Analysis of Contracts and Negligence: Case Studies and Legal Aspects

This report provides a comprehensive analysis of contracts and negligence, covering essential elements such as offer and acceptance, intent to create legal relations, consideration, capacity, and privity of contract. It explores different types of contracts, including face-to-face, distance selling, written, verbal, deeds, inferred, and online contracts, as well as business-to-consumer and business-to-business contracts. The report also examines various contractual terms such as expressed, implied, exclusion clauses, and innominate terms. Furthermore, it contrasts contractual and tort liabilities, delving into the development of the duty of care and the neighbor principle. The report also discusses vicarious liability, including a case study involving a business owner, and concludes with a discussion of breach of contract conditions and their implications. The report includes a sample contract for the purchase of beauty products and a letter to the owner of a company regarding a breach of contract.

ASPECTS OF CONTRACTS AND
NEGLIGENCE

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Essential elements that lead to formation of a contract and their significance.....................3
1.2 Type of contracts...................................................................................................................4
1.3 Different terms of a contract.................................................................................................5
TASK 2............................................................................................................................................5
2.1 & 2.2 Drafting of a contract for the purchase of the contract ..............................................5
2.3 Writing report to Mr. Michael Hair, owner of “Hair UK”....................................................6
TASK 3............................................................................................................................................7
3.1 Contrast between contractual and tort liability.....................................................................7
3.2 Development of the concept of “Duty of Care” and neighbor principle...............................7
3.3 How a business is held vicariously liable.............................................................................8
a) Can Mathew sue Alan.............................................................................................................8
TASK 4............................................................................................................................................9
4.1 Draft a short letter to brad.....................................................................................................9
4.2 Solution for following case study.........................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
The objective behind preparation of this report is to analyze the different aspects of
contract and negligence. The report herein showcases the different elements of a contract act and
makes a detailed expression of these elements which are important for determining the validity
of a contract. The purpose of conducting this report is to draw lights on the different types and
terms of contract act. Further, the report has made a sharp contrast between contractual and tort
liabilities. Moreover, the report has made a clear determination on the nature of liabilities that
persist in negligence. The report has bought out various conclusion in reference to varied case
law specifying the degree of liabilities that lie on an employer arising due to vicarious liabilities.
TASK 1
1.1 Essential elements that lead to formation of a contract and their significance
For a valid contract to form it is important to discuss in brief the essential elements that
requires to be accomplished by the contracting parties. The following are the key elements-
1. Offer and acceptance- Offer is manifestation of willingness to enter into a contract on a
specified terms, made by the offeror with an intention of making it binding once
accepted by the person to whom it is being addressed. Offer may be expressed or by
conduct. Acceptance is the final expression of affirmation to the terms stated in an offer.
It is also important that there must be an intention of the offeree to bound itself by the
terms stated in an offer. Offer must be accepted in accordance with the precised terms
for converting it into a valid agreement (Kelly and et.al., 2013). Unilateral and bilaternal
are the two different forms of contract. Here, unilateral offer is the type of open offer
which is being given to the general public. But, in the bilateral offer firm will have to
perform as per the terms and conditions of the contract (Harvey v Facey
[1893] AC 552).
2. Intent to create a legal boundation- Agreement has no legal binding on parties until it has
been made with a legal intention. It is important that parties enter into mutual agreement
to actually get legally bound by it. In case of ordinary transaction, a presumption of legal
intentions of parties to enter into contract is made (Jones v Padavatton [1969] 1 WLR
328).

3. Consideration- In context of general law, a contract isn't binding unless supported by
some valuable consideration. The given thing is also specified under Thomas v Thomas)
(1842) 2 QB 85. A promise is not binding on parties unless it has been supported by
some consideration. Consideration needs to be sufficient enough but need not be
adequate (Chen-Wishart 2012).
4. Capacity of contract- It has been withheld by the contract law, that the parties must have
attained the age of 18 and above before entering into a contract act as well as be solvent
before making such contracts.
5. Privity of contract- the doctrine of privity of contract specifies the general rule, that a
third party holds no legal right to exclaim his rights for a contract to which he isn't a
party. Thus, it cannot claim to use upon his rights for a non-performance of a contract in
order to gain its promised performance (Hemraj, 2003).
Case Study
As per the case study, James has advertised on e-commerce website about the sale for a
high definition web camera for £55. Maria responded to this advertisement via an e-mail
showing ts willingness to buy at the counter-offer at £45. This counter-offer has invalidated the
previous offer making the contract standstill. The negotiation and James unwillingness to accept
negotiation has affected the validity of the contract. Thus, James and Maria are not legally
binding with one another.
1.2 Type of contracts
There are different type of contract that are identified between the parties, formed for the purpose
of entering into a legal relationship-
1. Face-to-face contract: In this type of contract all conditions regarding agreement is
decided between the parties by way of verbal communications. The probability of denial
by parties in reference to the terms and condition cannot be traced in this type of contract.
Often it has been seen that such type of contracts are entered by those who are more
related and close to one another. In such type of contracts the consent of parties is taken
immediately and responses can be availed (Beale and et.al., 2010).
2. Distance Selling: Here the legal relationship between parties is established between
parties whereby the means of communication are used such as telephones or e-mails. The
physical presence of parties while the formation of contract isn't assured. Moreover, in

