LAW011: Legal Analysis of Contract and Negligence Assignment

This document provides a comprehensive solution to a law assignment focusing on contract and negligence. The assignment addresses the formation of a valid contract, including offer, acceptance, and consideration, and examines the concept of contractual intention. It explores the liability of parties in a contractual dispute, specifically addressing a scenario involving Ringo and Paul. The assignment also delves into the essential elements of negligence, including duty of care, breach of duty, causation, and damages, using case examples like Donoghue v Stevenson. Furthermore, it analyzes the legal implications of a negligence claim, providing a framework for assessing liability. Finally, the assignment considers different business structures available to Ringo and his friends, comparing the advantages of partnership and limited company models, providing a comprehensive overview of the legal and business aspects of the given scenario.

RUNNING HEAD: LAW OF CONTRACT & NEGLIGENCE
Law of Contract and Negligence
Name of the student
Name of the university
Author note

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Response to question 1:
1.(a) Under the law of England and Wales, what is a contract and what are the requirements
for a valid contract to be formed?
(b) Would Ringo be liable to pay Paul based on the facts above?
A contract is a type of agreement that is either recognised or enforced by law which establishes
into obligation in between two parties. A contract becomes legally binding when there is a
presence of voluntary agreement enforced by law between two or more parties. The formation of
a contract starts with an ‘offer’. It can be an offer for exchange of money for buying goods.
There can also be an offer of receiving services in exchange for any other services. Basically a
contract becomes valid when there are an offer acceptance and consideration. There are three
essentials of a contract to be created:
 Agreement
 Contractual intention
 Consideration
The first requirement of a contract is the involvement of the parties reaching the agreement.
Generally an agreement can only be reached if one of the party makes an offer and the opposite
party should be present to accept the offer made by the other party. Whether the parties have
reached the agreement is decided by the court by applying an objective test.
Offer:

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An offer is the willingness to express a contract on specific terms that is made with an intention
that is binding once the acceptance is done by the addressed person1. There should be a
manifestation objective of intention by the offeror bounded by the specific offer if the acceptance
is done by another party. The offeror shall be bound if his conduct or words induce an observer
of the third party for believing the intention to be bound even if he has no intention. This has
been held in the case of a university where a place has been offered to a student resulting in
clerical error2.
The address of offer can be done to the world at large, to a specific group or a single person. An
offer can be done by conduct or can be made expressly. There is a distinguished offer in case of
an invitation to treat in which an individual does not make any offer rather an invitation is sent to
another party. A statement is an invitation, or an offer depends mainly on the intention of the for
which the statement is made. The case of Carlill v Carbolic Smoke Ball Company [1893] 2 QB
256 is much relevant in this case.
Acceptance:
Acceptance is an unqualified and final expression of agreement concerning an offer. There
should be a manifestation of an objective by the receiver of the particular offer of intention
bounded by the terms. There should be an acceptance of an offer along with precise terms
forming an agreement. An acceptance of an offer should be made by conduct. There is no legal
effect on acceptance unless it is communicated to the person making the offer. The basic effect
in case of a postal acceptance takes effect when the acceptance letter is posted3. The rule of
postal acceptance cannot be applied if it does not include the terms of offer that is express.
1 Stover v Manchester City Council [1974] 1 WLR 1403.
2 Moran v University College Salford (No 2), The Times, November 23, 1993.
3 Henthorn v Fraser [1892] 2 Ch 27.

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Acceptance is required for an offer that is to be communicated in a specific way through which
the order can be accepted. If an acceptance takes place through an instantaneous medium like
electronic mail it will affect the place and time of receipt4. It is to be noted that the silence of the
offeree cannot stipulate the offeror to acceptance. A failure of acceptance in communication does
not effect when there is a variation in terms of the made offer. In this position, there is a case of
counter-offer that can either be rejected or accepted. Revocation of offer can be made at any time
before the acceptance of the offer; in that case the communication must be made to the offeree.
But the revocation of communication should not be done personally to the offeror. If the
communication of revocation is not done then it becomes an ineffective communication5.
Consideration:
A promise is not a general rule in common law, binding of a contract until it is being supported
by consideration. The term ‘consideration’ is stated as “something that is valuable” that is
required for making a promise or giving a promise enforced as a contract. This can be considered
a detriment to the promisee, and it provides benefit to promisor. A promise contains no pledged
force until a value is given; there is no need for adequate consideration. The court does not enter
into the bargaining made between the parties6. The consideration should be provided by the
promisee. A promise can be made to a person and can be enforced if he provides the
consideration for the particular promise.
Balfour v Balfour7 in this case of a husband and wife the purpose to create legal bonding of a
couple when the agreement between them was that the husband has to pay his wife some amount
4 Entores v Miles Far East Corp [1955] 2 QB 327.
5 Byrne v Van Tienhoven [1880] 5 CPD 344.
6 There are a few exceptions, for example, where certain terms of a contract are void either by statute (for example, tenancy agreement) or where
common law holds the terms to be so unreasonable that they cannot be enforced and/or are varied by the courts.
7 [1919] 2 KB 571

