Aspects of Contract Law: Elements, Types, Terms, and Applications

This report provides a comprehensive overview of contract law, beginning with an introduction to the legal framework governing contracts. It details the essential elements required for a valid contract, including agreement, free consent, legal formalities, and the competency of parties. The report then explores different types of contracts, such as unilateral, bilateral, written, oral, distance selling, and void contracts, along with their implications. Furthermore, it analyzes various terms within contracts, including express clauses, implied clauses, exclusion clauses, conditions, warranties, and innominate terms. The report also applies these concepts to business scenarios, providing examples of how contract law principles are used in practice, such as in sales and service agreements. Finally, it evaluates the effects of different terms in given contracts, using case studies to illustrate the practical application of contract law.

ASPECTS OF CONTRACT
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Table of contents
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Introduction
Every country follows some legal frame work for the citizens of the country so that people can
live their like by maintain some rules for the betterment of the country. there is an another reason
it helps to protect their rights, if any mishaps they can execute their rights. For every specific
grounds there are many legal frame work is maintained. As per the topic of the study deals with
contract (Chamallas, 2014). Therefore, depended on the laws that are made by the government
the contracts can be formed properly. In order to build any kind of contracts, there are various
laws. For the particular contract, it is important to fulfil all the appropriate requirements that are
necessary as per the law of the contract. In the time to build any cases and to respect the correct
judgement, the maintenance of the law is essential. The laws of government are created in order
to provide all the legal rights to the people of the country and to make clear the unnecessary
things that are illegal to practice.
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AC1.1 Importance of elements that are needed in formulation of a valid
contract
The word contract is a very common word as without any contract a business transaction can't
take place. According to Bordia et al. (2015, p.212), it is necessary to build any kind of contract
by following the rules and regulations. A contract comes into legal existence when an agreement
is enforceable by law. The Contracts (Rights of Third Parties) Act 1999 states the valid contract
between the parties provides the legal rights of the parties to conducting any work. Before
creating the contract the parties need to ensure so many things that are necessary to include in
the contract. By following all the process appropriately, the parties can build valid contract for
the need. The important elements for the valid contract are following:
 agreement must be needed to constitute a contract.
 it must include two parties one will offer while other will accept
 consent must be free
 legal formalities must be fulfilled to enter a contract
 agreement must be supported by law
 parties must be competent as sound mind to enter a contract
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 parties must establish legal relationship
The above-mentioned elements are necessary to build the valid contract between the parties. The
proposal and acceptance process ensures the reality of e-contract. By the proposal, the parties
make clear the requirements for these contracts. Accepting the proposals, the parties ensure that
they agree with the proposal of each other. In order to make it real the proposal and acceptance
process is important.
The clearness of the subject of the contract is important to make clear the contracts importance
and validity as seen in case of Director General of Fair Trading v First National Bank [2001]. By
following the rules and regulations of the government properly, the parties can make their
contract valid. The formations of the valid contract can be built by following and fulfilling all the
requirements of the laws (Glover and Kusterer, 2016, p.56). As per the law, the parties need to
ensure all the important documentations. The completion of the contract can be possible with the
witness. In the formation of the contract, a third party is essential. In any negative incidents
occurred ten with the help of the third party the proper solution can be built easily.
AC1.2 Different types of contract and their impacts
Unilateral contracts- In any contracts the performance of term namely offer would be decided as
accepted the given offer, here the offer like some prize must be included that is called the
Unilateral contract (Wellin, 2016, p.23). In the case of FR ltd v Federal Trade Spa [2001], the
offers have been considered as accepted and even after the offer acceptance is remained the
party. An insurance party can use the Unilateral contracts where the insurance organisation could
make a promise to provide some amount of money to their clients if the clients make their
instalment at right time.
Bilateral contracts- Bilateral contracts are where both the party can make a deal by making a
promise to complete the obligations (Lee and Han, 2015, p.629). Here both the party can be
included under the legal considerations. In most of the business organisations, the Bilateral
contract can be used. For example, a contractor can make an offer to the buyers and the buyers
can accept the offer.
