Aspect of Contract and Negligence for Business Assignment

Aspect of Contract and Negligence for Business Assignment

Introduction:

A contract is the coming together of two or more than two parties for the similar purpose in exchange of something of value that sets the parties at par by making up for the loss suffered respectively. It is a fair transaction divided into different set of terms to be performed in line with the purpose of the contract. Every contract defines the rights and duties of the parties. The different aspect of contract law is studied under the present assignment. The aspect of contract and negligence for  business law  assignment also covers the element of breach if any undertaken while performing the contract. Furthermore, the different elements of the tot of negligence and vicarious liability are presented. The liabilities under contract law and law of tort are contrasted. The knowledge so gained form studying the concepts is then used to solve the case studies so provided.

Task 1

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.

Elements of Standard Contract are as follows:

• Offer:The statement of terms provided by the offeror to offeree is known as offer. Offer always moves from the offeror. It is necessary that the offeror should have the intent to enter into a contract. Offer could be of various types like invitation to offer and counter offer. Offer made should be clear to understand (Adams, 2008).
• Acceptance:When offer is being accepted by the offeree then the term is known as acceptance. Acceptance ensures that the offer and the parties enter into a contract. Acceptance made by the offeree should be clear and express and should be communicated to the offeror. Acceptance for entering into the offer should be communicated to the offeror. According to the postal rules, acceptance is valid as soon as it is posted.
• Consideration:Consideration is a term regarded as the final price exchanged as a bargain. Amount exchanged for some value is known as consideration. Considerations ensure that each party shows the acceptance to replace the value for detriments caused in the transaction. According to the law consideration made should not be of past, be sufficient and should move from the promisee and should not be a part of any contractual duty or social duty (Finch, 2007).
• Intention:Parties indulging in the contract should have a specific intention which should help in determining its nature. There are two type of contracts to which agreement of parties could be made that are social contract and commercial contract. If social contracts are present then the same are not enforceable until and unless the same is determined but same is not with the case of commercial contracts (Meyer, 2010).
• Capacity:Ability of a person can be determined with the help of its capacity to enter into the contract. There are certain factors with the help of which capacity of a person could be determined like age, mental capacity and financial status of an individual while entering into the contract. The capacity will be termed as appropriate if parties entering into the contract are majority of age, have a stable financial condition and sound mind.

1.2: Discuss the impact of forming contracts

• Face to Face Contracts:The contract which is made in the presence of both the parties known as face to face contract. Element of the contract is the physical presence of both the parties entering into it. Term of contract is discussed at the time parties entering into the contract (Andrews, 2011).  Face to face contract is a time saving contract but it becomes hard to claim any breach for the contract as there is no written evidence of the term and is presented in the verbal format.
• Written Contract:Contracts made in the written format and acceptance of parties is shown on papers is known as written contract. Physical presence is not mandatory in written contract. Nature of written contract is clear and express. Written contracts could be presented in the court as they are in written format and has an evidentiary value.
• Distance Selling Contracts:These are the contracts the parties of which from different parts of the world. Most often distance selling contracts are formed in the form of written format and sometimes either in written or in verbal form. One of the most known example of a contract is online sale of products and services. It is necessary that the tem should be presented by the seller as soon as possible to the buyer which should include price and tax rates in it. Distance Selling Regulations of 2000 regulates the contract (Collins, 2008).

1.3: Give an analysis of the following terms in contract with reference to their meaning and effect as it may apply to Peter Abraham

• Condition:Terms necessary to be mentioned in the contract are known as conditions to the contract. The contract would become void if the term will not be fulfilled. Reason behind it is that the tem presented defines the purpose and the character of the contract. Conditions could vary according to the nature and type of contract.
• Warranty:Warranty is an essential part of contract but its non performance does not void the contract. The second most essential part of a contract is warranty, non-performance of which could be met with the damages by the damaging party (Giliker, 2010). Types of warranties that could be presented in the contract are full warranty, specific warranty, or life time warranty.
• Innominate Terms:An important term to the contract but are neither condition nor warranty are known as innominate terms. Innominate terms could be either determined by the event of breach based on its effect. The term may include signatures, notice or previous dealings. There are various aspects on the basis of which the term could be interpreted such as narrow and strict approach, fundamental breach or contra proferentum (TAN, 2008).

