Comprehensive Report: Contract and Negligence Laws for Businesses

This report provides a comprehensive overview of contract and negligence laws within a business context. It begins by exploring the essential elements required for the formation of a valid and legal contract, including offer and acceptance, consideration, and the capacity of parties. The report then delves into the different types of contracts, such as written and verbal agreements, and the significance of terms within a contract, distinguishing between expressed and implied terms. It further analyzes various case scenarios to illustrate the practical application of contract law principles, including scenarios involving the display of goods, the classification of contractual terms into conditions, warranties, and innominate terms, and the impact of exclusion clauses. The report emphasizes the importance of these legal concepts in maintaining propriety within business operations and preventing unfair trade practices. The analysis includes references to key legal precedents and the implications of these laws on business conduct. The report concludes by summarizing the key differences between liability in contract and liability in tort, highlighting their roles in protecting the rights and interests of parties involved in business transactions.

Aspects of Contract and
Negligence for Business
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
1.1.................................................................................................................................................3
1.2.................................................................................................................................................4
1.3.................................................................................................................................................5
LO2..................................................................................................................................................6
2.1.................................................................................................................................................6
2.2.................................................................................................................................................6
2.3.................................................................................................................................................7
LO3..................................................................................................................................................8
3.1.................................................................................................................................................8
3.2.................................................................................................................................................9
3.3...............................................................................................................................................10
4.1...............................................................................................................................................10
4.2...............................................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
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INTRODUCTION
The UK government mainly focuses on developing and enforcing the legislation within
the establishment that support them in maintaining propriety within the society. Along with this,
legislation also supports the business organization to prevent from the unfair trade and practices
(Elliot and Quinn, 2009). Therefore, governing authorities has focus on introducing provisions
related with contract law and negligence law that is mandatory for the organization in order to
perform the activities according to the proper code of conduct. For the present report in order
understand the provisions related with contract and negligence law it focuses on different case
scenario. The different scenario supports in gaining the insight knowledge regarding the different
terms that are used within the contract in order to attain validity and legality. Furthermore, it also
focuses on understanding the nature of negligence as well as different principles through which
negligence is applicable. Through referring the various case scenarios it provide an insight
knowledge regarding the key elements that are essential for formulating the valid agreement
among the party. On the other hand, it will also sum up the certain differences among the
liability in contract with the liability in tort as both are the different terms that protect the rights
and interest of the innocent parties from the unfair practices.
LO1
1.1
In order to develop valid and legal contract it is required by the parties to focuses on
different elements within the contract so that it may be legal in the eye of law (Adamson and
Morrison, 2011). There are different elements and each of them plays significant role within the
contract as it support in formulating valid contract. Elements are listed as follows- Offer and Acceptance- The foremost element required for the formation of a valid
contract is valid offer and acceptance by the parties. There must be an offer provided by
the party to the other party via using face to face interaction or through using telephonic
conversation (Twomey and Jennings, 2010). The provided offer is need to be accepted by
the party so that parties can easily formulate the valid contract. This element within the
contract is followed by reviewing the case precedents of Fisher v Bell [1961] 1QB 394
through reviewing this case scenario government has stated that display of goods and
merchandise is not treated as the valid offer under the legal terms as it is merely termed
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as invitation to the general public (McKendrick, 2012). Along with this, case precedent of
Pharmaceutical Society of Great Britain v Boots Cash Chemist [1953] 1 QB 410 can also
be referred this has assessed that invitation to treat is not consider as valid offer as it is
termed merely termed as an effective way for entering into the negotiation (Tomasic,
2011). Consideration- Another element that is essential for formation of valid contract include
adequate consideration provided by the parties for execution of their performance.
Therefore, it is said that consideration must be something of worth accordant the law.
Through considering the case precedent of Thomas v Thomas [1842] 2 QB 851.
 Capacity of parties- Another essential element that is required while formation of valid
contract include capacity or competency of parties while entering into the agreement
(Twigg-Flesner, 2013). The capacity of parties mainly include that party must be
competent enough that is attain the age limit of 18 years, party must not be in the drunken
state or lunatic or unsound mind. If any of the party to the contract is incompetent then in
such situation contract is not termed as valid contract in the eye of law.
