Aspects of Contract and Negligence for Business
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Table of Contents INTRODUCTION..........................................................................................................................1 ASSIGNMENT 1.......................................................................................................................... 1 TASK 1 TYPES OF CONTRACT...............................................................................................1 TASK 2 ESSENTIAL ELEMENTS OF A VALID CONTRACT..............................................2 TASK 3 TERMS OF CONTRACT..............................................................................................6 ASSIGNMENT 2.......................................................................................................................... 8 TASK 1 DIFFERENTIATION BETWEEN LIABILITY IN TORT WITH CONTRACTUAL LIABILITY...................................................................................................................................... 8 TASK 2 LIABILITY IN NEGLIGENCE AND ELEMENTS OF TORT...................................9 TASK 3 VICARIOUS LIABILITY............................................................................................. 10 CONCLUSION............................................................................................................................11 REFRENCES.............................................................................................................................. 12
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INTRODUCTION The English Legal System has spread into many nations and also include former English Colonies such as USA, Canada, Australia and New Zealand. It is classified into two parts i.e. civil and criminal law. Civil law is further categorized into three parts i.e. law of tort, land and contract law. A contract is a legally binding agreement between two or more parties with the intention to create legal relationship The present report is prepared to evaluate the essential elements of valid contract in given business scenarios (Warren, 2012). The entire report is divided into two parts and in assignment one all essential elements, different types of contract and divers term in the given case studies is discussed. In second assignment liability in tort with contractual liability is differentiated. Further elements of tort of negligence and vicarious liability in given scenario is discussed.
ASSIGNMENT 1 TASK 1 TYPES OF CONTRACT A contract is a legal agreement between two or more individuals with specific terms and parties have intention to create legal relationship. It is the purposeful engagement of two or more parties to perform something in return for a valuable benefit which is known as consideration. Contract are of different types and some of them are enumerated below: Written contract: An agreement which is made on printed document that has been signed by both the contracting parties is known as written contract. In these types of contract terms are describe in written format (Moriarty and Manthorpe, 2013). It is the legally binding agreement and can be use as proof. For example John and William wanted to start a joint venture and for this they enter into a contract which will be in written format. This will involve term of contract such as profit margin, capital involve etc. Face to face contract: An agreement in which both the parties are physically present during the formation of contract is known as face to face Global Assignment Help Australia provides assignment help from professional Aussie writers .
contract. These types of agreements helps to solve all issues regarding the terms of contract at the time of formation (Frey and Frey, 2000). For example Joseph went into a showroom and bought a mobile phone. Hence the contract between them will be face to face and written contract as both the parties will be physically present and bill of phone will be in printed document. Distance selling contract: An agreement between two or more parties that takes place through internet for sale of product and services is known as distance selling contract. This involve two parties i.e. professional and consumer. In the modern era, people are highly using internet for purchase of goods and services (Alkhamees, 2012). For example Tom order a book through an online shopping website and made payment with the help of debit card. Hence the contract between both the parties were distance selling contract as both parties were not physically present. Moreover, rules and regulations also developed by government in context of distance selling contract in order to protect interest of customers.
TASK 2 ESSENTIAL ELEMENTS OF A VALID CONTRACT A contract is a legal agreement which requires to involve essential elements in order to make it valid and to protect interest of parties. It is important for both the contracting parties that they should have better understanding about legal requirements for formation of contract (Gillies, 2004). The essential elements of valid contract are enumerated below: Offer: It is an explicit proposal to agreement which if accepted by one party than completes the contract and binds both the individuals that made the offer and the person who accept that offer. This involve two parties i.e. offeror and offeree. The person who made the offer is known as offeror and on the other hand party who accept that offer is referred as offeree (Bagley and Dauchy, 2011).
