Analysis of Contract, Exclusion Clauses, and Professional Negligence

This report provides a comprehensive legal analysis of three key areas of law: contract formation, exclusion clauses, and professional negligence. The first section examines whether valid contracts were formed between James and Techno Ltd, and Oris Ltd, focusing on the principles of offer and acceptance, and revocation. The second section explores the enforceability of exclusion clauses in the context of Luca's car damage, considering whether the clause was properly incorporated into the contract and whether it covered the specific damage incurred. The third section investigates the legal position on professional negligence in the UK, particularly concerning the duty of care and the implications of disclaimers, using the case of High Street Bank and Williamson Baker & Co. as a case study. The report concludes with the legal outcomes of each scenario, supported by case law and legal principles.

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Cover Sheet
Name of the student
Student ID
Word count

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Contents
Solution 1....................................................................................................................................................3
Issue........................................................................................................................................................3
Applicable Law.......................................................................................................................................3
Application of Law..................................................................................................................................3
Conclusion...............................................................................................................................................4
Solution 2....................................................................................................................................................4
Issue........................................................................................................................................................4
Applicable Law.......................................................................................................................................4
Application of law...................................................................................................................................4
Conclusion...............................................................................................................................................5
Solution 3....................................................................................................................................................5
Issue........................................................................................................................................................5
Applicable Law.......................................................................................................................................5
Application of law...................................................................................................................................6
Conclusion...............................................................................................................................................6
Reference list...............................................................................................................................................7

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Solution 1
Issue
Whether Philip has a concluded contract with Techno Ltd or Oris Ltd and, if so, on what terms?
Applicable Law
In order to establish a contract it is necessary that there must be a valid agreement (offer plus
acceptance) along with consideration with legal intention by parties who are capable to establish
a valid contract. (Elawresource, 2017)
An offer is the first ingredient to make a contract. A statement or proposal which is made by an
offeror through which he desires certain acts or omission by an offeree is an offer (Carlill v
Carbolic Smoke Ball Company [1892]). An offer can be made orally or in written form.
The offer when confirmed by the offeree without bringing any changes to its terms is an
acceptance (Butler Machine Tool Co. v. Ex-Cell-O Corporation, [1979]. Mere enquiry is not
variations in the terms of the offer (Stevenson v McLean (1880)). An acceptance should be made
before the offer is revoked in order to be effective and binding. Further, an acceptance must
reach the knowledge of the offeror to make it binding in nature (Felthouse v. Bindley (1862).
(Duhaime, 2017)
When no offer is made, but, a person with the help of auctions, advertisements, tenders etc intend
to receive offers then it is an action of invitation to treat. The inviter receives offer from the
public and when gave his approval then it is an act of acceptance resulting in binding contract
amid the parties (Partridge v Crittenden [1968].
Application of Law
Contract with Julie
The Techno Ltd through its sales Director, Julie, has quoted a price of the installation of
Techno’s new Accounts production software system to James through an email wherein she
submits that their company is willing to charge a price of £4,000, to cover all installation costs
and appropriate staff training. She further stated that she is willing to hold the price open only
for one week and thus request to get back quickly. Thus, the mail that is sent by Julie is an offer.
Now, later James calls Techno Ltd and submits that he is willing to accept the offer of £4,000
made by Julia. He further submitted that whether the cost could also include on-site training for
any new staff he takes on over the next 6 months. Now, it was a mere inquiry and an inquiry is
not an offer. Thus, the acceptance by James is valid.
However, the acceptance is only valid provided it comes in the knowledge of Julie. When the
revocation was made by James till that time Julie has not listened to the acceptance.
So, the revocation by James is valid.
So, there is no valid acceptance made by James.
Contract with Oris Ltd

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An advertisement by email which is sent by Oris Ltd to James is an invitation to treat as per
Partridge v Crittenden the advertisement submits that ‘We offer “state of the art” accounts
production software for accountancy practices at a price guaranteed not to exceed £3,500’. Thus,
James must make an offer to Oris Ltd. James duly made an offer to Oris Ltd.
Now a valid contract will only be established provided Oris Ltd accept the offer of James.
However, before any acceptance is made by Oris Ltd, James withdrew his offer. thus, there is no
offer that is now prevail amid Oris and James which can be later accepted resulting in the
binding contract amid the parties.
Conclusion
It is concluded that there is no contract that is made amid James with Techno Ltd or Oris Ltd as
the offer that are made by James are withdrew by him before any acceptances are received.
Solution 2
Issue
Whether Luca can take any action against Prang Ltd?
Applicable Law
One of the clauses that are normally found in the contract amid the parties is the exclusion
clause.
An exclusion clause is the clause which excludes or limits the liability of one of the party to the
contract with the consent of another. It is necessary that the liability which the party intends to be
excluded by relying on the clause must be made part of the clause and is held in Curtis V
Chemical Cleaning Co [1951]. (The Law Teacher, 2017)
The clause must be made part of the contract before the formation of the contract and must be
made with the consent of both the parties (Olley V Marlborough Court [1949]. If any one party is
relying in the clause then he must make all reasonable efforts to bring the clause within the
knowledge of the affected party in order to make the exclusion clause enforceable in law
Thornton V Shoe Lane Parking [1971]).
Application of law
It is submitted that Lucas was very happy and thus decided to treat himself to new silver Audi
A8. He normally parks at the local pay and display car park operated by Prang Ltd.
Parag Ltd has displayed a sign at the entrance of the car park and in front of the payment
machine which submits that “These premises are not staffed by our employees and may be
dangerous. Clients use these premises strictly at their own risk and Prang Ltd accept no liability
whatsoever for any damage or injury sustained by those using this facility or their vehicles or
property no matter how caused”.
It is submitted that since the exclusion clause is relied upon by Parag Ltd unilaterally, thus, such
clause is only be binding upon Luca provided the clause is brought to her notice. Parag Ltd has
placed the clause in front of the car park and at the entrance and thus the notice is clearly visible