Written and Oral contracts- Oral contracts are such as when the contracts could be made orally
instead of any written documents between the two parties (Lipson, 2016, p.173). On the other
hand, the written communication is all about when the contracts can be made between the two
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parties through written documents. Most of the time written contracts can be used to make the
contract more effective.
Contracts of distance selling - This kind of contracts can be made through the social media like
phone, E-mail, web sites and so on (Martin, 2016, p.38). Here the customers choose the product
and the contract is made via the internet.
Void contracts- This kind of contracts can be made under legal considerations. This is kind of
contracts can be considered as a void who are below the mentioned age and unable to carry the
agreement of the contracts. Ivey v Genting Casinos Ltd t/a Crockfords 2016. Is the recent
example of void of contract.
AC1.3 Terms in contracts analysis
Different stipulations within the contracts are such as-
Express clause term- In this term the contract must be included in express term and all the terms
must be written form that helps to make the term more convenient for both the parties as well as
for the courts (Iacobucci and Trebilcock, 2016, p.173). As a result, the courts can be able to
make the judgment based on the contracts. The court can identify whose fault was made to fulfil
the contracts.
Implied clause term- In this contract term the intention of the parties can be easily reflected and
in this type of term all the matters are not expressed but instead of this, all the terms of the
contract can be considered as a part (Razmanet et al. 2013, p.132). In this types of term all the
employees, customers come under the legislation even if the legislations might not mention in
the term.
Exclusion clause – According to (2016, p.25), in this type of the contract, the parties may be
excluded at any time. Both the party may not liable for any kind of considerations. However,
this type of clause needs to be accepted by both the parties.
Condition and warranty- Condition is the core part of any contract (Gray, 2015, p.127). This is
an important part of making the contract. On the other hand, the warranty is all about a term that
is provided to the clients during making the contract for selling any such products. Warranty
could be many types. Michalak v General Medical Council 2016 is the case which shows the
breach of condition and warranty.
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Innominate terms- According to Zipursky (2014, p.145), this term cannot be separated from the
conditions and the warranty term. It is included within the warranty and condition term. In this
type of term, the termination can be included in the contract.
All the above-stated term can be essential for making any kind of contracts.
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AC2.1Elements of contract in reference to business scenarios and its
application
Business scenario 1- Mr. john goes to a shop to buy one fountain pen where he saw nicely styled
fountain pen kept in a shelf . He ask the shopkeeper what's the price of the pen. The shopkeeper
tells £1,050 , Mr. john has 800 so the shopkeeper tells john he can sell it at £950. Mr. john tells
he think it over lunch. at that Louis agreed that he will sell the pen to other customer but when
john came back he didn't find the pen Louis sold the pen for £1000. so here is an open offer but
john at that time did not accept the offer. Shopkeeper made the open offer to the customer and
respond the offer but not accept the offer so Mr. john cannot claim any damages from the
shopkeeper as he not accept the offer. Business scenario 2- In the second situation harry and
porter entered into a contract to renovate a shop for £50000 the work should be complete within
6 months before 10th November 2017. The contract made in march 1st 2017. Before the work
started harry paid an advance amount to start the work £25000. after few time later porter told
harry that the payment amount have to be increased to £75000 and at time harry agreed upon the
condition as he want the work to be completed at stipulated time. Again after few time later
porter told harry the work could not be completed within the time so he want 20 days extra. In
this situation harry could not claim any damages form porter as he agreed upon the second
condition with free consent.
AC2.2 Application of the law of terms in respect to different contracts
A Condition- This term can be used for the distance selling and the reason is the seller can make
the buying condition for the customers so that the customers can be able to understand the
various conditions to but the products from the seller (Zipursky, 2014). All the stated condition
can help to the customers to clear the term and condition of buying the product. A condition can
help to make the contract more efficient. In any case of issues, the seller can make a clear
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statement that the condition already mentioned during buying the product and it can also help the
courts to handle any such issue.
