrepresented and there is a concealment
of facts, so claims will be sanctioned in this case (Smith, 2011).

TASK 3
As a Health safety manager, I owe the responsibility to throw the light on the different
aspect of safety and security at the workplace as well as highlights the other consequences
(Weisbach, 2011).
3.1 PROVIDE SIMILARITIES & DIFFERENCES WITH RESPECT TO
CONTRACTUAL LIABILITY AND LIABILITY IN A TORT
There exist many similarities between the law of tort and contractual liability as both the
contract comes into existence due to breach to the injured party. Both the law provides
compensation and damages to the victim. However, these laws are also different on some
points:
Basis of difference Liability in tort Contractual liability
Damages The amount of liability
depends on the situation to
situation.
The liability is limited only to
the amount of the
consideration involved in the
contract.
Cause The consideration for the
cause is given under liability
of tort
The impact of cause is not
considered under the
contractual liability.
Scope The scope is unlimited The scope to the liability is
limited
remedies The remedy is provided to
the aggrieved party by way
of compensation
The remedy under the
contractual liability is
provided by way of
restitution or restoration.
Rights affected Rights in Rem are affected
due to a breach under the
law of tort (Weisbach,
2011).
A right in Persona is affected
when there is a breach of
contractual liability.

3.2 EXPLAIN WITH EXAMPLE THE NATURE OF NEGLIGENCE AND ITS
LIABILITY
Negligence refers to the failure towards the duty of care that is required to be undertaken
by a reasonable and cautious person. In case of person proven guilty of negligence will be
required to pay the damages in case of injury caused to another person (Hillman, 2012). The
negligence is said to be committed only if there is the existence of the duty. There are four
factors that need to be present so as to make the person liable for the negligence:
 The defendant owes any kind of duty to the public at large.
 Defendant has failed to honour that duty.
 The aggrieved person suffers some kind of injury in a physical or emotional sense.
 The damage must be foreseeably caused due to injury.
The nature of the person depends on the reasonability of the case and the prudence
concept. Furthermore, it is required to consider the enormity of the risk.