distance selling, the offeror shall serve some stipulated time within which the offeree is
required to make acceptance to the offer. In this context, online shopping can be
considered as the best example of distance selling contracts (Levinson, 2005).
3. Written contracts: Hereby, a contract deed is formed which incorporates the terms and
conditions mutually entered by the parties. In case where conflicts arise the deed shall be
referred for undertaking judgments (Fontana v. Upp 128 Cal. App. 2d 205). In few cases
like contracts of immovable property, written contract is a mandatory requirement for all.
4. Verbal contract: It is the type of contract in which terms and conditions of the contract is
orally being decided by the parties. In this form of contract, the chances of not fulfilling
the rights and obligations of agreement is more because here parties does not have any
evidence of their legal relationship.
5. Deeds: It is the legal which needs to be signed and delivered by the respective parties. It
is basically used when one party transfer its ownership right to other.
6. Inferred contract: It is the unwritten contract which automatically gets applied when two
parties makes the decision for entering into the legal relationship.
7. Online contract: It is the type of contract which is formed by taking help from different
electronic means. This contract is just like written contract.
8. Business to consumer: This contract is made between the buyers and firm.
9. Business to business: This contract is totally opposite to the B2C contract as the given
type of contract forms legal relationship between those parties who operate different type
of business.
Herein, such contract are being considered as major element of a contract defining the
legal or contractual relationship between their parties.
1.3 Different terms of a contract
The contractual terms are entered into a contract to specify a degree of obligation between
parties. These terms make it mandatory for parties to abide by their performances. These
contracts incorporate following terms in it-
1. Expressed terms- these terms are being inserted into a contract by mutual consent. These
terms can be orally or in written form be expressed. Warranties and conditions come
within this head.

Condition is a leading term of contract. Wherein, any condition specified is breached, party
aggrieved is entitled to deny the contract entered and claim for subsequent damages (Poussard v
Spiers (1876) 1 QBD 410). Whereas, in case of warranties the party is only entitled to claim for
damages and holds no right to cancel the contract (Ole Lando and Commission on European
Contract Law, 2003).
2. Implied terms- Such terms are implicit and have been justified legally. They provide
fairness to the contract and are obligatory for parties to abide by such contracts. These
terms are specified by law and are meant for the bonafide purpose. The sales of good act
also resides in the given category. Thus, the given act depict that it is the responsibility of
corporation that it must make measure with respect to give the high quality of services to
its buyers in an effective manner.
3. Exclusion clause- these terms defend the faulty party in case of non-satisfactory
performances. Such terms are reasonable only when they have been mentioned prior to
entering into the contract through mutual acceptance. The exclusion clause must not be
contradicting the legal laws.
4. Innominate terms-these terms are neither classified under a condition nor into warranty.
These are known as an intermediate terms. These terms are flexible and can be inserted in
contract in favor of the parties (Hong Kong Fir Shipping v Kawasaki Kisen Kaisha
[1962] 2 QB 26).
TASK 2
2.1 & 2.2 Drafting of a contract for the purchase of the contract
Bella is a UK fictitious company which is selling its beauty products and is now planning
to launch it new shampoo which Bella is aggressively advertising. The contract is being drafted
to make purchase of the shampoo so advertised.
The contract is established between two parties Bella UK [First party].......Hair 4 U..[Second
party]. The term of the given contract will be start from 25-dec-15 and it will be terminated on
30-dec-15.
The terms are depicted in below:
1. Expressed terms: herein, the contract order has been placed by Hair 4 U company to
Bella UK which is an expressed from of contract. In this respect, the expressed terms of
the contract is 10 boxes of Miracle oil at a price of 5 which is being clearly stated by the

