ACNB Report: Contract and Negligence Law in Business Environment

This report delves into the intricacies of contract and negligence law within a business context. It begins by outlining the essential elements required for a valid contract, such as offer and acceptance, legal relationship, lawful consideration, and capacity of parties. The report then explores different types of contracts, including written, oral, face-to-face, and distance contracts, examining their impacts and applications. It analyzes specific contract terms like express, implied, and innominate terms, providing their meanings and effects. Through case studies, the report applies legal principles to real-world scenarios, such as a book purchase dispute and a swimming competition, evaluating contract validity and the implications of negligence and vicarious liability. Finally, the report differentiates between contract and tort liabilities, explaining the nature of liability in negligence and employer's liability, and how a business can be held vicariously liable, solidifying the understanding of legal concepts and their practical applications in business operations.

ACNB

TABLE OF CONTENTS
introduction....................................................................................................................................1
task 1................................................................................................................................................1
1. Importance of the essential elements required for the formation of a valid contract..............1
2. Impact of different types of contract.......................................................................................2
3. Analysing terms in contract with reference to their meaning and effects...............................3
4. Discussing the impact of different types of contract and analyse terms in contracts with
reference to their meaning and effect..........................................................................................4
5. Application of the law on terms in different contracts............................................................4
6. Evaluation of the effect of different terms in given contracts.................................................5
Task 2...............................................................................................................................................5
1. Difference between contract and tort liability.........................................................................5
2. Explaining the nature of liability in negligence and employers’ liability...............................6
3. Explaining how a business can be vicariously liable...............................................................6
4. Applying the elements of the tort of negligence, vicarious liability and defences in different
situation........................................................................................................................................7
conclusion........................................................................................................................................8
references.........................................................................................................................................9

INTRODUCTION
Current business environment is full of agreements between different businesses and
individuals. Most of the parties use oral and written contract for managing operations. There are
number of laws which emphasis on the formation and operations of business organization. The
purpose of this report is to identify and examine different aspects of contract and negligence for
business (Stone, Devenney and Cunnington, 2011). The present study will focus on different
elements which are required for a valid contract. Including this, research will apply these
elements of contract in different situations of business. Along with this, study will try to increase
understanding about the principles of liability in negligence in business activities. Including this,
elements of tort of negligence and defences are also describing in the following paragraphs of
report.
TASK 1
1. Importance of the essential elements required for the formation of a valid contract
There are number of different elements which are required for developing a valid
contract. For example, Balfour vs. Balfour (1919) is a case of social agreement and it is not a
valid contract (Zoll, 2012). So, as per this, a valid contract requires the following elements:
 Offer and acceptance: In order to create a valid contract, there must be a lawful offer
from one party and lawful acceptance by another party. So, offer and acceptance are the
essential elements for developing a valid contract. Without inclusion of these elements, a
contract cannot be considered as valid and can be termed as a simple agreement.
 Legal relationship: A valid contract requires legal relations between both the parties
because it shows official consequences and obligations. But, social and familiar
relationships are not considered as the attributes of valid contract. Case of Balfour vs.
Balfour 1919, has reflected social relationship between both the parties, so, it is not
included in a valid contract (Tomprou and Nikolaou, 2011).
 Lawful consideration: Consideration can be defined as different ways and as per this
element of valid contract, both parties must be agreed on predefined promises.
 Capacity of both parties: For developing a valid contract, both the parties must be
capable enough to complete the agreement in a lawful manner. So, capacity of both
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parties is also included in the essential element of valid contract (Sources and definitions
of contract law, 2014).
 Free consent: As per this element, parties of valid contract must be agreed on same thing
in a same sense. Consent must be free from coercion, influence, fraud, mis-presentation,
mistake, etc (Essential elements of a contract, 2014).
 Lawful object: Purpose and object of an agreement must be valid and legal then it is
consider as a valid contract for both the parties.
