ACNB Assignment Contract negligence business

ACNB Assignment Contract negligence business

ACNB Assignment Contract negligence business


Diploma in Business (Marketing)

Unit Number and Title

ACNB Assignment Contract negligence business

QFC Level

Level 5

Task 1 Explain the essential elements of a valid contract in a business context

ACNB Assignment Contract negligence business

LO 1.1  Explain to Peter Abraham how a contract is formed and the importance of the various elements which has to be present to form a contract.

When an agreement is combined with other contract marketing essentials then it results in the contract formulation. An agreement is the combination of offer and acceptance which must be coupled with other essential to make a contract. Thus, all contract elements are required to be analyzed which helps in contract formation. (MacMillan & Stone 2012)

  • When an offeror wish to establish a contract then he must make an offer to another person called an offeree. An offer is a form of terms which is conversed to an offeree and which an offeror wait for to be complied with by an offeree as it is (Gibson v Manchester City Council (1979). It is a command of an offeror which should be performed by an offeree. This command of an offeror should come within the knowledge of the offeree to be valid in law(Carlill v Carbolic Smoke Ball co (1893).
  • When an offer comes into acquaintance of offeree then it is offeree’s duty that such offer should be responded back by him, wither in the form of approval or in the form of rejection. When the offeree agrees to follow the offer and does not bring any variation to the same when the approval is given, then, this act of an offeree is called an acceptance  (Chillingworth v Esche (1923).
  • An offeror offer when combined with the acceptance of an offeree results in the formation of an agreement  (Chappell & Co Ltd v Nestle Co Ltd  (1959). This agreement gets enforceability when is supported by some benefit called consideration in law.  A consideration must be sufficient but not necessarily be absolute in nature to be valid.
  • Now, even when there is offer, acceptance and consideration, still there is yet another element which must be present, that is, the legality of the objective of the parties. The business law of contract submits that the parties should make offer and acceptance with legal intention (Rose & Frank v Crompton (1924). In family relation, this intention is assumed to be absent and is present in commercial relations. But, these general presumptions can be disapproved by putting down evidence to support the same.
  • Finally, when the offers and acceptance are made amid the parties then such promises should be made by those parties who are major, that is, above 18 years and must be of sound mental ability. If parties are incapable then they cannot make a valid contract with each other.These elements are very important to make a valid contract with each other. All elements must be present and if any single element is not complying with the it’s legal principle then such contract has no validly in law.

LO 1.2  Discuss the impact of forming contracts (as it may apply to Peter Abraham) by means of

A few contracts are: 

  • Face to face – Those bond which are vocally made after being present physically in front of each other by the parties (Bannerman v. White (1861). These are verbal contracts and hence are not simple to prove because proof of oral terms is very difficult.?
  • Written – The contract on paper or document are written contracts. They are non-verbal in nature. These contracts are solid piece of evidence and can be proved in court easily as are in documented form.?
  • Distance Selling - When parties are physically apart then the contract formulated are distance selling. These contracts if oral then are weak but of are in written form then are solid piece of evidence.

LO 1.3 Give an analyses of the following terms in contracts with reference to their meaning and effect (including remedies and damages) as it may apply to Peter Abraham.

The terms within a contract are categorized in four major categories: (Weitzenböck 2012)

  • Conditions – These are very important terms and if they are not followed by the parties then the contract will leave its essence and such contract can be easily terminated by such a party who is not at fault (Poussard v Spiers(1876).The aggrieved party can also sue the defaulter for loss. 
  • Warranties – The terms which are not very essential in the contract is called warranty. A warranty is non-essential term which even if not executed will not impede the sanctity of the contract (Bettini v Gye (1876).  The aggrieved party can ask for damages in situation of default.
  • In-nominate – the terms which neither condition nor warranty but becomes one of them when any violation took place. It is the nature and gravity of the breach which decides whether the term should b considered as condition or warranty. The consequences depend upon the nature of the term (The Hansa Nord (1976).
  • Exclusion – Those terms which prohibit a person to be answerable to the liability which is imposed upon him because of breach of contract term under a clause is known as an exclusion clause (Curtis v Chemical Dyeing & Dry Cleaning Co. Ltd (1951). These clauses are valid when are in the notice of both the parties. The relying party should make every effort to carry the phrase in the perceive of the other party prior relying on the clause.