Bella Company .
2. Implied Terms: It is obligatory for parties involving must abide by the terms so
specified in its contract. In any case where the parties are not abiding themselves by the
conditions and regulations stipulate then in that case, the aggrieved party has the right to
claim for its damages caused to them (Lewis, 2011).
3. Exclusion Clauses: Bella UK, seller of Miracle oil has clearly specified that it shall not
be responsible for any adverse consequence as it has only guaranteed 20% of the success
of the product. Thus, this exclusion clause holds validity since it has entered in a prior
consent to the agreement for above contracts.
The consideration decided for the given contract is shampoo bottle which is being purchased
by Hair 4 u and in return of accepting the bottle firm will give money to them. In this contract,
all UK legal laws and provision will be applied.
............................................ …............................................
(Signature) (Signature)
….............................................. …..............................................
(Printed name) (Printed name)
….............................................. …..........................................
(Address) (Address)
…............................................. …............................................
(Date) (Date)
2.3 Writing report to Mr. Michael Hair, owner of “Hair UK”
a)Breach Of Condition
Where, it has been seen that there is any breach of condition of a contract, then Hair 4 U
has the right to repudiate the contract. The party has the right to get discharged from making any
purchase and let go its obligation to undertake future performances.
As per the given case, Bella 4 U has declared the condition that it shall provide 10
shampoo of Miracle Oil at a price of 5. If in any case the above condition is breached or where

the company has set back from its words, Hair 4 U shall have the rights to repudiate the contract.
Thus, if any individual who will breach the specified terms and conditions of the contract
at that time he/she will be being consider as liable for the same. In the effect of that, defendant
party will have to pat the damage to the claimant (Poussard v Spiers (1876) 1 QBD 410). The
concept relating to termination of contract varies in both condition and warranty. Here, the
contract will be terminated by the party if terms and conditions of contract are not fulfilled. But,
in case of warranty parties can claim the damage but they cannot terminate the contract.
b)Legality of exemption clauses
Exemption clause is a term where the Bella can look for meeting the consequences that
can arise in future as a consequence of entering into a contract. In this contract Bella has clearly
specified that it holds no responsibilities for any adverse outcomes, the product assures only 20%
success.
In case, where there is no hair growth from utilizing the product, Hair 4 U has no right to
sue the company. On the contrary if any skin irritation arise as a result of using the product the
company can sue company as per Sale Of Good Act. The hair 4 U has the rights to claim for
damages and seek remedies in the court. The exclusion clause will be consider as valid if it is
properly being inserted by the parties while forming the contract. However, it is considered as
invalid when parties do not communicate about the same to the respective individual while
forming the contract.
TASK 3
3.1 Contrast between contractual and tort liability
Contractual liability occurs when parties fail to meet their contractual obligations. Tort
Liability on the other hand is an act of negligence or party inability to undertake its due standards
of care in its action.
Difference between contractual liability and tort liability-
1. In contract the obligation is undertaken on a voluntary basis whereas in case of tort
obligation is imposed stringently by law (Nysten-Haarala, Lee and Lehto, 2010).
2. Legal relationship is formed through mutual consent of parties in a contract but this is not
the same case in tortious act. The parties are unaware about the liabilities whereas in case
of contract act the parties are acknowledges by each other right.

3. Claim of damages stated in case of tort are determined as per the court of law. In cases of
contracts the deed determines the liability of the parties.
4. There is breach of duty in cases of tort whereas in case of contract there is breach of term.
5. Tortious liability arise out of faults and mistakes, whereas the contractual obligation arise
out of debts, covenants and sumps.
6. In case of tort the responsibility is placed on all. On the other hand in case of contract the
liability is restrictive to the contracting parties (Vicarious Liability, 2014).
7. In the contractual liability parties who are in the legal relationship knows about each
other very well. However, in the case of tort both parties does not have any information
about each other. However, they came to know about each other when something wrong
happens (Home Office v Dorset Yacht Co Ltd, (1970) AC 1004 House of Lords). In tort
liablity, unliquidated damages are given to the parties.
3.2 Development of the concept of “Duty of Care” and neighbor principle
Duty of care is a legal obligation which assures that adequate safety and security must be
provided to all. If in any case these duties are looked around to breach the legal liability, the
tortfeasor is imposed upon for providing compensations to the victims for the losses so incurred.
Usually, duty of care occurs whereby an individual or a group performs an activity which
has the likely possibility to harm the other either economically, physically or mentally (Smith
and Atiyah, 2006). The first element in a negligence is duty of care. This reflect concern
regarding the relationship between the defendant's and the claimant, wherein the obligation is
imposed upon the defendant to provide adequate care to plaintiff for avoiding any sort of
injuries.
Donoghue v Stevenson 1932 is popularly recognized as the snail in the bottle case. In this
case Ms Donoghue has placed an order for a ginger beer. The bottle received was opaque and
after consumption of almost all she became aware of a snail in the bottle. She consecutively fell
ill due to its consumption. Donoghue files a case against David stevenson the manufacturer of
ginger beer. The court of lords gave its ruling in the case favoring Donoghue and direct for legal
actions to be undertaken against David Stevenson. The court of aw specified due responsibility
to undertake reasonable care to avoid acts and omission which are likely to cause injuries to the
neighbors (Levinson, 2005).
This negligence principles can be signified from the following situations-

