Comprehensive Analysis of Contract and Negligence in Unit 5: Law

This report analyzes the core elements of contract law, including offer, acceptance, consideration, intention, certainty, capacity, and lawful object, differentiating between various contract types such as unilateral, bilateral, simple, and specialty contracts. It explores the significance of express and implied terms, conditions, and warranties within contracts, and the implications of breach. The report then examines a case study involving a faulty laptop purchase, assessing the presence of a legally binding contract, the potential for implied warranties, and the application of the Magnuson-Moss Warranty Act. Furthermore, the report delves into the concept of negligence as a tort, contrasting contractual and tortious obligations, and detailing the principles of legal liability, duty of care, and the doctrine of res ipsa loquitur. The analysis includes the application of these legal principles to real-world scenarios, offering insights into consumer rights and legal responsibilities.

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UNIT 5
Contract & Negligence
1.1
The elements of contract law are an inevitable feature of common law, which follows the system
of precedent (Poole 2010). A contract is an official agreement between two or more parties,
which can be written or oral. It does not necessarily have to be formal. The idea of a contract is

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not just for ‘one off’ contracts, and can be long-term relationships or comprised of hundreds of
individual contracts (Poole 2010).Not all agreements are contracts, in order for there to be a
contract that is enforceable by law the agreement must meet the following elements or criteria:
Offer – In order for a contract to be valid an acceptable there must be an offer, without one
neither party is legally bound. It is an expression to be legally bound on certain terms, without
further negotiation. There must be two or more parties involved and the person being offered
must know what is being offered to them and also what the person offering expects to get in
return. This must be distinguished from an invitation to treat, which is an expression of
willingness to negotiate.
Acceptance – Once an offer has been made there must be acceptance on the offered terms from
the other party. There would not be a contract until both parties have agreed upon the terms,
rules and regulations. Negotiations must be finalised, with acceptance being made verbally or
written. They must have agreed upon the same terms in the same sense. Postal acceptances are
made when the letter is posted, not received.
Consideration – In order for the contract to be legally valid there must be an exchange, in which
something is given back in return for something. E.g. if you were to buy a TV from the shop, you
enter into contract for purchasing the TV with the consideration being the money you pay for it.
Intention – There must be the intention by both parties to be have relations of a legal nature.
Certainty – The terms, rules and regulations of the contract must be stated clearly, obviously and
understood by all parties involved.
Capacity – All parties involved must be capable to enter into the contract legally. Both of the
parties must be competent enough to be involved in contract. Miners, people with mental
difficulties and people being misrepresented are examples of parties that would be considered
incapable of being contracted by law.
Lawful Object – The purpose of the contract must be stated and must be legal. For example it
cannot be fraudulent or against the law.
1.2
A unilateral contract is one in which the offeror makes an offer that can only accepted by
performing a stated act. This is different to a bilateral contract in which all parties involved
exchange mutual promises. Unilateral contracts are most commonly rewards, E.g. if you get a
‘hole in one’ in a golf course then you enter into a contract to win a free round.
A simple contract is one in which the evidence is in writing or made orally, but is not under seal
or of record. Contracts of this nature are frequently entered into without proper thought or
deliberation and therefore there must be a good cause, consideration or motive for it to be
legally bound. A speciality contract is different, since it is signed, sealed and delivered and where
both parties keep a written copy of the agreement, such as when an individual borrows a
mortgage from a bank. This is considered as more formal and constitutes higher dignity than
simple contracts, making it more enforceable by law.