A Warranty- This is an important part of any business organisations. All the customers would
love to get warranty period on the purchasing product. This can help to make the usages of the
product in safe, Keefe v Hoteles Pinero Canarias SL 2015 is the case which shows the breach in
warranty. The customers would love to use the product of the organisation under warranty
period. In the case of any such issues regarding the warranty, the clients can make a case against
the organisation if the organisation denies solving the issues under the warranty period. To
handle the case the court can tackle the documents about the warranty period that can help to
solve the issue of the customers.
An Innominate- In this term the sellers can gain help and the reason is that in this term both the
condition and the warranty can be terminated. This is less effective for the customers. Te
business organisation can take help from this type of term. In the given case study, Todor can
take help from this term where he can sell the book to Ivan by using this term during the selling.
AC2.3 Effect of different terms in given contracts and its evaluation
In the given scenario, John went to a park managed by the council where he takes a chair instead
of 50p but the chair collapsed and he becomes injured. When John went to ask for compensation
the council said that in the ticket all the detail information about any kind of damage matter are
not in the concerned matter for the council.
In this case, the council has used A Condition to use the chair on the condition all the facts are
mentioned. That is the reason the counsellor did not listen to the words of John. in this case, John
must know the condition of hearing the chair. This is due to less awareness about the hiring chair
so the fault is not on the council of the park (Tadros, 2014). This term is good that the entire
information is mentioned in the ticket so John cannot make any complaint to the court. In this
case, the conditioned is given and John did not see the condition. In this scenario, john cannot
make any such claim due to his ignorance of the condition to hire the chair from the park.
A warranty can be beneficial for the customers. Here the customers can feel free to use the
products. This can be the essential part to sell the product by any business organisation. This is a
good term to make the contract between the two parties.
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LO3
AC3.1 Comaparision of contractual liability and liability of tort
Contrast liability in tort with contractual liability. Trot is an act which states damages, loss or
injured to the body of individual or the legal rights of the individuals by the person who is under
the duty of statue. the individual who will indulge themselves undue fraud agreement then the
court of law sue that person and also gives verdict to not to do any repetition of same work. if
anyone faces damages then he has to be compensated. trot is arises when the party violated the
agreement of the contract. Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd 1965.
contract liability is exists when the contract agreement bind the parties together. the main
difference between trot and contractual comes out of 1. Result of agreement and 2.Result of law
the party who file the suit against the person due to whom he suffers law, and the person is
under the obligation of the court of law also pay the damage which the person who do the breach
suffers Haley v London Electricity Board 1964. The person will not have right to file suit for
giving the punishment by the court. The liability in contractual lies with the voluntarily by the
parties but in trot the liability lies with the party. Donoghue v. Stevenson 1932.
Breach of Duty in Tort occurs when an individual become failure in acting as a reasonable
person to whom he owes a duty to.
AC3.2 Explanation of the nature of liability in Negligence M1
According to Ćorić and Grgić (2015, p.113), contract liability negligence is all about the present
legal rules that help to maintain the liability of the contract and it also considers the types of the
injury and also focus on the value of the harm as well. The word negligence is about to not give
proper care. Here in the case of John the council of the park is not good enough to take care
about the chair so that the incident happened with John could not be happened. Therefore, it can
be said that the councillor of the park is responsible whatever injuries happened to John. The tort
negligence by the council of the park must pay the compensation to John.
Negligence is a kind of behaviour always stands below the standard law to protect the others
from any such risk as if chair breaking in the case of john can be the finest example. The main
theory of negligence can be divided into two sections and they are such as executive simplicity
here to prove the behaviour is much easier than the state of mind and another is behaviour and
mental both are a completely different test so the result would not be good.
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The park has neglected the law of tort and the council could provide the compensation to John.
The council of the park did not follow the rule of liability and as a result, John is suffering from
the damage of the chair and he injured. The council of the park was not careful enough to
maintain the rules of liability in tort. The council of the park totally neglected the liability of tort
so they must pay the compensation of John.
AC3.3 Explanation of process of a business being vicariously liable M3
According to De (2016, p.30), vicariously liability is all about when a person makes wrong to
other than the other personified for that and the person who is the cause of making suffer that
person must be responsible and has to pay the compensation. In the case of any relationship
when two parties like a servant and the owner or the employer and the employee or it might be
the principal and the agent. Here in this case it is the mistake by the servant or the employees or
the agent but the job given by the employer or the principal. In this matter, the principal or the
employer must keep in mind that whatever task is assigned to the person whether they are good
or harmful. If the assigned job is harmful then the whole liability is on the employer and on the
principal. In the case of any such injury, happen to the servant or the agent then the principal
must be responsible for the damage.
