Contract and Tort Law Case Studies

This document presents a comprehensive analysis of contract and tort law through various case studies. It covers essential elements of a valid contract, different types of contracts and their impacts, and various contractual terms. The document also contrasts liability in tort with contractual liabilit...Read More

ACNB

TABLE OF CONTENTS
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................3
1. Importance of essential elements required for the formation of valid contract.......................3
2. Impact of different types of contract .......................................................................................4
3. Description and impact of different type of contractual terms................................................6
4. Case study of Ivan and Todor..................................................................................................6
5. Case study of Adam and Brian................................................................................................7
6. Case study of Barry and local council.....................................................................................8
TASK 2............................................................................................................................................8
Contrast liability in tort with contractual liability.......................................................................8
2. Scenario A................................................................................................................................9
Case of Mark and Regent Hotel.................................................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12
2

INTRODUCTION
Contract and negligence law is developed by parliament of UK to describe standard
obligations of parties to be fulfilled during their performance. These obligations are mandatory to
be fulfilled by the parties in contractual relationship as well as in general actions. Further,
provision of damages has been provided in situation where there duties are not complied in a
proper manner (Twomey and Jennings, 2010). In present report, description of provisions of
contract and negligence law is provided in order to give suitable outcome to the case scenarios.
For justified outcome conclusive decisions of cases previous case laws will be referenced.
TASK 1
1. Importance of essential elements required for the formation of valid contract
Contract can be defined as an enforceable agreement by law in which parties are required
to provide satisfactory performance else they are held liable to provide damages. Agreement
created by parties is considered legally enforceable if following essential elements are part of it:
Element Description Case
Offer Offer is a proposal given by one
party to another party (general or to a
specific person) for the completion
of particular performance (Slapper
and Kelly, 2011). Offer is required to
be certain and distinct from
invitation.
In the case precedent of Harvey v
Facey [1893], contract was not
enforceable by law because offer was
not specific as consideration was
supported by word the lowest price.
Acceptance It can be termed as consent, given by
the party to whom offer was
provided. It was required to be
unconditioned. In situation where
acceptance will be conditional then it
will be treated as counter offer.
In accordance with the case of Hyde v
Wrench (1840), court held that
previous offer is canceled with the
counter offer. By considering this fact
their agreement was not considered
valid.
Intention All parties must intend to create legal
relationship for the promise made by
As per the case of Balfour v Balfour
[1919], social and domestic
3

them in agreement (Deaki and et.al.,
2007).
agreements does not have legal
enforceablity.
Consideration Consideration can be defined as
benefit for which parties enter into
contractual relationship. It moves
from promisor to promissee.
As per the case of Re McArdle (1951)
past consideration is not said to be
valid for contractual relationship.
Privity of
contract
In accordance with this English
doctrine, third party is not entitled to
make claim of damages for the non-
satisfactory contractual performance.
In the case of Dunlop v Selfridge
(1915), claim of third party for
damages was not considered valid by
the court of law.
2. Impact of different types of contract
Given statement is not right as different contracts have difference impact on the
performance of parties. Impact and description of various form of contracts is enumerated below:
Unilateral contract
Definition
In these contracts, general offer is given to the public in which each person is entitled for
the acceptance (Rush and Ottley, 2006). On the performance of offerree, offeror will be obliged
to complete the promise made by them.
Impact
Offerree is not obliged for the performance of promise as it is optional for them.
However, on the performance of offerree, offeror will be obliged to complete the promise made
by them.
Case
In Carlil V Carbolic Smoke ball, defendant (offeror) denied fulfilling promise after
completion of performance by claimant. In the cited case, court of law had provided decision that
the defendant liable to provide damages for the breach.
Bilateral contract
Definition
4

Bilateral contract is formed through mutual permission of contracting parties. In this
contract, both parties had made promise on their part thus they are responsibilities for the
fulfilment of same (Adamson and Morrison, 2011).
Impact
In this contract, all the contracting parties have obligation to fulfil the made promise else
they have to provide damages for the breach of contract.
Case
In the case of Lampleigh v Braithwaite [1615], offer was provided to specific party and
they had provided acceptance for the same. Thus, in this case both offeror and offerree were
liable to accomplish their promise.
Collateral contract
Definition
It is a subsidiary contract, in which an individual enter into a contract which is directly
influenced by the another main contract (Curry, 2008).
Impact
Both subsidiary and main contract are supported by similar consideration. These
contracts are not said to be valid, if there is not appropriable agreement.
Case
In the case of Barry B Davies, collateral contract was formed between auctioneer and
buyer as consideration was supported by other main contract.
Electronic contract
Definition
It is a type of distance contract, in which party negotiate on contractual terms through e-
communication. Validity of this contract is assessed by distance selling regulations.
Impact
In order to protect interest of consumers, selling parties are obliged to comply norms of
Consumer Protection Act and Sales of Goods Act (Elliot and Quinn, 2009).
Case
5

