Analysis of Contract and Negligence in Business Law - Report

This report provides a detailed analysis of contract and negligence law in a business context. It begins with an introduction to contract formation, including essential elements like offer, acceptance, and consideration, and explores different types of contracts such as face-to-face, written, and distance selling agreements. The report examines various contract terms, including conditions, warranties, intermediate terms, and exemption clauses, and their effects. It then delves into the differences between tort and contractual liability, the nature of liability in negligence, and the concept of vicarious liability. Case studies are used to apply the legal principles of contract formation and negligence, including examples of exclusion clauses and their application. The report concludes with a summary of the key findings and a discussion of the practical implications of contract and negligence law for businesses.

A S P E C T S O F C O N T R A C T & N E G L I G E N C E F O R
B U S I N E S S
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TABLE OF CONTENTS
Introduction:..................................................................................................................... 2
Task 1.............................................................................................................................. 3
1.1 Formation of contract and the importance of the various elements which has to be
present to form a contract to Peter Abraham:...............................................................3
1.2 The impact of various kinds of contracts to Peter Abraham:..................................4
1.3 The different terms in contracts and their effects with reference to Peter Abraham:
......................................................................................................................................5
Exemption clause:............................................................................................................6
Task 02:........................................................................................................................... 6
2.1 Elements of the contracts:..........................................................................................6
2.2 Apply the law in terms of the case 03 and 04:........................................................8
2.3 The effect of different terms in the given contracts:................................................9
Task 3.............................................................................................................................. 9
3.1 The difference between tort and contractual liability:..............................................9
3.2 The nature of liability in negligence:......................................................................10
3.3 Health and safety officer being vicariously liable:.................................................12
Task 04:......................................................................................................................... 13
4.1 Application of the elements of the tort of negligence to the Mr Brown:.................13
4.2 APPLICATION of the law of vicarious liability to the case 08 and 09:..................14
Conclusion..................................................................................................................... 14
References.....................................................................................................................15
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INTRODUCTION:
The report is based around the identification of key practices, disregard, and the elements present
in the agreement, which are very necessary. Currently the context of business is experiencing the
pressure with relation present among several individuals and the firms (Chan, 2009). The valid
contracts offer the firms and individuals with the evidence that this is enough related to the
appearance of the requirements which is focused over mutual meetings linked to the view of how
these scenarios which are destructive can get examined. In a similar way, the agreements, which
are under court, are legal. This report has the key purpose to provide better data and other
information related to contract laws along with the fundamental guidelines that enhances among
every situation.
TASK 1
1.1 FORMATION OF CONTRACT AND THE IMPORTANCE OF THE VARIOUS
ELEMENTS WHICH HAS TO BE PRESENT TO FORM A CONTRACT TO
PETER ABRAHAM:
Some of the elements of the contract are provided to Peter Abraham that establishes the contract
that is valid. There exist many essential elements in a contract that makes it as a lawful and
binding file. Peter Abraham is required to focus over the elements of contract for creating a valid
that is contracting. The element of the contract includes:
 There is a specification by an offer in depth that actually what will be provided.
 The contract acceptance that second partner created in opposition to the established offer.
Any type of the thing, which is exchanged among the parties such as the money of consideration.
The elements include:
Offer:
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This is the basic element of contract which initiates the process of development of a contract.
The offeror transmits his intention to enter into a contract to the other party, in an effective
manner. However, as held in Harvey v. Facey (1893) an offer shall be distinguished from an
invitation to offer. The latter is not an element to contract, and cannot be accepted to proceed the
process of formation of contract.
Acceptance:
In response to an offer, the other party is under an obligation to make an unconditional and
unqualified acceptance. It is shall be communicated to the offeror in an effective manner, and the
same shall be an unaltered agreement on the specific terms of the offer (Caliendo, 2011).
Consideration:
This reflects the promise and the incentive for performance of the promise between the involved
parties. One of the parties gain from this consideration and the other suffers a detriment. In
accordance to the law laid down in Re McArdle (1951) a consideration shall be completely
lawful as well as valid in nature.
Consent of Parties:
It is imperative for the parties to agree on the same object and terms of contract. Moreover, there
consent to enter into the relationship shall not be through misrepresentation or fraud.
Competence of Parties:
All the parties involved in the contractual relation shall have the capacity to form a valid contract
in the eyes of law. They shall not be under age, mentally or financially incapable.
1.2 THE IMPACT OF VARIOUS KINDS OF CONTRACTS TO PETER
ABRAHAM:
Face to Face:
Definition: In each agreement it is necessary to make it in type of contract like in writing, hence
the contract exist between the parties, which is litigate regarding the reimbursements.