1.2
There are different types and nature of contracts that supports the parties to enters into the
agreement. The key aim of formulating the contract is to fix or set up the rights and duties of the
parties so that they may engage in rendering proper services. There are various form of contracts
that are available to the parties that mainly include- Written contract- The standard form of valid contract include written contract under
which parties focuses on preparing written deed that consists of all duties and
responsibilities of the parties that they need to perform (Hernandez, 2010). Both the
parties within the written contract mutually agrees to the different terms that describes as
their obligations that need to be focused by the parties. The impact of written contract is
that at the time of arising disputing or conflicting situation it act the evidence that parties
have entered into the agreement (Conditions, warranties & innominate terms. n.d). Along
with this, governmental authorities also consider the written agreement while providing
indemnities to the innocent party.
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 Verbal contract- Another type of contract include verbal contract under which parties are
physically present at the time of formation of contract and they verbally agrees to the
terms and condition stated by the parties (Owen, 2007). The impact of verbal contract is
that it termed as legal but at the time of dispute it may not consider as provable as there is
no concrete record or evidence of engaging in contract agreement.
1.3
It has been analysed that there are different terms that are used by the parties at the time
of formation of valid contract (Taylor, 2011). As the terms within the contract plays significant
role as with the help of terms within the contract it may provide remedies to the parties. Basically
there are two types of terms exists within the contractual agreement that is- Expressed terms: These are the key terms within the contract on the basis of which
contract has been formulated (Hernandez, 2010). These terms are inserted by the parties
through their mutual consent and these terms are decided by the parties prior to the
development of valid contract. Through reviewing the case scenario of Chapleton v Barry
Urban District Council [1940] governmental authorities has stated that terms entered the
parties after formulation of contract is not be treated as terms. The main effect of
expressed terms within the contract is that they are stated within the agreement and
parties need to perform their activities through considering the expressed terms within the
contract (Haarala and et.al., 2010). In the situation expressed terms are not fulfilled by
one party then another party have right to claim for the damages.
 Implied terms: Another terms within the contract include implied terms these terms are
not clearly stated within the agreement by the parties. These are those terms that are
generally provided by the governmental authorities and implied within the agreement
(Twigg-Flesner, 2013). The effect of implied terms within the contract is that it protect
the interest and activities of innocent parties and to eliminate the impact of biased terms
that are entered into the contractual agreement. This term within the contract is explained
through referring case of Hutton v Warren [1836] EWHC J61 accordant to this case
claimant planted corn and barley on the field and worked there to grow the crops. But
before harvesting the field the tenant was terminated from the work. Thus, he submitted
bill of the seeds that is spent on the land. While the suspect refuses to compensate the
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farmer stating that it was not mentioned within the tenancy agreement (Tomasic, 2011).
Through considering case in the court it was implied that defendant must provide
compensation for the expenses related with growing crops.
LO2
2.1
Case Scenario
Through considering the case setting Ivan goes to the book shop and purchases the book
that was display for the sales for £50. Ivan takes the book and goes to the counter for purchasing
it. But the Todor tells that it was the book last copy and he has already sell the book to Carl and
forgot to remove from the display shelf.
Thus, through considering the above scenario there are certain elements of contract that
has been applied it mainly include offer. Under the case display of goods on the shelf is not
consider as valid offer it merely termed as the invitation to treat (McKendrick, 2012). Therefore,
in such circumstances Todor is not duty-bound to accept the offer of Ivan. Along with this, the
case scenario also have consideration element as Todor has specified that price of book that is
£50.
2.2
It has been assessed that there are some other terms also that is imposed within the
contractual agreement. These terms mainly comes under the expressed terms as they are clearly
stated within the written deed that is formulated by the parties (Williams, 2010). Accordant with
the English Law contractual terms are mainly bifurcated into conditions, warranties and
Innominate terms (Conditions, warranties & innominate terms. n.d). The classification of terms
mainly include- A Condition- These are consider as the main judicial admission that are consider as the
key ground on the basis of which whole contract is formulated. These are also termed as
the primary terms and obligation that are mutually described by the parties that they are
agreed to perform (Cooper, 2011). The consequence or effect of condition is that if the
contractual party is unable to perform accordant with the condition then in such situation
party is entitled to breach the contractual agreement. Through considering the case
precedent of Poussard b Spiers [1876] 1QBD 410 condition can be easily explained. The
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case clearly states that breach of condition provide authorization to the party to terminate
the contractual agreement and it also allows the innocent party to claim for the damages. A Warranty- Another terms within the contract include warranty these are the ancillary
terms or secondary terms that are entered within the contractual agreement (Cross, 2011).
The effect of warranty is that in the circumstances if the party is unable to accomplish the
warranty then in such situation party is not liable to repudiate the contract but they are in
the condition to claim for the damages.