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Task 2 Apply the elements of a contract in business situations

LO 2.1  Apply the elements of contract in the given business scenarios below;

Case 1 – Agreement

When any one person (offeror) intends his wishes to be comply of by another person (offeree), then, the communication of such wish is an offer in the law of contract. In such case, it is the offeror who is making an offer to an offeree and the approval of such offer by an offeree is called an acceptance in law.

But, the situation differs in cases when the person is not making an offer but inviting offers from people. This situation is called invitation to treat and the person making invitation is called inviter. The inviter makes advertisement, display goods, etc, and invite offers from people, the people acts like an offeror and makes offers to the inviter. The inviter has to act like an offeree and when the offer is confirmed then a contractual relationship is made amid the parties.

Now, the Online ad by Gumtree is an invitation and is held in  (Partridge v Crittenden(1968). So, Gumtree is an offeree. Carol is an offeror and has made an offer to the Gumtreee. But, this offer was never approved by Gumtree. (McKendrick 2011).

So, no contractual relationship is established between the two.

Case 2 – Consideration

The combination of offer and acceptance results in agreement and the agreement gets its enforceability when is supported by a consideration (Pao On v Lau Yiu Long (1980).  A consideration is the gains which budge from an offeror to an offeree because the offeree has undertaken the desires of the offeror. But, the consideration which moves amid the parties must support future/present promises but no past consideration is valid in law. . (The Law Teacher 2016)

Now, Devi was given appointment on 12thn April by George. Preston is not aware of the same and promised George that he will provide him with a contract if he appoints Devi. This promise of Preston is supporting an act which is already done and is thus a past action. In law, any consideration which supports past action is invalid. So the promise of Preston is invalid and is not enforceable in law.

LO 2.2  Apply the law on terms in the following cases

Case 3 – Exclusion clause

Exclusion terms prohibit a person to be answerable to the liability which is imposed upon him because of breach of contract term under a clause is called an exclusion clause. These clauses are valid when are in the notice of both the parties. The relying party should make every endeavor to bring the clause in the perceive of the other party prior relying on the clause  (Thornton v Shoe Lane Parking (1971).

Now, the couple entered the restaurant and handed over his coat to the porter which contains 500. He received a receipt which contains an exclusion clause according to which the restaurant is not liable for any stolen thing or theft.  The amount was missing when he took the coast back. When the receipt was handed over to him there was no attempt by the restaurant or the porter so that the clause is brought to the perseverance of the couple. So the exclusion clause is not applied here and the couple can recover from the restaurant.

Case 4 – Implied term

The terms which are followed by the parties as per law are implied but the terms fpuind in the contract specifically by the parties are express terms (The Moorcock Case (1889). (ElawresourceUK 2016)

Now, these terms are applied upon the facts of the case. There is a contract between Zehphra and Aaron according to which Aaron will take the warehouse of Zehphra. Zehphra will charge a particular rent from Aaron. In the meantime, Aaron has made improvements in the warehouse of Zehphra and upon this it was decided between them that the rent will not be increased for coming five years. Thus, there is an express undertaking amid the two.

Now, Zehphra died, and the property is inherited to Yeti. Now, Yeti has increased the rent. Yeti has an implied obligation to comply with the contact that is entered by Zehphra. So, Yeti should not increase the rent of Aaron and if he increases the rent then there is violation of implied term. So, Aaron can sue Zehphra if he increases the rent of the warehouse.

LO2.3   Evaluate the effect of different terms in the given cases

Case 5

Whenever contract is executed then one of the significant term that is made art of the contract upon which any contract is standing and which is considered the heart, soul and essence of the contract is called condition. This is such a term in a contract that if such a term is not complied with by the parties then the contract main status is lost and the party is hands not violated the contract has every right in law to annul the deal and prosecute the evasion party for damages and compensation (Poussard v Spiers (1876). 

The information in instant case being enquired by the insurer is a condition. In instant case the term submits whether any accident or claims were made by the holder or any one, but, the same was denied by the holder and which was a false statement.

This statement was the basis upon which the company was entering into an insurance contract with the company. Thus, since this clause is dishonored by the holder so the main spirit is broken, that is, condition is dishonored. In instant case the company can deny the claim of insured and cancel the contract.