Explanation: In case Peter Abraham makes a contract, which is written for the business purpose
and it is specified under the contract that is written in which each party needs to agree with the
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contract. A contract, which is simple, could be in writing of the verbal type based over the
agreement parties.
Written contract:
Definition: A contract that is presented in written form displays the entire set of guidelines,
which both parties have provided under the agreement and it, is completely contracted each
party. The parties engaged under the agreement, which is written, could be firm, people, and
businesses.
Explanation:
The valid contract guidelines need to be presented over a contract that is written and needs to
have both the party's signature. The contract, which is written, is made and provided through a
lawyer or by the law that creates the guidelines, which are made visible for the parties involved
prior to agreement authorization (Dehejia, 2014). The contract, which is written in that both
parties, needs to know and identify the duties. The contract, which is written, secures involved
parties related to contract breach.
Distance selling (telephone, internet):
The agreements related to distance sales do not allow a person to examine the products prior to
buying.
Definition: For instance, this will be agreed acceptance, which Peter Abraham has made by
phone or the Internet. At the time when the distance sales contract is made, the supplier should
specify some of the data such as:
 The in-depth specification about the material used in building which is provided in the
agreement.
 The preparation of delivery by the Peter Abraham
 In case of validation, the Peter Abraham has return, termination, strategies for refunding
and exchange.
1.3 THE DIFFERENT TERMS IN CONTRACTS AND THEIR EFFECTS WITH
REFERENCE TO PETER ABRAHAM:
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Definition: The various policies showed under, any agreement for creating it as valid combine
contracts, conditions, transitional and the implied agreement (Ferrer-i-Carbonell, 2012). The
Peter Abraham duties are focused under the expressions of contract that are engaged under the
agreement of the customer. The expressions of the agreement are provided below:
Condition:
Definition: The condition is seen as significant that is essential regarding the key contract. Non-
compliance of these terms make the parties incapable to perform their obligations under the
contract. Thus, is directly connected with the primary object for entering into contract. In
furtherance to the same, in Poussard v. Spiers the court held that breach of these clauses shall
make the contract void ab initio.
Warranties:
Definition: The warranties are also seen as a word that is not highly focused. These are the
auxiliary terms which in essence support the performance of contract, and nothing beyond that.
Thus breach of these terms does not entitle the parties to make it void ab initio, rather it only
entitles the other party to claim damages.
Intermediate term:
Definition: These are the intermediate terms which cannot be classified into conditions and
warranties, on the basis of their wordings. However, the real classification is done on the basis of
impact of breach of these terms (Freeman, 2010). Hence, if the damage sustained by the parties
is fundamental in nature, to the extent that they are made incapable to perform the agreement,
then it shall be a condition, Otherwise it can be classified as a warranty.
EXEMPTION CLAUSE:
The clause of exemption operates to either restrict or limit the liability which is imposed on the
parties, in the event of breach of any of the clauses. However, the judiciary at various instances
has criticized the inclusion of these terms in contracts, and therefore, have propounded the test of
incorporation and construction for verifying the validity of the clause. The application shall vary
in the case of signed and unsigned documents, and in the case of Curtis v. Chemical Cleaning
(1951) different terms were propounded.
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TASK 02:
2.1 ELEMENTS OF THE CONTRACTS:
Case 1:
As given in the scenario Carol comes across an advertisement on the online classified ad,
Gumtree in relation to a brown couch. She desired to buy the same and hence communicated it
through an email. In order to assess the status of relationship between Carol and Gumtree, the
legal principles in relation to formation of a contract are required to be understood. In order to
form a valid agreement between parties all the elements of contract shall necessarily be present.
First of all a valid offer shall be made by one of the parties, which shall be accepted by the other
party, without making a counter offer. In the case of Carllil Carbolic Smoke Ball Co. (1893) a
valid offer shall effectively communicate the intention to be bound by a contractual relationship.
However, it is vital to establish a distinction from 'invitation to treat' . These merely reflects
communication of the opportunity to make an offer in respect to specific products or services. As
held in case of Fisher v. Bell (1953) a shopkeeper displaying his products in the store is basically
making an invitation to offer. In response to the same the consumers make an offer, which shall
be further decided by the shopkeeper to accept or reject it (Friedman, 2014). Further, in the case
of Patridge v. Critenden (1968) it was upheld by the court that advertisement of products amount
to invitation to treat.
In pursuance to the same law laid down in these cases, the advertisement of Gumtree was an
invitation to treat. The communication made by Carol to the representatives of Gumtree
amounted to an offer. Hence at this stage no valid contract has come into existence . The
enforceability of the relation shall be determined only once the owners either accept or reject the
offer made by Carol.
