In-depth Analysis: Contract and Tort Law in Business Scenario

This essay provides a comprehensive legal analysis of a case scenario involving John, a restaurant owner, and various other parties, focusing on aspects of contract and tort law. The analysis covers potential breaches of contract between John and Sam regarding a lamb supply deal, examining the legal implications of revoking offers and the validity of oral contracts based on precedents like Payne v Cave and Wells v Devani. It further investigates the complexities of the contract between John and Roger from Bank Farm, highlighting issues of misrepresentation and the potential for legal action under the Misrepresentation Act 1967 and Consumer Protection Act 1987. Additionally, the essay addresses the tort of negligence in the context of a car accident involving John and Ria, discussing contributory negligence and the employment implications of Ria's termination. The essay considers various legal perspectives and relevant case laws to assess liabilities and potential legal actions by all parties involved.

ESSAY
Case Scenario: Contract and Tort Law

Table of Contents
Introduction...........................................................................................................................................3
Overview and issues in the scenario..................................................................................................3
Legal issues, liabilities and potential for legal action by parties........................................................4
Conclusion.............................................................................................................................................7
References.............................................................................................................................................8

Introduction
The case study scenario of John, the restaurant owner, Sam, joint owner of Spring
Farm, Roger, manager of Bank Farm and Ria, John’s employee, puts together a complex real
world situation dealing with tort of gross negligence and breach of contract. The essay looks
from the perspective of each individual involved in the scenario and assess the actions based
on the laws that apply. The essay also throws light on the past court cases that relate to the
incidents in the provided scenario and hence draws a corresponding between the previous
verdicts and the legal issues that may be associated with the above scenario. The essay briefly
goes through all the potential legal liabilities that might arise due to the incidents on the
people involved but the main focus will be drawn on the violation of the contract and the tort
laws between John, Roger and Ria. This essay, however, does not discuss the moral aspect of
the actions of the individuals but will throw some light on the adverse outcomes that might
arise through these actions affecting the parties involved.
Overview and issues in the scenario
The scenario revolves around the perspective of John, a restaurant owner, who prides
himself on his use of regional ingredients. John, for his search of hand-reared lamb, contacts
the co-owner of Spring Farm Sam and offers a deal for 2 years’ supply. Whilst waiting for
Sam to confirm the deal, John also comes in contact with the manager of Bank Farm, Roger.
John verbally discusses and brings up the fact that the lambs supplied must be hand-reared
and Roger confirms that, and therefore, John gets a verbal agreement and later a written
contract. It is to be mentioned that in the contract there is no mention of the clause of the
lambs supplied being ‘hand-reared’. John also had to revoke the offer to Spring Farms –
resulting in Spring Farms incurring the loss because of rejection of a deal.
A while later, when John comes to realize that the lamb supplied by Bank Farm isn’t
hand-reared, John, in a fit of anger, contacts Roger and asks to terminate the agreement with
refund. Roger declines remembering the manner of lamb rearing because of being a new
employee. John, seeking to meet Roger, asks his employee, Ria, to drive because of him
being intoxicated. Ria brings the fact to John’s attention that she wasn’t too confident to drive
and had only passed her test the day before. John insists and Ria proceeds to drive because
she is unable to decline. The car ends up in a crash because of Ria driving fast and not
breaking quickly enough. John, not wearing a seatbelt, incurs severe injuries and is unable to

