Aspects of Contract and Negligence

This report thoroughly examines aspects of contract and negligence law within a business context. It begins by defining essential elements of a valid contract, including offer, acceptance, intention, consideration, and free consent. Different types of contracts (face-to-face, distant, oral, written) and contractual terms (express, implied, exclusion clauses) are analyzed. Two case studies are presented: one involving Mary, who purchased a faulty television, and another concerning Paul, who was injured by a negligent employee at a cinema. The report applies contract law principles to Mary's case, evaluating the validity of exclusion clauses and available remedies. It contrasts liability in tort with contractual liability and explains the elements of negligence (duty of care, breach of duty, causation). The concept of vicarious liability is explored in relation to Paul's case, considering the cinema's potential liability for its employee's actions. The report concludes by summarizing the key legal principles and their application to the presented scenarios.

ASPECTS OF CONTRACT AND
NEGLIGENCE FOR BUSINESS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Essential elements of contract..........................................................................................1
1.2 Discussing and analyzing the different types of contracts...............................................2
1.3 Analysing different types of contractual terms................................................................3
TASK 2............................................................................................................................................4
2.1 Applying essential elements of contract to the Mary case...............................................4
2.2 Applying law on terms to Mary case................................................................................5
2.3 Evaluating the remedies available to May........................................................................6
TASK 3............................................................................................................................................7
3.1 Contrasting liability in tort with contractual liability.......................................................7
3.2 Explaining nature of liability in negligence.....................................................................7
3.3 How business can be consider as vicariously liable.........................................................8
3.4 Applying elements of tort of negligence in the Paul case................................................9
3.5 Applying law on vicarious liability to Paul case..............................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Contract is the written and spoken agreement between two or more parties. In order to get
the benefit of all legal laws and regulations, it is being required by the parties that is form
contract (Contract definition, 2015). This is because, if it is not formed then in the given
circumstances it will become difficult for the individual with regard to claim for any type of
damages which is being incur by it due to the non compliance of terms and conditions of
agreement by another party.
In addition to this, while forming contract parties also have to improve their knowledge
and understanding regarding the essential elements which are associated with it. It is due to the
fact that lack of knowledge and understanding regarding the same will lead to hamper the
validness of contract. This report is based upon the case scenario. In this regard, the report will
showcase the application of contract in the given business scenario. In addition to this, the report
will also provide detailed description regarding the principles of liability in negligence.
TASK 1
Induction report has been produced for the new employees and it covers following points.
This report will help in enhancing legal provision related knowledge of new employees in an
effective manner.
1.1 Essential elements of contract
There are varied essential elements identified which needs to be consider by the
respective parties with an aim to form the valid contract. The detailed explanation regarding the
same is depicted in below: Offer and acceptance: The contract can be consider as valid if offer as being made by
one party is being accepted by another without any kind of pressure. The formation of
contract starts with an offer. However, it ends when it is being accepted by another party
or individual (Edwards, Edwards and Wells, 2008). The acceptance made by the party
depict that he/she is satisfied with all the conditions as being specified in the contract.
Thus, it can be said that offer is the proposal which is if accepted then it becomes a valid
contract. The offer made by party differs from invitation to treat (Pharmaceutical Society
of Great Britain v Boots [1953]). Intention to develop the legal and authenticate relationship: It is another most crucial
element of valid contract. This depict that the contract formed will be consider as valid if
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parties shows their intention with regard to enter into the legal relationship. However, it
has been evaluated that the agreements which is of domestic and social nature do not
contemplate the legal relationship (Harpwood, 2009).
 Capacity of parties: The parties to whom which contract is made must be competent. In
this regard, it can be said that the parties will be consider as competent if they do not
possess following characteristics:
1. Minor
2. Person of unsound mind or insane
3. The individual which has been disqualified by the law. Consideration: In simple words consideration is called as something in return. For the
parties it is essential that they must specify some consideration in return of fulfillment of
terms and conditions of contract. It is not necessary that party must set their consideration
in the monetary terms only (Essential elements of valid contract, 2015). Thus, it can be
stated that consideration can also be set in non monetary terms also. Free consent: It is another most important element of contract. This element state that
the parties must agree upon the terms and conditions of contract in a manner in which it
is stated. However, the consent with regard to enter into the legal or contractual
relationship will be consider as valid if it is not caused by undue influence, coercion,
fraud and misrepresentation etc (McKendrick, 2012).
