Aspects of Contract Law Report

This report provides a comprehensive overview of contract law, covering essential elements such as offer and acceptance, capacity, and intention. It distinguishes between unilateral and bilateral contracts, as well as expressed and implied terms. The report also delves into conditions, warranties, and innominate terms, and examines exclusion clauses. Furthermore, it differentiates between contractual and tort liability, explaining negligence and vicarious liability with relevant case studies. The report concludes by applying these concepts to practical scenarios, demonstrating their real-world implications.

Aspects of Contract

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1................................................................................................................................................1
1.2................................................................................................................................................2
1.3................................................................................................................................................3
TASK 2............................................................................................................................................3
2.1................................................................................................................................................3
2.2................................................................................................................................................4
2.3................................................................................................................................................5
TASK 3............................................................................................................................................5
3.1................................................................................................................................................5
3.2................................................................................................................................................6
3.3................................................................................................................................................6
TASK 4............................................................................................................................................7
4.1................................................................................................................................................7
4.2................................................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Laws are an imperative part of life as it safeguards the rights of individuals from all sort
of wrong deeds and actions persuade by other people. It demonstrates various terms and kinds of
contract which are crucial to have an in depth knowledge regarding the English Law. The current
research report revolves around various aspects of contract that is essential form a valid
agreement between the binding parties. Main purpose of this report is to provide reader an
understanding of the essential elements to form a constricting contract as well as to apply these
terms and clauses in diverse circumstances(Gray, 2010). A clear distinguish-en is made between
conditions and warranties as well as contractual and tort liability. In addition to it, vicarious
liability has been successfully explained along with the nature of negligence.
TASK 1
1.1
As per the English law demonstrates that an agreement can only be termed as valid when
there are all essential elements of a binding contract present in it. In order to get a deep
understanding of it, some of them have been highlighted underneath with its relevant case
studies: Offer and Acceptance: In accordance to the laws, there shall be an offerer who is
proposing an offer to the another party which when accepted by the acceptor becomes a
binding contract between the two. With reference to the Carllil v Carbolic Smoke ball
company case which states that the firm created an offer by putting an advertisement in
the newspaper to consume at-least 3 smoke balls according to the printed instructions on
the product. The person who causes influenza while performing the prescribed task
minimum 2 times a week will be rewarded with the some of 100 pounds. Mrs Carllil
accepted the offer and she entered into a binding contract with the company. Further, she
caught flu and claims that all the conditions were fulfilled by her so she must receive the
respective amount of money. Capacity: A person is only deemed to enter into a contract, if it has crossed the age of 18
years(Bell, 2011). This is so because as per the English law a minor cannot into any
binding contract as it is not eligible to understand the terms and conditions governing the
contract. Likewise, a person cannot be asked to form a contract when he/she is of
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unsound mind. These constitutes of an individual with unsound mind and drunker as they
are not in capacity to form a legal contract.
 Intention: This element has been raised in order to avoid certain cases which are not
entitled to bring to the judiciary. Each and every agreement cannot be treated as a valid
contract between the binding parties. Citing example from the Balfour v Balfour case, a
husband was conducting its business internationally. He sent monthly maintenance
charges to his wife, when they were happily married. With passage of time, the
relationship between the two soured and the husband stop sent the prescribed amounts.
The wife claimed for the respective sum of money by the enforcing actions against him.
The court stated that their was no intention to create a legal agreement between the
husband and wife and it was strictly a domestic agreement between the two(Goldberg and
Zipursky, 2007).
1.2
There are varied kinds of contract which binds the two parties in the legal obligation to
perform their duties and responsibilities. The impact of these agreements of the respective people
have been enumerated hereunder: Unilateral Contract: It can be stated as a contract wherein one party promises to perform
certain obligations. The contract is formed on the basis if nominal consideration is
offered by the offerer in form of reward to the general party. The offer can be made in the
form invitation to treat, advertisement and display adverts. This can be specifically been
understandable from the Carllil v Carbolic Smoke Ball company wherein the innocent
party accepted the offer after reading the advert in the newspaper. He performed the
prescribed act according to the laid instruction in a need to avail the respective amount.
The firm refuses to pay the sum of money stating that their was no acceptance made on
the part of Carllil(Ole Lando and Commission on European Contract Law, 2003). The
court held the defendant liable demonstrating that it is a unilateral contract made between
the binding parties whereby the company created an offer in general and the same has
been accepted by the Carllil.