1. Negligence: A plaintiff holds the right to take civil action against the defendant's,
provided the defendant's has caused some injury or loss of property to the plantiff.
2. Duty of care: Manufacturers have their duty of care till the end consumers or users of
their product (Marsh and Soulsby, 2002).
3. Neighboring principles: As per this case law, neighbor is defined as a person who are
closely and directly affected through the act of another which is ought to reasonably led
to other person in a contemplation for affecting, when one is directed for an act or
omission which is subsisting in the current situation.
4. Foreceablity: Whatever act which defendant perform must be held forceable as per th act
of negligence.
5. Remote damage: The affected party is liable to get the damage if injury is being caused to
other person due the negligent act of respective individual who have duty of care.
3.3 How a business is held vicariously liable
Vicarious liable is the type of liability in which the party who have not done something
wrong will be held liable for the act as being done by its workers. Harbour Board -v- Coggins &
Griffith (Liverpool) Ltd; HL 1946 case also entails that the employer must abide with his duty of
maintaining the safety and security of its workers. The same thing is also being communicated
by the provisions of Occupiers liablity act.
Alan is a local milkman which has hired Mathew, a minor for delivering mil on Wednesdays. He
had appointed him even after clear indication by Norfolk farms to not appoint any minor. Alan
injured Mathew while reversing its care (DiMatteo, 2012). On the basis of this scenario the
nature of vicariously liability is determined in the following manner-
a) Can Mathew sue Alan
Mathew holds complete responsibility to sure Alan for its act. It is clear from the case that Alan
is the person who has hired Mathew for assistance on Wednesday. He held complete
responsibility of him as an employer (Gardner, 2011).
b) Can Norfolk farms be held vicariously liable for this situation
No, Norfolk cannot be held vicariously liable for this situation. This is because Norfolk
had clearly indicated the terms that no minor shall be appointed for this job. Since, they were
unaware about Mather appointment they cannot be constituted liable (Fairgrieve, 2003). But, if

we see this case in other way. At that time it is the responsibility of employer that it must take
proper and regular feedback from its employees regarding the activities which is being
happening in the farm. However, in the given case employer of Norfolk farm has not performed
such type of activity. Thus, it is being consider as vicariously liable for the given situation.
TASK 4
4.1 Draft a short letter to brad
To
Brad,
Respected Sir,
After going through the details of your case, it is clear that Brad holds the complete right
to claim for its damages suffered by him due to Charles negligence. Charles was holding
complete Albert's account, and he was liable to serve the authentic information about him to you.
Thus, in this case there clear indication of Charles negligence and it is because of him that you
had to suffer the rent arrears. Thus, Charles is liable to pay for damages incurred by Albert, as it
was due to his negligence act. Ross V Caunters 1980 case also depict the same situation. Here,
negligent act has been done by solicitor. Due to his negligent act, the award of damage is being
given by law in the favour of disappointed beneficiary.
Yours Faithfully,
ABC
4.2 Solution for following case study
a) case of Graham and Macho Men Plc
Yes, in this case consumer can claim for injuries from Macho Men. It is because Macho
Men Plc holds employee-employer relationship. Action taken by Graham was in favour of
company. Though Macho Men holds due responsibility, it still can depart from responsibiliy by
seeking defence under Ex turpi causa non oritur actio (Mullis and Oliphant, 2011). Thus, here
Gramin's employees will be held liable for his act.
b) Case of Carla and Link Ltd
Yes, Carla is liable for the damages caused to George car as she had been using it during
its non-working hours. Further, Link Ltd cannot consider it as vicariously liable for Carla fault as
it has happened outside the course of employment.

CONCLUSION
It can be concluded from this report that it is important for contracting parties to abide by
the terms and meet the criterion of essential element in order to make the contract a valid one.
Contractual obligation is a liability arise out of breach of terms and tort liabilities arise out of
breach of duty (King Jr, 2005). Lastly, the implication derived proving the existence of
employee-employer relationship is important to justify the significance of vicariously liability.