Analyzing Contractual and Tortious Liabilities in Business Law

This report provides a comprehensive analysis of contract law and the tort of negligence within a business context. It begins by defining the essential elements of a valid contract, including offer, acceptance, consideration, and intention to create legal relations, and then discusses different types of contracts like written, oral, unilateral, and bilateral contracts. The report applies these elements to a business scenario, examining express terms, implied terms, and innominate terms, and their impact on the parties involved. Furthermore, it differentiates between obligations in contract and negligence, outlining the nature of liability in each case. The report also delves into the elements of the tort of negligence, including duty of care, breach of duty, causation, and damages, and explores defenses against negligence claims. Finally, it addresses the doctrine of vicarious liability, explaining ways in which a business can be held liable for the actions of its employees or agents, providing a thorough understanding of legal liabilities in business operations.

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Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
1. Stating the essential elements required to form the legal binding..........................................1
2. Discussing the different types of contract...............................................................................2
3. Applying the elements of the contract in context to the given business scenario...................3
4. Stating the type of terms as per the given scenario and its effect upon the competent parties
.....................................................................................................................................................3
5. Applying the terms of law in different contracts....................................................................4
TASK 2............................................................................................................................................4
1. Stating the differences between obligation in contract and in negligence..............................4
2. Stating the nature of liability in case of negligence................................................................5
3 and 4. Applying the elements of the tort of negligence and defenses in the different business
situations.....................................................................................................................................6
5. Stating the doctrine of vicarious liability................................................................................7
6. Ways through which business can be vicariously liable.........................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Contract may be defined as a legal binding or agreement between two or more competent
parties who give their consent on terms and conditions of the contract. Competent parties to a
contract must fulfill for essential requirement such as offer, acceptance, lawful consideration and
intention to create the legal obligation (Appleman, Appleman and Holmes, 2013). These
elements are highly required in order to form a valid contract. Contract is usually made in the
written formation but they may also be orla or implied form. The present report is based upon the
different case scenario which will discuss essential elements which are required to form a legal
binding. Besides this, it will also develop understanding about the different types and terms of
the contract as well as its effect upon the competent parties. Further, it will also shed light on the
doctrine ODF vicarious liability and aspects of negligence.
TASK 1
1. Stating the essential elements required to form the legal binding
There are mainly four essential interments which competent parties must fulfill in order
to form a valid contract. Essential elements refer to offer, acceptance, lawful consideration as
well as intention to form a legal binding or agreement (Chen-Wishart, 2012). In order to covert
agreement into a contract parties to a contract must fulfill the following essentials which are as
under:
 Offer: It may be defined as proposal in which one party expresses their feelings in
relation to purchase or sell of an asset. As per the cited scenario Xs contacted to Country
Pine Ltd in relation to the supply of dining tables, chairs and barstools @ £4200. In this
case, Xs had made offer to Country Pine in relation to the purchasing of furniture.
 Acceptance: When one party give acceptance to another party by taking into
consideration all the terms of the contract then it is considered as an acceptance. In the
given case Country Pine quoted £45000 for the supplying of furniture. Whereas Xs
negotiated the amount and quoted £42000 for such deal. Country Pine had accepted the
figure which are quoted by Xs and thereby shows their acceptance.
 Lawful or legal consideration: Considerations in form of monetary terms is also one of
the essential elements which are required to form a legal binding. For the legal
relationship there must be a law consideration between the parties to a contract. In the
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cited case Country Pine takes £42000 in return of the supply of furniture. Besides this,
Xs also receive assets in return of the losing money. Thus, in this each party of the
contract give something and receive something in the monetary terms rather than in kind
(Lawful consideration, 2011).
 Intention to a form a legal binding: Legal intention is also required between the parties to
a contract which assures satisfactorily performance from both the sides (Four Essential
Elements of a Contract. 2015). In the cited case scenario Country Pine Country Pine had
accepted the offer which is made Xs which reflects that both the parties have intention to
create the legal obligations.
2. Discussing the different types of contract
As per the given case scenario written contract had made between the parties to a
contract. Country Pine quoted the figure of £45000 in relation to making delivery of dining
tables, chairs and barstools. In this situation, Xs had quoted £42000 and sended the standard
contract form by making their signature. Country had accepted the conditions and sending the
further mail to Xs which contains data and delivery time. At the time of delivery Xs had received
the invoice of £43100. In this situation, Xs represented his query in relation to the high prices. In
addition to this, there are number of dining table whose legs are detached from itself. In this,
Country Pine had represented the written evidence or mail which contains that price could be
raised by 5% if price of the raw material increased. Besides this, Country had also mentioned the
clause that thrty have no liability for any kind of defects. On the basis of the written evidence
Country Pine is not liable to compensate Xs for the damaged assets. Thus, written contract
provides assistance to the defendant party in against to the claimant on t6he basis of written
proof.