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of money in spite of living separately due to some illness, the husband has to pay the agreed
amount.
The court held that the agreement could not be enforced as both the parties do not have
any intention to create legal binding because the parties were on amicable terms when the
promise of the agreement was made. Later on, when they divorced, that particular agreement
cannot be enforced by law.
The main essentials of a valid contract are explained below in details:
 Misleading conduct: Misrepresentation is stated in under section 18 of the
Australian Consumer Law 2010. An individual must not practice any
misrepresentation and deceptive type of contract or should not involve in a contract,
which is likely to be misrepresented or deceived.
 Mistake: It makes a contract more complex. If mistaken in some aspect of the
particular contract, the party cannot escape from the contractual obligations even in
case of a fundamental mistake.
 Duress: It allows the victim of that particular contract to escape bindings or the
contractual obligation by furnishing enough evidence of a voidable contract.
 Undue influence: In case of undue influence makes a contract voidable. This is due
to the application of inequality of power utilisation between the parties in a contract,
which results the fragile party to enter into a contract along with party in dominance.
Unconscionability: It involves the transaction between the fragile party and the superior party. It
overlaps duress and undue influence.

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(b) Based on the above facts, Ringo will not be liable to pay Paul as there was no intention to
create legal binding. It can be considered as a domestic contract. Both the parties could not be
enforced as they were no intention for creating a legal binding. The contract made between
Ringo and his son were on amicable terms when the promise was made between the parties.
Response to question (2):
Essential elements of negligence:
When an individual tends to act or acts carelessly or insensibly because of which an injury or
hurt can be caused to another person under the principles of law causing ‘negligence’. The
individual acting in an uncaring way will be legally liable if any hurt is caused which is foreseen.
The negligence of law was enforced or developed in the case of Donoghue v Stevenson [1932
AC 562]. The negligence claim will be held successful if the claimant can be able to prove:
 The offender should owe a duty of care.
 If the offender causes a breach of duty.
 If any breach of duty causes injury.
 The destruction caused should not be remote
Duty of care:

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When a negligence claim is assessed the preliminary matter to take a glance about is whether any
duty of care has been owed by the defendant over the plaintiff. In several circumstances the
relation in between the plaintiff and the defendant develops a duty of care that is legal.
Breach of duty:
The second thing to take a glance about is whether the breach of duty has been caused for doing
something to a ‘reasonable person who is prudent’ should have done in similar circumstances.
This short term ‘reasonable person who is prudent’ explains how will an average individual act
in a more responsible way in any situation according to the standard of legal procedures. The
similar case that relates the provided case is the Vaughan v Menlove (1837) 3, Bing. N.C. 467
states clearly the concept of the breach of duty.
Causation:
The third thing to take a glance about is the negligence done by the defendant that injured the
plaintiff, and it has been proved that due to the action of the negligence of the defendant, the
plaintiff has been injured which is easily foreseen. A similar case which clearly states the
concept of causation Barnett v Chelsea & Kensington Hospital [1969] 1 QB 428.
Damages:
The final matter to take a glance about is whether an individual has been hurt due to the action or
negligence of someone else, a claim can be made using the medical bill that was required for the
treatment of the person who is injured. A related case of The Wagon Mound no 1 [1961] AC
388.

