Comprehensive Analysis: Key Aspects and Implications of Contract Law

This report provides a comprehensive analysis of contract law, covering essential elements like offer, acceptance, and consideration. It explores different types of contracts, including unilateral, bilateral, and collateral contracts, and distinguishes between express and implied terms. The report exa...Read More

Aspects of
Contract

TABLE OF CONTENTS
Introduction......................................................................................................................................3
1.1................................................................................................................................................3
1.2................................................................................................................................................4
1.3 ...............................................................................................................................................5
2.1................................................................................................................................................6
2.2 Case study..............................................................................................................................6
2.3................................................................................................................................................7
Task 2...............................................................................................................................................8
3.1................................................................................................................................................8
3.2................................................................................................................................................9
3.3..............................................................................................................................................10
Task 4.............................................................................................................................................11
4.1..............................................................................................................................................11
4.2.............................................................................................................................................11
Conclusion.....................................................................................................................................11
References......................................................................................................................................13
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INTRODUCTION
Contracts are the legal documents which develops contractual obligations for the parties
involved or affected by the same. Legal knowledge helps in analysing the impact of various acts
on the activities done by a person or business (Bell, 2011). Globalization has developed the reach
of business units to various parts of the world but different legal demands makes it necessary for
the company to develop an in-depth knowledge about the subject. Th present report has
highlighted different facets of contract act along-with the provisions governing the negligence
act. It analyses various aspects of valid contracts and types of contact as well. It also develops an
in-depth understanding about what are the implication of non compliance and breach of contract
for parties.
1.1
A contract is a legal document which binds the parties involved, in a contractual
obligation creating a legal impact for non compliance or negligence of duties (Contracts, 2014).
The essential elements of valid contract are discussed henceforth. Offer: It is an expression of acceptance which reflects the desire for performance of
duties and responsibilities of a contract. Offer clearly expresses the terms of contract and
demands the consent of parties for the same (Whincup, 2006). An offer is the expression
of one party to develop a contractual relationship with the other. The consent to the given
terms and conditions converts the offer into a contract however for modification in terms
the offeree develops a counter offer. (Case reference: Harvey v Facey) Acceptance: This is the expression of consent given by the offree for the given terms and
conditions of the offer. Acceptance helps in developing a mutual binding between the
offror and offeree. The revokaction of a offer is an important term used in this context.
As per English law an offer can be revoked by developing a counter offer however the
time is an important factor for the same (Faure, 2009). If the offer is revoked after the
implied acceptance of the party, the offer becomes void. The case reference Brogden and
Metropolitan railways reflects that lack of communication regarding the contract was
assumed as the acceptance of contract for which claimant performed the duty. The
contract was considered valid as the their was no communication form the end of
defendant.
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 Consideration: this implies that every contract is developed between two or more parties
and each party must receive something of a value. In other words it can be said that a
contractual obligation develops a relation where the parties are intended to develop a
mutually beneficial relation (Giliker, 2010). The benefit must be of some value and that
the promise of gift form one party to other is not considered as a consideration.
 Intention: This element of the contract explains that a contract is developed between the
parties who are willing to enter into a legal obligation and that no outside persuasion or
threat are implied on the parties to develop a legal obligation. The contract which is
proved to be developed under the influence, threat or persuasion nullifies the legal
obligation thus is considered void (Van der Puil and Weele, 2014). The case law Balvour
v Balvor mentions that a promise from a husband to a wife for maintenance was social
agreement which was formed out of emotional bonding. The legal intension did not exist
for the same.
1.2
It can be assessed that the given statement is not correct as there are varied types of
contract specified within English law. However, the rule of contract varies as per the
implications on the basis of varied type of contracts. These are as follows- Unilateral contract- In such type of contract there is only one party who promises to
carry out the operation and thus the other party is free to act without their wish. It is
called as unilateral contract. However, its impact can be revoked at any time before
completion (Chen-Wishart, 2012). Further, offer cannot be revoked once the offeree has
started the performance. Case reference: Carlil v Carbolic Smoke Ball Company 1893
reflects the same. The advertisement of smoke ball represented a clear offer by the
company to public that a person who catch flu after consumption of smoke balls in the
prescribed manner will be rewarded GBP 100. Mrs Carlill consumed the product as per
the prescribed guideline yet caught flu. She thus claimed GBP 100 from the company as
per the unilateral contract conditions. According to court judgement Mrs Carlill was
claimant of the reward on the basis of unilateral contract formed between the company
and her.