Case 6

There are two basic terms that are normally found in any contract. The contract which is the main element and foundation is called a condition and violation results in contract termination and claim of damages (Poussard v Spiers (1876). But, the term which is supplementary to the condition and which only allow damages to the aggrieved is called a warranty Bettini v Gye (1876).      

Now, in the given situation, there are two terms which are asked by the company from the holder. The first one is a warranty and the second is the condition, the first one only deals with the alteration in the specification of makers and the second deals with any theft claim in last five years both are deprived of by the holder but the second term is the main essence of an insurance contract and is highly relied upon by the company. As per second term the insurer can cancel the policy but on the basis of the first term only damages can be claimed by the parties.

Task 3 Explain the principles of liability in negligence in business activities

LO  3.1 Explain the similarities and differences (contrast) of liability in tort with contractual liability using an example.

Both the laws i.e. contract and tort, though are from the same source but are very different with each other specifically when liabilities of the two are concerned. The basic contrasting features between the two are submitted herein below. (ACCA 2016)

  • Normally whenever the liability in contract is imposed upon the party to the contract then it is the contract terms that define the limit of the liability. Thus, there is liquidation in the liability of contract. But, when any tortuous breach is incurred by the parties then the liability in such situation is not determined any pre decided terms and conditions, rather, the team are defines as per the courts. Thus, the liability in case of tort is un-liquidated in nature.
  • Also, the parties are totally strangers in tort law and the legal responsibility is forced on the defendant for the loss caused to the plaintiff whom he is not known. But, in the rule of contract the parties are identified to each other and the liabilities is amid the parties to the contract.
  • The liability is very strict in contract because the same is pre determined as per eth contract terms. But is not pre determined in tort and is mainly a fault based liability principles because the liability is originated from the fault of the defendant.
  • In the law of contract, the parties have the duty to comply with the contract terms. But, in the law of tort, the parties are forced to comply with the duty of care and in case of default the defendant is answerable as per tort law.

LO 3.2 Explain using suitable example how liability for negligence can arise and the conditions needed to be met for a claimant to successfully prove negligence.

The law of negligenceis one of important legislation. The law of negligence penalizes the defendant for not complying with his legal duties in law and for causing harm to the plaintiff which he would have avoided. However, the basic ingredients to prove the law of negligence are:

  • That the defendant is compulsory with a legal duty of care to conduct without causing any harm to plaintiff Donoghue v Stevenson (1932). The duty is only inflicted upon the defendant when the plaintiff to whom the injury is caused is his neighbor or is in proximity to defendant and the act of defendant falls upon the plaintiff directly Anns v Merton London Borough Council (1978). Also, the defendant is under the manner of the deity of care only when the loss is logically probable by the defendant. When these two principles are fulfilled then the defendant has a duty of care to cater with (Junior Books v Veitchi (1983).
  • But, when the level of acre that is required to be met by a defendant is not complied by him then the duty is considered to be breached. This is the second main element in the law of negligence. The level of care that is required in each and every situation is very different. If the plaintiff is ill, aged or child then the level of care is much high when compared with the plaintiff who is a normal human being (Blyth v Birmingham Waterworks Co (1856).
  • The violation of duty shall result in causing harm to the plaintiff which is the direct result of the defendant actions (Barnet v Chelsea & Kensington Hospital Management Committee (1969). This causation is extremely necessary in order to prove the negligence Jeb Fasteners Ltd v Marks, Bloom & Co(1982). Also, the loss to the plaintiff which is caused should also be reasonably foreseeable by the defendant.

When all the above stated elements are proved then only the defendant can be said to be negligent.

LO 3.3 Explain what vicarious liability means and how a business such as your organisation can become vicariously liable giving example.

The law liability i.e. vicarious in nature is a very important piece of legislation under which the boss is held to be answerable for the events of his employees which are carried out by such employee within the course of employment.

There are few essential to prove to hold the boss answerable for the actions of the worker. First, the association amid the two are must be of boss and worker Mersey Docks & Harbour Board v Coggins and Griffiths; secondly, the employee being moving on his actions within the course of employment Netheremere Ltd v Taverna & Gardiner; third, that the acts are governed and directed by the employer Limpus v London General Omnibus Co; forth, that there is no independent actions of the employee. Thus, the employee can hold his employer liable for the actions committed by him on behalf of his employer.