 Possibility of performance: The contract cannot be enforceable by law if it possesses the
act which is impossible to perform in both physical and legal way. Overall, it can be said
that by considering all these given elements contract the validness of the same can be
maintained.
1.2 Discussing and analyzing the different types of contracts
There are numbers of contracts identified which parties can choose in order to enter into
the legal relationship. Each contract possesses their own characteristics and has the different
impact on the parties. The type of contracts identified is described in below: Face to face contract: It is the type of contract in which terms and conditions of contract
are decided by parties through mutual discussion and agreement. In the given form of
contract, presence of all members who are entering into legal relationship is necessary.
Here, the offer as being made by one party is quickly accepted by other (Rosly, 2010).
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Thus, it can be said that it is very less time consuming process of forming the contract.
Furthermore, in the given type of contract parties instantly make decision that whether
they want to accept the offer as being made by one party or not. Distant contract: It is another type of contract which is completely different from the
above mentioned contract. In this contract, parties do not physically meet with each other.
Hence, in order to form the contract they take assistance from the means like telephone,
email and postal (Zoll, 2012). However, the validness of the given contract is determined
if all the rules relating to the postal are applied to the same. Oral contract: This contract is formed when parties make verbal discussion. There are
huge uncertainties associated with the given type of contract. This is because, in oral
contract parties do not possess any proof or evidence of contractual terms and conditions.
In order to protect the respective parties, dispute remedy is provided to them after
considering the situational approach which are associated with them (Miller, 2011).
 Written contract: It is the most common and formal form of contract. Here, contractual
terms are described by the parties by preparing the deed with regard to the same. Parties
can use this deed in order to deal with the situation that may tend to occur in the future.
Thus, in the written contract parties have the proof or evidence of their contractual
relationship. This evidence can be used by the parties in the circumstances when any of
party members denies in fulfilling the terms and conditions of contract.
1.3 Analysing different types of contractual terms
In accordance with the English Law, contractual terms are the standard guidelines which
need to be follow by the parties. For parties it is essential that they must abide with all the terms
and conditions of contract (Terms of contract, 2015). However, if not abided then in this
condition the respective party has to pay damage to another party who has incurred losses or
damages due to non compliance of terms and conditions of contract. The detailed explanation
regarding the different terms of contract is detailed in below: Express terms: These are being consider as the terms which is being described by the
party either in written and oral way. The given terms are also included in the draft which
party prepares. The express terms are further bifurcated in the following way:
1. Conditions: These are being regarded as the basic or important terms of
agreement and they are directed associated with the objective of contract
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(Poussard v Spiers (1876) 1 QBD 410). Here, parties will tend to be reside in
the default position if they fail to fulfil the terms and condition of contract.
Thus, for the contractual party it is very necessary that they must abide with all
the terms as being given in contract (Edwards and Ogilvie, 2012).
2. Warranties: These are the ancillary terms which depict about the obligations
which need to be fulfilled by parties (Bettini v Gye 1876 QBD 183). Here, party
who will not fulfil the warranty will be consider as fault. As the result of it, the
respective party is obliged with regard to pay the damages to another one.
3. Innominate terms: The given terms neither resides in the category of warranty
nor in condition. Here, damages are given to the parties on consideration of fact
that the innocent party is derived from all the advantages of contract. Implied terms:These are the terms which is decided by the law or court. The main aim
behind the formation of given terms is to provide protection to both party from unfair
practices. The given terms are the part of contract even though it is not expressively
described in the body of contract (English, Cohen and Balcom, 2012). Hence, it is right to
say that the given terms has its importance in agreement.
 Exclusion clause: This clause provides protection to the party who is in fault in the eyes
of law. This clause is the part of unfair terms. With the help of given clause, party who is
in default can save itself from the payment of damages. Overall, it can be said that by
including these all given terms in contract, the validity of the agreement formed can be
maintained.
TASK 2
2.1 Applying essential elements of contract to the Mary case
Case scenario
As per the given scenario, Mary has entreated in the departmental store with an aim to
purchase the television. Mary has purchased the television and at the timer of taking the product
Sales assistant of firm has called Mary and told her that she needs to sign some agreement. May
has signed the agreement without reading the terms and conditions of the same. On reaching the
home, Mary turned the television but it exploded. Due to this, Mary got injured.