 An Innominate terms- Another terms in the contract include Innominate terms this was
incorporated through considering the case scenario of Hong Kong Fir Shipping v
Kawasaki Kisen Kaisha [1962]. This term is practically applicable in the circumstances
when term cannot be divided into condition or warranty. With this approach, party will be
eligible for rejection the formulated contract only if they are underprivileged from the
benefit.
2.3
Case Scenario
The case scenario states that John went to the park that was managed by the local council
were he sees notice that chair is for hire for 50p per hour. John pays the money and hire chair for
sometimes in return of the money local attendant has given the ticket that clearly states the
exclusion clause that is Local attendant has no liability in the situation if individual got injured or
get damaged by the hired equipment. Later, the chair got collapsed and results in damaging their
clothes as well as causing injury.
Through taking the above case into the consideration it has been evaluated that there are
different terms of law as well as existence of exemption clause within the contracts. According to
the expressed terms that is stated exclusion clause on the ticket local council have no liability to
pay for the injury and damages (Tikkanen and Kaleva, 2011). In the circumstances if the
exclusion or exemption clause was not entered within the receipt provided by the local attendant
then in such situation local attendant will be liable for providing damages to their clothes as well
as injury (Stanberry, 2015). Furthermore, accordant with the implied term local council who was
the in charge of managing the park must have duty to take care of their hired equipment so that it
may not effect in injuring the individual those who visits the park. In accordance with
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considering the lawsuit of Chapelton v Barry UDC [1940] 1 KB 532, exclusion or exemption
clauses are effectual in the situation when it is backed up as well as integrated by the judicial
provisions.
LO3
3.1
The UK government has formulated various provisions related with contract and
negligence so that it may protect the right and interest of the weaker party. Therefore, there are
certain differences among the liability in tort with the liability in contractual agreement. These
are enumerated as follows-
Basis of differences Liability in contractual
agreement
Liability in tort
Basis of origin The key reason for arising
contractual liability is in the
situation if parties to the
agreement are unable to
accomplish the stated terms and
condition of the contract.
On the other hand, liability in tort
arises in the situation if one party
is unable perform according to
standard norms as result of this
guiltless party get bruised ir
injured (Mullis and Oliphant,
2011).
Relationship among the
parties
Within the contractual liability
there is contractual agreement
among the parties that is mutually
consented by the party. Scammell
& Nephew v. Ouston [1941] AC
251
While, there is no relationship
among the parties relation is
imposed by the judicial system
through reviewing the negligent
action. Barnett v Chelsea &
Kensington Hospital [1969] 1 QB
428
Ground for paying
damages
Under contractual liability
damages is paid to the parties
after consulting the written deed
which is prepared by the parties
On the other hand, damages
within the tort liability arises after
measuring the level of injury or
damage occurred to the innocent
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(Twomey and Jennings, 2010). party.
Case scenario Through reviewing the case
precedent of Avery v Bowden
(1855) compensation for the
damages is provided by the
defendant if they are unable to
accomplish the agreed contractual
terms.
Through considering the case
scenario of Donoghue v Stevenson
damages are provided by the party
when they are unable to take care
of their actions as a result it occur
the injury to another party.
3.2
The term negligence is defined as civil wrong in which party fails or neglect to perform
their standardized responsibility and duty thus, outcome in occurring injury to the other party
(Elliot and Quinn, 2009). The key purpose of executing negligence law by the UK government is
that it focuses on imposing the obligation on the organization so that their employees perform
activities in such a manner that it may not results in performing wrong activities. Therefore, if
the individual fails to perform or execute their services according to the defined criteria then in
such situation they are accountable for paying compensation for the injuries and damages that
has been occurred to the innocent party (Adamson and Morrison, 2011). For claiming successful
negligence it is required by claimant to accomplish certain principles that are- Duty of care: The foremost principle of negligence include that parties are obliged to
take care of their actions and duties so that they may avoid the elimination of activities
that can results in causing damages to the other party. Breach of duty: Another principle of negligence is breach of duty that is defendant must
breach their duty by not not performing their activities in the standard format that directly
results in arising the situation of negligence. Through considering the case scenario of
Donoghue v Stevenson, defendant (Stevenson) had breach their duty by not reviewing the
production process of beer as while consuming the beer decomposed snail emerged from
the bottle of beer.
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 Causation: Another principle of negligence include causation that is applicant is needed
to showcase their accidental injury that has been caused by the activities that is performed
by defendant (Zoll, 2012).
