Contract and Negligence: Examination of Legal Principles and Scenarios

This report provides a comprehensive analysis of contract and negligence law. It begins by outlining the essential elements of a contract, including offer, acceptance, consideration, and intention to create legal relations, while also differentiating between various contract types like face-to-face, written, and distance selling contracts. The report then delves into the analysis of different terms within a contract, such as expressed, implied, and innominate terms, and their implications in case of breach. Through case scenarios, the report illustrates the application of these concepts, including the impact of invitations to treat, unilateral contracts, and exclusion clauses. Furthermore, it contrasts contractual liability with liability in tort, and explores the elements of the tort of negligence and vicarious liability, using relevant case examples. The report concludes by summarizing the key findings and legal principles discussed throughout the analysis.

ASPECTS OF
CONTRACT AND
NEGLIGENCE

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Importance of essential elements of a contract.....................................................................1
1.2 Impact of different types of contract ....................................................................................2
1.3 Analysis of different terms in contract..................................................................................2
TASK 2............................................................................................................................................3
2.1 Impact of different types of contract ....................................................................................3
2.2 Case Scenario........................................................................................................................4
2.3 Case Scenario........................................................................................................................5
TASK 3............................................................................................................................................5
3.1 Contrast between liability in tort and contractual liability....................................................5
3.2 Case Scenario........................................................................................................................6
3.3 Case Scenario........................................................................................................................7
TASK 4............................................................................................................................................7
4.1 & 4.2 Case Scenario..............................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
Books and Journals.....................................................................................................................9

INTRODUCTION
An agreement between two parties which is enforceable by law is known as a contract.
All contracts are agreement but all agreements need not be contract. An agreement will be a
contract in the eyes of law only when it contains essential elements of a contract – offer,
acceptance, consideration, contractual intention and consideration.
Tort means wrong done by a person or an entity which causes injury to other (Hunter
2015). Tort law consists of laws and regulations which are intended to provide remedies to
person for the injury caused by the wrongful act of others.
The present report explains importance of essential elements of contract and impact of
different types of contract in different business scenario. Further, it contrasts contractual
liabilities with liability in tort. Lastly, it explains elements of tort of negligence and vicarious
liability in different business scenario.
TASK 1
1.1 Importance of essential elements of a contract
The essential elements required for formation of a valid contract are as follows:
 Offer: It is first requisite for formation of a contract. It is an expression of willingness to
enter into a contract. As per the case of Harvey v Facey, 1893, an offer must be made
with the intention to be legally binding on offeree. Offer is different from an invitation to
offer and this difference is based on the intention at the time of making offer.
 Acceptance: When the offeree gives his assent and agrees to all the terms of agreement,
the offer is said to be accepted (Hillman, 2013). According to Hyde v Wrench, (1840)
case, the terms of agreement must exactly match the terms of offer otherwise it would
amount to counter offer and thus, no contract exist. Acceptance will be valid only if it is
communicated to the offeror.
 Intention to create legal relations: An agreement will be enforceable by law only if it has
intention to create legal obligation. As per the case of Balfour v Balfour 1919, it is
contended that in case of domestic and social agreements, a presumption is raised by law
that parties do not intend to create legal relations.
 Consideration: As per Thomas v Thomas, 1842 case, consideration is something of value
in the eyes of law. Some rules are to be followed for consideration – past consideration is
no consideration, it must move from the promissee and it must be sufficient but not
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required to be adequate, any existing public duty or social duty would not amount to a
valid consideration (Poole, 2012).
 Capacity : The parties to the contract must be contractually capable i.e. a person below
the age of 18 years (minor) and a person of unsound mind cannot enter into a contract.
Any contract entered by them will be void.
1.2 Impact of different types of contract
There are different types of contract – face to face contract, written contract, distance
selling contract. The type of contract to be entered is determined by the conditions prevalent at
that time.
 Face to face contract: Such type of contracts can be entered when both the parties are
present in the same location. They can meet each other and discuss all facts and figures
related to the contract. Parties can inspect goods before entering into the contract and
satisfy themselves regarding its quality and fitness. This enables them to execute contract
smoothly and reduces the chances of breach of contract.
 Written contract: Usually, face to face contracts take form of written contracts as parties
are able to meet in person and decide the terms of agreement (Potter, 2016). All the
terms, conditions and clauses are agreed, written and signed by the parties. In this type of
contracts, there are reduced chances of any conflicts or disputes in the future. In case of
breach of contract, written contract can be produced before court of law as evidence.
 Distance selling contract: Parties enter such type of contract when they are located in
different areas. as they are not able to meet each other. Distance selling contracts are
based on trust and faith as parties cannot inspect goods before entering into the contract.
For negotiating and agreeing the terms of contract, some organised means of
communication like post, phone or internet is used.
