Analyzing Aspects of Contract and Negligence for Banking Sector

This report provides a detailed analysis of contract law and negligence within the banking sector. It examines essential elements of a valid contract, the impact of different contract types (unilateral and bilateral), and various contract terms (express, implied, and innominate). The report also explores principles of liability in negligence, including the tort of negligence, vicarious liability, and relevant case studies such as Donoghue v Stevenson. Furthermore, it addresses the minimization of damages in tort and contractual liabilities, highlighting the difference in relationship between parties in both cases. The report concludes with an application of these principles to specific business scenarios, evaluating the effects of different contract terms and liabilities in negligence.

ASPECTS OF LAW AND NEGILENCE
FOR BANKING

Table of Contents
ASPECTS OF LAW AND NEGILENCE FOR BANKING...........................................................1
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Essential elements of a valid contract...................................................................................1
1.2 Impact of different types of contract ....................................................................................1
1.3 Terms of the contract............................................................................................................2
TASK 2............................................................................................................................................2
2.1 Essential elements that are included in the formation of a contract as per the given
scenario.......................................................................................................................................2
2.2 law of terms as per the given case ........................................................................................2
2.3 Effects of the contract terms quoted......................................................................................3
TASK 3............................................................................................................................................3
TASK 4............................................................................................................................................4
4.1 Elements of tort of negligence and deference in different situations ..................................4
4.2 Elements of Vicarious liability..............................................................................................5
CONCLUSION................................................................................................................................5
REFERENCES ..............................................................................................................................5

INTRODUCTION
A contract is a legal agreement between two or more person who come together to exchange
something. A valid contract can be formed only when offer and acceptance is present (Adams,
2010). A contract can be in tangible and intangible. In this project report, essential elements of
valid contract are discussed. Along with this, different types of contract and the term which are
included in it are also enclosed. In addition to these elements of vicariously liability, contractual
liability and liability in tort are mentioned. Lastly, various case studies have been solved out by
considering different elements of a contract.
TASK 1
1.1 Essential elements of a valid contract
There are two major elements that are required for forming a valid contract.
Offer: - It is act of offering something to another person with an aim to sell thing or to
generate profit. Suppose a owner of a book shop sells book then in that case; it will treated as
the owner who is offering books to the individual person in order to sell it (Beever, 2007).
Acceptance: - It is an act of accepting something in exchange of anything that is offered
by another person. Considering the above example, it can be said that the person who purchase
the book form bookshop is acceptor of the book.
1.2 Impact of different types of contract
Unilateral contract: - In this type of contract, only one individual is mandatory to follow
terms and conditions which are included in a contract.
Impact: - These types of contract can be revoked anytime as and when liked by the other party.
But, if any party has started performing the act as per the contract then in that case a contract
cannot be cancelled (Caruso, 2007).
Bilateral contract: - In this type of contract, both the parties who enter into a contract are
obliged to consider all terms and conditions of a contract.
Impact: - Once the offer and acceptance has been made then in that case both the parties are
liable to perform the act of the contract.