 Foreseeability: The last principle within the negligence is forseeability that is also termed
as anticipation or predicting the consequences of the neglectful activity.
3.3
Another liability that is is imposed by the UK government include vicarious liability
under which the controlling party is accountable for the wrong activities that are performed by
their staff and employees (Milner, 2011). Therefore, the doctrine is enforced by the English law
that support in eliminating the neglectful action of the party. Through considering the aspect of
business it has been assessed that business or employer is accountable for the wrongful actions
that are performed by their employees and staff within the employment terms.
With the help of considering the case scenario of Lister v Hesley Hall Ltd [2001] UKHL
22 the warden has engaged in performing the neglectful activities that results in engaging in the
sexual activities within the boys hostel. Therefore, here employer is vicariously liable for the
activities that are performed by their staff members or warden. Whereas employer is not liable in
the situation when their staff are engaged in the criminal activities or actions. These are excluded
from the vicarious liability. Along with this, vicarious liability has also focused on the different
situation that must satisfy that employer or owner is liable or accountable for the negligence
activities of their staff that mainly include party who has engaged in the wrongful activities
should be employed within the employment whether for full time or part time (McKendrick,
2012). On the other hand, another condition is that wrongful or negligent actions performed by
the staff must also conducted within the employment.
LO4
4.1
Case Scenario
Through considering the case scenario, David is driving the car at speed of 35 MPH in
the zone where standard driving speed is around 25 MPH. While driving the car at four lane
street nine year old child was running into the street chasing soccer ball. David without looking
swerves the car into another lane and hits the telephone booth that results in serious injury to
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him. However, the telephone booth was snaps into two different pieces and it also knocks the
David and results in unconscious state with attaining permanent injury
Through considering the above case scenario it results in applying elements of tort of
negligence as well as it also results in applying certain defences in the situation. The elements of
tort of negligence include;
 Duty of care- Through considering the case scenario it was the responsibility of TeleCo
to take care of their telephone booth as with one hit it snaps into the two pieces. While
David also have to perform their duty with care through driving slow on the four lane as
it was mentioned that speed of car must not exceed 25 MPH but David was driving at 35
MPH.
Along with the elements of tort, case scenario also focuses on different defences such as
Contributory negligence, Volenti non fit injuria and Ex turpi causa (Chetwin, 2011). In the
foremost defence claimant had impart their activities so that it may engage in performing
neglectful action. Another defence that is applied in the case scenario include volenti non fit
injuria under which David knowingly put themselves in the situation that results in causing them
injury (Adams, 2010). They are aware regarding their actions that it may results in arising the
risk of damages and injury to the party. The last defence include Ex turpi causa that is applied in
the circumstances when the wrong actions performed by the individual is unfair accordant with
the law and judicial systems.
4.2
Case Scenario
The case scenario states that head chef within the hotel Colin is fed up with the Roger
due to its attitude and anger. Within the employment period Colin knocks the head of Roger
dishwasher with the frying pan that results him in causing serious injury.
Thus, through considering this scenario Roger is in the situation to claim for the vicarious
liability against the Regent Hotel for the aggressive action executed by the Colin head chef. As,
under the vicarious liability employer is accountable for all the duties and actions that are
performed by their employees. Along with this, Roger is also in the position to sue Colin directly
for their injuries through considering the occupier's liability act that is framed by the
governmental authorities. Accordant with the Occupier Liability Act 1957 it is stated that
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individual is liable for providing remedies or indemnities for the personal harm or injury that is
occurred to the party (Occupiers’ Liability Act 1957, 2015).
Along with this, considering the scenario of vicarious liability Colin within the
employment period has hit the Roger head with the frying pan that results in causing him serious
injury. Thus, Regent hotel is being held vicariously liable for the actions and activities of their
employees and staff that are executed within the employment period.
CONCLUSION
Through considering the above report it has been summarizes that parties must involved
in formulating the valid contract so that they may easily perform or execute their services within
the workplace. On the other hand, report has also concluded that for the valid contract it is
essential for the agreeing parties to focus on the certain essential elements that results in
formulating the valid contract that is legal in the eye of law. Whereas, it has also gained an
insight knowledge regarding the nature of negligence as well as four different principles of the
negligence action that allows the claimant to recover for their damages and injuries that has been
occurred to the innocent parties. On the other hand, it also sum up the certain differences among
the liability in contract with the liability in tort as both are the different terms that protect the
rights and interest of the innocent parties from the unfair practices.
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