 Bilateral Contract: In contrast to the above described agreement, there is another
contract which involves two or more parties that come together to form a binding
contract, agreeing to the stated terms and conditions. As per the Bilateral contract, both
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the parties are in position to perform the binding obligations and breach of it can cause
the party to pay for the respective compensation to the another based on the amount of
loss born by it.
1.3
Terms are an integral part of an standard contract which needs to be performed by both
the binding parties. The two major terms of a contract are implied and expressed which has been
enlisted hereunder: Expressed terms: These are the clauses that have been discussed at the time of formation
of contract either orally or in a documentation format. These can be either considered as
warranties or conditions depending upon the situation and the binding parties. When an
oral agreement is made between the respective parties, it becomes difficult to decide
whether the statement given can be deemed as terms or considered as mere
representation. Case Reference Esso Petroleum v Mardon(Whincup, 2006).
 Implied terms: At times of forming a business contracts, there are certain clauses that is
to be followed by the binding parties as they are implied by the court. These are
necessary clauses breach of which will lead to an illegal contract by the court of law. A
major example of it can be stated as the Sales of Goods act 1979 whereby the businesses
needs to comply by all the terms stated by the English Law. With reference to the
Rowland v Divall case wherein the claimant bought a car from a dealer and after painting
it, he sold to the defendant at 400 pound. After 2 months the car was stolen by the thief
and it reached back to the original owner. The court stated that the ownership of the car
remained with the original owner as defendant did not have any right to sell the goods
which is an implied term.
TASK 2
2.1
In accordance to the current scenario, Ivan visits a Todor's bookshop after reviewing a
display advert in the shop. As per the English law, display of any item in the shop can be
regarded as an invitation treat the general people. There is a wide difference between invitation
to treat and an offer, both cannot be regarded the same(Faure, 2009). This can be clearly
acknowledged from the Fisher v Bell wherein the court held that display of goods is just an
request not an offer created by the shopkeeper. Reviewing back to the present case, wherein the
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claimant appears the shopkeeper and ask to sell the book at the enlisted price in the display
screen. Ivan proposes an offer to the Todor to sell his book at 50 pound. Therefore, there is an
element of offer as well as nominal consideration.
The bookseller informs Ivan the respective book has already been sold yesterday to Carl
and he forgot to remove it from the bookshelf. From this statement it can be ascertained that the
the proposed offer to sell the book by Ivan was not accepted by the defendant. Therefore, it can
be said that in the current scenario the major element of a valid contract that is acceptance is not
present. Therefore, it cannot be deemed as a binding contract between both the parties.
2.2
A contract is formed by varied means of terms which becomes the basis of duties of the
binding parties(Giliker, 2010). Every term cannot be regarded as important in a valid contract.
The imperativeness of each is decided by the court and the relevance in the different cases. Some
of these have been highlighted below: Conditions: These are the main clauses of every contract, repudiation of which leads to
the breach of agreement. The innocent party has the right to claim for the damages for the
amount of loss suffered by him. It has also the right to turn off the contract as the
defendant fails to perform his legal obligations. With reference to the Poussard v Spiers
case, an opera singer was recruited to perform for the lead night of the firm. She got ill
four nights before the main performance. The company hired a new singer and replaced it
with Madame Poussard. The company has the right to breach the contract due to the non
fulfilment of condition. Warranties: These are the less important terms of a contract as compared to the
conditions and therefore does not goes to the root cause. Breach of warranties does not
lead to repudiation of contract, though the innocent party can claim for the damages but
does not terminate the contract(Johnston, 2014). This can be clearly analyses from the the
Bettini v Gye case wherein the firm repudiated the contract on the breach of warranties
which is illegal according to the English Law.
 Innominate Terms: There are certain clause in the agreement which have not been
described as conditions or warranties and can be termed under the following head. The
court needs to decide upon whether the breach of an innominate term can be regarded as
conditions or warranties. This is resolved by properly analysing the effect of breach of
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the clause on the innocent party. If the loss to the injured party is substantial it will be
treated as breach of conditions and vice versa if the loss is nominal.
2.3
Before reviewing the conferred case scenario, it is essential to understand varied terms of
a contract. Exclusion clause is a purport used by one of the binding parties to restrict its liabilities
or to transfer the same onto another people involved in the present contract(Andrews, 2015).