Task 4 Apply the principles of liability in negligence in business situations

LO 4.1  Apply the elements of the tort of negligence and defences in the given business scenarios below;

Case 7

If the defendant who is forced with the legal duty of care is not complied with, then, if such breach has resulted in causing harm to any plaintiff then such plaintiff has every precise in law to prosecute the defendant for negligence. Thus, the basic essentials are:

  • That the defendant owns duty (Muirhead v Industrial Tank Specialities)(1985).
  • The care is against reasonably foreseeable events.
  • The plaintiff must be the neighbor of the defendant, that is, they are intimately related with each other.
  • That the duty of care which is imposed upon the defendant is not catered by him adequately  (Blyth v Birmingham Waterworks Co (1856)..
  • That because of the breach of duty of care some kind of loss must had been suffered by plaintiff.
  • That the loss caused should not be remote and should be direct due to the acts of defendant.

Now, the defendant can still protect his interest if he plaintiff has also contributed by his actions which have resulted to his loss along with the actions of the defendant. In such situation, the obligation of the defendant can be reduced up to the level of plaintiff contribution (Sayers v Harlow (1958)

Now, Mr Brown visited the hospital in order to cure himself. The relationship amid the parties is proximate as the hospital actions impact the health of the patient. Also, the hospital is aware that any non performance of duty will certainly hamper the interest of Mr Brown. Thus, there is duty on the hospital which is not fully performed by Mr Brown when the doctor recommended medicines on telephone without proper checking Mr Brown and which resulted in death of Mr Brown.

So, negligence is incurred by the hospital. But, the hospital can prove that Mr Brown has also contributed to his own loss as the problem that is told by Mr Brown is totally different from the diseases he is actually suffering from and thus misguiding the doctors. Thus, the hospital can rely on contributory negligence on the part of Mr Brown and may reduce its labiality under the law of negligence.

LO 4.2  Apply the elements of vicarious liability in given business situations below (Cases 8 and 9);

Case 8

The employer is held to be answerable for the proceedings of his employees which are carried out by such employee in his employment. If the acts of the employee are outside employment then there is no application of law. Rose v Plenty (1976).

Now, the driver of the company is authorized to take up client from the airport. The driver did so but he consumed alcohol before picking up the client and crashed into the post and the clients endure injuries because of the same. Now, the actions of the driver is totally in employment, that is, while picking the client from the airport and returning to the company. Thus, the company is answerable to the loss of the client even when the driver is drunk.

Case 9

The law of vicarious liability allows any third party to sue the employer for the loss which is originated by his employees. If the loss which is incurred by an employee is out of the course of his own actions, then, the employer is not answerable for the same. Rather, an employer is only answerable for those events which are followed by him in his employment Colonial Mutual Live Assurance Society v The Producers and Citizens Co-operative Assurance Co of Australia (1931).

Now, Mr Jones is working and while working his actions has resulted in causing harm to his colleagues. His colleague was severely in inured. Now, the colleague is suing the supermarket for his loss which is caused by Mr Jones on protect that Mr Jones is the employee of the supermarket. It was contended by the supermarket that it has no responsibility for the actions of Mr Jones as the responsibility of health and safety is the department of some other company. Now, since Mr Jones is not working as the employee of the supermarket when the injury to the colleague took place, thus, the coworker for Mr Jones cannot sue shop in law.

Reference List


ACCA, 2016, Key Aspects of the law of contract and the tort of negligence.
Weitzenböck EM, 2012, English Law of Contract: Terms of contract.
Case Laws
Anns v Merton London Borough Council (1978).
Barnet v Chelsea & Kensington Hospital Management Committee (1969).
Bannerman v. White (1861).
Blyth v Birmingham Waterworks Co (1856).
Bettini v Gye (1876).  
Chappell & Co Ltd v Nestle Co Ltd  (1959).
Carlill v Carbolic Smoke Ball co (1893).
Chillingworth v Esche (1923).
Curtis v Chemical Dyeing & Dry Cleaning Co. Ltd (1951).
Colonial Mutual Live Assurance Society v The Producers and Citizens Co-operative Assurance Co of Australia (1931)Donoghue v Stevenson (1932).
Gibson v Manchester City Council (1979).