work for long hours after the treatment and also having to hire a manager to run his
restaurants. Ria is terminated without notice.
Legal issues, liabilities and potential for legal action by
parties
Contract
The incident occurring between John and Sam ended with the revocation of contract
by the offerer after the acceptance by the offeree. The case of Payne v Cave (1789) shows
that the United Kingdom entitles the offerer to revoke their offer before it has been accepted
(LawTeacher, 2013). It is also required that the message of revocation is communicated
clearly and the offeree has the knowledge about the revocation, as seen in Dickinson v Dodds
(Turner, 2007, pp.32–33). In the incident between John and Sam, however, John has
allegedly revoked his offer after the offer being accepted, which has also resulted in Sam
incurring the loss of another deal that she rejected in order to accept John’s offer. Therefore,
if Sam’s claims are proven to be true and it is clear that a contract had been offered by John,
then Sam is bound to receive compensation.
However, the scenario presented does not clearly mention any incidence of a formal
contract being constructed and only mentioned John offering the deal. This, however, can be
objected, as seen in Wells v Devani, where the court found that if the respected parties
intended to enter into a formal agreement, the oral contract would be considered valid and the
parties be liable to the claim (Williams, 2019). Therefore, Sam would then have the legal
power to challenge John and receive compensation under breach of contract for the
revocation of contract by John.
In addition to this, there was misrepresentation in the contract law as an untrue
statement to John was being made Roger that he will going to supply hand reared lamb and
this has induced john to enter into the contract with Bank Farm. As per the contract law of
UK, this is a fraudulent misrepresentation and must be founded in the tort of deceit. Other
than this, even there was no arbitration clause was included in the contract which states
regarding the terms of negotiation. This again falls in the category of negligence
misrepresentation and related action against Roger will be based on the Misrepresentation
Act 1967.
The case of John and Bank Farms (as forth represented by Roger) is a much more
complex scenario with several points of ambiguity being present, making the claims of both

the parties weak. When viewed from the perspective of John, the incident seems like a simple
case of breach of contract simply because of the fact about the lamb being hand-reared was
misrepresented in the verbal conversation between John and Roger. The misrepresentation of
this information could have had a severe impact on John’s business, and therefore his life,
and John’s rage and his ask for the termination of contract with the refund of his money,
subjectively viewing, can be justified. Roger’s perspective explains his claim of not being
able to recall if the lambs were hand-reared because he was recently employed but this claim
doesn’t hold too strong because he actually stated that the lambs were hand-reared when
asked by John during the conversation.
These perspectives, however, wouldn’t be too impactful when viewing from the
perspective of breach of contract. Under the breach of contract law, the claimant, here John,
has to show that there has taken place a breach of contract which has resulted in loss for the
claimant (Felstead, Williams and Browne, 2018). However, it has been very explicitly
mentioned in the case scenario that the contract between John and the Bank Farms only took
a mention of who the parties are, the length of the contract and the negotiable price. The
contract had no additional clause of the lambs being hand-reared and therefore make John’s
argument weak. John’s position is also weaker in this situation as he carries the burden of
proof, and without proof beyond doubt about the breach of contract, the verdict can’t be in
John’s favour.
The case gets more interesting when we consider that, as already mentioned, the
United Kingdom Supreme Court has considered oral contracts as legally binding, as can be
seen with the example of the case between Blue v Ashley and Wright v Rowland, where, in
both the cases, the claimant suggested a verbal contract taking place in the conversation. In
both the cases, the judges accepted the verbal agreement as valid, however, the decision was
ruled against the claimants because of the informal nature of the conversation. These cases
also had the ambiguity of whether the conversations were actually supposed to end in a legal
contract (Davies, 2017). The judges also ruled, taking inspiration from Gestmin SGPS S.A. v
Credit Suisse (UK) Limited, that when viewing an oral contract as legally binding, one must
rely as little as possible on the recollection of events by both parties and put much more
emphasis on actual facts and evidence of the contract taking place (Practical Law, 2022).
There is a possibility that the verbal agreement between John and Roger can be taken
as legally binding because of the professional nature of the conversation as well as the

