Analysis of Contract and Negligence in Business Law

This report provides an analysis of contract and negligence, focusing on their significance in legal and business contexts. It contrasts tort liability with contractual liability, explaining the core principles and differences between them. The report delves into the concept of duty of care and the law of negligence, using the Donoghue v Stevenson case as a key example. Furthermore, it elucidates how businesses can be held vicariously liable for the actions of their employees, outlining the conditions and principles governing this form of liability. Task 4 applies these principles to specific case studies, analyzing the elements of tort of negligence and vicarious liability in practical scenarios. The report concludes by summarizing the key findings and emphasizing the importance of understanding contract and negligence for individuals and organizations to ensure justice and legal compliance.

ASPECTS OF CONTRACT
AND
NEGLIGIENCE

TABLE OF CONTENTS
INTRODUCTION............................................................................................................................3
TASK 3............................................................................................................................................3
3.1 Contrasting tort liability with contractual liability ...............................................................3
3.2 Explaining duty of care and law of negligence ....................................................................4
3.3 Explaining how business can be vicariously liable ..............................................................4
TASK 4............................................................................................................................................5
4.1 Elements of tort of negligence ..............................................................................................5
(a).................................................................................................................................................5
(b)................................................................................................................................................6
4.2 Elements of vicarious liability ..............................................................................................6
(a).................................................................................................................................................6
(b)................................................................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES.................................................................................................................................8

INTRODUCTION
Aspect of contract and negligence plays an important role for individual so that they can
get justice from the wrong practices which are practised by different individuals or organizations.
Contract is considered as a written or verbal agreement through which a legal relationship
formed between two or more parties (Adams, 2010). Further, the elements of contract gets
fulfilled when both parties accepts the terms and condition of contract. This present document
will help reader to understand the tort liability in contractual liability. This report will also
emphasize on the concept of duty of care and negligence.
TASK 3
3.1 Contrasting tort liability with contractual liability
There exists some difference between the contract and tort liability. Some of them have
been discussed down under:
 Contract law comprises of body of laws where parties need to consider the different
elements which are present in contract in order to have a positive relationship. Further,
contract also elaborates duties and responsibilities which parties have to follow before
entering into contract. On the other hand, tort law has been developed due to the act of
negligence (Bowyer, 2010). It governs the situation where one person has harmed or
injured other person not intentionally.
 Contract liability is undertaken on voluntary basis as no person is bounded to get into the
contract. On the other side, tort liability is imposed by law.
 In contract, parties have option that whether they want to form any sort of legal
relationship with other party or not. On the other hand, in tort liability, this particular
option is not available with the party because laws are imposed by court of Lord.
 In contract liability, parties who are in contract will be liable for the act and no role of
second party will be treated as legal. On the contrary side, each and every member who
are linked with the act either through indirect way will be considered as liable in tort
liability (Jentz and Miller, 2007).
 Damages incur by any one party has to pay compensation to the other party. However, in
tort liability, decisions relating to damages are generally made by the court of lord.
With reference to the case Donoghue v Stevenson (1938), tort liability can be understood
in more précised manner.

3.2 Explaining duty of care and law of negligence
'Duty of care' formed after the case of Donoghue v Stevenson (1938). The above case has
been discussed down under:
Mrs. Donoghue went to cafe with friend and the friend brought a bottle of ginger beer and
ice cream for her. However, the ginger beer came in opaque bottle so that the content within that
was not visible. Mrs. Donoghue poured half of the content of bottle over the ice cream and drank
the same too. Further, after eating half of the ice cream, she then poured the remaining content on
the ice cream. Due to this, a snail emerged from bottle. Due to this, she suffered with some kind
of personal injury and therefore has commenced claim against the manufacturer of ginger beer
organization (Caiado and Salgado, 2010).
Furthermore, her claim was successful and she got the desired compensation. With this
case, the establishment of modern law of negligence and neighbour trust comes into play.
Neighbour principle is a part of duty of care and it states that every individual or organization
should follow this effectively. Further, if any sort of injury happens to person either personally,
mentally or physically then the party will be liable to pay the damages to party who have
suffered the losses.
Moreover, duty of care can be defined as a positive relationship which law recognises as
giving the legal duty and care (Negligence - duty of care, 2016). A failure to take such care can
be result into paying of damages to the party who has got injured or suffered. Moreover, the
contract will be also considered as breached.
3.3 Explaining how business can be vicariously liable
Vicarious liability can be defined as an alternative liability which takes place in the
doctrine of law. Vicarious liability shows that the employer will be responsible for the act which
has been done by their employees. Moreover, there exist some conditions which are applied in
given form of liability (Jennings and Twomey, 2010). Further, it is the liability where bad actions
of employees causing damages have to be compensated by their employer. Moreover, there are
some principles which makes employer liable and some of them have been discussed down
under:
 Act of negligence must take place within the course of employment
 Superiors must have specific authority to control their subordinates
 Action of negligence must take place on the basis of rights and authorities of employer

