Aspects of Contract and Negligence for Business (ACBN)

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Executive Summary:

Law of contract and law of tort are substantially different from each other. Fortunately, in

Business context both laws of contract and law of torts are significant to know. The agreement

which is applicable and enforceable by law is defined as the contract. Law of tort is designed to

deal with the problems of negotiations when it is necessary. In this report, both laws of contract

and law of tort are discussed in the practical business case. Having a deep understanding of this

case and answer to these questions will pave the way to solve any practical business problem that

is related to this site.

Table of Contents

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Executive Summary:........................................................................................................................2

Introduction:....................................................................................................................................4

TASK -1...........................................................................................................................................5

1.1 Explaining to Peter Abraham how a contract is formed and the importance of the

various elements which has to be present to form a contract.......................................................5

1.2 Discussing the impact of forming contracts in various ways for Peter Abrahams...........7

1.3 Analyzing given contractual terms with reference to their meaning and effect...............9

2 Task 2: Case studies...............................................................................................................11

2.1 Applying the elements of contract in given business scenarios...........................................11

2.2 Applying the law to terms on the following contracts....................................................12

2.3 Evaluation of the effect of different terms in the given contracts...................................13

3 Task 3: Vocational Scenario...................................................................................................14

3.1 Explaining the similarities and differences of liability in tort with contractual liability

using an example........................................................................................................................14

3.2 Explaining using suitable example how liability for negligence can arise and the

conditions needed to be met for a claimant to successfully prove negligence...........................15

3.3 Explaining what vicarious liability means and how a business can become vicariously

liable using examples.................................................................................................................16

4 TASK 4 - Case studies...........................................................................................................17

4.1 Applying the elements of the tort of negligence and defences in the given business

scenarios below;.........................................................................................................................17

4.2 Applying the elements of vicarious liability in given business situations below (Cases 8

and 9);........................................................................................................................................18

Conclusion:....................................................................................................................................19

References......................................................................................................................................20

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Introduction:

Every society is made up of thousands of exchange relationship which is based upon the

agreement. People give promise and keep a promise; in essence, society is organized on the basis

of agreement. An agreement has the characteristics of having more than one party who are

eligible to make an agreement and valid consideration, lawful object and competence of the

parties. If this agreement is enforceable by law then it is considered as a contract. Therefore, the

law of contract makes every single business transactions possible in our society. Without the law

of contract, people will have the opportunity to break the promise and the other party cannot

have the remedy of the loss. Fortunately, we are not stuck in this loss.

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TASK -1

1.1 Explaining to Peter Abraham how a contract is formed and the importance of

the various elements which has to be present to form a contract

Every contract must have some elements which are fundamental for any business contract to be

valid. Without having any of these elements may make a contract void ab initio that is invalid

from the beginning.

Figure 1: Elements of valid contract

Sources: (Chen-Wishart, 2010).

Offer and Acceptance:

One party of the contract must offer something to engage in the contract, then the another party

has to accept the offer before the quit of the offer if they want to engage in a legal and lawfully

enforceable relationship (Chen-Wishart, 2010). Here Peter Abraham is the offeror and he offers

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Element of

Contract

Consent

Consideration

Competence of Counterparties

Offer and Acceptance

Intention to create legal

relations

Lawful Object

the building his infrastructure. On the other hand, the self-employed contractor is the offeree who

can accept the offer.

Consideration:

In every business contract, there must be some consideration from both parties of the contract.

Peter Abraham consideration is the service it gets from the self-employed contractor and on the

contrary, the consideration of the self-employed contract is the money amount he will get from

Peter (Riches and Allen, 2011).

Competence of Counterparties:

Both parties of the contract must be eligible to make agreement and contract. Parties of any

contract will not be considered as competent if they are not of age by the definition of law or if

they are mentally ill at the time when signing the contract. In this case, Both Peter Abraham and

the self-employed contractor are competent (Maclntyre, 2011).

Lawful Object:

The subject or object of the contract must be valid according to the national law. For instances, if

the object of the contract is Wine is Saudi Arabia, then the contract is invalid. In this case, The

object of the contract is valid that constructing the building (Beale and Tallon, 2012).

Intention to create legal relations:

Both parties of the contract, Peter Abraham and the self employed contractor must have the good

intention to create a legal relationship.

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1.2 Discussing the impact of forming contracts in various ways for Peter

Abrahams

Peter Abraham can from its contract with the self-employed contractor in three distinct forms.