Reviewing the present scenario wherein John went to a local council and purchased a coupon of
token from the parking attendant to be seated on the chair of the park for one hour by paying 50
pound as a sum of amount. This illustrates that there is a valid contract between both the parties
as they entered into a contract which has its respective terms and conditions along with all
essential elements of a contract such as offer and acceptance, consideration, evidence in form of
receipt and capacity of the parties.
Thereafter, it has been analysed that John got injured due to the failure of chair as it got
collapsed. He went to the parking attendant asking to pay him the amount of compensation for
the injuries caused to him while sitting on the chair owned by the council. The attendant shows
him the clause that is printed on the back of the receipt given to John which states that the
council shall not be liable for an injuries caused while using properties of the park and no
damages shall be paid(Arlen and Carney, 2012). This is an exemption clause used by the owner
of the park to escape from the liabilities by transferring the mistake on the innocent party. Apart
from this, it can also be analysed that there is presence of inclusion clause along with the
exclusion term as the fonts are printed on the back of the receipt in very small fonts which is not
readable even.
TASK 3
3.1
Contractual liability arises due to the non performance of conditions and warranties by
the defendant as agreed upon at times of formation of agreement. Contradictory, tor liability
arises due to the non fulfilment of reasonable care that is accepted by each person in regards to
safeguard the interest of the others. Both the terms have been distinguished clearly in the
following table:
Basis of Comparison Contractual Liability Tort Liability
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Relationship Both the parties enter into a legal
and binding relationship at the
times of contract formation.
There is not binding relationship
between the two parties, kinship is
likely to arise due to the non
performance of duty.
Liability Breach of conditions by the
defendant leads the innocent party
suffered from loss which results in
liabilities.
Negligence on part of the legitimate
which caused loss of life, injuries
and damages to the aggrieved party
which caused obligation.
Damages Amount of loss born by the
innocent parties is to be paid by
the legitimate as well as it has
right to terminate the
contract(Buchan, 2013).
The said loss suffered by the
innocent needs to be compensated
by the defendant.
Case Reference Payzu v Saunders 1919 O' Connell v Jackson 1971
3.2
Negligence on part of one party leads to damage of harm to the another can be termed
under the head tort liability. Every person is entitled to undertake a reasonable care in order to
protect the other citizens from getting injured. In order to claim for the tort liability, the owner
must prove the following enlisted points which can be deemed under the head nature of
negligence: Legitimate owned a duty of care: The claimant is entitled to prove that the legitimate
needs to undertake reasonable duty of care with references to the Caparo test it can be
clearly understandable. Breach of duty on part of defendant: Thereafter, the claimant needs to prove that failure
on the part of the defendant caused damage or harm to him. This is undertaken due to the
carelessness and negligence on part of legitimate(Chamallas, 2014).
 Breach caused harm or damage: The tot of liability only binds the two parties when
there is any sort of damage or harm caused by the other. That too the harm is not too
remote which means that the loss suffered it indispensable to the innocent party. Case
Reference: Wagon Mound no 1 (1961) case.
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3.3
Vicarious liability is likely to arise in those cases wherein the employer is held liable or
guilty for the act or actions of its employees. For instance, any wrongful deeds conducted by the
workers in the business premises will conducted as illegal by the English law and the employers
shall be obliged as they have not taken any actions to stop them. Vicarious liability can be seen
the case when there is any sort of discrimination, unlawful work and inequality being practised in
the organization which is likely to harm the another party(Davies, 2016). Moreover, in the
proceedings wherein the customers are made deprived of the original profit of availing the
prescribed product or services by the company can be classified under the following head.
Stating example from the Lister v Hesley Hall Ltd case wherein the lawsuit held the
business entity liable for the actions or wrongful deeds conducted by its employees. Later on it
was recognized that the court declared the employers innocent as any of such acts cannot be
persuaded by the owner of the company. The employers were initially held obliged for the sex
discrimination act conducted in their absence by its workers.
TASK 4
4.1
The current scenario dictates that David was driving his car at 35 MPH in a 25 MPH lane.
Some of the children's were also playing over there. In order to protect Kelvin; the street child,
David hits the TeleCo pole which was broken into parts which fell on the child. Kelvin got
injured along with David and the local telephone pole was also damaged and cause loss to the
company(Gallagher and et.al., 2014). From this, it can be analysed that there was negligence on
the part of David as he needs to perform reasonable care to protect others from harm or loss.
Therefore, it can be examined that there was a duty of care that is to be performed by the
legitimate and it was also breached by him which caused damage and harm to the innocent
parties.