In accordance with the case of Golden Ocean Group Ltd v Salgaocar Mining Industries
PVT Ltd [2012], parties to the electronic contract are required to comply norms of distance
selling regulations.
3. Description and impact of different type of contractual terms
Segregation of contractual terms is not an easy task because breach of all terms lead to
the imposition of obligation for damages (Frey and Frey, 2000). Classification of contractual
terms can be done by considering its impact on contract. Description of these terms and impact is
explained as follows:
Expressed and implied terms
Expressed terms are stated by parties in contractual deed. These terms are supported by
mutual consent of parties. On the other hand, implied terms are inset by law and custom in order
to provide effect to the obvious intention of parties.
Conditions and warranties
Expressed terms can be further bifurcated into conditions and warranties. Conditions are
said to be major terms of agreement which is directly connected to the contractual objective.
Breach of conditions is considered as breach of contract and innocent party is entitled for the
termination of contract. Warranties are subsidiary terms which specifies obligation (Oughton,
Marston and Harvey, 2007). For the breach of these terms, party in fault is liable to provide
damages.
Innominate terms
This provision is applicable in scenario where contractual term cannot be divided as
either condition or warranty. For this aspect case of Hong Kong Fir Shipping v Kawasaki Kisen
Kaisha [1962] can be considered. Decision of this case states that innocent party is entitled for
the remedy of breach of contract only in situation where they are not able to take entire
contractual benefit.
Exclusion clause
These terms are governed by the provisions of Unfair Terms in Consumer Contract
Regulations 1999. Exclusion clauses are inserted to exclude obligation of party arising under
contract (Plimpton, 2007). These terms are considered for relief only if it is properly
incorporated and clause covers the loss described in the claim.
6

4. Case study of Ivan and Todor Invitation offer- Invitation to treat is way to show intention by party for formation of
enforceable agreement. It will not be considered as offer. In the described case situation,
invitation was provided Todor by keeping book on display. In this case offer was
provided by Ivan for the purchase. Written contract- These contracts exists when contractual terms are described in written
manner. In the described case, there is verbal agreement between parties. Acceptance- In case of invitation, initial party is entitled for acceptance or rejection of
offer. By considering this fact, Todor is not legally bounded to provide acceptance on
offer of Ivan. Expressed terms- In this case, expressed terms will be price of the book.
 Condition- In this agreement condition is term described by the seller.
In accordance with the case of Patridge V Crittenden 1968, all the essential elements of
contract are not present in this agreement. Henceforth, agreement between parties is not
enforceable by law.
5. Case study of Adam and Brian Unilateral contract- In these agreements, offer is provided to the general public by an
offeror. In the described case, unilateral offer was provided by Adam through
advertisement. He declared that he will be provide reward to the person first person who
will cross English Channel first. Intention- This is the assumed element of contract. It is assumed that Adam has intent to
form legal relationship with the party who will provide performance. Offer and acceptance- Ad provided by Adam will be treated as offer and performance of
Brian will be said as acceptance. Expressed term- In this case, expressed terms will be the statement described in
advertisement.
 Condition- Condition of the contract is price declared by Adam in against of
performance.
As per the case of Carlil V Carbolic Smoke ball, Adam is obliged to provide reward as
per his promise to Brian. It is because, revocation of offer by him was not in suitable time.
7