However, each form has its benefits and costs on the performance of the contract. In the

following section, we have discussed the forms of contract formation

Figure 2: Contract forming ways

Source: (Willmott, Christensen and Butler, 2005).

Face to face:

Peter Abraham can deal with the self-employed contractor face to face, which is they can

promise each other about the consideration of theirs of the contract (Anson, 2009). If they want,

they can have some human witness in place that can assist when a dispute arises. Although this is

very easy and cheap way of making a contract, unfortunately, this poses some problems when a

dispute arises.

Written contract:

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Contract forming ways distance selling written contractface to face

Peter can also follow this approach of written contract where the contract between him and the

self-employed contractor will be written down in a document and then it will be signed by the

both parties within the presence of some witnesses. This written document can work as the proof

when resolving the dispute (Maclntyre, 2011).

Distance selling:

The Internet grows dramatically. Distance selling becomes a good option of forming contract.

With the help of any prominent Website or over the telephone, Peter Abraham can contact the

self-employed contractor and then can offer him about the offer. Later, the employed contractors

have the opportunity to either accept or reject the offer (Beale and Tallon, 2012).

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1.3 Analyzing given contractual terms with reference to their meaning and effect

Figure 3: Contract terms

Source: (Turner, 2009).

Condition:

Conditions are explicitly mentioned aspects of the contract which are obligatory to fulfill. If this

is conditions are not fulfilled then a great amount of loss happens to one party of the contractor.

In that case, the injured has the right to void the contract from his side or he can continue and

demand the loss from the other party (Maclntyre, 2011). For example, the Peter States that

Elevator must be present in the structure, but the contractor did not give any elevator.

Warranty: warranty are also important and explicit terms of the contract, but breaching

these aspects does not create so many problems to any party rather it causes a substantial amount

of loss which does not require the termination of contract rather the injured can claim the loss

money. For instances, Peter said Sky Blue color must be painted, but the contractor did it with

Pink Colour (Riches and Allen, 2011).

Exemption clauses:

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Contract terms

condition

warranty

innominate terms

exemption clauses

Exemption clauses identify what will be the limit of the punishment to one party if it breaches

any explicit or implied terms of the contract. This was initiated by the case of Photo

Productions v Securicor (1980) case.

Innominate terms:

Innominate terms are those terms of any contract that are not determined as either

warranty or condition rather they are determined as so when the loss takes place. The

court will decide whether it is a warranty or a condition on the basis of the loss happened

to the party (Maclntyre, 2011). If the loss is great then it will be considered as a condition

otherwise as a warranty.

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2 Task 2: Case studies

2.1 Applying the elements of contract in given business scenarios

Case-1:

in this case, there is no contract between Carol and Gumtree. Since there is a dearth of an

important element of contract that is offer. Here Gumtree published the ad as an invitation to

offer and an offer. So when Carol emailed back saying that he wanted to purchase this apartment,

it can be considered as only Offer, not as acceptances. Therefore, now, the duty of acceptance

lies on Gumtree. He can either accept the offer or Reject this. If Gumtree accepts then it would

be a contract otherwise not (Riches and Allen, 2011).

Case 2:

For this situation, Gorge can't implement against Preston, on the grounds that the protest of the

agreement is not present here (Elliott and Quinn, 2007). Preston offers Gorge the IT firm

£150,000 on the off chance that they enlist his child. Be that as it may, for this situation, his child

is as of now on the offer. Along these lines, for this situation, Devi is the agreement question, but

he is as of now contracted before the offer. In this way, the offer of the Preston is invalid and in

this manner there is a possibility for the Gorge inc to acknowledge it and uphold it

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2.2 Applying the law to terms on the following contracts

Case 3:

In light of the issue of Unfairness of the prohibition provision, Restaurant can't assert the

appropriateness of the rejection statement (Bradgate and Savage, 2009). At the point when the

receipt was being given over, it had not been educated to the client, besides, it was on the rear of

the receipt. Along these lines, the shamefulness of the rejection statement is available for this

situation. So the Man has the privilege to assert the cash once again from the eatery and the

Restaurant is likewise subject to pay back to the Couple.

Case 4:

As per the instance of Liverpool City Council v Irwin [1977], which expresses that if the

proprietor to repair the regular parts of the building and on the off chance that it is not done and

on the off chance that it is done from the inhabitant part. At that point, the occupant can

guarantee the pay if the tenure contract ended (Dobson, Stokes and Dobson, 2008).