 Legal formalities: There are some legal formalities which are required for developing a
valid contract. These formalities include registration, license, etc. Formalities are required
for different agreements such as sales, mortgage, lease, gift of immovable property,
articles of association of a company, etc.
Absence of above discussed elements can reduce the validity of contract. It means that all
these elements are required for developing a valid contract (Olander and Norrman, 2012).
2. Impact of different types of contract
Given statement has stated that “When one speaks of ‘types of contract’, it is all the same
under English law”. According to the English law, this statement is not true because there are
different types of contract which are developed by distinct parties as per the situation and
requirements (Miles, Fleming and McKinney, 2010). Different types of contracts and their
impacts are described as under:
 Written contract: According to the English law, when both the parties write their
promises on a paper as a proof of contract then these types of agreements are known as
written contract. Such contracts are essential for long term agreements and have different
advantages also. In addition, written contract provides equal rights to both the parties in
order to take legal actions in various circumstances (Middlemiss, 2012). For example:
written contract is generally formulated at the time of purchasing land, building and
automobiles.
 Oral contract: This type of contracts are based on verbal communication between both
the parties. In this type of contract, both the parties can write their promises and liabilities
on paper but their contract does not have any existence in written form. Telephonic
purchase is also known as an oral contract (Written vs. Verbal Agreements, 2012).
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 Face-to-face contact: At the time of formulating contract, face to face existence of both
the parties is essential in face to face contract (Brand and Davenport, 2012). It is based on
mutual concern, trust and understanding. This contract can be developed in written and
oral form. Example of this contract is purchase of goods and services from a grocery
shop.
 Distance contract: At the time of developing a contract both parties are not present.
Online selling and purchasing of goods and services are considered as distance contract.
Emails and telephonic conversations are deliberated as important ways for developing
distance contract (DiMatteo, 2012).
3. Analysing terms in contract with reference to their meaning and effects
There are some specific terms which are comprised in different contracts and these terms
have specific meaning and effects on contract. Therefore, all these important terms are described
as under:
 Express term: All those terms and conditions on which both parties are agreed on same
sense are known as express terms (Goldman, 2013). These terms are included in the
contract as per the permission and concern with both parties and there are no legal
coercion on both parties for agreed on these terms. Clear descriptions of express terms
are necessary for developing a valid contract. Both parties needs to fulfil their promises
and duties as per the requirements and conditions. In case of any disputes between
parties, court can take appropriate actions using the express terms (Hayre, 2015).
 Implied term: There are some specific terms which are applied by court and both parties
needs to follow all concerns. These terms are known as implied terms. Generally these
terms are included by court for resolving future issues. Warranty is one of the important
implied term which are generally included for the agreement of sales of goods and
services.
 Innominate term: As per the English contract law intermediate terms are known as
innominate term (McKendrick, 2015). General condition and warranty are not included in
innominate terms. It is depending on the effects of incident and breach of contract on
injured or innocent party.
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4. Discussing the impact of different types of contract and analyse terms in contracts with
reference to their meaning and effect
As per the given case Ivan is an individual who came to the Todor’s bookshop for
purchasing a HND business book. This book was displayed by Todor at his bookshop. But, when
Ivan takes this book and wants to pay the money to Todor. But he refused to sell that particular
book because he has already sold this book to Clark but refuse to remove it to display. Therefore,
as per this case there is no single element of valid contract between Ivan and Todor (Lockwood,
2011). As per the case there is no legal formalities between both parties such as Ivan had not
paid purchase money to Todor. Along with this, there is not a valid offer and existence between
both parties. Free consent and lawful considerations are also not included in the given case.
Therefore, presence of all important elements of valid contract are missing between Ivan and
Todor. So, it is not a valid and legal contract. So, as per this situation Todor is entitled to refuse
to sell the book to Ivan (Miller, 2011).
As per the above discussion valid contract include different types of terms such as
express, implied and innominate term. But, these terms are not included in invalid or illegal
contract. Above description has reflected that Ivan and Todor did not have a valid contract so,
these terms will also not be considered by both parties. So, these terms cannot affect the situation
(Morgan, 2011).
