Legal Report: Contract and Negligence Law with Case Studies

This report provides a detailed analysis of contract and negligence law. It begins by outlining the essential elements required for contract formation, including offer and acceptance, consideration, capacity, intent to create legal relations, and privity. It then discusses various types of contracts, such as distance selling, face-to-face, and written contracts, and applies these elements to specific scenarios. The report further examines contractual terms, including expressed, implied, innominate, and exclusion clauses, along with their interpretations. It contrasts contract and tort liabilities, focusing on the elements of negligence, defenses, and vicarious liability, with references to key cases like Donoghue v Stevenson and Ryland v Fletcher. The report also explores the duty of care of occupiers and the validity of exclusion clauses. This report, which is available on Desklib along with other study resources, offers a comprehensive overview of these crucial legal concepts, making it an invaluable resource for students studying law.

Aspects of Contract and Negligence

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Key essential elements which require formation of a contract with its importance.........1
1.2 Discussing the main types of contracts............................................................................2
2.1 Application of above element in the specified scenarios.................................................3
D2...........................................................................................................................................4
TASK 2............................................................................................................................................4
1.3/2.2 Analyzing terms of contract and applying their interpretation to the respective cases4
2.3 Effect of Expressed and Implied terms in reference to case............................................5
M1: In case of no negligence, is exclusion clause valid and why?........................................6
D1: “Exclusion clauses are valid, regardless of when introduced to a contract”...................6
TASK 3............................................................................................................................................7
4.1 Elements of Tort of negligence and state possible defenses as per the case....................7
3.1 Contrasting nature of liability in Contract with tort liabilities.........................................8
3.2 Liability in negligence with reference to Donoghue v Stevenson 1932...........................9
M2: Ryland v Fletcher 1868...................................................................................................9
TASK 4..........................................................................................................................................10
4.2 Bill liability for negligence and is XYZ held vicariously liable....................................10
3.3 Vicariously liability provisions......................................................................................10
D3 Occupier's duty of care...................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
The aim of this report is to draw light on two different legal aspects one is contract and
other is negligence. Contract binds people into a legal agreement which needs to be complied by
the parties that are entering into it. This report herein is presented to introduce the law of contract
with a clear emphasis on the key elements whose persistence determines the validity of a
contract. The aim of this report is to draw one's attention on varied types and terms of contract
which determine the legality aspect of a contract. The report has made a sharp contrast among
tort and contractual liability. Moreover, the report showcases the tort law principles and nature of
liabilities in negligence. The report has made detailed discussion on the degree of liability that is
lying on owner under the term vicariously liable.
TASK 1
1.1 Key essential elements which require formation of a contract with its importance
A contract is an agreement that led to a rise of an obligation which is enforceable or
recognized by law. It is a legally binding agreement in between at least two parties that are valid
to contract.
It is important to take into consideration the following elements during the formation of a
contract-
1. Offer and acceptance- Offer is a promise to do or to not do something specified in clear
terms that may or may not be accepted by another. Offer is a willingness expressed by
someone to enter into a specified contract. It is entered with intent to be binding once
accepted by the person to whom it is being addressed. The significance of offer is that
when it is accepted, contract is formulated (Goldberg and Zipursky, 2007).
In addition, to offer acceptance it may be rejected, a counter-offer may be made, the offer
may be lapsed or offeror may withdraw back its offer in a way that it is no longer
available for the acceptance.
Acceptance is when the offeree provides its assent to an offer. Acceptance is a final and
unqualified expression of affirmation to the terms of offer. Acceptance holds no legality until it has
been validly communicated to the offeree. Acceptance may be written, oral or implied by way of
offeree conduct (Collins, 2003).
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2. Consideration- As per the general rule, a promise is not binding as a contract unless it has
been supported by consideration. Consideration is something that serves value for a given
promise and is required to make the promise enforceable as a contract. Consideration
should be sufficient but need not prove to be adequate.
3. Capacity to contract- For entering into a contract, it is important for all to hold legal
capacity to do so. This makes it imperative for parties entering into contract that they
cannot be bankrupt or minor.