Applicability of essential elements
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There is application of four different type of essential elements of contract is being seen
in the given case scenario. It consists of offer, acceptance, intention and consideration etc. On
the basis of given case scenario, it is identified that departmental store had given offer to Mary
by giving agreement of deed (Hunt, Kessler and Mawer, 2012.). This offer was accepted by her
and in order to show her acceptance she has signed the deed which is being given by the sales
assistance of company. The whole thing also showcases that all parties have the intention with
regard to enter into some legal or contractual relationship. In addition to this, another essential
element of contract which is of consideration was also applied to the given case. Here, the
payment as being made by the Mary will be consider as consideration for the departmental store.
In the similar way, the television set which departmental store had given to Mary was considered
as the consideration for her.
Validity of contract
In the given case scenario, applicability of different essential element of contract is seen.
Thus, it is right to say that the contract which is being made between Mary and departmental
store is considered as valid (Johnson, 2013). This is because, the given case satisfies all the
essential elements of valid contract.
2.2 Applying law on terms to Mary case
Different law on terms are applying to the Mary case. On the basis of analysing the given
case, it is identified that the departmental store has specified two different type of clause in the
deeds. It is of clause 9 and 11. Here, the clause number 9 depict that the company will not be
regarded as liable for the replacement or repair of faulty product. Furthermore, in the
circumstance when the customer gets faulty product then he/she will have to bear all the cost
which is associated with the respective good (Oya, 2012). In the similar way, clause number 11
states that firm will not incur liability to pay for the damages in the circumstances when injury is
being caused to the customer because of the faulty product. With the help of these given clause,
departmental store which is named as Sales for Us is saving itself from the payment of damages.
As per the Unfair Contract Terms Act 1977 provisions, the exclusion clause will be
consider as valid if it will get full support from legisatory aspects. However, in the given case
clause number 11 will not be consider as valid. This is due to the fact that the Sales of Goods Act
depicts that it is the responsibility of seller that it must provide high quality of goods and services
to its customer for the purpose to reduce to the possibility of injury. Furthermore, the consumer
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law and Health and Safety Act also possess the similar type of obligation (Rush and Ottley,
2006).
Overall, it can be said that the exclusion clause which is being inserted by Sales for Us
departmental store will not consider as valid. It is due to the fact that, the given exclusion clause
is imposing restriction on the firm liability to pay for the damage in the case of personal injury.
2.3 Evaluating the remedies available to May
An evaluation is being carried out with regard to the remedies which are available to
Mary. In the given case scenario, Mary got injured when television set was explored when she is
turning it. The incident was happened in the same evening when Mary had purchased the
television set. Due to this, Mary arms had burned. Due to her injury, she could not work for three
weeks. Mary is self employed which mean that she could not earn for more than three weeks.
Thus, it can be said that because of her injury she had incurred huge financial losses.
After recovering from the injury, she had again went to the departmental store and had
claimed for the damages (Godden and et.al., 2013). Here, she had claimed that departmental
store must replace her faulty television as well as she had also claimed that the store must
provide her financial compensation for the tenure in which she had not earned income.
On considering the exclusion clause associated with the given case, it can be stated that
both given clauses are not applied to the given case as they are not considered as valid. This it is
the liability of departmental store that it must pay remedy to the Mary which is being demanded
by her. Overall, it can be said that Mary is entitled to get all the damages which is being caused
to her (Appelbaum, 2014). Thus, it is the duty and responsibility of departmental store that it
must give payment of all the damages which is being caused to her.
TASK 3
3.1 Contrasting liability in tort with contractual liability
There is a difference exit between liability in tort and contractual liability. Following
table describes the difference that exists between both the given concepts:
Basis Liability in tort Contractual liability
Reason behind the
occurrence
This occurs when party fails to
fulfill its obligatory roles and
responsibilities in an effective
This occurs when party will
not give satisfactory
performance as per the terms
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manner and because of this injury is
being caused to innocent party.
and conditions of contract.
Relationship between the
parties
Here, the relationship between the
parties is imposed or specified by
law (Bowyer, 2000).
Here, parties enter into
relationship through their
mutual agreement or consent.
Basis relating to damages In the given case, parties do not
prepare any kind of deed. Thus, in
the given case party who is in fault
has to pay reasonable damage to the
respective party.
Here, damages are given to the
parties on the basis of
contractual deed.
Impact on aggrieved
party
Here, damages are given with an
aim to bring claimant in the
condition where any kind of
negligent action was not being
carried out by the parties.
The main aim of contractual
obligation is to bring claimant
in the condition wherein
satisfactory performance is
being given by the party.
