Consumer Behaviour, Contractual Liability, and Negligence in Business

This report provides a comprehensive analysis of consumer behavior in the context of contractual liability and negligence. It begins with an introduction to consumer behavior and its regulation, emphasizing the importance of contractual agreements in mitigating legal complications arising from consumer actions. The report then delves into the essential elements of a valid contract, including offer and acceptance, intention to create legal relations, and consideration. It explores the impact of different contract types such as verbal, written, and distance selling contracts, along with their respective terms, including conditions, warranties, and exclusion clauses. Furthermore, the report differentiates between contractual liability and negligence in tort, highlighting the nature of liability in negligence and providing a case study. Finally, it examines vicarious liability in business scenarios, concluding with a summary of key findings and references to relevant sources. This report is a valuable resource for understanding the legal and practical aspects of consumer behavior in business.

Consumer Behaviour

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Essential elements of valid contract......................................................................................1
1.2 Impact of different type of contract......................................................................................2
1.3 Terms of contract..................................................................................................................3
TASK 2............................................................................................................................................5
2.1 Contractual liability and Negligence in tort..........................................................................5
2.2 Nature of liability in negligence............................................................................................6
2.3 Vicarious liabilities to business.............................................................................................6
TASK 3............................................................................................................................................7
3.1 Importance of essential elements which are required for valid contract ..............................7
3.2 Explain the impacts of different types of contract and their terms.......................................8
3.3 the elements of tort of negligence and vicarious liability in different business scenarios....9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Consumer behaviour is natures shown by an individual person, groups or by different
organisation while making purchase or involving themselves in exchange of things in order to
accomplish their needs and wants effectively. The consumer behaviour while engaging them in
commercial activities should be regulated through some rules and regulations so that do nor
neglect their liabilities. The consumer liabilities restricts and customers to be liable for in-
negligence behaviour in marketplace (Petkus Jr, 2010). The company is not liable to compensate
any losses if consumer was not following up all the aspects of negligence. This is an part of
contractual agreement made between the company and customers to in written or printed form.
This valid contractual liability helps in protecting the companies from the legal complications
because of potential neglecting behaviour of customers while making purchase.
In this particular report contractual liability is differentiated with negligence to tort. This
assignment describes the different aspects which are required to form an valid contract which is
enforceable by law. This respective report also studies about vicarious liability to business while
carrying out successfully operations in marketplace.
TASK 1
1.1 Essential elements of valid contract
Contract is the agreement between two or more than two parties and it is binding on parties.
There are three element of contract as-
 There must be offer and acceptance.
 intent to make legal relation.
 There must be consideration (Cova, Kozinets and Shankar, 2012).
Following are the important factors of contract as-
Offer
 Offer is made by the party to make the valid contract. It is important segment of contract
and without it contract can't be valid.
 There are two part where one party make offer to another one. The person who accept the offer is called as offerer and the accepting party is considered
as offeree.
Acceptance
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 It is the factor that took place when offer that is made by one part is accepted by another
one then it is called as acceptance.
 The acceptance must be communicated to offerer. The contract can be valid when it is accepted by the party, otherwise not.
Intention to create legal relation
It is required for the part of the contract to have intention to create legal relation because
in contract both the parties are legally bounded. Contract is the relation between two and more
than tow parties where they have legal relationship with each other. When there is no legal
relation then it does not come under the definition of contract (Dono, Webb and Richardson,
2010).
Consideration
Consideration means the exchange of money. It is important factor and without it contract
can't be considered as valid. This provides validity to contract. Consideration can be as-
 A promise to do something where one party is not legally obligated. A promise not to do something.
Capacity
It is the legal competency of person who is entering into contractual relationship. This is
considered as the capacity to enter into legal agreement and competency to perform the act of
contract. The basic thing in it as he/she must have sound mind to enter into contract. The people
who is minor, insane, under influence of drug, bankrupt and enemy alien are not capable to enter
into valid contract (Gangale, Mengolini and Onyeji, 2013).