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Verbal contracts can be made when terms have been offered or agreed by means of spoken
communication between two or more parties. This is enforceable unless it is fraudulent. Some
contracts however cannot be made verbally; many must be made in writing, such as mortgages.
In written contracts, terms are documented and written, making it easier to understand, settle
disputes and follow. Contracts can be made in certain cases without any documentation. In
implied contracts responsibilities arise from an agreement that is not expressed in writing or
orally. This is where the contract is assumed to be formed, such as a customer assuming
warranty for certain purchases.
1.3
The terms involved in a contract set out the responsibilities or duties of each party under the
agreement. The terms will either be express terms or implied terms. Different types of terms
hold different levels of importance.
The most significant terms in an agreement are the conditions. These are the terms to which the
contract must strictly follow and if they are broken the contract becomes void. A voidable
contract remains a valid contract until the party who has right to complain takes steps to have it
set aside (Poole 2010 p.20). If one party breaks the conditions, then the harmed party decides
whether to terminate the contract or to carry on with the agreement anyway.
A warranty is a term that is less fundamental to the contract than the conditions. If broken, the
harmed party can claim harms or damages but will not be able to revoke the contract that was
made. If a condition is false or if any of the conditions are breached then the wronged party will
treat the contract as voidable. Terms can be implied even though they are not written formally,
such as ones that are implied by law, fact or custom (McKendric 2011). Sometimes it is hard to
distinguish whether a term is a condition or a warranty, and a term may be intermediate.
2
There was a legal contract in place since the sales assistant offered the laptop through the form,
which Carol accepted by filling the form out. The terms and conditions were stated explicitly on
the forms for Carl to sign and even though Carol chose not to read them there was still a legally
binding contract when she signed the form.
Even though in the terms and conditions ‘ARBOS’ stated the explicit condition that they accept no
liability for the replacement or repair of faulty products, Carol may be able to argue that she
assumed a short-term warranty would have existed as an implied term. Since she did not read
the terms and conditions fully when she first signed the contract, and since has not had much
time to read them in her spare time, this means that there may not be certainty, an essential
element of a contract. Since for a contract to have certainty it would mean that both parties fully
understand the conditions of the agreement.
Carol would have assumed that there was a warranty on the laptop, especially for as short a
period of time as a week, when she signed the terms and conditions, meaning that the week
warranty was an implied term. This implied term would be contractual since it is fairly obvious
to both parties. The court can rule the implied term as being a significant component of the
contract even though ‘ARBOS’ did not state it in their terms of conditions. Both parties need to
understand the conditions of the contract in order for it to be legally binding. Since Carol did not

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read the terms the validity of the contract is questionable. Therefore ‘ARBOS’ should pay
damages for a new laptop for Carol. However since it is not a breach of a fundamental condition,
purely a breach of warranty, Carol must carry on the duration of the contract as originally
planned and does not have the right to terminate the contract.
The Magnuson-Moss Warranty Act is an example of a law that governs consumer warranties on
products. The act prohibits anyone who offers a written warranty from disclaiming implied
warranties. This means that consumers will always get the basic protection of an implied
warranty. Since a week was such a short period of time, the warranty on the laptop would be
assumed, and Carl should have the right for damages and ‘ARBOS’ should be forced to pay to
repair the laptop.
The law says that even though it may not be included in the contract if it would not make
commercial sense without it, then the term is still existent as an implied term. It would not make
any sense for warranty to not exist after a week of purchase. Since it is a major technical fault on
the laptop this would not ever be reasonably expected after a week of purchase. This is implied
by fact, since it is the reasonable expectation of both parties for the laptop to work for longer
than a week. This can therefore override the explicitly written clause in the contract.
3.1
A liability in tort is the legal obligation of one party to a victim as a result of a civil wrong or
injury. Generally contractually obligations are voluntarily undertaken, where one party owes a
duty to the person they are in contract with. These people have e legal duty to act responsibly, as
the contract states. Tortious obligations however are different, since the law imposes them, just
like how we are all in tort not to cause physical harm to an innocent person. The law gives rights
to parties and there is a duty imposed to respect these rights. When a tort is committed, the
person committing the wrongdoing must face the remedy of damages and pay harms to the
victim.
They are similar since they are both civil wrongs and they both get resolved in court in search of
a remedy. However, in a tortious claim there may not necessarily have been any previous
transactions or relationships with the parties involved, whilst in a contractual claim the parties
involved would have been in contract with one another before the court case. In both, the victim
must have to prove their loss in order to claim damages.
In the case, David was in contract with ‘Express lines’ to be travelled safely on the bus, yet this
condition was broken and so he can claim damages and has the right to revoke the contract. The
contract will be void, treated as through it never existed in the first place.
3.2
In legal terms, to be liable for something it means you are responsible in some way for an
outcome that violated the law. You must have had the intent to violate the law to be liable for the
wrongdoing. However negligence can be applied when a person fails to make the appropriate
decisions. This means that someone can be held accountable even when there was to intent to do
wrong. Negligence is the failure to exercise the necessary amount of care to prevent the damage
caused. The modern law of negligence was established by Donoghue vs Stevenson (1932) AC 562
For example, someone may be under the influence of alcohol whilst at work and hurt someone