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by Luca. Parag Ltd has taken reasonable attempt to bring the clause within the notice of Luca.
Thus, the clause is binding upon Luca.
Now, one day Luca found that his car was badly damaged by a service vehicle being driven by
one of Prang’s employees.
It is submitted that this loss cannot be claimed by Luca as the same is excluded by Parag Ltd
specifically through the exclusion clause.
But, Luca was again hit by the employee of Parag Ltd which was dr8ven by him dangerously.
However, this second loss that is sustained by Luca is not excluded as the clause does not
exclude the loss that is caused to any person because of the negligence of the employees of Parag
Ltd.
Thus, the loss on second account is not excluded by the clause.
Conclusion
It is thus concluded that the first Loss that is caused to Luca is excluded by the clause. But, Parag
Ltd cannot exclude the second loss that is caused to Luca as the same is not covered within the
exclusion clause.
Solution 3
Issue
What is the current legal position regarding negligence by professionals in the UK and how has
this developed over the years? Are High Street Bank likely to be successful in their law suit?
Applicable Law
The negligence is the branch of tort law wherein it is necessary to prove that the defendant is
under the legal obligation of duty of care which is violated by him resulting in loss to the
plaintiff. This law of negligence is also prevalent by professionals in UK. The professionals are
the person upon whose expertise the people rely and they believe that the advise furnished by
these professional with be accurate. Thus, if the professional does not comply with their duty of
care then they can also be held liable for negligence.
To prove negligence on the part of the professional it is necessary to prove that:
i. The professional while making the audit report has a duty of care to provide the
reports with utmost accuracy. The duty of care is against those persons who are in
proximate relationship and who can be reasonably foreseeable by the professionals
Cole V South Tweed Rugby League Football Club Ltd [2004];
ii. Once the duty of care is imposed upon the professional then if such professional does
not carry out his duty as per the level of expectations required in any given situation,
then, there is breach of duty of care;
iii. Once the duty of care is breached then the plaintiff must have suffered with damage.

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Now, the professional cab protect himself from negligence by relying upon any disclaimer which
excludes him from any liability that may arise because of the negligence and is held in Barclays
Bank Plc v Grant Thornton UK LLP [2015].
Application of law
Williamson Baker & Co. has prepared the audit report of Hot Resorts Group according to which
the financial position of the Group is very sound. However, the report was false as within months
of the preparation of the reports the Group collapsed.
Now, the High Street Bank considered that Williamson Baker was negligent in their acts.
It is submitted that Williamson Baker is imposed a duty of care giant all those persons which it
can believe that would rely upon his audit reports. Now, banks are normally relay upon the audit
reports before granting loan to any company, Thus, Williamson Baker own a duty of care giant
High Street Bank as they are in proximate relationship and is reasonable foreseeable.
Now, the Williamson Baker is aware that his report is being relied upon but still it overstated
those statements of the group’s true financial position. Thus, there is breech on the part of
Williamson Baker because of which losses are suffered by the Bank.
Thus, Williamson Baker is negligent.
However, Williamson Baker had included a disclaimer with their audit report that “it was solely
for Hot Resorts Group and they held no responsibility to anyone else for their audit work”.
Thus, the liability is excluded by Williamson Baker.
Conclusion
It is concluded that Williamson Baker is negligent against the Bank but the liability is excluded
by relying in the disclaimer.

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Reference list
Case laws
Barclays Bank Plc v Grant Thornton UK LLP [2015]
Butler Machine Tool Co. v. Ex-Cell-O Corporation, [1979]
Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1.
Cole V South Tweed Rugby League Football Club Ltd [2004] HCA 29;
Curtis V Chemical Cleaning Co [1951] 1 KB 805
Felthouse v. Bindley (1862).
Olley V Marlborough Court [1949] 1 KB 532
Partridge v Crittenden [1968] 1 WLR 1204
Stevenson v McLean (1880).
Thornton V Shoe Lane Parking [1971] 1 All ER 686
Online material
Bond Dikinson (2017) Whether an auditor’s disclaimer excluded a duty of care to a third party
bank (Online). Available at: https://www.lexology.com/library/detail.aspx?g=1d6d02ae-26bf-
476a-bc61-f036bf1a59d3. (Accessed on 13th October 2017)
Duhaime (2017) Part 4: Offer & Acceptance (Online). Available at:
http://www.duhaime.org/LegalResources/Contracts/LawArticle-89/Part-4-Offer-
Acceptance.aspx. (Accessed on 13th October 2017)
ELawresourceUK (2017) Contractual agreement - offer and acceptance (Online). Available at:
http://www.e-lawresources.co.uk/Offer-and-acceptance.php/. (Accessed on 13th October 2017).
The Law Teacher (2017) Exclusion Clause Term In A Contract (Online). Available at:
https://www.lawteacher.net/free-law-essays/contract-law/exclusion-clause-term-in-a-
contract.php. (Accessed on 13th October 2017).