Besides the written contract there are also the oral as well as unilateral and bilateral
contract which place different impact upon the competent parties are as follows:
 Oral contract: In the oral contract competent parties discuss all the terms and conditions
in the oral form. Nevertheless, in the case of disputes claimant have no legal proof in
against to the defendant party which creates difficulty in front of the legal authorities in
relation resolving of disputes
 Unilateral and bilateral contract: In unilateral one party who make promise to another
without taking consent of another party. In unilateral contract offeror has obligation to
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perform his promise if offeree also perform as per the terms and conditions of the
contract. Offered possesses right to claim for the compensation if offeror make default in
his performance (DeMitchell, 2006). In contrary to this, competent parties have agreed to
the terms and conditions of contract. Both the parties to a contract has the legal obligation
in relation to the performance of promise
3. Applying the elements of the contract in context to the given business scenario
As per the essential element of contract there must be offer, acceptance, legal
consideration and intention between the parties to a contract. On the basis of the cited case
scenario Xs have made offer to Country Pine that he is ready to give £42000 with the intention to
the purchasing of dining table, chairs and barstools. Country Pine had also accepted the offer and
agreed to deliver the furniture at the mentioned price. This aspect reflects that all the essential
elements are present in agreement so it is considered as a valid contract. Nevertheless, the
invoice which Xs received contains £43100 as well as most the dining tables are damaged.
In this situation Xs made complaint to Country pine then CP drew the attention of the
claimant upon clauses which are mentioned in contract. Country pine had mentioned in contract
that price could be raised by 5% if the price of raw material increased. In addition to this, they
have also mentioned that company has no liability for defects after delivery. On the basis of this
aspect Xs has the legal obligation in relation to the performance of their duties and
responsibilities. Thus, Xs has to prevail the contract until and unless mutual consent in occurred
between the parties in relation to the revocation or reformation of the contract.
4. Stating the type of terms as per the given scenario and its effect upon the competent parties
There are mainly three types of terms such as express, implied and innominate parties
which place different impact upon the parties to a contract. On the basis of cited case scenario
express terms are involved in the contract. Express terms may define as those in which both the
parties give their mutual consent upon the terms and conditions which are inserted in contract
(Sutton, 2010). It provides right of sue to the innocent party if defendant party make default in
their performance. In the given case Xs and Country Pine gave their mutual consent upon the 5%
rising in prices as well as no liability for defects clause. It is recognized as an express terms of
the contract. As per this aspect, if Xs does not perform in accordance with the terms of contract
then Country have the right to make sue upon him for the loss which is suffered by claimant.
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Thus, if Xs make default in his performance then Country Pine has the right to claim for the
compensation ion against to defendant party.
5. Applying the terms of law in different contracts
Different terms of the contract place different effect upon the parties to contract which
are enumerated below:
 Express terms: It refers to the terms and conditions are inserted by the parties to a
contract with their mutual consent. In accordance with such terms competent parties are
obliged to perform their duties and responsibilities as per the contract (Platz, 2007). If
defendant party make default in their performance then innocent party have the right to
make sue upon them for the compensation.
 Implied terms: Implied terms refer to rules which are included by laws and legislation in
contract (Treitel, 2002). These terms are also known as default rule which provides safety
to innocent party in against to the defendant party.
 Innominate terms: Innominate term may be defined as contractual terms which may
either be condition or warranty. These aspects are highly dependent upon the type or
nature of contract which are made by parties to a contract. Condition and warranty place
different effect upon the competent parties. In case of breach of condition claimant
possesses the right to repudiate the contract or claim for damages which are suffered by
innocent party. Further, in warranty right of innocent party is limited to claim for the
compensation. In this, claimant does not have the right to repudiate the contract.
As per the cited case scenario there is express terms are mentioned in the contract. In
contract exclusion clause are mentioned by Country Pine. It is the mistake of Xs that he did not
read the clauses which are included by Country Pine. Thus, Xs is not entitled to claim for
damages in against to Country Pine.