1.3 Analysis of different terms in contract
The different terms of contract are expressed terms, implied terms and innominate terms.
In case of breach of contract, it is important to know which type of term has been breached to
provide the remedy available (Lan and Pickles, 2011).
 Expressed terms: The terms which are clearly outlined in the contract and are specifically
agreed by the parties at the time and the contract which is made are known as expressed
terms. Such terms may be expressed verbally or in writing. For example – price, time of
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delivery etc. are certain specific terms which are covered in individual contracts for each
specific trade.
 Implied terms: Although, some terms are not specifically mentioned in the contract by
either party but then also it included in contract because the contract would not make
commercial sense without that term (Patterson, 2010). Implied terms are those terms
which are not expressly stated but which are implied either because of parties' intention
or by operation of law or by custom or usage. There are two main types of implied term :
 a) Implied by statue: Terms imported by operation of law whether parties intend to
include such terms or not.. For example – in a contract for sale of goods, there is an
implied term regarding quality and fitness of that particular good.
 b) Implied by circumstances: These terms are not expressly set out in the contract. But
parties must have intended to include such terms in the contract. Two tests are adopted by
the court to govern whether a term may be implied – bystander test and business efficacy
test. The courts will not implyHunter, H., 2015 a term merely because it is reasonable to
do so and terms implied should not conflict the expressed terms of a contract
 Innominate terms : This approach was established in the case of Hong Kong Fir Shipping
v Kawasaki Kisen Kaisha, 1962. It is a contractual term that can neither be considered as
a condition or a warranty but is intermediary i.e. incidental to the contract (Engel, 2013).
The innominate term approach looks to the effect of the breach and ascertains whether
the innocent party was deprived of substantially the whole benefit of the contract due to
breach. The innocent party can repudiate the contract only when it is deprived of
substantially the whole benefit of contract.
TASK 2
2.1 Impact of different types of contract
In the cited case, Ivan goes to Todor's bookshop and sees a HND business book which he
wants to buy on the display. Ivan goes to the counter to pay for it but then, Todor informs that
that book is the only copy and he had already sold the book to Carl but forgot to remove it from
display.
According to contract law, it is the case of invitation to treat. An offer must be
distinguished from an invitation to treat. An offer will lead to a binding contract on acceptance
whereas invitation to treat cannot be accepted. As per the case of Pharmaceutical Society of
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Great Britain v Boots, 1953, it was held that goods on display on shelf are an invitation to treat
not an offer. The customer makes an offer to purchase the goods and the trader will decide
whether to accept it or not.
Therefore, from the above, it can be concluded that Todor can refuse to sell the book to
Ivan as display of book on the shelf was merely an invitation to treat and not an offer. Hence,
Todor can decide whether to accept or refuse the offer to purchase the goods by Ivan (Winfield,
2013).
2.2 Case Scenario
In the present case, Adam advertises a award for the first person to swim across the English
channel from Dover to Calais. Brian sees the advertisement and sets out to swim. Meanwhile,
when he is in mid-channel swimming, Adam places out another advertisement announcing that
reward is being withdrawn with immediate effect. Brian being unaware of this , continues his
voyage and duly arrives in Calais.
Generally, an advertisement is an invitation to offer not an offer. But in some cases, an
advertisement can amount to offer. Unilateral contracts is a legally enforceable promise where
one party makes an express promise in exchange for an act by another party. It can be inferred
from the case of Carlill v Carbolic Smoke Ball Co, 1893, reward offers are usually unilateral
contracts. If the offeror does not provide the reward after the offeree has fulfilled the
requirements of contract, then, he can sue for breach of contract.
Thus, in the given case, Adam will be liable to pay the reward to Ivan as the
advertisement constitute unilateral offer. The following points can be considered :
 The statement referring to pay a specific amount demonstrates an intent.
 It is possible to make an offer to the world.
 In unilateral offer, acceptance is through full performance so there is no need that offeree
communicates an intention to accept.
2.3 Case Scenario
In this case, Barry goes to park managed by local council. He sees that chair are available
for hire @ 50p per hour. He is given a chair and a ticket after paying the amount. But the chair
collapses under him which causes damage to his clothes.
Exclusion clauses are inserted into a contract with the aim to limit or exclude a party's
liability in case of breach or negligence (Greabe, 2010). However, the party can rely only when :
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 It is incorporated in the contract
 It has been made clear Adheres to unfair contract terms act 1977.
Incorporation : An exclusion contract can be incorporated in the contract by three different ways
i.e. by signature, notice or course of dealing. As per L'Estrange v Graucob, 1934 case, it was
held that when the plaintiff signs the document containing exclusion clause, it will automatically
form part of contract and party is binding on the party.