4. Intent to create legal relations- Agreement though assisted by consideration is not
binding until the contract made is without an intention to make it legally binding on them.
Parties entering into contract must have the intention to that offer and acceptance which
shall be binding upon them. There is a presumption that for entering into a commercial
contract, parties are required to be legally bound to it.
5. Privity of contract- The doctrine of privity of contract consists of two general rules where
at first, third party is not legal to proclaim his rights for contract to which he is not a
party. Secondly, it cannot sue upon for non-performance of a contract in order to gain its
promised performance (Schwartz and Scott, 2003).
The term Offer shall not be confused with the term “Invitation To Treat”. While offer is
just a mere expression of intention to do or not to do some act, Invitation to treat on the other
hand is merely an invitation for customers to submit an offer. Unlike offer, it lacks the intention
to be bound by it. Invitation to treat often arises in situation where there are pre-contractual
negotiations, store displays and advertisements between parties.
In case of Bill advertisement in trade Journal to which Cathy negotiated, the revising of
price and acceptance of earlier quoted price of Cathy @£80000 shows an invitation.
1.2 Discussing the main types of contracts
There are different types of contracts which have been identified by the parties
contracting formed to enter into a legal contract. Contract rule vary differently depending on the
type of contract.
1. Distance selling contracts- Such contracts are entered by parties who are not physically
present at the same place to initiate the contract. The validity of contract has been
signified by the postal rule. In this type of contract, the offer is deemed to be accepted
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only when it has valid means of communicating the same to the offeree. Further, party
who serves the offer shall stipulate the time period within which offeree can seek to make
acceptance to the offer. Online selling is the most common example of online selling
(Havighurst, 2000).
2. Face to face contracts- Here, in this type of contract, all conditions of agreement are
determined through verbal communication. Parties are physically present at the same
place while undertaking the contract. In such type of contract, it becomes difficult to
gather evidences regarding exact terms and conditions as expressed by individual while
entering into a contractual relation. This is because of non-existence of written proof to
determine its validity. Often in such contracts, quick responses are recorded otherwise it
shall be considered to be lapsed. The case of retail purchasing is also a type of face-to-
face contracts.
3. Written contracts- The process of writing down terms and conditions of contract and
getting it signed by both the parties that are undertaking obligations are specified. This
written formation is specified as a contract deed. However, any conflicts arise the deed
can be used to determine the justification. Some contracts are lawfully bound to be
entered in written form, like Copyright contracts (Gray, 2010).
In order to make the contracts enforceable, it is important for it to lie within any of these
segments and to define their legal or contractual relation between their parties.
2.1 Application of above element in the specified scenarios
The contract offering made by Bill in case 1 was general in nature. The advertisement
presented in a specialist trade Journal was an open offer to which Cathy approached to purchase
the product in £80000, subsequently Bill replied to the offer by providing her with an offer of
£90000. By gaining no response from Cathy, Bill sent her a mail accepting her offer of £80000.
The rule as per court of law has specified that you are to accept an offer; you must accept
the offer exactly without any further modification, if you alter the offer in any manner or in any
way, this will be a counter-offer which eliminates the existence of original offer and original
offer cannot be accepted at a future date. Thus, in the given case, this rule shall be applied and
there shall be no contract as the original offer had lost its existence by the application of counter-
offer.
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The second case on the offer made by Bill to Liza is a specific offer made to her. The
transaction entered between the parties Bill and Liza is valid. The rules that shall be applied here
will be Postal rules. The general rule is that a postal acceptance shall have an effect when letter
of acceptance is posted. In this case, Liza has shown her acceptance by replying to Bill and
affirming to the offer given by her. Thus, the contract entered between them is valid.
Subsequently, Liza replies on revocation of previous acceptance that letter will only be affirmed
if Bill receives the revocation letter before the letter of acceptance.
D2
Promissory estoppel is an equitable doctrine, whereby the court can help you to recover the
losses that have been incurred because of non-fulfillment of promise by another person. It states
that the aggrieved party can recover the damages which have been made because the promisor
refused to act upon the promise made by the promisor earlier (Ward, 2010).