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 Bilateral contract- Here, a contract has been developed that consists of an exchange of
promises. However, as long as the offeree states an intent to accept the offer the contract
is formed regardless of the offeree's subjective intent. However, its impact states that if
any of the party does not carry out its promises after valid contract formed i.e. offer and
acceptance then the particular party is going to be liable. Brogden v Metropolitian
Railway 1877 case refers that written agreement between the two parties was made where
defendant drafted the contract and claimant made some minor changes in the same. The
defendant never communicated its agreement but continued performing the business
transactions. In case of dispute the written agreement was held valid because defendant
continued to perform contract without objecting to the terms of contract. Collateral contract- Furthermore, in such type of contract the consideration for which is
the making of some other contract. Its impact can be stated that for such type of contract
there should be promissory for any contractual terms (DeMitchell, 2006). However, if
there is no promise this collateral contract may be vague. Shankinlin Pier Ltd v Detel
Products 1951 case explains detailed explanation of the same. The claimant approached
contractor for suitable pint for the company walls against which the product of defendant
was suggested. The company gave warranty that paint will last seven years but it started
to peel in 3 months. The warranty by the product was not attained for which the
defendant was held responsible. The claimant thus seeked the cost for damages caused.
 Face to face and distance contract- In distance contract the parties are not physically
presence at the time of forming a contract. Therefore, the validity of the contract has been
stated through postal rule. Here, offer has been presumed to be accepted only if the offer
is effectively communicated to the party as per valid means. (Case reference: Henthorn v
Fraser 1892). On the other hand, face to face contract are the contract that is formed
through verbal communication and both the parties are present physically. There is a
written proof of evidence which has been recorded at the time of forming the contract
which is the validity of terms (Milner, 2011).
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1.3
It can be assessed that the given statement if false as the terms are easily identifiable and
are also distinct from each other. Following are the different terms that are involved in a contract
which are as follows- Expressed term- In such type of term these are expressed by the parties in order to form a
contract. Here, the court of law will focus on the terms which were expressly agreed by
the contractual parties. (Case reference: Scammell v Ouston 1941). However, such terms
are mentioned in both oral and written form while forming a contract. Further, conditions
and warranties are also the part of the term of contract. Conditions can be stated as the
term which is important to the contract (DiMatteo, 2012). While, warranties are less
crucial terms but they do not possess the right to revoke the contract. Further, there are
innominate terms that are neither condition nor warranty. However, these are particularly
recognized as an intermediate terms. These are flexible terms that need to be involved
into the contract in order to favour the parties. Implied terms- It is the term which is implied by the court of law and not through
expressly terms. However, there are many terms in the contract which is implied by the
court of law as per the presumed intentions of parties. Such as sales of goods act. (Case
reference: Hutton v Warren 1836). However, these are legally implied in order to provide
fair and relevant justification to the parties belonging to the contracts (Falk, Huffman and
Macleod, 2015).
 Exclusion clause- It is the clause in the contract that states to exclude the liability
altogether or to restrict it through limiting the damages or through imposing other
conditions. However, these are referred to as exemption clauses. (Case reference:
Chapelton v Barry UDC 1940).
2.1
In this particular case, it can be stated that Todor has displayed the book in the store and
thus Ivan treats it as an open invitation to purchase the specific book. This represents offer given
by the party. Ivan seeked permission to purchase the book which revealed the acceptance. Since,
Carl had provided the first response for the offer it was taken duly accepted by Todor and book
was sold to him. Here, it is crucial for both the parties to enter into the contract and form
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conditional terms so that contract cannot be revoked (Fried, 2015). The contract effectively
revealed an innominate term which said that first respondent will be given the preference.
Hence,. Todor will not be eligible to accept the offer from Ivan. However, the contract has been
already formed, therefore, Ivan is not at all liable to claim damages for the book. Moreover,
Todor is also not bound to sell the book to Ivan as it is already sold to Carl and just possession
has not given. The claim of Ivan regarding the book can be refused by Todor as it has been
already sold to Carl. Both the parties have carried out an offer and acceptance terms in order to
form a contract. Further, there is not a written contract made by parties.