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Acceptance: When offeree comply with the terms of an offer made by offeree than it is known as acceptance. It is an implication by conduct or an express act that manifests assent to the terms of an offer so that a binding contract is formed is known as acceptance. Consideration: This is also an essential element for the formation of valid contract. This must have a value that can be determined objectively. Consideration is the price for which promise is bought and a contract must involve lawful consideration (Heine and Kerber, 2002). Intention to create legal relationship: It is important that both the contracting parties should have intention to create lawful relationship. They are required to understand the legal requirement of a valid contract and should intend to formulate lawful binding agreement. Capacity of parties: This is also essential that parties entering into the contract should be legally competent as they are required to be age of majority, should be of sound mind and should not expressly disqualified by law (Oughton, Marston and Harvey, 2007).
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Mini-case A: Under this scenario, some essential elements of valid contract were involved as an offer was made by Arnold for sale his dental equipment as he was retire from his London practice. Fiona received the note from her uncle and she wanted to take advantages of her uncle's offer. Both the parties that wanted to enter into the contract were competent as they were of age of majority and are sound mind. Further there was also legal consideration as offeree will pay £15000 to Arnold in exchange of dental equipments (Best and Banes, 2007). There was absence of acceptance as her uncle was away at a conference so Fiona leaved a message with his secretary. There was no direct communication regarding purchase of equipments. Hence there was no contract between Fiona and Arnold and due to this offeror sold dental equipments to another person. Mini-case B: In the given scenario of Mrs. Smith and David, an offer was made by Mrs. Smith through an advertisement on local paper. She offered reward for the return of Lucky- black and white cat. On the other hand David accept the offer and spends £15 for a taxi to return the cat to Mrs. Smith. The parties of contract were competent to enter into in it as they were of sound mind and age of majority (Morgan, 2011). There was also legal consideration as Mrs. Smith offered a reward of £10 in exchange of cats. There was an counter offer made by David in exchange of cat as he claimed £25 and Mrs. Smith refuse to pay David. Offeree had not right to claim against offeree as there was no such offer made by offeror. Further Mrs. Smith was not accountable to pay any damages to David. Mini-case C: In this context, Mrs. Smith made an offer to his next door neighbor, Ted. She was the owner of three rented house and she offered Ted to collect the rent on his behalf from tenants while she was in abroad for business. On the other hand Ted accept the offer and collected rent from tenants. When she returns she said that she will given £50 for his work but later she refused to pay Ted (Apme and et. al. 2004). There was no valid Global Assignment Help Australia provides assignment help from professional Aussie writers .
contract between Ted and Mrs. Smith as there was only offer and acceptance. They had no intention to create legal relationship and also there was no legal consideration at the beginning of offer. Hence Mrs. Smith there was no valid contract between Mrs. Smith and Ted.
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help@globalassignmenthelp.com.au Mini-case D: In the given scenario, Lynx Cars Ltd was the manufacturer of revolutionary fuel efficient smaller car. There was an offer made by Roadstar Ltd and was accepted by Lynx Cars Ltd which resulted in five year dealership agreement between both the companies. The agreement was not legally binding but the parties honorably pledge that they will carry out clauses of agreement. An initial order for 2000 cars by the end of 2007 was placed by Roadstar Ltd and on the other Lynx Ltd accept that offer (Platz, 2007). There was legal consideration as Roadstar Ltd will pay money in exchange of 2000 cars. Further Lynx Cars Ltd was unable to comply with order due to production difficulties and they states that they will be withdrawing from dealership agreement. Roadstar Ltd have the right to claim against Lynx Cars Ltd because as per initial order they made promises with customers and non fulfillment of promise may impact on their market position. Hence they have right to claim compensation. Global Assignment Help Australia provides assignment help from professional Aussie writers .
Case law Heathcote Ball v Barry, (2000), The highest bid at an auction submitted by claimant, stated to be without reserve. The item in the auction were two Alan Smart engine analysis that were worth £14,000. The bids of £200 each was submitted by claimant but the auctioneer refuse to sell them at that price. Further claimant brought an action for breach of contract and claimed damages of £27,600. Hence, the given scenario involve all essential elements of valid contract as there was an offer which was accepted by auctioneer
(Twomey
and
Jennings,
2010).
