Legal Aspects of Contracts: Elements, Liability, and Business Analysis

This report delves into the multifaceted aspects of contract law, beginning with an introduction to the essential elements required for a valid contract, such as offer, acceptance, and consideration, and exploring various contract types, including express, implied, and executed contracts. The report analyzes the impacts of different contract types on business operations and examines the importance of understanding contract terms. It then moves into a business scenario to illustrate contract formation, emphasizing the elements of a contract and the legal implications of different terms. The report also contrasts tort and contractual liability, examining the nature of liability in negligence and the concept of vicarious liability in a business context. Finally, it explores the elements of tort negligence and vicarious liability, providing a comprehensive overview of contract law principles and their practical applications.

ASPECTS OF CONTRACT

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Importance of essential elements for a valid contract ..........................................................3
1.2 Impacts of different types of contract ..................................................................................4
1.3 Analysis of terms of contract ...............................................................................................6
TASK 2 ...........................................................................................................................................7
2.1 Elements of contract according to the given business scenario ...........................................7
2.2 Law on terms in different contracts .....................................................................................8
2.3 Effects of different terms of laws .........................................................................................9
TASK 3..........................................................................................................................................10
3.1 Contrast between tort and contractual liability ..................................................................10
3.2 Nature of liability in negligence..........................................................................................11
3.3 Vicarious liability by a business.........................................................................................12
TASK 4..........................................................................................................................................12
4.1 Elements of tort negligence.................................................................................................12
4.2 Elements of vicarious liability ...........................................................................................13
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Contract is a legal document which is formulate between in the two parties. This is
formulate with the aim of building relationship between two or more person. This
should be legal in form in which both the parties have mutual concern on that as well as
a consideration also. Without any consideration a contract is not a contract. In some
cases the consideration is not present can it get fulfil with the help of satisfactory thing.
The requisite legal binding contract elements are as follow: offer, acceptance,
consideration, mutuality of obligation, capacity and competency, a written instrument.
As per all the factors a proper definition of contract is made which is a contract is a
written agreement which helps in satisfy a party by a offer of another party in which a
proper offer and acceptance is made and the object have capacity to complete the needs
of an individual by paying certain amount for that. In the present report several factors
get discussed of contract with the help of using different scenarios of
business(Appleman, Appleman and Holmes, 2015). These activities aid in more better
understanding about law along with the vicarious liability which is directly related with
two person.
TASK 1
1.1 Importance of essential elements for a valid contract
A contract is lawful binding agreement between two or more parties regarding any deal
which is enforceable by law. A contract never become a contract without any offer.
Once the offer made a legal acceptance is must(Ayres and Ayres, 2012). If an individual
reject the offer then it not leads in become a contract. If an acceptance is made then it
should be enforceable to the law.
Moreover a offer also be legal like dealing in drugs is not a lawful activity it is illegal
activity and it should not get consider under any lawful term. Hence, it can be said that
all contracts are agreement but all agreements are not contract. So it is concluded from
the above discussion that an agreement is:
1. A contract is made between two parties
2. Not in the verbal form but in the written framework
3. Under any act which is propound by the government or any other legal body

Once all these factors get included any agreement can become contract. It should have to follow
this manner which leads in making a contract which is enforceable by law. Now let's
come to the essential elements which are compulsory to get fulfil for making any lawful
binding. Such important factors for valid contract are as follow:
1. Proposal (Offer)
2. Acceptance
3. Two parties
4. Free consent
5. Lawful consideration
6. Object must be lawful
7. Agreement should not get void by law
8. Possibility performance
9. Written
10. All conditions should be fulfil
All above mention things are necessary for making an agreement to a valid contract(Bakr, El
Hagla and Rawash, 2012). This leads in promotes the lawful activity which is
compulsory for any movable and not movable thing. If one of the above condition not
get completed one person be able to sue the another one. This leads in promote the
compensatory activity. Hence, an agreement should have to complied all the things in a
legal manner which further helps in making a valid contract.
For example if A buy a car from B. Both are freely agree to made a written agreement with
mutual consent on some consideration. But A found that the papers of the car are not
completely presented and provided. This leads in create a valid contract into illegal
format. Now A is able to sue against B.
It is clearly found from the above example that one condition is not totally completed
which leads in making a valid contract into void form. This shows that an illegal activity
which is related with car take place(Bix, 2011).
1.2 Impacts of different types of contract
There are different types of contract which helps in promoting the legal activity in a
business. The main reason behind making of any contract is to save the rights of
different groups of the society and they do not get cheated from others. It should get