Case 2:
As presented in the scenario, Preston made an offer to pay £150,000 to George, if he hires his
son, Devi in their large IT company. This offer was made on April 13, 2015. However, Preston
was unknown to the fact that Devi was handed over the appointment letter on April 12, 2015, a
day before the offer was made. George now wishes to enforce the contract and claim the
determined amount.
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In the present case a valid offer and acceptance was made by the parties, however, it was not
attached with a valid consideration. It has been declared by court in the case of Thomas v.
Thomas (1842) that in order to form a valid and enforceable agreement a valid and lawful
consideration shall be attached with the offer. Further in Lampleigh v. Braithwaite (1615) it was
established that consideration shall not be past in nature, subject to the exception of proceeding
by request.
In accordance to the law laid down in these cases, the consideration being offered is invalid for
being past in nature. The fact that Preston was unknown to Devi's appointment in the company
shall not hold any relevance. Therefore, no enforceable relation can be said to be existing in the
present case.
2.2 APPLY THE LAW IN TERMS OF THE CASE 03 AND 04:
Case 3:
As reflected in the given scenario a man forgot his wallet in the coat and handed over to porter at
the time of entering a restaurant in London. In return of which a receipt was given to the man
which contained an exclusion clause, restricting liability if any valuable is lost from the coats.
After consuming the meal at the time of payment he realized that his wallet was left in the jacket
pocket. He immediately got the coat and found all the money to be missing. He decides to claim
the said amount from the restaurant authorities, who have placed reliance on exclusion clause
mentioned on the receipt.
In order to ascertain the liabilities of all the involved party, it is fundamental to examine the
validity of exclusion clause. In the case of L'Estrange v. Graucob (1934) the court reiterated the
test of incorporation and construction for checking the validity of these clauses. It was also held
in the case that in case of unsigned documents it is important for the parties to effectively
communicate the inclusion of this clause to the other party. It has also been held in Chappleton
v. Barry (1940) that inclusion of these clauses in tickets or acknowledgment receipts cannot be
held to be valid. Therefore, in light of laws laid down, the exclusion clause cannot be considered
as valid as the man was never given a notice of inclusion of this clause. Hence, the restaurant
shall be liable to make the payments for amount of loss sustained by the man.
Case 4:
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Aaron enters into a tenancy agreement with Zehphra for renting a warehouse. Aaron decides to
undertake significant enhancements of the property, in return of which Zehphra agrees to not
raise the rent amount for next 5 years. However, on death of Zehphra after one year, Yeti
inherited the property. He communicated his intention to enhance the rent amount, but Aaron did
not agree to the same. In pursuance to the same Yeti decided to terminate the contract, in
response to which Aaron submits his repair expenses. On refusing to reimburse the amount, Yeti
stated that no such clause was mentioned in the agreement.
It is an established law that in the case of tenancy the expenses of repairs in borne by the
landowner. This is an implied term by custom. In the case of Hutton v. Warren (1836) validity of
terms prevalent in trade was upheld and was considered to be applicable on the parties in the
same as express terms (Heckman, 2011). A similar opinion was reiterated by court in Shirlaw v.
Southern Foundries (1939) and it was observed that these terms shall be considered at par with
other expressly included terms. Therefore, in the present case it is an implied term that expenses
of repair shall be borne by Yeti, irrespective of the fact that it is mentioned in the agreement or
not.
2.3 THE EFFECT OF DIFFERENT TERMS IN THE GIVEN CONTRACTS:
The standardized construction of law is seen, as the contract that exists between the parties
involved that does not allows the dealings such as the policy of have it or leave this.
Case 05: Under this scenario, there is observed right sample and law establishment of
standardized construction agreement while the holder of policy relates to the signing of contract
with the firm related to insurance.
Case 06: Yes, the firm of insurance consists of the rights of finishing the agreement from the
date of beginning as this is visibly provided under the type of proposal that under any car
adjustment while the previous years will result in the agreement ending.
TASK 3
3.1 THE DIFFERENCE BETWEEN TORT AND CONTRACTUAL LIABILITY:
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Definition: There is significant difference present between tort and contractual liability in that
there is a contractual force starts on yearly basis (Brand, 2011). Conversely, tort liability is
defined as the obligation imposed by law.