Case
Roger a dishwasher in hotel complaining regarding the skin rashes which has developed
due to long period of washing. Firm has provided the rubber gloves but employees generally do
not use them. Colin gets fed up with Roger behaviour and in anger throws a frying pan.
Decision
There exist certain provisions which are identified and the same can be used with an aim
to held vicarious liability upon the owner of firm. Further, in vicarious liability, business
enterprise is held liable for the act of its employees if owner will not take measure with regard to
provide the safe working environment to its employees. In relation to this, business organization
can be held liable for its act if any sort of injury is caused to employees during the course of
employment (Cuthbert, McFarlane and Neely, 2012). Further, Ben has given facilities of rubber
gloves to their staff by seeing the skin problem which can arise at the time of washing utensils. If
Roger is not wearing the same then it is his fault which will lead him to suffer from skin rash.
Thus, Ben will not be liable for the issues faced by Roger. However, from the above case, it is
also evident that Roger can sue Ben as per the elements of vicarious liability instead of Colin
who has inflicted the injuries to him. Further, Ben can also sue Colin for the actions he has done
and also the offences so committed.
But still, Ben the owner will not be held liable for the act of Colin. It is eventually
because Ben has taken efforts regarding giving safe working environment to its employees. It is
due to intention of Colin, Roger got injured and thus, Ben will not be liable for the act of Colin.
Apart from that, Roger will not be able to claim any sort of damages from Ben as well. Yes, Ben
can sue Colin in order to pay damages because throwing a frying pan is offence and due to this
negligence, Roger can get the compensation from Colin.
TASK 4
4.1 Elements of tort of negligence
(a)
Case:
As per the case scenario, with the negligence of taxi driver, taxi cab has over turned
towards the A-Road outside London. Mr. Smith who lived in that area only heard about the
accident and went to see that if any sort of assistance can be given to injured people. Further,

Smith has spent almost 10 hours in giving the emergency services at site. Due to this
involvement, Smith suffered from nervous shock.
Applicability of provision:
Here, the application of tort of negligence will come into play and taxi driver will be
liable to pay the compensation and damages. However, incident has not directly impacted the
party but affected the health up to a great extent (Malhotra and Lumineau, 2011).
Decision:
Taxi owner will be liable to pay the compensation. However, taxi driver has not obeyed
the duty of care and breached the contract but this has not directly impacted Mr. Smith. Tort of
negligence will be applicable as if the incident wouldn't have taken place, Mr. Smith wouldn't
have faced nervous shocks. Further, the services provided by Mr. Smith were invaluable and due
to this he has suffered from shocks. The services so rendered were not called upon and the
emergency services must have required the valuable support.
Moreover, the element of vicariously liability is present as driver needs to prevent these
actions. Further, Mr. Smith suffered and he went beyond the duty of call immensely.
(b)
Case:
Paul is learning to fly helicopter. One day while flying, Paul has an accident and crashed
the helicopter into a tree with the best effort of saving.
Applicability of provision:
Here, the tort of negligence will be applicable and the party who have been impacted is
can sue for compensation and damages (Petrin, 2010). Apart from it, there are different reasons
due to which accident have taken place i.e. due to failure of any button, weather problem, etc.
Decision:
Here tort of negligence will be practised because Pilot himself knows that he is a learner
and cannot fly helicopter by taking passengers into the same. Therefore, pilot or organization will
be liable for the same. He will be liable because the pilot acted illegally and take passengers with
him even after knowing that he is a learner. Paul will be liable and can be sued for his
negligence.
Further, the injuries which are caused to passengers from the Paul's plane are liable
towards Paul only. Moreover, the standards of care will also depend on the extent to which the