6. Case study of Barry and local council Written and bilateral contract- In the described case, there is written and bilateral
contract between parties as there is mutual exchange of promises. Ticket is provided by
local council for the description of terms. Condition- Condition in the contract is price for the services of chair described by local
council. Expressed term- Condition of the contract is expressed terms.
 Exclusion clause- Exclusion clause in present case is term described on the backside of
the ticket in the described case.
By considering the case precedent of Chapleton v Barry, terms stated on ticket is not part of the
contract. Thus, in present case local council will be liable to provide damages for the injury of
Barry.
TASK 2
Contrast liability in tort with contractual liability
Provision of liability in contract along with tort law has been built with the aim to assure
expected performance by the parties despite of the presence or absence of contractual
relationship between the parties. Further, many differences are present in tort and contractual
liability which has been described below in the following table:
Basis of difference Contractual liability Tort liability
Reason of occurrence It takes place when contract
terms are not satisfied in
appropriate manner (Mann,
2002).
It arises when parties in the
contract are not able to
perform as expected and due to
this reason innocent party is
injured
Relationship between parties Legal relationship exist
between the parties in the
contract at their mutual will
Relationship is imposed by law
after negligent action takes
place
Basis of damages Damages are provided as per
deed prepared by parties
As per the condition of
damages and negligence which
8

happens due to innocent party
Case reference In case of Avery v Bowden
(1855), indemnity were
presented by litigant as
fulfilling contractual terms
were denied.
In case of Donoghue V
Stevenson, indemnity were
offered as producer was not
able to take care of their
standard obligations and
innocent party was injured due
to it (Hollingsworth, 2014).
2. Scenario A
For successful claim of negligence, it is required for claimant to satisfy the following principles:
 Breach of duty of care: Suspect must be failed to satisfy the responsibility being
obligatory on them with presence of provision of negligence (Levinson, 2005). Further,
as per the case of Blyth V Birimingham water works 1856, reasonable conduct is
considered as per the actions of prudent person.
 Duty of care: It is the main duty which is expected from prudent person in similar
condition in which negligent action has taken place. Further, considering this aspect case
of Donoghue V Stevenson can be undertaken (Owen, 2007). In this case court has taken
decision that standard of individuals linked with parties with the principle of neighbour
love.
 Economic losses: Provision of case Ross V Caunters 1980 represents that negligence
claim is considered by court of law in situation where damages are foreseeable from the
negligent action (Palmer, 2014). In the case provided, damages were occurred to due to
negligent advice of defendant and due to this reason he was liable to provide for damages
for the same.
In the scenario provided, Ben has major responsibility to render proper working
surroundings to visitors and trepassers as per the provisions present in the Occupier's Liability
Act. Further, as per this duty it is necessary for Ben to take proper care so that chances of injury
may reduce to the party from their operational activities. By considering the case study provided
Ben has satisfied is responsibility by providing safety gloves to each and every workers who is
9

present within the workplace. Further, gloves provided were not used by Roger and due to this
reason accident took place. Carelessness of Roger cannot be undertaken as breach of duty of
Ben. Moreover, the claim made by roger all the principles associated are not satisfied and Ben is
not liable to pay for damages.
Scenario B
As per the defined provisions of vicarious liability, it is essential for the plaintiff to claim
for the damage. This framework has been developed by English Law and here the main provision
is given to prevent the negligence aspects raised for carelessness. Hence, vicarious liability
protects the act of negligence of those who has conducted the act of negligence (Partington,
2013). However, in the case of employment, employers are responsible for the acts of employees
as they owe the duty of care. Case of Lister v Hesley Hall Ltd [2001] UKHL 22 is one of the
similar case example that shows the concept of vicarious liability. The subsequent case depicts
that employer has considered all his duties and responsibilities; however warden was not in a
state of conducting sexual abuse of boys who live in the hostel. Hence, the below mentioned
conditions needs to exist if claimant is about to depict the liability of employer towards the act of
employees:
The party which is held as liable needs to be employee of the respected parties as through
that only, legal actions can be specified. There should be direct relationship among the employee
and employer as through that legal obligation can be fulfilled (Morgan, 2011). In order to
transfer the obligation of negligence, it is essential for the parties to specify all the necessary
actions that lies under the concept of vicarious liability.
Furthermore, the most important aspect under this concept is that negligence should be
conducted during employment period only as out of employment actions, the act of negligence
will not be considered under employer's actions.
Thus, from the discussion, it can be said that employer will be held liable for the acts of
Colin because at workplace employees are not supposed to conduct physical benevolence. Hence
it will not release the obligations of Colin and he can not be claimed for the damages. Hence,
from the discussion, both Colin and the employer will be entitled for the damages caused to
Roger.
10