Explanation:
Typically, contractual pressures are willingly taken into account, whereas pressures related to
tort or implied by the law. This signifies that the Health and Safety Officer has a freedom to talk
about the safety of the workplace and its consequences as he enters into an employment contract
and should follow the obligation. Therefore, the Health and Safety Officer has not been offered
any kind of independence under the tort obligation. Within the employment obligation, Health
and Safety Officer cannot defame other individuals and cannot intrude the belongings of other
individuals(Besley, 2012). Health and Safety Officer will come into a contract with the company
owes the responsibility to the company to communicate the safety concerns with the employees
of the company. While in tort, Health and Safety Officer has a responsibility to encroach to all
the employees. There is a considerable amount of difference between the two. The tort law is
mainly emerged from the writ of trespass. Contractual law is designed primarily from the three
kinds of action like sumps, covenant, and debt. The Health and Safety Officer needs to follow
the liability in contract, whereas liability in tort is depended on fault. Thus, in case Health and
Safety Officer Purchase safety material from the market as later on find that the material is of
poor quality, the officer can sue the market in contract, without proving that the market owner is
negligent.
3.2 THE NATURE OF LIABILITY IN NEGLIGENCE:
Definition: Liability in negligence is described as the absolute liability on specific parties having
no interest to trouble as well as eliminating the need to provide proof of the trouble by the law;
negligence is related with the lack of ability to provide the required amount of care for the
purpose of evading harms to others. The nature of liability is defined in terms of duty of care and
breach of duty.
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Explanation: In the case of Health and Safety Officer, he is accountable for the health and safety
concerns of the company, and the Health and Safety Officer needs to be efficient to consider
himself accountable for the concerns of the company as any employee is injured due to poor
quality stuff of the company. The tort obligations revolve around the obligations offered by law,
whereas the strict risk is on the shoulder of the Health and Safety Officer that might present by a
criminal association (Bentolila, 2013). There is a rule describing precise obligation makes a
personal legally responsive for the injuries and harm caused another employee would lead to
held Health and Safety Officer responsible. In this particular case, the Health and Safety Officer
is responsible for all the concerns related to safety of the company employees and reliable for the
injuries because of the problems in the company. The kind of liability in negligence is a famous
phrase that involves any kind of illegal activities that in case Health and safety officer is
responsible for any sort of injury or harm caused by the company employees that cannot be
evaluated along with regard as an act of tort. Thus, Health and safety officer is liable for the
employees on behalf of the company to pay for the sum of tort liability. The harm caused to the
company employees is not settled will develop a fundamental element of the tort law as the
recoverable sum of funds is relied on the company to the employees along from a single case to
the other one as well as cannot be evaluated the time when harm takes place. Regardless of this
scenario, illegal act is offered as few acts are with no first-class insights of the dynamic
individual, how it is involved in the wrongful conduct along with the absence of care. All such
kinds of conduct are called as the act of negligence. All the liability is emerging from these kinds
of conduct are referred to as liability in negligence.
Duty of care:
Definition: Duty of care is described as the individual who may have a responsibility of care
towards another person for the purpose of ensuring that he/she might not suffer any kind of
damage. The most significant component of negligence is the genuine matter of consideration.
The principle was fundamentally designed in the scenario of Donoghue v Stevenson (Becker,
2014).
Explanation: This may indicate the link is present between Health and safety officer and the
employees of the company that needs to be an obligation for considering the dismal so to
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discontinue from entering to the employment contract with the company, which allows the
officer to be responsible for all kinds of safety, conducts in the company. There are certain
techniques used for the obligation needs efficient formulation: there is a distinct linkage present
among the company employees and Health and safety officer as he needs to take care of all of
their health and safety issues though homogenized principles set by the law for the health and
safety issues within the workplace (Akay, 2014). This duty of care of the Health and safety
officer arrive at the time when workers of the company for which the officer appointed as the
health and safety in charge faces some sort of issues of health and safety like an accident,
damage or harm of the company property for that the employee will be admitted in the hospital
and pay huge amount of bills and the company deduct his/her salary. This particular damage to
the company employee is from an economic viewpoint. Therefore, the lack of duty of care of the
Health and safety officer causes tangible damage to the worker and lead to monetary loss.
Breach of duty:
Definition: This is related to a scenario in that a single person or a company has a duty of care
towards the other person or company; though they are not successful in fulfilling the obligation
as promised. This might considered as a breach of duty (Appleton, 2015).
Explanation: Regarding the case of Health and safety officer, there are a number of elements
required to be taken into account by the law. The company and the newly appointed Health and
safety officer both have the considerable duty to perform like (donogheu vs Stevenson 1932).In
the scenario of Health and safety officer, he performs his duty, however, in case any employee is
harmed by the company property of another employee so the company and the officer would be
responsible and bear legal outcomes. If the Health and safety officer would not perform his duty
that would lead to a breach of duty and he has to face a lawsuit by the employee who face injury.
Nonperformance of the duty under the contract results in breach of duty or contract. In that case,
3.3 HEALTH AND SAFETY OFFICER BEING VICARIOUSLY LIABLE:
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