In any case, for this situation, Aaron has a suggested term with Zephra that she won't expand the

lease for a long time on account of fo the change is finished by the inhabitant Aaron. Tragically,

after the demise of Zephra, Yeti acquired the property and she chose to build the lease of the

property by damaging the suggested term of the inhabitant contract. At the point when Aaron

rejected the augmentation of the lease then Yeti ended the agreement, so now, Aaron has the

power to guarantee for the remuneration of the spending from his part (Gilles, 2014).

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2.3 Evaluation of the effect of different terms in the given contracts

Case 5:

In the agreement of protection strategy, Good confidence between the guarantor and the

policyholder is essential. So in this specific case, Insurer plainly asked the policyholder before

the agreement Have you or any individual who will drive been included in any engine

mischances or made a claim (blame or non-blame including burglaries) amid the most recent five

years.

This was imperative data for the guarantor, in light of the fact that, on the premise of this data,

they would choose whether to issue the arrangement or not and if the strategy is to be issued,

then what ought to be the premium (Gilles, 2014). In any case, the policyholder hid the data

imagining that it is his own data. Thus, he abuses the lead of false representation. In this manner,

the organization can dismiss the policyholder.

Case 6:

This is an issue of pure deception. In any case, the organization will take their choice on the

premise of the data gave by the policyholder. In this manner, the organization has the privilege to

dismiss the claim. It is on account of, for this situation, the law of protection user picture video"

or most extreme great confidence is disregarded as a result of false representation (Anson, 2009).

Both parties of the contract must be eligible to make agreement and contract. Parties of any

contract will not be considered as competent if they are not of age by the definition of law or if

they are mentally ill at the time when signing the contract .Be that as it may, a short time later,

the insurance agency became more acquainted with about the change and two protection claims

made by one of the drivers of the auto. The protection contract was canceled by the insurance

agency for rupturing the "most extreme great confidence" through fake deception and it was

advocated by past case. Despite what might be expected, the cash which will be paid to the

independently employed building temporary worker will be his thought

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3 Task 3: Vocational Scenario

3.1 Explaining the similarities and differences of liability in tort with contractual

liability using an example

Contract law is implied when people decide to come to an agreement on some point while tort

law is applied when dispute or problem within two or more parties happens without having any

pre contract. Therefore, tort law is about the injury happens because of any wrongdoing from one

party to any other party. The injured party becomes the Plaintiff, on the other hand, the

wrongdoer will be tortfeasor or defendant.

Tort Liability Contractual Liability

The nature of duty is somewhat rigid in the

case of liability in tort.

The option for compensation is cancellation of the contract and compensation for damage for the aggrieved party (Anson, 2009).

No prior relationship is required in the case of

liability in tort

Prior relationship is a must in the case of

contractual liability

The option for compensation is liquidated

damage for the aggrieved party

This occurs when any terms of the contract are breached by any party of the contract

It occurs when the legal right of other

individual is breached

The nature of duty is somewhat flexible in the

case of contractual liability

The instance of liability in tort is a battery,

assault, and public nuisance (Maclntyre,

2011).

The instance of contractual liability is a

breach of sale of property contract, failure to

pay in the agreed time etc

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3.2 Explaining using suitable example how liability for negligence can arise and

the conditions needed to be met for a claimant to successfully prove negligence

Commitment in thoughtlessness can rise when damages or wounds were conveyed on to a man

as a consequence of the inconsiderate exhibition of another person. The commitment in the lack

of regard suggests the break of the commitment of care towards the hurt person. The lack of

regard commitment is a kind of tort hazard which was developed by the Donoghue v Stevenson

[1932] case law. For this circumstance, it is shown that the producers or suppliers can be

heedlessly committed for their careless movement which can damage or mischief the customers

of the things or organizations without having any lawfully restricting relationship with the

customers or customers. The applicant sued the distributer of the ginger blend as a consequence

of offering ales with separating snail which achieved outrageous stomach misery and

gastroenteritis to the customer. On the off chance that the protest of the agreement itself is, illicit

in the nation then the agreement will void abdominal muscle initio. The holder of the mix was

hazy and Donoghue couldn't see the snail some time as of late (Beale and Tallon, 2012).

Stevenson did not have any yearning to meet the case as Donoghue was not a get-together of the

understanding but instead the court constrained danger of lack of regard to Stevenson for their

break of commitment of care towards the "Neighbors". So as to shape an agreement four central

things to remember, as a matter of first importance, the offerer must represent an offer and the

offer must be acknowledged by the other party before it is repudiated.