2.2 Case study
Here, it can be stated that in the particular case, it involves expressed terms between both
the parties. Expressed terms can be stated that both the parties agree to carry out a contractual
term. It also involves various clauses which need to be involved in the contract so that parties can
be informed regarding them. However, it is different from implied terms which are stated by the
court of law. It helps in directly conveying the objective of the contract to the parties involved
within contract. Expressed terms assists in bounding the parties in order to execute the contract
and attain results (Gilbert and Vargo, 2014).
In the given case, Brian reads the news in the newspaper regarding the offer of swimming
across the English channel from Dover to Calais. Hence, Brian accepted the particular offer and
start his voyage. At the time when Brian was in the mid of his voyage Adam gives another
advertisement in the newspaper regarding withdrawing the reward ans he is not liable to give nay
reward to the person who swims across the English channel. Since, Brian is not aware of the
advertisement he continues his voyage and swims across the English channel. Thus, it is an
expressed contract and Adam is liable to pay the damages to Brian as he completed the offer.
Further, Adam is not able to revoke the contract in between and is required to give reward to
Brian (Gray, 2010).
2.3
Exclusion Clause, terms are added to provide protection to defendant's for non-
performance. The given case depicts that, Barry went the local council park and founds a notice
board which states that visitors can hire a chair for 50P per hour. The park was regulated and
managed by local council. Barry purchased the ticket from the counter but did not pay attention
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on the instructions given on the back of the ticket. Thus, it is termed as the acceptance of the
offer by Barry. Therefore, it forms a proper offer and acceptance that is supported by
consideration. Hence, there is an intention to form a legal contract which is valid by the end of
both the parties (Chen-Wishart, 2012). The inclusion of the term at the back of the ticket
represents the exclusion clause as the font of the warning was small and not clearly readable.
Moreover, when the chair collapses and damages the clothes of Barry. He complained
regarding this to local council where the attendant states that it is clearly mentioned at the back
of the ticket that local council is not responsible for any type of damages or injury caused to
person. There is an exclusion clause involved which states that there is no obligation arises at the
part of local council to pay the damages for the injury (Milner, 2011). The exclusion clause on
the ticked can be treated as the wrongful act by the party against which Barry could claim for
damages caused. Thus, Barry contention for damages is correct.
TASK 2
3.1
According to English law the contractual obligation and tort liability differ highly in
various aspects of performance. The contractual liability arises between the parties of contract
when one or more than one party is unable to perform duty of contract. Tort liability on the other
hand is one which arises when a company or person is unable to perform the standard care of
duty and causes loss or damages to the other(s) due to the act of negligence. The basic difference
between the two has been explained henceforth.
Basis of difference Contractual liability Tort liability
Relationship between parties A contractual liability is
developed between the parties
due to mutual consent of the
parties that is developed by the
elements of offer, acceptance
and legality (Johnston, 2014).
This relationship is imposed by
law when the defendant
neglects the basic duty of care
(Goldberg and Zipursky,
2007).
(Donoghue v Stevenson case
reference mentions that the
defendant's negligence caused
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injury to the claimant as
consumption on faulty
products caused the same )
Nature of obligation The terms of the contract
determines the obligations of
the contractual liability
The obligations are not
mutually agreed upon. These
are imposed by legal
authorities.
(Case referance: Blyth v
Birmingham Water Works
(1856)
Reason of occurrence The claimant suffers the loss
when defendant is unable to
comply to the terms of the
contract. As per the caselet
Hadley v Baxendale (1854) a
defendant's liability is implied
through breach f contract
If claimant is able to prove that
the cause of damage or loss
caused was due to the
negligence of defendant and
ignorance of standard duty of
care then it is considered to be
a tort liability (Heine and
Kerber, 2002). (Case reference
Barnett v Chelsea &
Kensington Hospital )
Basis of damages The non compliance of the
terms of contract leads to the
breach of contract
Case referance: Payzu v
Saunders (1919).
The act of negligence makes
the claimant liable for the loss
of damages and injuries
caused.
Possible reduction of damage The damages can be mitigated
will the amount the claimant
has failed to mitigate the loss.
The percentage till which
claimant's conduct has
contributed in the loss can be
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deducted From the damages.
(O’ Connell v Jackson 1971)
3.2
The act of negligence occurs when the loss or harm caused to the innocent party is due to
the negligence of the other. This may be occur as defendant is unable to perform the duty o care.