The exclusion clause may be contained in a ticket or notice but reasonable and sufficient notice
of such exclusion must be given as per Olley v Marlborough Court, 1949 case. The way of
presenting exclusion clause should be done carefully and clearly to ensure it is free from any
ambiguity.
From the above analysis it can be articulated in the cited case, exclusion clause was mentioned in
the ticket given to Barry which clearly stated that no liability will be accepted in case of injury or
damage caused due to hired equipment. As per law, exclusion clause may be contained in a ticket
or notice other than signed documents but it should be clear.
TASK 3
3.1 Contrast between liability in tort and contractual liability
Tort is an act of wrong done by one party which causes harm to other party. It is a civil
wrongful act when one party fails to perform its duties in a reasonable manner so as not to harm
others (Dorfman, 2010). It involves intrusion into health, safety, privacy or profit of one person
or entity by another party. In tort law, liability is held when one party causes injury or damage to
other and he is required to compensate for such injury or damage. As per Reyland v Fletcher,
1868 case, a party will be liable to compensate for damage caused due to his action to other party
even if such act was unintentional or accidental. The five important characteristics of liability in
tort are – civil wrong, infringement of right in rem, remedy of a tort should be damages or
compensation in money, rights infringed should be a right fixed by law and remedy available
shall bea common law action. The main of liability in tort is to compensate for the loss, damage
or injury suffered due to wrongful act of another person. A common case of tort is negligence
where damage is caused due to carelessness of other party. Tort law also provide for other
remedies like injunction, ejectment of trespasser, restitution of land etc.
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A contract is an agreement between two parties which is legally binding on them. The
duties and responsibilities of both the parties are clearly outlined by the terms of contract.
Contract law clearly defines what can and what cannot be included into a contract and provide
remedies available in case of breach of contractual duties by any of the party.
Following are similarities between contract law and tort law :
 Both are civil law
 Claimant can bring a sue against defendant and claim for compensation
 Claimant must prove that the damage caused is not too remote.
But there are following differences between liabilities in tort and contractual liabilities : Relationship between parties : Under tort liability relation is non – contractual and is
imposed by law (Robertson, 2010). While, in contractual liabilities, relationship between
party is created and governed by the contract. Consent : Tort involves an intrusion by a person into health, safety, profit or privacy of
other person or entity and hence, liability in tort is not based on consent. Whereas, free
consent is an essential element of a valid contract.
 Purpose of award damage : The compensation for breach of contract is normally defined
in the contract. But, in tort liability, compensation is mainly for claimant's loss and is
based on the extent of damage caused to him.
3.2 Case Scenario
In the given case, Roger is a dishwasher working in the Regent Hotel owned by Ben. He is
complaining about the skin rash caused due to long periods of washing up. He is not wearing the
rubber gloves provided to him while washing the dishes.
Negligence is a failure to take reasonable care that a person of prudence would have
exercised in the same situation. Duty of care refers to the circumstances recognised by law which
gives rise to legal duty to take care.
In this case, Roger will be liable under law of negligence as he is not wearing the rubber
gloves provided by the Hotel at time of washing.
3.3 Case Scenario
In the present scePotter, P.B., 2016nario, Colin, headchef of Regent Hotel is fed up with anger
and attitude of Roger. He hits Roger with a frying pan knocking him unconscious (Foote and
Lareau, 2013).
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Vicarious liability refers to circumstances when other person is held responsible and
guilty for the wrongful act of another person. As per the case of Wilson and Clyde Coal Co. v
English (1938), employers are responsible for the actions of his employees during the course of
employment.
Therefore, Roger can bring a claim in vicarious liability against Ben for Colin's actions as
it was employer's responsibility to provide safe working environment.
TASK 4
4.1 & 4.2 Case Scenario
In accordance to the given case scenario, Mark decides to swim in the pool of Hotel
Regent, where he is a frequent visitor. While entering the pool area he noticed a clear warning to
not enter the area during the specific hours, as it may prove to be dangerous. However, Mark
decides to ignore the warning and jumped in the emptied pool. He sustained injuries and also
incurred loss as his expensive sunglasses were broken. Mark now wishes to invoke liability
under Occupier Liability Act.
In pursuance to this law the occupier of the property is under a duty of care to all those
who either visit or trespass their property. In relation the given facts of the case, Regent Hotel
can be termed as the “occupier”, as it satisfies the applicable test of degree of occupational
control being exercised by them. On the other hand, Mark can be termed as the “Visitor” under
law, as he was expressly or impliedly permitted to be on premises of the occupier. The scope of
duty imposed on the occupier requires them to undertake every such reasonable care to ensure
the safety of the visitors. In order to mitigate this liability, the occupier should have undertaken
relevant actions to minimize uncertainty of liability. On failure to assure the same, occupier shall
be made liable to provide damages to the aggrieved visitors, to the extent of his personal injury.