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Task 2:

2.1 Apply the elements in the given scenarios below

Case 1: Under the present case, it may derived that Carol was on the look out to purchase a couch. She thereby, saw an  advertisement and promotion  in the newspaper regarding the same that stated the condition and price of the couch. As discussed an advertisement in the newspaper would be considered as an invitation to offer as it is advertised with the purpose of inviting the offers from interested buyers. Being an invitation to offer it cannot be mistaken for an offer. The situation provided explains that an e-mail was sent by Carol to the seller whereby she agreed to purchase the couch. The e-mail would be considered as an offer. As the seller did not bring any acceptance or rejection against the offer therefore, no contract could be said to have been entered into by the parties Carlill v Carbolic Smoke Ball Co. (Collins, 2008)

Case 2: Under the present case it may be determined that Devi wanted to work with the firm named George, Smith and Fogarty in the department of cyber-security. For the same purpose he had applied for the interview with the firm for the position. It was instructed to his Dad no to interfere with the hiring process as he was a man of power. The interview was done and the company had decided in the favor of hiring George on 12^th April making him the offer for the same. Devi’s dad decided to present 150,000 Pounds to the company in order to hire his son for the position. The letter was posted on 13^th April. It is derived that Devi’s father had made an offer and consideration for an event that should happen. As the event has already taken place on 12^th April, the offer would not be a valid offer as consideration of past nature is invalid. Therefore, no contract could be accepted and brought against Devi’s Dad for its enforceability under the law Mmills v Wyman. (Vettori, 2007)

2.2: Apply the law on terms in the following contracts

Case 3: As per the scenario, it may be illustrated that a couple had gone to a restaurant to have dinner. At the entrance they were asked to check the coats and the slip was assigned for the same. The slip had clauses included that said that the restaurant would not have any liability in case of loss of property present in the coats checked with the restaurant. Eventually, after having dinner the man realizes that the wallet was present in the coat that was checked at the entrance. However, when he approaches the front desk to check the coat for wallet it is not found with the coat. He losses a wallet along with money. It may be stated that the clause present on the slip would be considered as a exemption clause because it restricts the liability in case of happening of an event. The event herein would be missing of the  belongings from the coat that are checked in at the desk. The same was provided in writing. However, the slip was provided after the coats had already been checked into. Therefore, the contract so found was after the occurrence of the event and therefore the same would be invalid in nature. As no contract exists no exclusion clause could be valid, Therefore, the couple may be able to claim for the damages so suffered L’Estrange v Graucob. (Andrews, 2011)

Case 4: The present case illustrates that the tenant rents certain premises. For the peaceful enjoyment of the same he carries out repair work. The repairs in turn increase the value of the property to which the owner promises not to increase the rent for the next five years. The land owner eventually dies an year later. The new land owner decides to increase the rent to which the tenant denies. The tenant is asked to leave the premises to which he asks to be repaid the amount of repair work conducted by him on the premises that increased the value. It can be determined that the tenant is entitled to the compensation towards the repair works as the same is the right of the tenant under Property Laws. It is an implied term under the contact that if the tenant is carrying out the repair works the same amount may be claimed from the landowner in proportions Hutton v Warren. (Meyer, 2010)

2.3: Evaluate the effect of different terms in the given scenario

Case 5:According to the case study, the policy holder signs a policy with reference to claims that may be made under the policy. It states that a certain set of information has to be answered in order to claim the policy in case of an accident. The policy questions in the policy form were regarding the claim if made for stolen car prior to obtaining the policy to which it was denied with the policy holder. As the car was stolen and investigation was undertaken by the policy company to check if the details provided are true. It was found that the car had been claimed for stolen in the past five years. It can be stated that the term of policy questions of the policy forms are directly related to acquiring the property, therefore, it would be categorized as a condition. As the condition was breached in the given cases study the policy company may void the policy for committing breach of a condition Poussards v Spiers. (Andrews, 2011)

Case 6: According to the case study, the policy holder at the time of applying for the policy was made to answer certain questions regarding the details of the car. It was asked to tell if the car had the original parts and that if the owner had made a claim for theft in the past. The policyholder denied it. Therefore later when the theft occurred, an investigation was undertaken by the policy company to ensure the facts are right. It was found that the two claims had been filed previously and that certain parts of the car were not original. However, the policy holder clarified that the claims made were rejected or was unaware of and that the car was bought as it is with the replaced parts. Therefore, the information provided was false and the same affected the authenticity of the car for the purpose of deriving the policy. However, the term stated in the policy forms is a condition as its effect is directly related on the claim to be made. Therefore, the company would be right to void the contract as the policyholder had misrepresented the condition. (Richards, 2006)