Thus tort liability can successfully be applied in the conferred case which explain the
nature of negligence. David is liable to pay compensation to the telephone company in regards to
the damages incurred by them. Furthermore, he is liable to pay all amount of injuries and loss
caused to Kelvin on non performance of duty which is entitled to be performed by each
individual.
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4.2
As explained about vicarious liability is a sort of obligations laid on the business due to
the actions conducted by the staff members of the company. In accordance to the present case
wherein Colin was the head Chef of Regent hotel which was frustrated and angry with the acts of
Roger: the dishwasher(Hart, 2016). One fine day, Colin hit Roger with a fried pan which caused
him with severe injuries. Vicarious liability can only be applied when there is any sort of worker
and owner relationship between the parties which is successfully seen in the present case.
Moreover, any sort of wrong deeds persuade by the employees in the organization can be
deemed illegal and the organization will be held liable. Likewise, in the current scenario, the
wrong deeds of the employees caused in severe injuries to Roger(Hersch and Viscusi, 2014).
Furthermore, it can be stated that vicarious liability can be successfully applied in the
conferred case as the Chef was aware about the behaviour of Roger and he did not took any
action to eradicate the same. Carelessness on it part caused harm to Roger. Moreover, the
claimant has also the right to claim actions against Chef without imposing any vicarious
liability(Hesselink, 2015).
CONCLUSION
The report can be summed up by conferring that all the elements of a valid contract are
necessarily needed to bind the parties in a legal agreement. The study presents various aspects of
contract along with respective case studies. It can be concluded that every citizen of the United
Kingdom is obliged to perform reasonable duty of care otherwise it can be held liable by the
court.
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REFERENCES
Books and Journals
Andrews, N., 2015. Contract law. Cambridge University Press.
Arlen, J. and Carney, W. J., 2012. Vicarious liability for fraud on securities markets: Theory and
evidence.
Arlen, J., 2016. Economic Analysis of Tort Liability for an Imperfect World.
Bell, T. W. 2011. Graduated Consent in Contract and Tort Law: Toward a Theory of
Justification. Case Western Reserve Law Review. 61(1).
Buchan, J., 2013. Contract Law. In Franchisees as Consumers (pp. 69-84). Springer New York.
Chamallas, M., 2014. Two Very Different Stories: Vicarious Liability Under Tort and Title VII
Law. Ohio St. LJ. 75. pp.1315.
Davies, B., 2016. Contract Law, by Mindy Chen-Wishart, Oxford, Oxford University Press,
2015, 615 pp.,£ 32.99 (paperback), ISBN 978-0-19-968916-3. The Law Teacher. pp.1-3.
Faure, M., 2009. Tort law and economics. Edward Elgar publishing.
Gallagher, M. and et.al., 2014. China’s 2008 Labor Contract Law: Implementation and
implications for China’s workers. Human Relations. pp.0018726713509418.
Giliker, P., 2010. Vicarious liability in tort. Cambridge University Press.
Goldberg, J. C. and Zipursky, B. C., 2007. Tort Law and Moral Luck. Cornell Law Review. 92.
pp. 07-15.
Gray, J., 2010. Legal commentary. Journal of Financial Regulation and Compliance. 18(3). pp.
293-300.
Hart, T., 2016. Recent Cases on vicarious liability. CILEX Journal.
Hersch, J. and Viscusi, W. K., 2014. Assessing the insurance role of tort liability after Calabresi.
Law & Contemp. Probs. 77. pp.135.
Hesselink, M. W., 2015. Contract theory and EU contract law. Amsterdam Law School Research
Paper, (2015-39).
Johnston, D., 2014. Peter Roberts, Petroleum Contracts, English Law and Practice. The Journal
of World Energy Law & Business. 7(2). pp.175-177.
Ole Lando and Commission on European Contract Law, 2003. Principles of European contract
law. Kluwer Law International.
Whincup, M. H., 2006. Contract law and practice: the English system with Scottish,
Commonwealth, and Continental comparisons. Kluwer law international.
Online
Clarke, P. 2015. Contract and Tort Law. [Online]. Available through:
<http://www.legislation.gov.uk/ukpga/1984/3/data.pdf>. [Accessed on 3 November
2016].
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Hong, C., 2015. What are the elements of a contract?. [Online]. Available through:
<http://www.hillhouse.com.au/legal-question/what-are-the-elements-of-a-contract/>.
[Accessed on 3 November 2016].
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