TASK 2
1. Stating the differences between obligation in contract and in negligence
There is significant difference between the obligation in contract and in negligence. In
case of contractual liability rights, duties and responsibilities are determined by parties to a
contract with their mutual consent. On other hand in negligence, rights and duties are determined
by legal authority (Overgoor and et.al, 2015). Along with it, contractual liability occurs when
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parties to a contract fails to perform their duties and responsibilities according to the terms and
conditions of contract. In contrary to this, liability in tort occurs when competent parties do not
perform their roles and responsibilities as per the standards. In addition to this, under the
contractual liability competent parties build legal binding or relationship with their mutual
consent (Granger, 2015). On other hand in tort liability, legal relationship is formed between the
parties to a contract by legal authority. On the basis of such aspects it can be stated contractual
liability highly differs from tort liability.
2. Stating the nature of liability in case of negligence
Negligence consists of the situation in loss or injury is suffered by the employee or guest
due to the failure of employer in making proper health and safety arrangements. As per the case
scenario Country Pine manufactures the furniture and employed forty employees within an
organization. There are several key elements which provide support to innocent party in against
to defendant which are enumerated below:
 Duty of care: On the basis of this aspect employer has the liability to make proper health
and safety arrangement for their employees. If employer fails to perform the duty of care
which caused damages to innocent party. In this case, employee possesses the right to
make sue upon employer for compensation (Handford and McGivern, 2015). Besides
this, employer is also entitles to compensate the claimant to the extent to which loss is
suffered by him.
 Breach of duty: It refers to the failure of employer in relation to the performance of duty.
If employer or company breaches their duty then employee has the right to make sue for
damages.
 Forseeability: This element emphasizes that if loss is easily foreseeable by employer then
if he fails to make the proper safety arrangements for the same (Haripriya and Haripriya,
2014). Then, employee has the right to make sue upon employer for the damages.
 Remoteness of damages: If claimant has evidence which prove that physical injury is
suffered by claimant due to the negligence of employer (Nijem and Galpin, 2014). In the
cited case scenario Fiona slipped due to the negligence aspect of Country Pine. On the
basis of this aspect Fiona possesses the right to make sue upon CP for physical injury.
The above mentioned aspects provide support to claimant in against to defendant if they
succeed in satisfying all the above mentioned aspects.
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3 and 4. Applying the elements of the tort of negligence and defenses in the different business
situations
As per the cited case scenario in February Fiona had visited the CP showroom with the
intention to purchase some beds for her bed and breakfast business. During this, Fiona slipped
due to some water spill. Unfortunately, Fiona had fallen down and her leg was also breaking
down. In this situation, Country Pine is entitled to compensate Fiona for the physical injury
suffered by her. As per the case of negligence Fiona has evidence of physical injury in terms of
broken leg. It is the responsibility of employer to make proper safety arrangements for their
guest. Due to the failure of Country Pine loss is suffered by Fiona. On the basis of this aspect
Fiona has the right to claim for damages in against to Country Pine. Thus, Fiona needs to make
sue upon defendant party. Besides this, CP is also entitled to compensate the innocent party to
the extent to which loss is suffered by her.
In addition to this, employee who operates machine has the work to cut and assemble the
furniture. Sanding machine is installed by Country Pine within an organization which helps in
finishing the woods before its assembling. In order to maintain the health and safety standards
Country Pine had repeatedly informed their employees in relation to the removal of safety
guards. Company had informed that employee should not remove the safety guard when wood
jam occurs. On the basis of case scenario, Bob was operating the sanding machine with the
intention to meet the customer demands on the occasion of Christmas. During his working the
wood become jammed.
In order to remove such blockage Bob had separated safety guard from sanding machine.
Due to the removal of safety guard Bob is got heavily injured. His hand and arms had adversely
affected due to such injury. As per the aspects of negligence Country Pine had repeatedly inform
their employees in relation to causes of removal of safety guard. By this, they had performed
their duty of care to the large extent. Loss is suffered by Bob due to his own negligence in
relation to the health and safety aspects. Bod had totally ignored the information provided by
Country pine in relation to the ways of operating machine. Thus, Country Pine is not accountable
to Bob and his damages. In accordance with the principles of negligent Country Pine is not liable
for the loss which is suffered by Bob.