1.3 Terms of the contract
Express terms: - These are the terms that are expressed at the time of forming a contract.
This is a clause that is included by both parties at the time of its formation.
Implied terms: - this term is expressed at the time of forming a contract (Chandler, 2015).
This is a clause which is additionally included by the court of law.
In nominate terms: - These are not the terms that cannot be treated as a warranty nor it
can be treated as conditions.
TASK 2
2.1 Essential elements that are included in the formation of a contract as per the given scenario
According to the given situations William advertised to sell the the Airbus 320. in an
aviation. Later on after seeing the add Harry was ready to pay the advance of £100000 to
William for not selling the Airbus to anyone else. However ,\the same proposal was accepted by
William. Thus, as per the situation it can be said that both offer and acceptance has been
included in a contract (Ciccarelli and Ciccarelli, 2005). Therefore, a valid contract can be
formed. In this case William is the offeree who offers Airbus 320 for sale. Similarly, on the other
hand Harry was the acceptor who modified the offer made by William. Then the same was
expected by William at last.
2.2 law of terms as per the given case
As per the following case Mr. Peter took his bike for repair at this favorite bike shop. He
presented the same and was received a docket on which it was return that all goods accepted only
subject to terms and conditions displayed. After seeing this message, Mr. Peter has asked about it
from the shop assistant. In lieu of which he say not to worry it is simply related to the price
change for new bikes. After this, Peter left and was not able to see the most important message
because of the carelessness of shop assistant. After 6 days, when Peter came to collect his bike
he found that his bike was thrown away in unclaimed bikes.
Therefore, after examining the case it can be concluded that Peter is liable to claim for a
sum of compensation for a damage caused to him. As he has talked to shop assistant about the
notice but it was ignored by the shop assistant. Peter was not able to see another important
message due to the carelessness of the assistant (Cimino, 2010). Thus, it can be said that it the
implied term where a contract is not formed by mutual understanding of both the parties.
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2.3 Effects of the contract terms quoted
As per the given situation, Best cars Ltd has formed a contract with Car World to
purchase 30 cars in a condition which are ready to run on the roads of UK. Therefore, by
assuming in nominate terms the following statements has been examined.
I) If the car supplied by Car World are illegal then cannot be even modified after a
particular period of time. Thus, in this case The Best Cars Ltd. are completed susceptible
to claim for the sum of compensation for the loss suffered by him and he can even revoke
the contract made by Car world at anytime (Dickinson and Nicholson, 2015).
II) In the given statements the engine of the car are required to be adjusted with an aim to
conform the EU environment law, which will only take 5 minutes. Thus, after applying
the concept of in nominate terms it can be said that contract cannot be cancelled and
compensation cannot be claimed. Because on loss has been suffered by Best Cars.
III) As per this statement Best Cars Ltd can claim for a compensation for the damages
caused to him for 3 months. But cannot cancel the contract. Because in order to conform
that the engine supplied are prefect by EU environmental law it will take the time period
of 3 months.
TASK 3
In case of liabilities in tort damages can minimized by paying the fixed amount of
percentage to the injured party whereas in contractual liabilities damages are minimized by
paying a whole sum of compensation. Likewise, in case of tort liabilities individual are paid the
compensation by placing them at the place of negligence whilst individual are placed at the
actual place of the contract and then compensation is paid to them (DiMatteo and Hogg, 2015).
Apart from this the relationship between both the parties are made by law in case of tort liability
and in case of contractual liability relationship are developed by mutual trust and understanding.
Liability in negligence is the carelessness of an individual towards this duty of care which
in turn can consequence into damage or injury. It can also be said as a duty of failure of one
individual towards other. As per the case of Donoghue v Stevenson 1932, there was a duty of
negligence by the manufacture of the ginger bear towards his customers. A duty of care was
breached by manufacture of the ginger bear due to which Mrs. Donoghue has suffered a
personal injury. Therefore, according to the neighbour principle Mrs. Donoghue is liable to claim
for a some of compensation from the producer of the bear for the damages caused to her.
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Neighbour principles says that an individual must take care to avoid omissions which are likely
to cause injury to the neighbour (Eftestøl-Wilhelmsson, 2015).
The main rational behind the decision taken in case of Donoghue v Stevenson 1932 was
the concept of neighbourhood principles. According to this principles a duty of care was
breached by manufacture of ginger bear.
Vicariously liabilities are the financial obligation in which an individual who has the
direct relationship with the person who have caused the injury is liable to pay the sum of
compensation to the person who has suffered a injury or loss. For instance- if one employee say