In case of Central London Property Trust Ltd v High Trees Ltd [1947], it was held by
lords that Central London Property can only demand for future increment in rents and cannot
claim the arrears accrued during the war years.
Requirements of Promissory Estoppel-
1. The contract must be pre-existing or legal obligation is altered Combe v Combe [1951]
2. Clarity and unambiguous promise must be ensured
3. Unjust created for promisor to go back to its promises
4. Changes in positions Alan v El Nasr [1972]
TASK 2
1.3 & 2.2 Analyzing the terms of contract and applying their interpretation to the respective
cases
Contractual terms are inserted into a contract for stating the degree of obligations that are
lying between parties. The terms specified make it mandatory on the parties entering into a
contract to abide by its performances. These contracts include the following terms:-
1. Expressed terms- Such terms are inserted on mutual consent between parties for
formulating a valid contract. The terms here are stated either in oral or in written form at
the time of its formation (Trebilcock and Leng, 2006).
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Conditions are a part this term of contract. Where any condition is breached, the suffering
party here has the right to rescind the contract and claim for the damages caused to him. On the
other hand, in case of warranty, the party is entitled to claim for the damages but doesn't hold the
right to rescind the contract.
2. Implied terms- A contract that is implied is in fact not expressed by the parties, but rather
it indicates a mutual intent to enter into a contract. These terms are interpreted by legal
and customs to provide justification and provide fairness to such contracts. These terms
are holding statutory importance and needs to be complied. Such terms are stated by law
with bona-fide intention of the parties.
3. Innominate terms- These terms are neither referred as a warranty or a condition. These
are identified as intermediate terms. In Contract Act, innominate terms are considered to
be flexible which are added into a contract in favor of parties (Chapman, 2009).
4. Exclusion Clause- These terms have been defending the faulty party in case of non-
satisfactory performance. These terms are reasonable only if they have been stated prior
to entering of contract through mutual acceptance. It is important to signify that exclusion
clause must not be contradictory to legal law.
Case 1
Opera singer Joyce DiDonato has entered into a contract to perform as an opera singer for
3 months for Royal Albert Hall Company. Due to her illness, she couldn't perform for the first
four nights. Company subsequently replaces Joyce DiDonato with some other singer. Joyce
DiDonato case on Royal Albert Hall Company for breach of contract is invalid as there was a
breach of condition by Joyce DiDonato to perform in the function. As she was unable to mark
her presence at the first four shows, the attempt of hiring new singer by Albert Hall Company is
valid. Thus, Joyce contempt to claim her right under the breach of contract is wrong.
In the second case, Joyce came into a contract with another opera singer for another
company. She again turned sick and couldn’t appear for the rehearsals. The employer sacked her
and replaced her with another singer which is a breach of contract. This is so because she has
been not been missing any of the performances which she committed to appear on. Thus, the
attempt of Joyce DiDonato to sue the firm is correct.
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2.3 Effect of Expressed and Implied terms in reference to case
Herein, case of Scammel and Ouston, Scammel was required to supply van on hire
purchase for a 2 year term. Ouston was to continue trade in his old van. The terms are clearly
expressed between the two.
Due to some disagreements, Scammel had refused to supply to Van. The action was to be
taken place at a future date. Thus, the act of Scammel on refusal of the Van is valid.
In the following case, it can be seen that the claimant was a farmer who was a tenant on
defendant's field. The claimant had ploughed some seeds of corn and barley on the defendant's
field before he could harvest the tenancy was terminated.
The claimant has passed on the bill to defendant for the work and for the cost of the seed
incurred by him. In this case, the action of farmer is already executed. Thus, the contract has
implied terms which makes the claimant assertion valid. The act was performed and thus, it is
liable for the defendant to compensate for the expenses incurred by him.
M1: In case of no negligence, is exclusion clause valid and why?