Further
there
was
legal
consideration and parties have the intention to create legal relationship. There was a binding contract and the claimant was entitled to damages covering the loss of bargain. Partridge v Crittenden, (7968), Under this scenario, defendant placed an advert in a classified section of magazine in which an offer was made for sale bramble finches for sale. A offence was made for sale of such birds as per protection of Birds Act 1954. The defendant was convicted and charged of the offence and appealed against his assurance. The advert placed by defendant was an invitation to treat it was not an offer (Wheare, 2003).
TASK 3 TERMS OF CONTRACT Terms of contract is the provision forming part of agreement. It is gives rise to contractual obligations between parties of contract. On other hand representation is the statement made during the negotiation at the time of formation of agreement but it may not form part of contract. In addition to this, representation does not give rise to any contractual obligations or liability (Pull, 2002). Terms of contract varies from one to another and in situation of breach of term, the innocent party is allowed to ask for compensation. The terms of contract are of different types like condition, warranty, innominate etc. If there is warranty terms takes place in the contract than in that situation injured party is allowed to ask for Global Assignment Help Australia provides assignment help from professional Aussie writers .
compensation from the party who is in fault or breached the term. On the other hand, in case of condition, the person who suffered losses or harm due to the breach of term or from the negligence of another party than in that case injured party have the right to discharge the contract (Middlemiss, 2011). Further innominate terms are those that may turns out either in condition or in warranty and it depends upon the nature of contract. Mini-case E: In the given scenario of Slick Car Sales Ltd and Paul, a sales agreement takes place between parties. There was an offer made by organization in local paper for sale of second hand car. Paul sees the advertisement and visit the showrooms and selected a car priced at ÂŁ3,995 and the salesman tells him that car was a 1994 Mondeo which has had only one owner and has done 30,000 miles. The agreement describes the car as 1994 Ford Mondeo, Cayman blue, registration number L931 AJU. The contract between Slick car sales Ltd and Paul involve representation which was made salesman that is car has had only one owner (Collingsworth, 2006). Further the terms of contract among the parties was condition as model number, color and registration number of car was condition. If the color, registration number or model of car change than in that case Paul is allowed to
discharge
the
contract.
On
the
other
hand
in
situation
of
misrepresentation or if any statement of salesman results untrue than Paul can ask damages in that case. Mini-case F: Under this scenario, Jim and his family were on holiday at seaside and he takes his family to Fun Park. He pays ÂŁ1 in order to park his car which was run by the Stand Council. The notice was at the entrance of the car was written by council which states that cars parked is entirely at the risk of owner but the notice was partly obscured by overgrown shrubs. Further they bought a admission ticket and enter into the Park (Bhadbhade, 2010). The ticket also contains the term of contract as on the backside of ticket states that company does not accept any liability for personal injury Global Assignment Help Australia provides assignment help from professional Aussie writers .
and death of visitors. The clause of contract in the given case was exclusion which exclude liability of company. While children's of Jim was on the Waltzer a metal bar files off and injured Jim and his family. Jim and his wife has right to claim against Leisure Ltd and can ask for damages suffered by them with the use of Unfair Contract Terms Act 1977 which states that company cannot exclude their liability in case of personal injury or death of another party. When they return to their car from their hospital treatment they discover that it has been damaged by the van of Stand Council (Levinson, 2005). They also have right to claim against council and ask for compensation as warni8ng was not effectively given by them as notice of warning was partly obscure by overgrown shrubs.
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help@globalassignmenthelp.com.au ASSIGNMENT 2 TASK 1 DIFFERENTIATION BETWEEN LIABILITY IN TORT WITH CONTRACTUAL LIABILITY Liability in tort takes place even when there is no actual contract among the parties. Tort is the wrongful act or damages which is done negligently or willingly which include stringent liability for party who is in default. Tort cause someone else to suffer loss which result in legal liability Global Assignment Help Australia provides assignment help from professional Aussie writers .