3.2 Explaining nature of liability in negligence
Negligence is considered as the action in which damages is being caused to the innocent
party. With an aim to make claim for the recovery of damages following principles are identified
which needs to be fulfilled by the claimant party. Duty of care: This principle states that it is the duty of defendant that it must make efforts
with regard to reduce the possibility of injury to the claimant (Donoghue V Stevenson).
In the case of Donoghue V Stevenson, Stevenson resides in duty of care position. Thus,
he is responsible for providing high quality of beer to its customers. Breach of duty: This principles is applied when defendant will not fulfill its general roles
and responsibilities in an effectual manner. As a result of it damage is being caused to the
innocent party. In the Donoghue V Stevenson case, decomposed snail incurred from the
drink which is severed to the claimant. In this case, Stevenson has breached his duty of
providing high quality of goods to its buyer (Harpwood, 2009).
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 Causation: This principle depicts that claimant must be injured due to the ineffective
action on the side of defendant. Here, primary reason of injury must be tortuous actions.
In Donoghue V Stevenson case, Donoghue got injured due to the negligence of
Stevenson. Thus, here Donoghue has full right with regard to claim for the damages
which is caused to him.
3.3 How business can be consider as vicariously liable
Vicarious liability is the type of liability in which liability is being imposed upon the
employer of firm for any ineffective action which is being carried out by the employees. In
accordance with the given context, following condition is identified which is if fulfilled then
business will be consider as vicariously liable:
 The party who is found as negligent must possess the status of employee.
 The action of negligence must be carried out by employees during employment. There must be employer and employee relationship exist between the individual (Miller,
2011).
Case study of Film Flops
In the particular case, Paul has decided to purchase ticket from cinema. Here, before the
film had started he has decided to purchase some popcorn from the shop. During the given time,
employee of Film Flops had accidentally poured hot coffee on Paul and due to this he got
injured. The manager of cinema was called after this incident and through investigation it was
explored that the employee was intoxicated.
On analysing the given case, it can be said that business will be consider as vicariously
liable for the ineffective action of its employee. This is because, it is the duty of employer that it
must ensure that its worker must not consume any toxic or alcoholic drink during the course of
employment (Edwards and Ogilvie, 2012). Furthermore, it is the duty of employer that it must
form such type of policies which established the proper distance between customers and
employees. Thus, in the given circumstances it can be said that Film Flops will be consider as
liable with regard to pay for the damages which is being caused to the Paul due to the negligent
action of its employee.
3.4 Applying elements of tort of negligence in the Paul case
Following elements of tort of negligence are applied in the case of Paul:
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 Duty of care: Here, employees of Film Flops reside in the position of duty of care. In this
regard, they have responsibility with regard to protect visitors from any of the ineffective
circumstances. Breach of duty: The employees of Film Flops were found as intoxicated. Thus, the given
action depict that employee has breached its duty.
 Causation: Here, Paul got injured due to the negligent action of Film Flops employee.
The given case satisfies all the principles of negligence (Rush and Ottley, 2006). Thus, it is right
to say that Paul has full authority with regard to claim for the damages which is being caused to
him due to the negligent action of Film Flops worker.
3.5 Applying law on vicarious liability to Paul case
Following principles identified which is if satisfied then the party who currently resides
in the negligent position can save itself from the payment of damages: Volenti non fit injuria- This principle applies when claimant voluntarily put
himself/herself in the circumstance which is risky and causes possible damage to the
workers. Contributory negligence- All the provisions associated with the contributory negligence
is applied when both claimant and defendant are equally involved in the action which is
negligent (McKendrick, 2012).
 Ex turpi causa- This provision depict that the defent will not be consider as liable for
his/her act if its action will not consider as faulty (Clunis v Camden and Islington Health
Authority [1998] 3 All ER 180).
Film Flops can avail the benefit of Ex turpi causa. This is because, at the time of
negligent action employee was intoxicated and thus employer cannot control the action of its
employee during the given situation.
CONCLUSION
Articulating all the facts from the given report, it can be concluded that in order to
maintain the validness of the contract formed, it is being required by the parties that they must
improve their knowledge and understanding regarding all the essential elements. Here, by
complying with the give type of activity, party can form valid contract.
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In addition to this, by specifying varied terms of contract bindings and obligations can be
created upon the respective parties. These terms can be used by the parties in the form of
evidence. Furthermore, by improving the knowledge regarding the elements associated with the
tort of negligence, respective party can save itself from being the payment of damages.
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