Privity of contract
It is important guideline of the contract that states that contract can not confer any right
and obligation to any other party and agent under contract except parties to the contract. The
party of the contract has right to sue to enforce their right or claim damages as well.
1.2 Impact of different type of contract
There are different type of contract that are considered in it as-
 Verbal
 Written Distance selling
Following are the contract along with its impact-
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Verbal contract
It is an agreement that has been agreed between two parties by spoken communication.
There are different element that are considered in it as offer and acceptance, consideration,
intention and capacity. The verbal agreement can be valid in the eyes of law when it is produced
in writing. The contract come to end when the conversation come to end, except it is written in
words (Ballantine and Creery, 2010).
Written contract
Written contract is valid in the eyes of law because it is legally bounded to the parties of
contract. It is important for contract to be in written form so that it can be valid in the eyes of
law. Contract of real estate sales, to pay someone else debt, contract that is of more then 1 year
and other are required to be in written form.
 The terms ans conditions are in written form.
 This can be used as evidence. It provides assurance that contract is in existence.
Distance selling
This contract is considered as consumer valid contract. This covers online shopping,
online booking of hotel and airlines. It can be terminated when the agreement copy is not
produced by the [party to the contract and this type of contract can be terminated by the parties at
discretion of them. It has wider impact where customers have right to cancel such contract within
7 days without making any excuse.
1.3 Terms of contract
When parties enter into contract then there are some terms that are used by term. When
there is any dispute arise in contract then it is difficult for party that which tern is used in
contract. There are different terms that are used as-
Condition
It is the most important term in contract. Before entering into the contract, there are some
conditions that are required to comply so that such contract can be valid. Both the parties of
contract are under the obligation of contract. If any of the party breach the contract then contract
becomes void (Bailey and et. al., 2010).
Warranty
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It is most important term in contract. If any party breach the warranty of the contract then it is
considered as breach of contract that resulted into damage.
Innominate
term
It is the term that is not defined as condition and warranty. It is identified that whether innocent
party of breach was deprived of substantially the full benefit of contract. When innocent part is
deprived then only they will be able to treat the contract as at an end.
Express
It is the term that is negotiated by the parties at the time of execution of contract. These are
expressly and specifically stated in contract. It can be like pay, hours and holidays. It is
important for the party of the contract to comply with such such terms and conditions so that
they can initiate the contract in valid manner.
Implied
Implied term is not stated clearly but nevertheless form a provision of contract. These are the
terms and conditions that are not specifically written in contract but it is required for the party to
comply with it. There are some conditions that are required to follow by the party to the contract
which are not specifically written in contract. The court assumes that such terms are intended in
the contract. This is not expressly stated in contract but required to comply with it (Gangale,
Mengolini and Onyeji, 2013).
Exclusion clauses
It is important term of contract that excludes one party from the liability that is generated under
the contract. This also limits the liability of party to specific condition, circumstances and
situation. It is part of the contract that has main aim to limit the liability of one person to specific
limit. There are some conditions that are written in contract that differentiate one from the
liability.
TASK 2
2.1 Contractual liability and Negligence in tort.
Contract law defines various provision that binds an agreement through enforcing various
laws. An contract is an valid agreement which is enforceable by law (Tovikkai and
Jirawattananukool, 2010). The contract is made between two parties. The purchase of material by
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consumers involving an development of agreement with an merchant which bound by different
contract laws to legalise the activities of the parties and can be demand for losses if any.
Liability in tort is defined as any cases which involves damage and harm to one of the
party (Shi and et. al., 2010, July). Tort consider the breach of contract or any losses faced by
party while utilising the services of others. The liability in tort can be considered as case of
negligence or strict liability cases.
The various elements that are to be proven by the compliant in order to file an case
against defend negligence are as follows:
 The litigant owned duty of care.