Case of Mark and Regent Hotel
The act of negligence is terminated at the time when defendant can take advantage from any of
the below listed defences- Contributory negligence- These defences can be applied only when claimant contributed
to negligent act. It facilitates to terminate the act of negligence from any kind of liability. Volenti non fit injuria- It is applicable only when claimant intention put himself in
position of risk of injury. Here, claimant is already aware of the situation or potential risk
which can be occurred to him or her (Moriarty and Manthorpe, 2013).
 Ex tupri causa- This is another defences which can be applied only when negligent
action of employees is not unjust in law.
According the above mentioned defenses it can be said that Mark intentionally jumped
into pool and he was also aware of the damaged situation of pool. However, it was also
mentioned on the board that no one is allowed to enter in pool during 7.00 pm to 7.00 am.
Despite of seeing the notice he just ignored everything and got himself injured. Meanwhile, his
sunglasses got damaged which were expensive. Therefore, in this case Occupier's Act will be
applicable. Liability will vary due to amendment in the provisions of this Occupier's Liability
Act:
Occupiers Liability Act, 1957
According to this provision owner is only responsible to pay for the personal losses and
not any other industry will be paid by him. Owing to this, hotel Rogent is not entitled to pay for
the expensive sunglasses of Mark. Here, the corporation will take advantage of volenti non fit
injura. Thus, hotel is not liable to pay either personal or property damages caused to Mark. This
is because corporate performed its duty very well by placing the warning on board. Thus,
defences will be applicable and Mark will not be paid for injury as it was his own fault.
Occupiers Liability Act, 1984
This Act was developed through amendment in provisions of Occupier's Liability Act
1954. This Act had extended obligation of occupier of property injury along with the personal
injury. Provisions of this Act are supported by the Health and Safety Act. In accordance with this
Act, only providing notice is not sufficient for the prevention of injury. By considering this fact,
11

hotel will be liable to provide damages for personal injury to Mark however defence of volenti
non fit injuria will still be applicable for termination of property injury.
CONCLUSION
From the present project report, it can be concluded that individual are required to
provide standard performance whether there is presence of contractual relationship or not. If they
failed to do so, they will be required to pay remedy for the injury of innocent party. Liability in
negligence can be relinquished from defendant by the applicability of defences.
12

REFERENCES
Books and journals
Adamson, J. and Morrison, A. 2011. Law for Business and Personal Use. 19th ed. Cengage
Learning.
Curry, K. E., 2008. MBA Fundamentals Business Law., Kaplan Publishing
Deaki, and et.al., 2007. Markesinis and Deakin's Tort Law. Oxford University Press
Elliot, C. and Quinn, F., 2009. Tort Law. Longman.
Frey, P., and Frey, M., 2000. Essentials of Contract Law. Cengage Learning.Mann, K., 2002.
Punitive Civil Sanctions: The Middleground between Criminal and Civil Law. The Yale
Law Journal. 101(8).pp. 1975-1873.
Morgan, P., 2011. The Modern Law Review. Wiley. 74(6). pp.932-946.
Moriarty, J. and Manthorpe, J., 2013. Handyperson schemes and the Equality Act 2010. Housing,
Care and Support. 16(3/4).pp. 114-125.
Oughton, D., Marston J. and Harvey B., 2007. Law of Torts. Oxford University Press.Palmer, C.
R., 2014. Common law environmental protection: the future of private nuisance, Part I.
International Journal of Law in the Built Environment, 6 (1/2). pp.21 – 42.
Partington, M., 2013. Introduction to the English Legal System. Oxford university press
Plimpton, L., 2007. Business Contracts : Turn Any Business Contract to Your Advantage.
Entrepreneur Press.
Rush, J., and Ottley, M. 2006. Business Law. Cengage Learning EMEA.
Slapper, G., Kelly, D., 2011. The English Legal System. Taylor & Francis.
Twomey, D., and Jennings, M., 2010. Business Law: Principles for Today's Commercial
Environment. Cengage Learning.
Online
Hollingsworth, G., 2014. Vicarious liability lawyers. [Online]. Available through:
<http://www.legalmatch.com/law-library/article/vicarious-liability-lawyers.html>
[Accessed on 8th December 2015].
13

Levinson, J., 2005. Vicarious liability for international torts. [Online]. Available through:
<http://www.1cor.com/1158/?form_1155.replyids=282> [Accessed on 8th December
2015].
Owen, G. D., 2007. The five elements of negligence. [Online]. Available through:
<http://law.hofstra.edu/pdf/academics/journals/lawreview/lrv_issues_v35n04_i01.pdf>
[Accessed on 8th December 2015].
14