Task 3

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

Liability under tort or contractual liability is the two aspects which are similar but could differ on several points. Liability under tort is considered as a strict liability like contractual liability. Affected party would only require establishing the breach, providing the reason is not necessary in case if liability under tort or contractual liability arises. In such a situation the liability so arises is from the voluntary acceptance of the duty in a situation. These kinds of duties are for the society in the tort and are on contractual basis under the contract (Morgan, 2011).

Up to certain extent these two liabilities could differ from each other and those differences could be determined as follows:

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

There are various factors due to which liability under law of tort in relation with the negligence could be considered. Various factors that are to be considered while determining the tort of negligence of duty of care are avoidance of the duty which leads to the damage that may weigh in monetary terms, physical or psychological. The primary thing that is to be considered is that it is necessary that the duty should exist which is to be considered while committing the negligence. It is important that the duty of care should stand against the entire society which is to be complied with every citizen with equal importance. Pre-existent of the duty of care should be avoided in order for it amount into a tort of negligence. The negligence shall be so grave that the results that presented cause harm or damage to the party through injuries (Bell, 2013). The injuries could be assessable in monetary, psychological or physical terms. It is necessary that the damages occurred should be clear and obvious from the breach of duty.

Various elements that could further be considered while studying the tort of negligence are:

• Donoghue v Stevenson: Under this case Mrs. Stevenson had gone to the cafe with her friend. Her friend bought a drink with ice cream for her. When Mrs. Stevenson had consumed half of the elements of her drink she poured rest of the half and noticed a decomposed snail which resulted in causing her stomach infection and psychological loss. The same was claimed for by her from the manufacturer. According to Lord Atkin, in such cases presented here of consumer cases the manufacturer then the manufacturer would not only be responsible for the specific consumer, rather it would be responsible for the entire society (Morgan, 2011). It means that not only for the buyer, the product should be prepared with such care both immediate as well as the possible user may not get affected from the defect. This constructed a universal burden of the product manufacturer.
• Caparo Industries plc. V Dickman: In this case principles of classification for the tort of negligence were laid by the court:
  • Remoteness of Damage: the damage that arises should have the least relation with the causation.
  • Proximity and Forseeability: it is necessary that the damage arise should be in the same area in which the breach had occurred.
  • It is necessary that the cause and the damage should be directly related for it to be a tort of negligence (Giliker, 2010).

There are several set of defences which could be considered or studies under the tort of negligence are that of comparative negligence, volenti-non-fit injuria or minor negligence. If comparative negligence occurs then both the parties involved whether damaged party or the damaging party will be responsible for certain extent for it to be a tort of negligence. In such a case the damaging party pays only the amount for which it is responsible for the caused damage. In case if the party let goes of the duty of care to manage other duties the defence of volenti-non-fit injuria occurs. In such a situation a party could give an excuse that it was indulged in other important duties other than one that is to be complied with against the society (Collins, 2008). If a minor person commits the ignorance than another defence occurs. If the negligence is committed by the party which is of less then 18 years then the punishment for the act will be granted on the basis of its age and on the basis of presumable level of understanding of the person while committing the negligence. Reason behind such decision is that it is being assumed that the children are incapable of judging the consequences of the act due to which they cannot take effect decision and unable to undertake the duty of care.

3.3: Explain what the vicarious liability means and how a business such as your organization can become vicariously liable giving example.’

Vicarious liability is considered in the law of tort if the party is responsible for another party for driving the benefits which are out of the work which is fulfilled by the party performing the work. It means if one party derives all the benefits for the work done by another party then the former party has the liability for the latter that arises. This kind of liability is considered as a vicarious liability. Primarily vicarious liability refers to the responsibility towards the other party. This kind of situation could be found in the employer and employee relationship as employee works for the benefits of employer under various situations. This is the situation that arises from the delegation of authority from the employer (Andrews, 2011). In such cases employer will be found responsible if the breach occurred is within the scope of employment and not outside of it. The obligation made in the breach should be professional not personal.  Various other arrangements under which vicarious liability could prevail are that of master servant, partnership, and the agency. Reason behind it is that the parties involved are bound to perform for the benefit of another party which leads to vicarious liability.