 Defendant is engaged in breach of contract.
 There is significant losses to plaintiff these damages may be economical, personal
injuries (Pepper, Jackson and Uzzell, 2011).
 The remoteness of damage are the losses which are uncontrollable by the defendant and
plaintiff.
Difference between the torts liability and contractual liability are as follows:
Torts liability Contractual liability
The liability in tort or negligence can be driven
without free consent.
But the free consent is required in developing
an valid contract.
Tort considered breach of legal duties which
follows legal implications.
While breach of contract demands for
infringement which defines rights if sufferer.
The reason for the breach of liability in tort is
considered important.
But this is not taken in account in breach of an
contract.
Damages ion tort is not precise and not
measurable in quantity.
But the losses in the breach of contract are
measured through stipulation.
2.2 Nature of liability in negligence.
Tort cases are driven form two elements either the case is intentional or it is liability to
negligence. The intentional tort is always have intentions to harm. This consider desire factors of
conduct or consequences. This desire or wants of harm creates a difference between negligence
and intention(What Is Tort Law Liability?. 2017). In case of intentional liability to tort there is
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always an actual desire of damages to sufferer or presumptive want of harm which leads to the
conse1quimeces of conduct. While in case of liability to negligence we the consequences are
determined but does not have any intentional desires to harm. This is consequences of neglecting
the things by the reasonable person. In this liability to negligence in tort its consequence are
certain but the person avoids them. But both the involved party is having knowledge of the
consequences but both the engaged person ignores the conduct and consequences which results
in losses and damages.
Case: Donoghue v/s Stevenson- In this case the an ginger beer manufacturer sold their
beer to an retailer in dark glass bottle. This bottle is having remains of snail. The person buys
ginger beer from the retailer and give is to an lady friend with her free consent. The lady drunk
half of beer and she saws the remains of snail due to which she become ill. The lady ultimate
consumer and the buyer of ginger bear plaintiff file case against the manufacturer. In this
particular case the case of negligence tort that both the parties neglects the consequences of
conduct. But majority of House of lords stated that there is an duty of care long with breach of
duty by manufacturer (Ester, 2012). It is his liability that the manufacturer should check the
quality of product before packaging and delivering to retailer that it must not contain any toxic
substance. So, the house of lords considered the manufacturer the liable for the negligence tort
and considered liable for losses of plaintiff.
2.3 Vicarious liabilities to business.
Vicarious Liability defines the wrongly committed of the responsibilities of an person
liable for its duties. Some time this liabilities is also considered as the person is liable for other
person wrong commitment in business environment also. Like for example this Vicarious
liability is considered in mostly the cases of master and servant or the agent and principle. The
commitment of an servant or the agent is can be results in consequences for which the business
firm, principle or master is helps liable (vicarious liability. 2017). As the servants and agent is
working on behalf of principle and so he is considered as liable for the consequences of wrong
commitment in vicarious liabilities.
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TASK 3
3.1 Importance elements which is necessary for valid contract
Declaration is a term defined as official contract, it could be in the form of oral and in
created. In made sort out of understanding it can be created formally or calmly. This is primarily
a certification which is made amidst the two social events which use to empower the courts to
make judgement on this. The agreement has six fundamental segments with the objective that it
can be a considerable contract, and if this will be not in written agreement then it can be an
nullified contract. A couple of segments are given under:
Offer :- It essential portion in a considerable contract that would be subject matter. This offer, a
certification and a involvement ought in bidding reflection of that way in which, if there is not
any offer than, there will be negative agreement. In, Contracts Act, 1950, there is particular part
in which understanding would be stated. This is one of the environs to guarantee which is the
assertion and that is truly significant either accepted. In that assertion, which imperative that
social occasion would form an offer. In that respect of one qualification which offer
advertisement and option in between.