In the case of Wheat v. E. Lacon & Co. Ltd. (1966) it was held by the court that in pursuance to
section 2(2) under Occupiers Liability Act 1957, the occupier should have undertaken reasonable
care in accordance to the circumstances. The standard of care should be sufficient enough to
make the visitor safe (Occupiers' Liability, 2017). Further, in the case of Cotton v. Derbyshire
Dales DC (1994) it was ruled by the court that use of warning notices, which clearly
communicate the presence of danger to access an area, shall be considered as a reasonable
amount of care from the end of the occupier (Zhou, 2014). Therefore, in light of this law it can
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be concluded Regent Hotel acted in a reasonable manner to install a clear warning to prevent
visitors from accessing that area. Hence, no liability shall be imposed.
CONCLUSION
It can be inferred from the present research that it is crucial for the parties to included
each of the essential elements of contract, in order to form a valid and enforceable contractual
relationship. English Law contains contracts which can be formed through distinct manners, and
can be characterized as face to face contracts, written contracts and distance selling contract. On
the other hand, under Occupiers Liability duty of care shall arise only if the occupier has a
reasonable reason to believe in presence of some kind of risk.
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REFERENCES
Books and Journals
Hunter, H., 2015. Modern Law of Contracts. Oxford University Press.
Hillman, R., 2013. Principles of Contract Law, 3d (Concise Hornbook Series). West Academic.
Poole, J., 2012. Casebook on contract law. Oxford University Press.
Potter, P.B., 2016. The economic contract law of China: Legitimation and contract autonomy in
the PRC (No. 10). University of Washington Press.
Lan, T. and Pickles, J., 2011. China’s new labour contract law: state regulation and worker rights
in global production networks.
Patterson, D. ed., 2010. A companion to philosophy of law and legal theory. John Wiley & Sons.
Engel, D.M., 2013. Perception and decision at the threshold of tort law: Explaining the
infrequency of claims.
Winfield, P.H., 2013. The Province of the Law of Tort. Cambridge University Press.
Greabe, J., 2010. Iqbal, al-Kidd and Pleading Past Qualified Immunity: What the Cases Mean
and How They Demonstrate a Need to Eliminate the Immunity Doctrines from
Constitutional Tort Law.Hunter, H., 2015. Modern Law of CoHunter, H., 2015. Modern
Law of Contracts. Oxford University Press.
Hillman, R., 2013. Principles of Contract Law, 3d (Concise Hornbook Series). West Academic.
Poole, J., 2012. Casebook on contract law. Oxford University Press.
Potter, P.B., 2016. The economic contract law of China: Legitimation and contract autonomy in
the PRC (No. 10). University of Washington Press.
Lan, T. and Pickles, J., 2011. China’s new labour contract law: state regulation and worker rights
in global production networks.
Patterson, D. ed., 2010. A companion to philosophy of law and legal theory. John Wiley & Sons.
Engel, D.M., 2013. Perception and decision at the threshold of tort law: Explaining the
infrequency of claims.
Winfield, P.H., 2013. The Province of the Law of Tort. Cambridge University Press.
Greabe, J., 2010. Iqbal, al-Kidd and Pleading Past Qualified Immunity: What the Cases Mean
and How They Demonstrate a Need to Eliminate the Immunity Doctrines from
Constitutional Tort Law.Hunter, H., 2015. Modern Law of CoHunter, H., 2015. Modern
Law of Contracts. Oxford University Press.
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ntracts. Oxford University Press.ntracts. Oxford University Press.
Hillman, R., 2013. Principles of Contract Law, 3d (Concise Hornbook Series). West Academic.
Poole, J., 2012. Casebook on contract law. Oxford University Press.
Potter, P.B., 2016. The economic contract law of China: Legitimation and contract autonomy in
the PRC (No. 10). University of Washington Press.
Lan, T. and Pickles, J., 2011. China’s new labour contract law: state regulation and worker rights
in global production networks.
Patterson, D. ed., 2010. A companion to philosophy of law and legal theory. John Wiley & Sons.
Engel, D.M., 2013. Perception and d
Dorfman, A., 2010. Can tort law be moral?. RATIO juris, 23(2). pp.205-228.
Robertson, D.W., 2010. Metaphysical Truth vs. Workable Tort Law: Adverse Ambitions?. Tex.
L. Rev., 88. pp.1053-1061.
Foote, W.E. and Lareau, C.R., 2013. Psychological evaluation of emotional damages in tort
cases. Handbook of psychology, 11. pp.172-200.
Zhou, Q., 2014. Yam Seng Case: A New Development of Good Faith in English Contract Law,
The. Int'l Trade & Bus. L. Rev..17. pp.358.
Online
Occupiers' Liability, 2017. [Online]. Available through: <http://e-lawresources.co.uk/Occupiers-
liability.php>. [Accessed on 6th February 2017].
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