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In light of the above explanation, Jerry as a claimant could easily satisfy in the provision of
damage caused due to the negligence of George. The extensive damage was done to the roof of
Jerry due to the negligence caused by George. This would not have been caused if he would have
keep a measure while cutting the trees. Jerry can claim the bill required for recovery of the roof
from George by satisfying the relevant provision of damage caused due to the negligence.
Response to question no 3:
There can be two types of business mediums that will be available to Ringo and his friends.:
 Partnership business
 Limited company business
The advantages of the partnership business are as follows:
 To bridge the gap in knowledge and expertise:
Doing partnership with someone gives access for expertise to a wide range for several
parts of the business. A partner who is good can bring experience and knowledge that
was lacking for improvement of the particular business or having some skills for growing
the business.

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 More Cash:
A partner who is prospective brings cash infusion in the business that a particular person
may have better connection of strategy. This will surely help the company for attracting
the potential investors and for raising the capital for the growth of the business.the
business partner who is right may help in enhancing the financial growth of the business
in the way of borrowing money.
 Cost savings:
Doing business with a partner helps in sharing the burden of finance for capital
expenditures and expenses needed for running the business. This helps to save
substantially than by doing the entire business alone.
 More business opportunities:
The main advantage of the partnership business is sharing the effort of the labour. The
partnership business not only makes an individual product but helps in affording the
flexibility and ease for pursuing better opportunity of the business. It can also eliminate
the downside of the cost opportunity.
 Better work/life balance
Sharing the labour lightens the load of the partners. It helps in allowing the take-off time
when it is necessary as gaining the knowledge of that the other trusted one with handle
the effort that helps to gain a positive impact on personal life.

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 Moral support:
Everybody keeps a need to bounce the debrief or ideas on the issues that are important.
Moral support can be gained when a setback is encountered to cope up with frustrations
and work. Sometimes it is needed to achieve a goal, or it is needed to vent from time to
time. Doing business on the owner makes a person lonely, rather having a partner helps
in better companion in business.
 New perspective:
It becomes easier having blind spots in conducting business. The partner in the business
helps to set new goals and ideas for the particular business. It helps in adopting new
business perspective for some other look about dealing the business, setting up the price
of the services and the products.
 Potential Tax benefit:
The basic advantage of a general partnership is the benefit of tax. A partnership, in
general, helps in not paying the income tax. Indicating the IRS Partnership website a
partnership that is general passes through several losses and profit to the partners.
Disadvantages:
 Liabilities:
Apart from sharing assets and profits a partnership business also states the theory of
sharing the loss in business along with any responsibility for any type of debts even the
particular debt is being incurred by the other partner. This places a huge burden on
personal asset and finance. The responsibility of any decision comes as a burden on both

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the partners of a business. Taking a glance on the disadvantages and the advantages of a
partnership business the issue of liability come in the top of the list.
 Autonomy Loss:
Enjoying the total control of the business in partnership the control of the business along
with some important decisions, is to be controlled jointly. Before exploring the
disadvantages and the advantages of a partnership business any individual should think of
the relinquish and compromise within the business.
 The issue in the emotion:
There can be arisen conflicts from the opinion difference or from the effort that becomes
unequal in a particular business. Emotions should not be weighed in the disadvantages
and the advantages in the partnership business.
 Selling complication in future:
Due to the change in the circumstances of the business, both the partners can willingly
sell the whole business. It creates a great difficulty if one of the partners in business
becomes less interested in selling the business.
 Lack of stability:
While balancing the disadvantages and advantages in a partnership business, this is to be
taken into consideration whether the partners can easily cope up with the unpredictability
in the business. Even though many of the partners have strategy for coming out of the
business as in the agreement of partnership the change in the trigger can make the
business unstable.

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The advantages and disadvantages of the company form of business are as follows:
 Limited liability:
The shareholder's liability otherwise and unless stated limits the face values of the
shareholders or the given guarantee by them.
 Existence in perception:
Insolvency, insanity and the death of the directors or the shareholders do not disturb the
existence of the company. There is a separate legal entity of a company along with
succession in the perception.
 Management of the professionals:
In the business of a company, the directors handle the management elected by the
shareholders and are individuals those who are experienced. In managing the day to day
activities professional managers those who are salaried are being hired. Thus the business
in the company always requires professional management.
 Potential Expansion:
There is not a single limitation for the maximum number of shareholders in a company
that is publicly limited; business expansion becomes easy by the issue of the new
debentures and shares.
 Transfer of share:

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If the company shareholders get displeased by the progression of the business they can
opt for selling their business at any point in time. During the change of business
ownership the operation of the business continues.
 Risk diffusion:
Due to the large membership, the whole risk of the business is divided among the
different members of the particular company. Therefore it becomes an advantage for
relatively small investors.
Disadvantages:
 Secrecy lacking:
According to the provision of the law, various statements have to be made by the
company that is available to the Financial Institutions, Company registrar; the business
secrecy comes down.
 Restrictions:
As compared to the partnership and proprietorship a company has more requirement in
the side of the law that has to be complied with. It consumes significant effort and time.
 Mischief in management:
In some cases, the directors and the managers try to misuse the resources of the company
for their own personal benefit. This leads to the closing of the company and also a
massive loss for the company.
 Lack of interest:

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Unlike the partnership and the proprietorship, the daily affair of a company is being
managed by the managers those are salaried. As they are not the owners and the
employees of that particular company. So they do not carry any commitment and
personal interest for the betterment of the company.
All the above mentioned business mediums are available to Ringo and his friends.
Response to question no (4):
The status of employment is important so that an owner of a business should contain a
clear understanding of the status of the individual's employment and the impact of their specific
rights to their entitlement of employment withholding the right of an individual that results the
employment cost in the claim of the tribunal.
When deciding on the status of the employment, the main disputes in the tribunals will be
considered strongly for the working relationship in a practical manner the control level of the
business exerts over a person. It is to be agreed regularly that there is presence of high level of
control subjected to the employees including the capability and the disciplinary procedures. The
workers have autonomy since they should have the intention of accepting the work that is being
offered to them. In the same time the individuals those who are self-employed do not have any
control as subjected by the company they work and they are always free to implement their own
conditions and terms in the service daily. The three main categories of the type of employment
are the employee, worker, self-employment.
In the case of a worker, there is a presence of contractual terms. The actual difference to
an employee is that a worker can turn the work down. Depending on the relation the employer
carries a restrictive right to control when and where the work is done.

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In the case of self-employment there is a freedom to decide where and when to work. The
individual performing the employment has to provide the equipment on their own, and they will
be free instruct other people to carry out the task on the instruction of the self-employed.
In case of an employee, an individual will have a service contract that can either be
implied or express. They always come under the control and rights of the employer. In the
contract of the employment they are always informed about the working hours and pay and other
essential employment conditions.
Reference:
Stover v Manchester City Council [1974] 1 WLR 1403.
Henthorn v Fraser [1892] 2 Ch 27.
Entores v Miles Far East Corp [1955] 2 QB 327.
Byrne v Van Tienhoven [1880] 5 CPD 344.
Farnsworth, E.A. and McCormack, A., 1999. United States contract law (p. 83). Juris Pub..

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Anson, W.R., Beatson, J., Burrows, A.S. and Cartwright, J., 2010. Anson's law of contract.
Oxford University Press.
Austen-Baker, R., 2017. Implied terms in English contract law. Edward Elgar Publishing.
Burton, S.J. and Drahozal, C.R., 1995. Principles of contract law (pp. 289-91). West Publishing
Company.
Ben-Shahar, O. and Porat, A., 2016. Personalizing negligence law. NYUL Rev., 91, p.627.
Goldberg, J.C., Sebok, A.J. and Zipursky, B.C., 2016. Tort Law: Responsibilities and Redress.
Aspen Publishers.
Wright, J., 2017. Tort law and human rights. Bloomsbury Publishing.
Best, A., Barnes, D.W. and Kahn-Fogel, N., 2018. Basic tort law: cases, statutes, and problems.
Wolters Kluwer Law & Business.
Inform Direct. (2019). Advantages and disadvantages of a partnership business - Inform Direct.
[online] Available at: https://www.informdirect.co.uk/business-management/partnership-
business-advantages-and-disadvantages/ [Accessed 4 Sep. 2019].
Business Trends and Insights. (2019). What Are the Advantages and Disadvantages of a
Partnership?. [online] Available at: https://www.americanexpress.com/en-us/business/trends-
and-insights/articles/what-are-the-advantages-and-disadvantages-of-a-partnership/ [Accessed 4
Sep. 2019].

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