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by accident, yet since they were drunk they were acting without due care. Sometimes someone
has strict liability, where the party is responsible for damage caused however they act.
Commonly manufacturers have strict liability, such as if one of their products does not work they
are liable, no matter what the reason is.
Normally you would consider what a normal person would have done in the same situation, and
then compare it to what happened to determine if there was negligence or not. In order for the
court to assume negligence the person must have had a legal duty to act with care in the first
place. They must have broken their duty to act with care and as a result caused some form of
harm to the plaintiff. The damage causes must not be too minuscule. If so then the court will
presume negligence and damages will be awarded. Under the doctrine ‘res ipsa loquitur’, the
Latin term for ‘the thing speaks for itself’, this shows how some acts assume negligence, since
they are obvious and the law already implies negligence. Such as swinging a chainsaw around
and accidently injuring someone, this is obviously negligent behaviour.
3.3
Vicarious liability refers to a situation where someone is held accountable for the actions or
omissions of another person. It is a doctrine of English tort law that imposes a strict liability on
employers for the actions of their employees (Giliker 2010). E.g. breaching of regulations, such as
copyright restrictions, harassing or physical harm and bullying by employees.Managers can be
held responsible for ensuring that their employees act lawfully when under their supervision.
Business can be held liable for the actions, or lack thereof, of their employees, such as employees
may physically harm a customer in a store leaving the company settling fees. In such instances,
charges will be made made unless it is demonstrated that all sensible steps have been taken to
diminish the risk. It does not matter what size the business is, however what is considered
‘reasonable’ depends on the circumstance and type of business.
Businesses should take preventative action to avoid becoming vicariously liable. It is important
that they consider their businesses culture, examine their gender, race, sexuality or religious
imbalances or conflicts. Businesses must appropriate set a level of monitor and control of their
employees as well as appropriate levels of training and education in order to minimise the risk of
unlawful actions occurring. Vicarious liability encourages accident prevention through
financially incentivising businesses into ensuring the safety of their employees and others
around them. Since the employer makes a profit from the activities of their employees he should
also bear any losses that those activities cause. In order for a liability to be established a tort
must have been committed. The person committing the tort must have been an employee.
Working hours must be appropriate, for example if a bus driver was over-worked for too many
hours and fell asleep whilst driving and crashed, the bus company would be vicariously liable for
the damages.
In the case where David is bringing a claim in negligence against ‘Express Lines’ or the ‘Driver’,
the driver definitely acted negligently, since he decided not to take a break. ‘Express Lines’ will
be vicariously liable for his actions since he represents their company. They had taken steps to
prevent this through their company policy of requiring breaks, yet this was obviously not
reasonable enough to prevent the crash.
4

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In order for the tort of negligence to be applied to a situation it is first best to established
whether there was a duty for the defendant to act with care. Under the legal doctrine of premises
liability, businesses are responsible for keeping their property safe from defects and dangerous
conditions, which might cause injury to someone. Since the building had the slippery floor, and
was owned and occupied by ‘The Bell Hotel’, to see if there was negligence we must see if they
took reasonable steps to prevent an accident happening. The Workplace regulations 1992
requires floors to be suitable and in good condition. The Health and Safety at Work Act 1974
requires employees to ensure the health and safety of all employees and anyone else affected by
their work, so long as is reasonable. This would involve balancing the risk against the measures
needed to control the risk, in terms of money, time and trouble.
Since there were no signs warning people entering the building with the slippery floor this leads
us to believe that not enough effort was put in by ‘The Bell Hotel’ to prevent to accident. In order
to determine whether ‘The Bell Hotel’ was acting negligently we need to identify whether they
knew or reasonably should have known about the slippery floor. If they did then they were
negligent and would face charges.
Whether ‘The Bell Hotel’ was negligent or not depends on how long the floor was slippery for. If
the cause of the slippery floor was only there for a minute, for example, then ‘The Bell Hotel’
would not be expected to be liable for the fall. Yet if the floor had been slippery for a long time it
would be the fault of ‘The Bell Hotel’, since they would have been expected to prevent problems.
However, she has been given medication that should only be taken with food and failed to follow
the instructions properly. Since this could have contributed towards the fall and she herself
could have taken more reasonable steps to prevent the fall, the strength of her argument is
reduced.
It is ‘The Bell Hotels’ legal obligation to keep their premises safe. If it were the fault of one of
their employees for the floor being slippery, then vicarious liability means that ‘The Bell Hotel’
will be held accountable, not just the employee who made the spill. Since they own the property
The Bell Hotel holds this vicarious risk. Whether or not the hotel took ‘reasonable steps’ to
ensure the safety of their premises will be decided on a ‘case-by-case’ basis, since what is
considered ‘reasonable’ for a large hotel will be different for a small hotel.
References
Poole, Jill., 2010. Textbook on Contract Law. United States, New York: Oxford University Press.
Giliker, Paula., 2010. Vicarious Liability in Tort: A Comparative Perspective. Cambridge University
Press.
Donoghue vs Stevenson (1932) AC 562
McKendrick, Ewan., 2011. Contract Law. England:Palgrave Macmillan