Exclusion clause is a term in a contract which seeks to put constraints on exercising the
right of parties to the contract. It is usually mentioned by parties who state that they shall not be
responsible for certain happenings. In the given case, Adriana has hired a car from City Cars
Rental which has before entering into contract mentioned the terms and conditions in small prints
and at the same time, after contract, Adriana has seen the Laminated Document stating
'Limitation of Liability'. This clause is an exclusion clause mentioned by the City Car Rentals.
The document has clearly mentioned that it shall not be responsible for the injuries caused from
the defects in the car unless it has been caused by their negligence.
The Adriana accident because of the burst of airbag is not because of the negligence of
Car Rentals. The exclusion clause that limits the liability of City Car Rental has shown that it has
no responsibility unless some negligence has been incurred.
As per the Question, where there is no negligence of Car rentals, it has been safeguarded
itself by the exclusion clause. Adriana cannot claim for her injuries.
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D1: “Exclusion clauses are valid, regardless of when introduced to a contract”
The statement given above is not valid; exclusion clause is valid, only if they have been
clearly stated to the party contracting with appropriate notice before the contract is made (Ole
Lando and Commission on European Contract Law, 2003).
The case of Thronton v Shoe lane Parking Ltd [1971] shows that the parking ticket isn't
valid in case where the car park ticket has specified the terms and conditions on the back side of
the ticket are no regarded as valid exclusion clause as they have been not bought into the clear
notice of purchaser during purchase.
TASK 3
4.1 Elements of Tort of negligence and state possible defenses as per the case
Tort of negligence is a breach of duty or failure of one party to exercise their standards of
care demanded by law with resulting in injury to party to whom duty was owned (Hemraj, 2003).
Negligence is persisting when one party fails to provide the utmost care required to the other
party. This act of negligence serves to protect the aggrieved party to claim for the damages to the
claimant. The act of negligence is only valid if it fulfills the below stated conditions-
1. Duty of Protect- It is a due responsibility of the person for the anticipated foreseeable
damages that have been taking place out of its negligence. It is the duty of a person to
undertake adequate supervision, maintenance of equipment and facilities, supervision of
high risked activities (Geistfeld, 2002).
2. Failed to provide reasonable standards of care- It is important for the party to
undertake adequate standards of care in their duties to students. If someone fails to
exercise the reasonable care of duties, it can lead to harm on others (Marsh, 2001).
3. Proximate Cause- The next element is the burden to prove the negligence and show the
connection between breach of duty and injury caused to the person.
4. Actual injury- The final element which needs to be proven in negligence case is that it
must cause a mental or physical injury.
Case Study:
By studying the case in detail, it has been seen that Albert is willing to be tenant of Brad
and for surety purpose, he passes on Brad his accountant's details. Brad confirms with Charles,
Albert's financial accountant. Charles doesn't bother to check his file properly and replies to Brad
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that Albert is an excellent client with high income and capital. On the contrary, if he had done a
detailed check, Albert was in continuous overdraft and was a serious debt concerns for bank for
many years. After a few months, Albert disappeared and left several pounds of rent arrears.
In this case, Charles being the accountant of Albert held the responsibility of showcasing
adequate details after supervising his accounting details. He due to his inadequacy in undertaking
reasonable standards of care has mistaken Albert's account with some other client accounts. The
negligence has proven the proximity cause between the breaches of Charles duty with damages
in the form of arrears caused to Brad. This makes it clear that the elements of tort of negligence
can be applied to this case.
The defenses available with Brad are to sue Charles under the Tort law and to claim for
the damages caused in the form of rent arrears. Charles being the cause of negligence, he is liable
to pay the losses borne by Brad due to prime victim Albert.
3.1 Contrasting nature of liability in Contract with tort liabilities
A significant contrast can be drawn between the liabilities of contract with Tort liabilities.
The differences are as follows-
Contractual Liabilities Tort liabilities
The consent of parties is necessary. Hereby,
the parties cannot be forced to bind into a
legal relationship (Fried, 2015).
There is no mutual consent drawn in case of
tort. However, the consent of victim is
important. Whereby, the victim has consented
to the tortious act, in the given situation, the
following action can be taken as a form of
defense which will let party recover its
damages.