injuries are serious and the negligence of him will make liable for the same. Therefore, injured
passengers will be entitled to get some sort of remedy from the actions of Paul which has caused
the injury.
4.2 Elements of vicarious liability
(a)
Case:
Linda owns a car which is used for bakery business purpose and used by his husband as
well. One day Mr Williams was unfit to drive, therefore Alexander his friend droved the care and
due to his negligence the passengers in car was injured.
Applicability of provision:
The elements of vicarious liability were not present as for that, employer and employee
relationship is essential; incident should happen at the course of employment; and employer
should have control over the incident (Zoll, 2012).
Decision:
Vicarious liability will be present because the incident took place outside the course of
employment and there also exist relationship between the Linda and Alexander. Therefore,
vicarious liability will not be present. Linda William will be vicariously liable for the incident
because Linda allowed Alexander to drive the vehicle and the same has been crashed due to
negligent driving. This present case is as same as Morgans v Launchbury (1973) and reader can
refer to the same. With this, it is clearly evident that Linda will be vicariously liable for the
incident so happened.
(b)
Case:
Alan a milkman has engaged a 13 year old boy to deliver milk. The organization from
milk is supplied i.e. Norfolk Farm does not know about the same. Due to Alan's negligent
driving, boy was injured.
Applicability of provision:
Vicarious liability element are still not present and therefore no compensation and
damages will be paid by the business venture (Morris, 2010).
Decision:

The boy was recruited by Alan not the organization and even the firm was not aware of
the same. However, employing a minor child is a crime and against the civil law but there is no
contract with vicarious liability.
CONCLUSION
From the above report, it is evident that aspect of contract and negligence is important for
individuals so that they get justice from wrong offence. This document is evident of different
elements of contract, vicarious liability, tort law, negligence which will give reader a clear idea of
these law terms.

REFERENCES
Journals and Books
Adams, A., 2010. Law For Business Students. 6th ed. Pearson Education Ltd.
Bowyer, M. L., 2010. Insurance contract law and regulation and competition in the UK insurance
industry: The missing link. Journal of Financial Regulation and Compliance. 8(2).
pp.140 – 150.
Jentz, G. and Miller, R., 2007. Cengage Advantage Books: Business Law Today: The Essentials.
8th ed. Cengage Learning.
Caiado, V. N. and Salgado, M. S., 2010. Contract Management and its Influence Over Design
Quality. Architectural Engineering and Design Management. 6. pp. 153-157.
Jennings, M. and Twomey, D., 2010. Business Law: Principles for Today's Commercial
Environment. 3rd ed. Cengage Learning.
Cuthbert, R., McFarlane, D. and Neely, A., 2012. The impact of contract type on service
provider information requirements. International Journal of Service Science,
Management, Engineering, and Technology (IJSSMET). 3(3). pp. 65-85.
Malhotra, D. and Lumineau, F., 2011. Trust and collaboration in the aftermath of conflict: The
effects of contract structure. Academy of Management Journal. 54(5). pp. 981-998.
Petrin, M., 2010. The Curious Case of Directors' and Officers' Liability for Supervision and
Management: Exploring the Intersection of Corporate and Tort Law. American
University Law Review. (59). p.1661.
Zoll, F., 2012. The binding power of the contract: Protection of performance in the system of the
Common European Sales Law. Journal of International Trade Law and Policy. 11(3). pp.
259 – 265.
Morris, J. R., 2010. The teaching of law to non‐lawyers: An exploration of some curriculum
design challenges. International Journal of Law in the Built Environment. 2(3). pp.232 –
245.Shaw, J.A.J. and Shaw, J. H., 2010. Business education, aesthetics and the rule of
law: cultivating the moral manager. Social Responsibility Journal. 6(3). pp.469 – 486.
Online
Negligence - duty of care. 2016. [Online]. Available through: <http://www.e-
lawresources.co.uk/Duty-of-care.php>. [Accessed on 5th May 2016].
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