5. Application of the law on terms in different contracts
Case scenario has stated that Adam has provided an announcement about a swimming
competition in a local newspaper and reward money for this competition was £1000. After
watching this ad Brain has decided to take part in this competition and start his swimming
activities. But, in middle of competition Adam has announced a new ad and withdraws the
reward money from this competition (Contract law, 2015). Brain was completely unaware about
this ad and after completing competition he claimed for reward money but Adam has refused to
pay. But, as per the tort law Adam is accountable to pay the reward money to Brain. According
to the given information Adam has provide a legal offer to Brain which is accepted by him
without any pressure. Therefore, all necessary elements are included in the contract so, it is
considered as valid contract. As per the tort law and vicarious liability employer is responsible le
to communicate all important information to respective persons. But, Adam has not used
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communicated information about cancellation of reward to Brain (Ranking, 2010). So, Brain has
a right to claim his reward money and Adam cannot refuse to give than money to Brain.
6. Evaluation of the effect of different terms in given contracts
As per the given case scenario Barry goes into a part which is managed by local council.
Barry hires a chair for 50p per hour and receive a ticket on exchange of purchase money. But
after some time chair collapses under him and damaging his cloths (Andrews, 2015). So, Barry
complains for the same and claim for money. But, local council has refused to give the money
and attendant as point to the clauses on ticket which states that “No liability is accepted for any
damage or injury caused by the failure of any hired equipment”. All these information have
reflected that all important elements of valid contract are existed in the contract between Barry
and local council such as offer and acceptance, legal relations and formalities, etc. But, local
council has not communicated information of statement on time because Barry has got ticket
after completing all necessary formalities of contract. So, in this case local council is liable for
the injury and damage of Barry and cannot refuse to pay money to Barry (Hatzis, 2012).
TASK 2
1. Difference between contract and tort liability
Contract and tort liabilities can be differentiated on the basis of definition, remoteness of
damage, nature of obligation, type and impact of damage, etc (Bennett, 2011). In Contractual
liability relationship between both parties develop on the basis of mutual concern and
understudying. But on the other hand, in tort liability relationship between both parties are
enforced by Tort law and both parties needs to be agreed for the same. Along with this, in
contract liability both parties needs to fulfil all terms and conditions of the contract. In contrast,
in tort liability offender needs to attain all standard of care which are required by professional
(Klass, 2010). In the contractual liability breach of the duty is considered as a cause of the
damage of claimant only in case of abnormal loss. But on the other hand, as a tort law
negligence of defendant is known as major reason behind the loss of claimant. Along with this,
in some specific situation breach of duty is also considered as important reason behind the loss of
another party. In contractual liability liable party can compensate the loss of injured party by
paying specific amount of money. But on the other hand, in tort liability loss of the injured party
cannot be reduced by the contribution of money (Sources and definitions of contract law, 2014).
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Overall, contractual and tort liabilities are quite different from each other so, each and every
person needs to focus on these liabilities at the time of developing contract.
2. Explaining the nature of liability in negligence and employers’ liability
Negligence liability is one of the important section of tort law and if any person is not
capable to fulfil their duty than it will be included in negligence liability. Major principles of
negligence are duty of care, remoteness of damage, types and impact of damage (Introduction to
Tort Law, 2012). As per the principle of duty of care at the time of taking any action everyone
should assure about the safety and security of their neighbour because their actions may affect
them in negative manner. If any physical injury and damage may lie due to particular action than
that person will be accountable for that particular damage. Defendant needs to provide
appropriate obligations to reduce the damage of injured person. But, in case of any unreasonable
care, expectations and requirements defendant is not liable to fulfil all the expectations (Miles,
Fleming and McKinney, 2010).
As per the give case study Ben is the owner of Regent Hotel in Wembley and Roger is a
dishwasher. He is facing some issues of skin rashes because of long periods of washing up.