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5. Stating the doctrine of vicarious liability
Vicarious liability consists of situation in which employer is held accountable for the
irresponsible or undesirable act of their employees or another person. Under vicarious liability,
employer has responsibility to exert control over their employees (Tadros, 2014.). Moreover,
employer has responsibility to frame strict policies and rule in order to restrict undesirable action
of employees. By introducing the penalties and other types of punishment company can easily
control the undesirable activities of their employees within an organization. Employer and
employees have contractual relationship with each other (Orne, 2015). Thus, he is obliged to
give compensation to another party for the illegal act of their employees. On the basis of
principles of vicarious liability employer is not liable to compensate the third party in the
following situations:
 Employer is not held accountable for the loss suffered by third party if employees
perform illegal activities in order to restrict the undesirable act of third party (Raine,
2014). In this case, third party does not have right to make sue upon the employer.
 Claimant party is able to claim for the compensation if they fail to proof the activities of
the employee as illegal or immoral.
Thus, Country Pine is held accountable for the compensation only when claimant get
succeed in proving the undesirable act of employees.
6. Ways through which business can be vicariously liable
On the basis of cited case scenario employees having responsibility in relation to the
supply of furniture driving rashly due to pressure of meeting deadline. On the occasion of
Christmas Jason was delivering the large consignment of furniture to the number of retail outlets.
With the aim to meet up the deadline Jason was driving over the speed limit. In order to avoid
the accident of child Jason’s crashed into a shop. It may cause of damages to the owner of shop.
On the basis of the case scenario Jason is not in control of his employer. Thus, Country
Pine is not held accountable for the illegal activity of Jason. Owner of shop can claim in against
to Country Pine when contractual relationship exists between the employer and employee.
Therefore, owner of the shop are not in position to claim in against to Country Pine as per the
vicarious liability act.
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CONCLUSION
From this project report it has been concluded that competent parties needs to undertake
all the essentials in order to form a valid contract. Besides this, it can be inferred that Xs has no
right to revoke the contract as per the express terms of the contract. It can be seen in the report
that different type of contract having different impact upon the competent parties. In addition to
this, it can be concluded that Fiona can claim for compensation in against to Country Pine.
Further, it can be concluded that Country Pine is not entitled to compensate Bob for the damages
which is suffered by them. In can be concluded that Country Pine is not held accountable for the
undesirable act of Jason.
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REFERENCES
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Chen-Wishart, M., 2012. Contract law. Oxford University Press.
DeMitchell, T. A., 2006. Negligence: What Principals Need to Know about Avoiding Liability.
Rowman & Littlefield Education.
Granger, B., 2015. Known Injuries Vs. Known Risks: Finding The Appropriate Standard For
Determining The Validity Of Releases Under The Federal Employers'liability Act. Hous.
L. Rev. 52. pp.1463-1529.
Handford, P. and McGivern, B., 2015. Two Problems of Occupiers' Liability: Part One-The
Occupiers' Liability Acts and the Common Law. Melb. UL Rev. 39. pp.128.
Haripriya, A. and Haripriya, V., 2014. Knowledge about Medical Law and its Negligence
among Doctors: A Cross-Sectional Study. Int J Sci Res Publ. 4. pp.1-3.
Nijem, R. M. and Galpin, A. J., 2014. Unilateral Versus Bilateral Exercise and the Role of the
Bilateral Force Deficit. Strength & Conditioning Journal. 36(5). pp. 113-118.
Orne, K., 2015. It's About Time: Modernizing the Federal Employers' Liability Act of 1908.
Ariz. St. LJ. 47. pp.343-343.
Overgoor, M. L. and et.al., 2015. Restoring penis sensation in patients with low spinal cord
lesions: The role of the remaining function of the dorsal nerve in a unilateral or bilateral
TOMAX procedure. Neurourology and urodynamics. 34(4). pp. 343-348.
Platz, L., 2007. Defining the most desirable outsourcing contract between customer and vendor.
Management Decision. 45(10).pp. 1656-1666.
Raine, J.M., 2014. Off-label use of medicines: legal aspects. In Contrast Media (pp. 17-21).
Springer Berlin Heidelberg.
Sutton, M., 2010. Record rewards: the effects of targeted quality incentives on the recording of
risk factors by primary care providers. Health economics. 19(1). pp. 1-13.
Tadros, V., 2014. Orwell's battle with Brittain: vicarious liability for unjust aggression.
Philosophy & Public Affairs. 42(1). pp.42-77.
Treitel, H. G., 2002. Some landmarks of twentieth century contract law. Oxford University
Press.
Online
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Four Essential Elements of a Contract. 2015. [Online]. Available through:
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