completed with the help of court room activity. If the legal body found any kind of
illegal format in agreement they clearly declared it void. It leads in reduce the chances
of fraudulent activities. So an individual can live a safe and healthy life(Bochicchio,
Longo and Mansueto, 2011).
Once the contract get made it do not get cancel by any one of the party. If any person do
so, they have to compensate to another one. Hence, the agreements are based on the
good faith of both the person towards each other. This is most important thing and their
should be a free consent between both of them. If any of the party is not agreed to by
content of the contract then they have right to change it. This leads in creating the
awareness between both of them and promotes healthy relationship. The different types
of contract are as follow:
1. Contract under seal: According to the traditional form of contract it is only get
enforceable to the law when it get stamped with the seal. The seal represents that the
parties are entailed to the legal consequences. Seal is a symbol of solemn acceptance of
the legal document. One the document get seal they become valid in nature and in the
eyes of both the parties.
2. Express contract: In an express contract parties states all terms and condition in oral or
written form. Their is a definite oral form of offer to the offeree in a manner so that its
all terms get explicitly demonstrate.
3. Implied contract: It do not get express in an oral and written form, they actually happen
under some acts. It is prepared with the mutual consent and such things are mentioned
which can not express in words. If in case an agreement got expire and both the parties
want to continue their working on same terms then they can reissue their old agreement.
4. Executed contract: An executed contract is one in which nothing remain to be completed
in the future. This helps in fulfil all the formalities at the time of contract formation.
5. Bilateral and Unilateral: In bilateral contract both the parties made promises to each
other with a mutual consent. It leads in making of the promise by the one party and both
parties agreed with each other(Bochicchio, Longo and Mansueto, 2012).
Where as on the other hand unilateral contract are those where only one party made
promise.

6. Unconscionable: According to this form of contract it is clearly identify that one party
have the bargaining power advantage. From one of the two party one party perform
each and every thing according to the superior party.
7. Adhesion: In this form of contract one party is powerful and make terms and condition
according to its will. So the one one is adhere to reject it as soon as possible if it is not
completing the wishes of respected party.
8. Aleatory contract: In this contract one or both parties assume risk. The whole loss bear
by either one of them or by both of them in case of uncertain event.
9. Void and Voidable contract: A void contract have no legal rights and obligations of
court. It is in effect no contract at all.
Voidable contract means when one of the party is suffering from any fraud activity. It
can not treated as the voidable contract until party feels that the contract is void.
All the contracts made a positive impact on both the parties who really want to make
such type of contracts which are enforceable to the law(Chomsky, 2014). This is one of
the most important factor. By using either of the above contract it is clearly identify that
it promote the welfare of the both the parties. This lead in taking care about their
interest and welfare.
By using seal form of contract this helps in using the agreement as the legal proof. This
lead in avoid contemplating the court rules. On the other hand express contract reduce
the work load of understanding the terms of contract. Where as implied contract are
helpful in making a better relationship. All the contracts are helpful as per the
enforceability to law.
1.3 Analysis of terms of contract
The terms of contract are either implied, expressed on the basis of their legality. All
these terms are play an imperative part in an agreement. The offer, proposal and
acceptance etc. all lawful terms are helpful in binding a contract. All these factors and
elements help in making a lawful contract. These terms should have to be understand in
a proper manner and have to get properly analyse before entering into an agreement. All
the terms should have to get verify by the offereer so that a better and mutual relation
bond can be made(Decock, 2013).

The terms of the agreement could be composed on the verbal form in which mouth
expression for the contract is made. After that expression they should have to be put on
paper. Both the parties made a negotiation process which helps in bargaining for the
consideration of the product.
Inferred terms regards as when both the parties are not include in the contract but a legal
documentation is made between both of them under some acts or legal obligation.
The express contracts are made in which both the parties can expressed their terms and
condition on the oral basis. This helps them in making a proper understanding about
what they really want to express. And after understanding their conditions they put it on
a legal document and made a contract which is enforceable to the law(Duan, 2012).
All the terms which are said by the parties have to be lawfully written on the agreement
otherwise it become an unlawful document where one party rights suffer. The contract
have to made under any statue this helps in making the contract more appropriate. The
statue of a contract helps in making an agreement which is enforceable to the law.
TASK 2
2.1 Elements of contract according to the given business scenario
Ivan wants to purchase a book from the Toder book shop and purchase a law book. But
when he go the counter to the amount of money for the book he found that book already
get sold and it was the last copy of book and force the bookshop owner to sale that book
to him which is not possible.
Their is not a proper offer made in this case it was a mistake by the owner to remove it
from the display shelf. Their is no contract made between both of them because Carl
already pay for the book. Now if Toder sale that book to the Ivan then the contract
between Toder and carl become void. Not only this it also harm the good faith of Carl
on owner(Ernita, Joaquin and Greitens, 2012).
Ivan insist is completely wrong and if he really want to buy that book he should have to
consult it to the right owner of book. If Toder accept the offer of Ivan then it leads in:
1. Harm the interest of Carl by selling the book because now he become the real owner of
book.
2. The agreement can not made because there is non offering of specified product.