This is unintentional and is enforceable by law (Sutton, 2010).
Case secnario: As per the given case Roger, the dishwasher claimed about the skin rash. The
hotel staff were given the rubber gloves as the precautionary measures. Roger claims that the
rashes were caused to him due to long periods of washing up thus makes Ben the hotel liable for
the injury.
Applicability of legal provisions: The case mentions that the hotel staff were provided by the
precautionary measures, Rubber gloves. The act of negligence is applicable under the following
four principles: Duty of care: Ben took due care of the implication of long period washing thus provided
rubber gloves. Roger by not wearing them caused the damages to his skin. Breach of duty: Ben did not ignore his duties however Roger did not use the company
resources for precautionary actions. Causation:The cause of damages caused to Rodger is not Ben as he gave the necessary
resources. Forseeability: Ben took the due care of any damages that can happen to the staff due to
long period washing.
Decision:
Referent to the above case it is evident that Ben is not liable for the act of negligence
under the mentioned principles hence Roger is not eligible to claim for remedy. As stated in the
case Vaughan v Menlove (1837) it is important to determine if the defendant has been
performing any Breach of Duty. In this case it was Roger duty to take precautions as such he isn't
eligible to claim for remedy.
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3.3
Vicarious liability is the one where the act of one party leads to the cause of damage to
the other. In other words if the employee of the company does any wrongful act the employer is
liable for the same and must take the due care of the damages (Heine and Kerber, 2002).
As per the given case Roger, Dishwasher irritated Colin, the headchef of Ben's hotel with
continuous nagging about the skin rash which outraged Colin such that he knocked Roger with
Frying pan. This resulted in unconsciousness of Roger for which Ben offered for hospital.
However Roger refused to go to the hospital. Roger claims from Ben against vicarious liability
of Colin.
As per the legal implication the act of under vicarious liability the employer is liable for
the action of employees. The case mentions that Roger was hit by Colin. Ben and Colin are in a
legal relations. The act of Colin did not occur due to negligence of Ben as he has developed a
safe working environment. Moreover after the incident he took offered Roger for hospital as
well. But Hotel, have an implied vicarious liability for the act of its employee and must pay for
the damages to Colin
TASK 4
4.1
Occupier's liability deals with duty of care for those who owe property by way of
ownership or lease them to people who visit or trespasses (Clarke, 2015). It is important that the
parties involved in the contract share a valid employer employee relation. Damages caused by
the independent contractor or self employed person cannot be claimed form the contractor.
The case mentions that Mark. Guest of Regent hotel went to pool. The hotel has clearly
mentioned a board which explained that the pool remains close between 7 pm to 7am and is
dangerous when unattended. Mark ignored the board and jumped in the pool which was empty
and caused damage to his expensive glasses.
English law mentions that the owner under occupier's duty must undertake the duty of
care which refers to the safety and security of the property. As per the case Regent hotel has put
a clear sign claiming that the pool is unsafe if unattended. Mark ignored the sign and caused
damages thus is not liable to claim for the damages caused to him from the hotel.
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4.2
Occupiers Liability Act 1957 imposes an obligation on occupiers with regard to 'lawful
visitors' while Occupiers Liability Act 1984 imposes liability on occupiers with regard to persons
other than 'his visitors'. These legal obligations are effectively used to define the definition of
trespassers for damages caused to the business.
Princliples applicable for tort liability includes:
 The presence of duty of care
 Occurrence of breach of duty by someone
 Breach resulting into injuries to another
 Monetary losses have been caused ( (Johnston, 2014))
The vicarious and occupier's liability is the part of tort law.
The case mentions that damages caused to mark was taken care of by the hotel authority
due the effective warning board applied on the pool sight. This clearly shows that the sight was
safe e and secured for the visitors and trespasser. Hence the hotel cannot the set liable under
negligence liability as well because the principle of duty of care was applied by the hotel.
CONCLUSION
From the above study it can be concluded that it is essential for parties to form a legal
contract. Further, different terms of contact has been analyzed that needs to be involved in order
to carry out the contractual terms of agreement. However, if there is no expressed terms within
contract then there will be certain implied terms into the contract. At the end, vicarious liability
and tort of negligence is required to be involved in the contract at the time of breach of duty
which is responsible for revoking the offer.
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