Roger does not use the rubber gloves which are provided by Ben for safety of skin. So, as per the
law of negligence Ben in not responsible for Roger’s loss and skin rashes. Along with this, Ben
has made arrangement of rubber gloves but Roger did not use that gloves at the time of washing
dishes. So, as an employer Ben has provided a safe working environment to Roger. Ben does not
owe Roger a non-delegable duty of care (Brand and Davenport, 2012). Therefore, Ben fulfilled
all liabilities as employer so, he is not liable for damage of roger.
3. Explaining how a business can be vicariously liable
Vicarious liability is also known as important part of tort law. It focuses on relationship
between employer and employee of an organization. According to this liability an employer is
accountable for safety and security of all employees (McKendrick, 2015). Along with this,
employer needs to focus on all actions for reducing the negative imp acts on other employees. As
per the vicarious liability, in working hours safety of employees is one of the major
accountability of employer. In case of transfer of employee from one place to another also lead
transfer of vicarious liability form one to other employee (Introduction to Tort Law, 2012).
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As per the given case Colin is a head chef of the Regent hotel and is getting fed up with
Roger of his attitude and anger (Goldman, 2013). Colin knocks roger with frying pen and due to
this reason Roger is severely injured. As per the vicarious liability employer is responsible for
the safety of employees. But, in this case Ben is not accountable for the injury of roger because
Colin is liable for the physical injury of Roger. Colin’s actions was intentional so, Roger can
claim against Colin not Ben. Overall, employer of an organization needs to pay attention towards
the different considerations of vicarious liability (Middlemiss, 2012).
4. Applying the elements of the tort of negligence, vicarious liability and defences in different
situation
Occupier’s liability can be defined as a duty of owner towards the person who visit their
land. Liability of occupier is different from negligence liability. As per the English law occupier
needs to follow two types of act such as Occupier's Liability Act 1957 and Occupier’s Liability
Act 1984. As per the given case study Mark who got injured and broke his sunglasses because he
jumped in an empty swimming pool (Lockwood, 2011). As per the Occupier’s Liability Act,
1975 Mark can claim against owner of the hotel for compensations of his loss but hotel
management has stated a warning near to the pool but Mark ignored that notice. So, owner or
occupier is not responsible for the injury and loss of sunglasses of Mark. There are three specific
defense against the Occupier’s Liability Act, 1984 under which occupier can exclude their
liability from any loss (Ranking, 2010). These are discussed as under:
1. Volenti non fit injuria: As per this law of doctrine injured person cannot claim on third
party for the damage if person willingly put himself in such types of situation which may
increase the probability of monetary and nonmonetary loss.
2. Contributory Negligence: As per this law if damage occurs due to the mistake of both
parties than they cannot claim against each other (DiMatteo, 2012).
3. Ex turpi causa: Ignorance of warning and other conditions a person cannot claim on
others for any kind of damage and injury.
Therefore, owner of hotel is not accountable for damage and loss of Mark because using
the warning Ben has excluded his liability from any injury and loss. As per the Occupier's
Liability Act, 1984 Mark willingly put himself in a place where he may injured. So, Ben is not
liable for injury and loss of Mark so, mark cannot claim against Ben for his loss (Bennett, 2011).
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CONCLUSION
The current research project has described different aspects of contract and tort low and
negligence. As per this report, Offer and acceptance, Legal relationship, Lawful consideration,
Capacity of both parties, free consent, Lawful object and Legal formalities are the major
elements of a valid contract. According to the English law there are different types of contract
such as written, oral, distance and face to face contract. Along with this project has also
concluded that due to the absence of the different elements a contract cannot be considered as
valid contract. Along with this, in this case one party can refuse to fulfil all needs and
requirements of claimant. Report has described that, employer of the organization is accountable
for safety and security of all employees. In addition, contractual liability and tort liability are
differentiate with each other on the basis of remoteness of damage, nature of obligation, type and
impact of damage. Report has also described that there are different terms such as warranty and
conditions by which occupiers can exclude their liability in case on any physical and other
losses.
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REFERENCES
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