3. Lack of free consent for selling of book.
4. Neither of the condition is satisfied so this type of contract can not be possible.
Hence, Ivan offering is wrong because Toder do not have any right to sale that book. This
scenario can only become possible in one situation when Ivan directly deal with Carl.
And if Carl rejected the offer then this contract do not lead taking place for a single
second.
2.2 Law on terms in different contracts
According to the legal obligations any contract should have to fulfil the conditions
which are mentioned in an agreement. They should have to get completed in which they
formulate. A person in contractual relationship have to follow the breach of contract. If
any of the party break the breach of contract then another party has the legal right to sue
against them. For any efficient contract making it is essential ton fulfil the conditions of
contract(Fisher and Kalbaugh, 2012).
If any of the party is disagree with any condition then they have the right to break the
breach at that time. Also the conditions have to be mentioned by knowing each other
interest so a healthy relationship can made.
These condition have to be in the written format so that both parties right get secure. In
failing to do so can have the court case and compensation should be made.
Where as warranty is not so much important term in breaking the breach. It is related
with the life usage of goods and products which is offer. In case offeror provide wrong
product then offerer have a right to get appropriate good against for that under the law.
But it is for the some number of time(Freedland and et. al., 2016).
The basic description of these two terms are as follow:
1. Condition: This is an important and serious term of contract and have the sober impact if
it got breached. An innocent party can repudiate a contract and can sue against for the
damage for breach of such terms. They are properly mentioned while preparing contract
and in case of breach break a direct effect is made on the other party. It is necessary to
mark all the terms and conditions in the contract and court have to look over on the
intentions of both the parties by considering them. Hence, terms and conditions of the
contract have to fulfil in appropriate manner of time.

2. Warranty: It is not so much important as the condition. Warranties represent about the
number of years of good life. If person break the breach of warranty then it should get
compensate for that. The compensation can be in the form of replacement but not in
terms of money. Like if a Carl buy a television from another John and John provide a
warranty of one year for the television but that it start providing some problems in its
start then Carl have the right to sue against to John for the replacement of television.
3. An Innominate term: It can be in both the form of condition and warranty. If any party
fails in performing any of the term of contract then it become liable to pay for that. But
not all the promises have the same significance. Some condition not only entitle the
injured party to claim damages but also have to end the contract at that time. A party
can breach the contract by not completing the condition but not breach it by warranty.
So these type of terms are refer to as the innominate terms or intermediate terms which
leads in break the breach at any time when there is a serious crises take place.
2.3 Effects of different terms of laws
Exemption clause states is a clause in an agreement in which it is clearly stipulated that
party is limited or excluded from liability. It is an unfair clause because it leads in
promoting the unfair practice and advantage to a party. Therefore more improvement
haven to be taken into account for creating fairness to the clause(Friedman, 2011).
In exemption clause there are majorly two main types of laws in which one is
“limitation clause” which signifies that “party is limited from liability” where as one the
other hand “exclusion clause” in which party is “exclude from the liability”.
Usually the court take the decision regarding this thing in which they identify that the
damage is related with the money or not. Legal body take the judgement by identifying
that activity is enforceable to the law or not.
According to the present case study John went to a John goes into a park which is
managed by his local council. He sees a notice which states that “chairs for hire for 50p
per hour”. John pays the 50p and is given a ticket by the parking attendant and gets a
chair. Later, the chair collapses under him, injuring him badly and damaging his clothes.
When John complains and wants to claim compensation from the Council, the attendant
points to an exemption clause on the ticket which states, “No liability is accepted for
any damage or injury caused by the failure of any hired equipment.” According to