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3.3 Explaining what vicarious liability means and how a business can become

vicariously liable using examples

In the time when one social event is held legally at hazard for the movement of various get-

togethers or avoidances of substitute get-togethers, it is known as the get-together is vicariously

at hazard. In this way, if the misfortune is noteworthy then it would be a condition, or

conversely, if the misfortune is irrelevant then it would be announced as a guarantee. An

Airplane association can be vicariously at hazard for the showing of it pilots (Beale and Tallon,

2012). The subject or object of the contract must be valid according to the national law. For

instances, if the object of the contract is Wine is Saudi Arabia, then the contract is invalid There

are a couple conditions under which a firm can be held vicariously at hazard. Firstly, if the

securing methodology of the firm is broken to the point that it starts lacking people and it causes

hurt, then the firm will be held vicariously at hazard. Moreover, if there is no effort by the

business for keeping the mischief from happening and there is veritable damage that happened,

then the fir m will be vicariously subject for that. An agreement is typically framed under three

arrangement, eye to eye, composed, and coordinate offering. Thirdly, if there is disillusionment

from the part of the relationship to ensure a working spot with prosperity, then said affiliation

will be held vicariously at hazard for that.

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4 TASK 4 - Case studies

4.1 Applying the elements of the tort of negligence and defences in the given

business scenarios below;

Case 7

The specialist's office would be viewed as tried and true if the conditions of remissness claim are

fulfilled. It would need to pay for the death of Mr. Brown to his widower because of the

vicarious commitment for the reckless direct of the pro who was an agent of the recuperating

office. Firstly, the specialist's office had a commitment of care towards Mr. Brown as he was a

patient of the mending office (Maclntyre, 2011). Moreover, the pro on commitment did not

check the patient and indiscriminately supported a couple of meds and this is a break of the

commitment of care. In the blink of an eye, if the destruction of Mr. Brown realized because of

the indiscreet exhibition of the pro, the recuperating focus would be committed for the passing.

So if Mr. Brown was by then a pneumonia understanding and the lack of regard of the authorities

exacerbated his condition to death, the recuperating office needs to compensate the widower for

her setback. In this way, if the misfortune is critical then it would be a condition, oppositely, if

the misfortune is immaterial then it would be pronounced as a guarantee. The subject or object of

the contract must be valid according to the national law. For instances, if the object of the

contract is Wine is Saudi Arabia, then the contract is invalid

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4.2 Applying the elements of vicarious liability in given business situations below

(Cases 8 and 9);

Case 8

For this circumstance, a stream who works for an official escort association was sent to get a

client at the plane terminal. In the time when he was holding up, he drank alcohol and did

similarly. On the landing travel, he held a disaster which persevered through the client really. It

was found that the driver over drank the alcohol (Riches and Allen, 2011). The client is right

now suing the association for the compensation. The fundamental thing that must be done is to

make sense of if the association can be held committed for the lack of regard of the driver. For

this circumstance, the association can be held vicariously at hazard for the driver used by it as it

fails to display an obtaining approach that will thwart the unbalanced delegates from going into

the association. Both parties of the contract must be eligible to make agreement and contract.

Parties of any contract will not be considered as competent if they are not of age by the definition

of law or if they are mentally ill at the time when signing the contract

Case 9

Here, the hurt individual can sue the market for the harm in light of the way that the damage that

the delegate had happened in the midst of the working hours in the work put and keeping up the

security of the specialists is the commitment of the business (Chen-Wishart, 2010). The accident

was brought on by one of the agents of the supermarket yet the market denied taking the

commitment in light of the fact that another association was assigned to keep up the prosperity of

the delegates working for them. In any case, this hazard can't be denied as it is one of the

organizations' liabilities and the supermarket will be vicariously subject for the inefficient parts

of its delegated expert to compensate the loss of the hurt specialist. In every business contract,

there must be some consideration from both parties of the contract.

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Conclusion:

To reiterate the entire task, we can state that if any noteworthy contract component is missing

then the agreement confront the danger of being ended. An understanding is characterized as a

shared relinquish between at least two gatherings. The assertion can either be upheld by laws or

may not be authorized by laws. One party of the contract must offer something to engage in the

contract, and then the another party has to accept the offer before the quit of the offer if they

want to engage in a legal and lawfully enforceable relationship. The main enforceable assertion

is considered as an agreement. An agreement has generally characterized an understanding

between two gatherings; offeror and offeree, which is enforceable by law. What's more that, in

each agreement, there must be a thought from every gathering? Be that as it may, in this task

what are the key components of any substantial contract will be examined. Without having any

of these elements may make a contract void ab initio that is invalid from the beginning

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