In a business organisation, all the task is assigned to the management and the entire task are to be
performed by the employees of the organisation (Ayres and Schwartz, 2014). So here, if the
assigned task is harmful to can damage many things then the whole responsibility would be on
the entire management of the organisation. The management of the business organisation must
be liable for the damage. All the above process are for the vicarious liability. This is helpful for
the employees of the organisation and they can be able to claim for any such damage or injuries
happen to them. On the other hand, vicariously liability can help to maintain the rule and the
regulation properly.
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AC4.1The tort of negligence and defences and its elements D2
In the case scenario where David was driving his car more than the normal speed and here, a
nine years old child namely Kevin who was running on the road and to save the child, David hits
a pole of the telephone which is under a Teleco company. As a result, the pole is broken into
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pieces and the broken pieces injured Kevin who is still in unconscious in the way Jackson v
Royal Bank of Scotland [2005]. Here the negligence of David can be the main part because he
was driving his car in 35MPH where to driving in the lane street is 25 MPH.
The child Kevin is very little to know about the rules but his parents must be aware of the danger
to run in the street. The fault is the parents of Kevin in responsible for neglecting the law of tort.
The parents of Kevin must be liable for the tort of negligence.
Apart from this, David who was driving the car is fully responsible for making the accident. He
completely avoids the rules of the speed of the car. The normal speed must be 25 MPH but he
was driving the car at 35 MPH and as a result, he is responsible for injuries of Kevin and he also
hits the telephone pole of an organisation. Here, in this case, David neglects the tort and he has
to pay the damage of both the Kevin and the Teleco Company.
Teleco Company can claim for the damage to the pole and it is the fault of David. In this case,
the Teleco Company can be able to get the compensation of the damage done by David.
So here, the telecom company is the only one who is not responsible for any such damage.
Therefore, David cannot make any such demand either from the telecom company or from the
parents of Kevin.
AC4.2 Elements of vicarious liability in business situations and its
applications D3
In the case study where the Colin is the main chef of Regent Hotel and where another chef work
under Colin name is Roger. One day Colin knocks unconsciously with frying pan to Roger and
as a result, Roger is seriously injured. In this situation, Roger does not want to go to the hospital.
In this case, Roger surely claims for his injuries and it is the finest example of vicarious liability.
Because Colin make the injury to Roger who is a head chef but Colin makes it unconsciously.
Roger can easily claim for the damage happen to him by Colin. In this case, Colin is liable for
the whole incidents. Apart from this, Roger can also make a case against the Colin. This is due to
the negligence of tort. The frying pan is harmful to any person. Therefore, the entire damage
made by Colin must be applicable to make a case against Colin.
In the case of Photo Production v Securicor [1980], the elements of vicarious liability can be
applicable for the Colin who is the head of the chef in the hotel where Roger works under Colin.
The entire action of Colin is liable to compensate Roger.
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Conclusion and recommendation
After conducting this report, it can be concluded that in order to build the appropriate contract it
is important to follow the suitable rules that are made by the government. Maintaining the proper
procedures of the contract can ensure the validity and reliability of the contract. Laws provide
the proper rights to the people. In various cases, the people can get justice by applying the laws.
The rights of the human secure by following all the laws. Based on the cases applies of the
appropriate laws are depended on. Apart from this, the negligence of tort can make a various
poor result and all the factors are stated in this report. The various factors of vicarious liability
are mentioned in this report and the result of vicarious liability is stated in the report. The
different type of contract has been mentioned in the report and the effect of the entire contract
can make a positive impact on the people.
The entire report focuses on the three different case studies in the report such as the accident of
David. The incident happened to John and the matter of Ivan. All the case studies are detailed
analysed in this report and the negligence of tort in the case study is mentioned. The factors of
vicarious liability are also stated in the related case study.
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