the clause it is clearly measure that party exclude themselves to pay
the liability against this accident(Gutmann, 2013). So it enables the
another party to take advantage of this clause. It cause harm to
another party because John get injured and he is not more be able to
sue the council in court for compensation just because of the unfair
clause formation. But John can sue a case against for using the act of
equipments. He get advantage of this clause because it signifies that
they are using outdated equipments.
TASK 3
3.1 Contrast between tort and contractual liability
A tort is an act that injures someone in some way and the injured person have the right
to sue against for the wrongdoer for damage. It is a type of civil activity in which one is
failed to perform all of its duty in a reasonable manner and harm the interest of others.
The liability in tort is related with party who made the harm to other person, and
therefore they have to pay some amount of compensation for that. One of the most
common case in tort is the negligence where the tort is committed with the carelessness
of one party(Hakanen and Roodt, 2010).
According to a breach of contract it is clearly mentioned that rights, duties and
responsibility of one party to another. Contract law outlines that a person what or what
should not to include in the agreement. Along with this also the remedies have to
include in that if any of the party break their contractual duties. In every contract both
[party should have the free consent over on all such terms and conditions which are
mentioned in the contract if they are not then that contract is not an appropriate contract
in nature. Therefore contractual liability arise out with of the responsibility of each party
are set by them in the contract which helps in binding both of them with each
other(Hofmann, 2010).
Both the liabilities are different from each other. The both are different in each and
every format which includes:

1. In tort liability it is non contractual and imposed by the law where as on the other hand
contractual liability is a contract which is made with the help of two parties and govern
by contract.
2. In tort liability it is clearly based on the health, safety and profit of other party and
contractual liability is based on the free consent of both the parties if one of the them get
not satisfied with the terms and conditions then they have right to break the breach.
3. The another major difference between both the terms are based on their nature of duty in
which duties in the torts are fixed where as the duties in contractual liability are based
on the contract.
4. In tort liability the interest and its corresponding duty are created by law where as on the
other hand it is created with the agreement between in two parties.
These are some of the major difference between in the tort liability and contractual liability.
With the help of contrast between them it is examine that tort liability is totally related
with the law and not between in the two or more parties. It is related with the health and
safety measure. Where as if there is a contractual liability taking place the whole
decision is taken on the basis of terms and conditions which are mentioned in the
mutual consent contract of two parties(Kosnik and Lange, 2011).
3.2 Nature of liability in negligence
Negligence is a failure to perform the exercise of carelessness or a person do not show
so much concern towards other person. It is a result of avoid or ignoring something by
an individual. This can be done in both the form contractual or tort. But negligence is a
harm which can done due to lack of ignorance not intentionally. For getting a
successful claim against any kind of negligence harm a person should have to prove
certain number of things which are as follow:
1. The defendant owed a duty of care
2. The defendant had breach the duty
3. The defendant breach of duty caused damage to claimant
If any of the thing get proved then it consider as the person should have to pay or compensate for
the injury from which the another person is suffering(Kreitner, 2011).
But some of the times it is identify that few people take the advantage of this clause and
made harm to some individuals. Hence, it become tough for a person to prove that the

harm is a result of negligence. So parties should have to be more aware about many
things.
3.3 Vicarious liability by a business
Vicarious liability means when one person is susceptible for the cause and harm
provided by another person to third party. Their is involvement of three parties in which
a person is one who harm the other person. The third party individual bear the
compensation which is provided by one person. The liability is only occur in the
employee and employer relationship.
Employer become the liable for the things which is done by the employee. In law terms
employer help all the liabilities which is done by the act of its employee. Like for
example, Cena is a delivery boy working with the smart telex post company. He have to
deliver a letter to a place which is near to its grandfather house. He spent some time
over their and got late for the delivery. Due to his rash driving a person got injured at
the time when he was on duty. Now the owner of the company become liable to pay for
the compensation to that person due to act which is done by the Cena. This is called as
the vicarious liability(Lacey and Lamont, 2014).
Also if any kind of discrimination take place in an organisation it should also be
consider as the part of vicarious liability and the employer become liable for all the
unnecessary acts which are done by its employees.
TASK 4
4.1 Elements of tort negligence
Tort negligence is done due to carelessness of one civil person towards other. It is
associated when defendant has breach the duty of care towards other which has owed by
him. As per the cited case study of David and Kevin hit and run case it is identify that
the act is done due to negligence of David over its speed. David is driving 35
MPH in 25 MPH zone down a four lane street where there are
children playing. One nine-year-old child, Kevin, runs into the street
chasing a soccer ball. David, without looking over his shoulder,
swerves into the other lane to avoid Kevin and in the process he hits
a telephone pole and is seriously and permanently injured. The