intention to have a formal contract regarding the same. John can also support his claim by
mentioning the fact that his restaurant has been known to serve produce that is regionally
farmed. These facts can be presented at the court which would strongly support John’s
argument. This could put Roger in worse off position because of the ignorant nature of Roger
towards the specific ask of hand-reared lamb by his customer. Roger’s defence of being a
new employee wouldn’t hold too strong because he didn’t make an attempt to know how the
lamb was reared. Roger can be found guilty of charges such as breach of contract and tort of
product liability under Section 2 of the Consumer Protection Act 1987, which hold the
supplier liable for not meeting the conditions of the product demanded (Global Legal Group,
2021). The act of John terminating the contract, along with the payment of damages, could
also be justified because of a repudiatory breach taking place (Horn, 2013).
Tort
The car accident involving John and Ria bears two different points of view and
mistakes happening on both ends. When looking at the incident from the perspective of John,
Ria was a qualified driver with a certification and John had trusted her to drive for him. Ria
showed an irresponsible behaviour by speeding and not applying the brakes at correct time
that resulted in severe physical damage to John as well as his dependence on a manager for
operating his restaurants, costing him money. Ria’s claims and perspective tells a different
part of the story. Her perspective claims that she resisted John’s offer of driving the car
because she had recently been certified and wasn’t very confident in driving and yet John
insisted and Ria had to agree to drive because of the pressure of a superior. The fact that John
wasn’t wearing a seatbelt during the accident also supports Ria’s claims of John having a
negligent behaviour. Also, with help of testing for liability as per the negligence. This is
necessary for the reason that the test of negligence will assist in analysing the working
efficiency of the business and this will provide a base to the company to take proper decision
relating to business.
In the present case of the there is the situation of contributory negligence because it
involves the behaviour which contributes to one’s own injury or loss and the standard is not
be met. Hence, for this in the current incident of John and Ria, Ria was saying that she has
recently being certified and not is also not confident. But then also John emphasized to drive
and as a result of this she did not applied break on correct time. Hence, this resulted in an
accident and John was injured badly. Also from side of John as well this is the case of

contributory negligence because of the reason that he was not wearing the seat belt which is
very important to be done. Hence, with respect to this it was analysed that John is also at fault
because he was not wearing the seat belt and this was wrong. John knew that wearing seat
belt is very important and then also he has not won the seatbelt which is his fault. In this case
no one is liable to sue other as both John and Ria are fault.
Employment
When discussing the event of John firing Ria on the basis of gross misconduct, it can
be understood that despite of the reasons that Ria was put in the situation, she had the
responsibility and was entrusted by a superior to drive. Her lack of capability (or confidence)
resulted in grievous harm to John’s life and his financials, and hence, Ria’s act would be
considered as gross misconduct (ACAS, 2020). On the other hand, Ria’s case also presents
strong arguments against John as tort of negligence. Any case of negligence consists of 4
parts- duty, breach, causation, damages. John had the duty to look after the well-being of his
staff, which was evident in the ruling of McGhee v National Coal Board, and understand the
capabilities of them (Rai, 2019). He breached this duty by unduly pressurizing his employee
with responsibility which she claimed she wasn’t capable of handling. This nervousness was
what eventually led to the car crash through which she suffered minor damages. John would
also be charged for ignoring road safety by not wearing a seatbelt and hence the case may
complicate itself to become a case of contributory negligence where John himself too was
responsible for the injuries caused to him, as in the case of Revill v Newbery (E-
lawresources.co.uk, 2022).
The grounds of terminating Ria from job is not correct as the it was not only the fault
of her. This is because of the reason that on the grounds of employment law there needs to be
valid reason and any person cannot be removed from job without any valid reason. Thus, in
this case, Ria can sue John and company for not dismissing her from the job as the incident
did not take place only because of Ria.
Conclusion
The essay looked at the case scenario by segregating the three individual events where
there was scope of legal liability. The case of John and Sam was relatively simple but yet it
would be difficult to draw any strong conclusion because of the lack of facts. A similar
pattern is also seen in the case of John and Bank Farms, where there was lack of any concrete

proof because of absence of any clause stating the requirement of hand-reared lamb in the
contract between the two parties. The incident between John and Ria reflects on negligent
behaviour by both the parties leading to severe injuries to John and job termination for Ria. It
is a case that could be considered under contributory negligence.

References
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https://www.lawteacher.net/free-law-essays/contract-law/how-is-an-offer-terminated-
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2022].
Williams, T. (2019). Oral agreements, even without key terms, can be binding | Harrison
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Horn, L. (2013). Repudiatory Breach – A Brief Summary And Case Study. [online]
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