for the person who actually commits the loss for another. Bourhill v Young, (1943), In this scenario, the claimant was a pregnant fishwife, she went to get her basket off the tram and the defendant drove his motorcycle past the tram at the high speed and collided with a car 50 feet away where the fishwife was standing (Kidner and Richard, 2007). The defendant was killed by the impact but the lady did not see it even after hearing the collusion. The lady went into the shock when she saw lot of blood on the road and her baby was still born. She against the defendant's state for negligence. On the hand contractual liability takes place when there is actual agreement among the parties and they fails to perform terms of contract. Contractual referred as the liability assume by one party on behalf of other through an agreement. Albert v MIB, (1971), in this case a docker was killed in a road accident on his way to work. Docker was a passenger in a car which is driven by a work colleague (Owen, 2007). The driver of car lifts to other dockers in return for payment. The claim was made against Motor Insurance Bureau (MIB) as driver had no insurance cover for passengers. The MIB only obliged to pay if there existed a contract between the driver and the docker.
TASK 2 LIABILITY IN NEGLIGENCE AND ELEMENTS OF TORT If there is legal relationship among parties than in that case duty of care takes place. In addition to this, when an individual fails to take proper care at the time of performance of contract than in that situation one party is held accountable for negligence. Further there are different types of defenses available to a defendant facing an action in tort such as illegality, contributory negligence, statutory or common law justification, consent and necessity (Kidner, 2008). In addition to this, there are four elements of tort such as presence of duty, breach of a duty, presence of a injury and proximate cause. In the given scenario of Donoghue v Stevenson, (1932), Mrs. Donoghue and her friend went in a cafe and they ordered an ice cream and a bottle of Global Assignment Help Australia provides assignment help from professional Aussie writers .
ginger beer. The beer came in an opaque bottle in which contents of the bottle could not be seen. She drank half of the beer and remaining contents of bottle she poured over ice cream and snail emerged from the bottle. Mrs. Donoghue suffered personal injury and claim against the manufacturer (Daniels, 2004). The element of tort can be applied in the given scenario as there was presence of a duty and duty was breached by manufacturer of beer. Further there was presence of injury as Mrs. Donoghue was personally injured and there was proximate cause. The manufacturer of ginger beer had not effectively perform his duty of care which cause personal injury and due to this he was accountable to pay compensation as per negligence of duty of care.
TASK 3 VICARIOUS LIABILITY Vicarious liability is a situation in which one person is held liable for the act of another. It takes place when there is legal relationship between both the parties. In situation of vicarious liability one party is responsible for the negligent or criminal acts of another party that is assigned by law because of legal relationship between parties (Faure, 2009). Under the given scenario of Mersey Docks and Harbour Board v Coggins & Griffiths (Liverpool) Ltd, (1946), Mr. Newell was appointed by Board's cranes to unload a ship. During the time of unloading the ship a person was injured because of negligence of Mr. Newell and the court decided that Board of Coggins and Griffiths were vicarious liable. There was legal employer employee relationship between Mr. Newell and Board and because of this organization is liable to pay damages to injured person for the negligence act of their employee. He was true employee of Coggins and Griffiths and there was legal relationship and due to this they were liable to pay compensation as per vicarious liability.
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CONCLUSION From the above report it can be concluded that parties entering into the contract are required to have better understanding about aspects of contracts as it will helps them to effectively carry out terms of agreement. Further there different terms of contract and breach of term cause liability on defaulting party. When one party held liable for act of another due to legal relationship than in that can vicarious liability takes place.
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REFRENCES ● Alkhamees, A., 2012. Private action as a remedy against market manipulation in the USA", Journal of Financial Regulation and Compliance. ● Apme, and et al, 2004. Business Aspects of Optometry: Association of Practice Management Educators. Elsevier Health Sciences. ● Bagley, C. E., and Dauchy, C. R., 2011. Business Law. Cengage.
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● Best, A., and Banes, W. D., 2007. Basic tort law: cases, statutes, ad problems. Aspen Publishers Online. ● Bhadbhade, N., 2010. Contract Law in India. Kluwer Law International. ● Collingsworth, T., 2006. Beyond public relations: bringing the rule of law to corporate codes of conduct in the global economy. Corporate Governance. ● Daniels, K., 2004. Employment Law for HR and Business Students. CIPD Publishing.
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