Acceptance :- Having a offer after the assertion, there would be affirmation. There is already
made consent that might be affirmation from individual or any other party. Right when the offer
is cleared by the party , then there would be affirmation once when they cleared with that
standards and bearings while understanding is offered by them (Morin, 2011). Understanding
will be zero if the social affairs will be so far and orchestrating will not make offer recognisance.
Consideration-Thought is like manner in which indispensable segment will understand.
Thought is assertion that would mean and other personality would be give something
subsequently in return. It would be think as transaction which make between the assurance
other hand, promiser (Sparks, Perkins and Buckley, 2013). There might be thought process in a
concurrence with objective that would be legally generous.
Aim to make lawful connection It is fundamental to have this portion in a comprehension. It is a
need of the target to make true blue relations despite the way that the Contracts Act 1950 is quiet
on the arrangement to make legitimate relations as one of the necessities of a liberal contract.
This portion would have an understanding which is not an affirmation in the strict sense unless it
is the conventional goal of the get-together that it ought to be lawfully enforceable.
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Assurance Another basic portion in a comprehension would be sureness. The terms and headings
being made in a declaration ought to be conveyed unmistakably and increased in value by the
party of the understanding. On the off chance that the understanding doesn't have any
acquaintance with, it would be never again honest to goodness.
Limit in an attestation is the get-together to the understanding must have the certified ability to
do in this way. 18 years of age is imparted as the age of a goal. Minors who are individuals
underneath the age of eighteen have no ability to go into contracts. Subsequently, crazy
individuals or individuals with unsound personalities besides can't go into any genuine contracts.
3.2 Explain the effects of various sorts of agreement and their terms.
A really limiting term can be depicted as 'Any course of action shaping piece of a
comprehension'. Each term offers move to a really confining obligation and burst of which can
offer ascending to arraignment. All terms are not conveyed explicitly but rather two or three
terms pass on less lawful gravity as in light of how they are fringe to the destinations of a
statement.
Sort of terms
There are two sorts of terms which are been elucidated under
Suggested Terms: Implied terms are the terms in which it has not been demonstrated by either
collecting that will in any case be solidified into the attestation, routinely in light of the fact that
the comprehension does not look great without that term (Solomon, 2014). There are two
standard sorts of Implied term.
Terms Implied by Statue.
Terms Implied by Courts.
Express Terms: Express terms can be depicted as the terms that have been particularly decided
and settled upon by the two get-togethers at the time of making that understanding and they can
be either in oral or in made.
Effects of terms
The importance of a term can be plainly gotten a handle on by lighting up the declaration.
Thusly, If a certification is certainly put into making structure, by then the announcement will
probably be a term of the affirmation. The general pick is that the social event is bound by every
last one of the terms set out in a legally confining report once they have checked it. This applies
whether they have inspected the terms and got a handle on them or not.
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3.3 the components of tort of carelessness and vicarious risk in various business situations
There are different parts of Negligence which obliges that a stunned gathering demonstrates the
join four factors by a "nature of the affirmation":
The disputant owed an assurance to the offended party (or a guarantee to the general masses,
joining the aggravated party)
The disputant abused that devotion
Due to the respondent's infringement of that commitment, the annoyed party drove forward hurt
The harm was a sensibly evident possible result of the respondent's improvement or inaction
(Paul and Rana, 2012).
In the given situation the faultlessness is happened when assorted individuals got slipped at
office floor of the Best Computers, in light of the way that they should give thought and data
concerning wet floor and demonstrate that for individuals entering to their organization
premises .
CONCLUSION
From the above report it is being analysed that consumer behaviour depends a lot on firm,
it is essential to have know and learn about it. It is important to know about the contract and its
terms and elements which will help in getting appropriate knowledge about law which a firm has
to follow so that they can be able to get proper information about the law. This will aid reader to
understand the basic things required to ruin the firm.
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Online
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dictionary.thefreedictionary.com/vicarious+liability>. [Accessed on 26th July 2017].
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