Legal relationship and obligations of parties is
determined on voluntary basis.
Here, obligation and legal relationship
between parties is imposed stringently by the
law (Bell, 2011).
There is a breach of term which impels the
application of contractual liability
There is a breach of duty which led to creation
of tortious liability.
In case of contract, the liability is restricted up In case of tort, the person owes responsibility
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to the contracting parties. on all who have borne the damages because of
the party’s tortious act. For example, in case
of defamation.
3.2 Liability in negligence with reference to Donoghue v Stevenson 1932
Donoghue v Stevenson 1932 is popularly known as the snail in the bottle case. In this
case, Ms Donoghue has ordered a bottle of ginger beer which was purchased by her friend. The
bottle was opaque and after consumption of most of its content, she became aware of the snail.
She later fell ill. Donoghue took a legal action against David Stevenson who was the
manufacturer of ginger beer. The court lords in 1932 gave their ruling in the case establishes as
civil law tort of negligence and held that it is the due responsibility to take reasonable care to
avoid acts and omission which is likely to injure your neighbors (CASE STUDY: DONOGHUE
V. STEVENSON (1932), 2014).
The clear indication of outcomes that were drawn from this case was:
1. Negligence: A plantiff can take civil action against the respondent if the respondent's
negligence has led to the injury or loss of property to plaintiff.
2. Duty of care: Manufacturers have a duty of care to the end consumer or users of its
product.
3. Neighbor principle: According to this case law, neighbor is defined as a person who is
closely and directly affected by ones act that is ought to reasonably have the other person
in contemplation as being so affected when one is directed to an act or omission which is
present in the current situation.
M2: Ryland v Fletcher 1868
According to the case of Ryland v Fletcher 1868, person who for his own intentions bring
upon his lands and collects and keeps there anything likely to be mischievous if it escapes, must
keep in his peril and if he does not do so, is prima facie answerable to all damages which is a
natural consequence of its escape (Uher and Davenport, 2009).
Herein, Ryland was held responsible for the damages caused to the neighbor who was
residing nearby the water reservoir. The English courts have turned this as strict liability and
have focused on the intentions that lie behind their act rather than the nature of liability.
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TASK 4
4.2 Bill liability for negligence and is XYZ held vicariously liable
Bill is a local milkman who contrary to his employer’s XYZ conditions engages a 14 year
old boy who is a minor to assist him in delivering milk. Bill had informed the teenager that he
was not supposed to employ him. XYZ was aware of the employment of teenager but didn't
respond to it. Due to bill's reckless driving, the boy got injured.
Bill was solely responsible for the teenager. The minor hold the right to sue Bill and
claim for the injuries caused to him due to careless driving of Bill. Bill held due responsibility to
ensure the safety and security precaution of teenager. Thus, Bill is liable for his negligence.
Yes, XYZ is a vicarious liable. Vicarious Liability is a legal doctrine whereby the
responsibility of one person is there for the failure of another with whom a special relationship is
exercised like parent and child, vehicle owner and driver or employee-employer relation.
Ordinarily, the independent negligence is not imputed on the other person. But in case of
vicarious liability, the lack of care on the part of employee in relation to whom employer owes
duty of care is there.
XYZ was aware about the situation and did not take any action rather avoid it. This
makes it imperative for XYZ to be liable for the actions of Bill.
3.3 Vicariously liability provisions
Vicariously liability is a type of stringent secondary liability that arises on superior for
the act of its subordinate. Employers are vicariously liable for negligent act or omission of
employees in its course of employment. Negligence in employment encompasses the actions
undertaken in cases of tort law or where an employer is held liable for the tortious act of
employees (Geistfeld, 2002).
The actions that can be taken into consideration for employer responsibilities of employee are-
1. negligence in employer hiring
2. negligence in employer supervision
3. negligence in employer retention
4. negligence in employer training
In the given case of vintage vehicle museum, owner asks his friend to drive a vintage bus
to Barnstable in Devon where its museum was situated. The friend negligence had created
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