X of a restaurant has hit the other employee say Y. Then in that case on behalf of the X employer
of the restaurant is liable to pay a sum of compensation to Y. In respect of the vicariously
liabilities two act has been establish “Occupier liabilities Act 1957” and “Occupier's liabilities
Act 1984” (Hogg, 2015). Occupier's liabilities Act 1984 was formed in order to protect the
employer from the greed employees. According to this act an employer is only obliged to
compensate if the mistake has been done by him.
TASK 4
4.1 Elements of tort of negligence and deference in different situations
I) On the basis of the case 1 it can be concluded that it was the Mark mistake not the
owner of the holiday park. There was no need for the Mark to climb on a fence if he knows that
the other side of the fence was a 20 meters deep gully. Therefore, after considering one of
element of tort liabilities that is necessity.
Necessity:- According to this no suspected party is mandatory to pay a compensation to a
claimant party if accident has occurred due to the carelessness of the claimant party only (Izhak,
2015). A injury party are to take the compensation only if it was the fault of the defendant party.
However on the basis of this element it can be interpreted that Mark is not liable to claim
for the serious injury caused to him. Because it was his own mistake. Owner of the holiday park
has already placed a fence into a wooden area to protect the visitors from any accident.
II) According to the Case 2 Council does owe any duty of care towards the Allen. Council
was knowing that there was the underwater obstacle. And he was also knowing in
advance that it was the habit of the Allen to swimming in the summer. Thus, in regard to
which Council was required to place a notice near the swimming pool (MacMillan and
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Stone, 2012). Thus, after applying the elements of Volenti-non fit injuria council is liable
to pay for a sum of compensation to Allen for the injury caused to him.
III) In the above two situation Mark and Council has the legal responsibilities. Mark is not
required to climb on a fence. And council should place a notice in front of the pool.
4.2 Elements of Vicarious liability
As per the case Mrs. Williams asked a one of his friend to drive a vintage bus to
Barnstable in Devon. The friend drove the car in a careless manner and damages Mrs. William's
car. Thus, according to the elements to the vicarious liabilities it was the friend mistake and
owner of Vintage Vehicle Museum is liable to claim for a compensation for the damages caused
to her car. Because the friend is acting as an employee or agent in the absence of the actual
employer. Thus, according to the vicariously liabilities friend will be considered as an employer
and he is liable to claim for the damages (Essential Elements of a Valid Contract. 2009).
According to the case of Lynch v Binnacle Ltd. Binnacle was liable to pay a compensation to
Lynch for the injury caused to him. Because it was the duty of the Binnacle to see that all its
employees are present at the place of work during a working hours. Thus, Binnacle is liable to
pay for the damages to the Lynch on behalf of the this employers according to the concept of
vicariously liabilities.
CONCLUSION
From the following report it can be concluded that for the formation of a valid contract
availability of offer and acceptance is much. In addition to this various case are solved by
considering the terms of the contract. Along with this elements of vicariously liability,
contractual liabilities and liabilities in tort are also considered to sought out various cases.
REFERENCES
Books and Journals
Adams, A., 2010. Insurance contract law and regulation and competition in the UK insurance
industry: The missing link. Journal of Financial Regulation and Compliance. 8(2). pp.
140–150.
Beever, A., 2007. Rediscovering the law of negligence. Bloomsbury Publishing.
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Caruso, D., 2007. Contract law and distribution in the age of welfare reform. Ariz. L. Rev. 49. pp.
665.
Chandler, A., 2015. Qamp; a Revision Guide Law of Contract. Oxford University Press.
Ciccarelli, J.K. and Ciccarelli, J.C., 2005. The legal aspects of parental rights in assisted
reproductive technology. Journal of social issues. 61(1). pp. 127-137.
Cimino, C., (2010. Virtue and Contract Law. Oregon Law Review.
Dickinson, J and Nicholson, A., 2015. Supreme Court Closes Another Vicarious Liability
Loophole: Woodland v Swimming Teachers Association. European Journal of Current
Legal Issues. 21(2).
DiMatteo, L. and Hogg, M., 2015. Comparative Contract Law: British and American
Perspectives. Oxford University Press.
Eftestøl-Wilhelmsson, E. 2015. European Sustainable Carriage of Goods: The Role of Contract
Law. Routledge.
Hogg, M., 2015. Restitution following Termination of Contract: a Contractual or Enrichment
Remedy?. Edinburgh Law Review. 19(2). Pp. 269-273.
Izhak, E., 2015. The Problem of Uncertain Factual Causation in Israeli Tort Law. Journal of
European Tort Law. 6(1). Pp.1-23.
Online
Essential Elements of a Valid Contract. 2009. Available
through:<https://sgcbusiness.files.wordpress.com/2009/10/chapter-2-the-law-of-
contract.pdf> [Assessed on 5th March 2016].
MacMillan, C. and Stone, R., 2012. Elements of the law of contract[pdf]. Available
through:<http://www.londoninternational.ac.uk/sites/default/files/programme_resources/
laws/ug_subject_guides/elements_law_contract-subjectguide4chapters.pdf> [Assessed on
5th March, 2016].
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