According to Health and Safety at Work Act of 1974, it is necessary that the employer should focus upon the safety and security measures of the company so as to ensure that mishaps could be avoided. To ensure that the employees working in the organization could remain free from any kind of damage or injuries it is necessary that the employer should consider the provision of water, equipments and other such health standards (Vettori, 2007). According to the act it is necessary that the employer should provide training to the employees regarding health and safety measures. It should provide the information to employees regarding measures to be taken at the time of emergency situation. According to Occupier’s Act, it is a responsibility of employer ensures the safety of visitors and non-visitors whether they are permanent or temporary. For the same it is necessary to know that the premises in which the visitors have entered should have the safety signs related with the massage of danger in case it persists on the premises (Giliker, 2010).

Task 4:

4.1:  Apply the elements of the tort of negligence and defenses in the given business scenarios below:

Case 7: Under the present case, it may be illustrated that a patient had approached a doctor for a checkup of chest pains at a hospital. As the doctor was busy the nurse telephoned him and asked for the treatment. The doctor prescribed some over-the-counter medicines and discharged the patient. However, the next day it was found that the patient had died from a toxic mould at the residence. The doctor had prescribed the medicine without running the check up of the patient. As the chest, pains may be the sign of a heart attack it should be attended with more seriousness. However, the cause of death was not from the medication but the toxic mould in the house. Therefore, the but-for test to check for the responsibility of the negligence has to be applied.

The negligence so conducted was while practicing the profession and providing skilled services by the doctor to the patient. The but-for test sets out that the reason of the harm should not be the mistake so undertaken. There should not be any relationship between the effect and the mistake for the applicability of the but-for test. As in the present situation, the medication did not cause the death; the doctor would not be liable for the same. The cause of death would be the pneumonia from the toxic mould and the same cannot be claimed for by the doctor for being involved in the process Froom v Butcher. (Giliker, 2010)

4.2: Apply the elements of vicarious liability in the given business situations below:

Case 8: The facts of the case present that the company had a requirement for arranging a pick-up at the airport for a client. The same was delegated to an employed driver with the company. On his way to the airport, as the flight had a few hours to arrival, he decided to stop for a few drinks before making a pick-up. When the flight arrived and the client boarded the car the driver was still drunk.  While on their way back the driver was not in his senses and crashed the car causing an accident that resulted in serious injuries to the client on board. As per the facts, it can be determined that the situation was a case of drunken driving.

It can be assessed that the job so being performed had been officially delegated by the company for the purpose of driving back the client. The scope of employment and the duty of performed are directly related. The company did not delegate the action of drinking on the job but driving the client was. Therefore the driver would be responsible for the acts of drinking and driving. However, as the same took place while discharging the official duties. Therefore the damage so taking place would be the liability of the employer as the driver would not have to drive if the same was not delegated. Therefore, according to the rules of vicarious liability the company would be liable for the actions so undertaken by the driver Lister v Hesley Hall Ltd. [Cooke, 2007)

Case 9: According to the case provided the facts are that an accident had taken place a the supermarket. The accident took place while loading the truck when an employee slipped and the pallet fell on another employee on the premise and the caused injuries to him. In turn, it was claimed by the supermarket that the responsibility of the health and safety was outsourced to another company at the moment. Under the case of Ready Mix Concrete (South East) V MPNI, it had been determined that if the there are more than two employers a the same time for a particular employee, then the employer having direct control over the situation would be responsible towards actions so performed by that employee. As the accident took place on the premises of the Supermarket, the responsibility for the actions would fall on the supermarket. A vicarious liability may be derived as the actions causing damage arise from the duties so delegated to the employee. The loading and unloading of truck was part of the job and the slip occurred causing the injuries during the performance of the duties. Therefore, the supermarket would be vicariously liable for the actions of the employee and the injuries so caused to another employee from the slip. (Morgan, 2011)

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Conclusion:

Under the present aspect of contract and negligence for business assignment, the essential elements required to enter into a contract are studied. The nature of the contract and the purpose of contract are described through various types of contract and the terms that influence the contract in a certain manner. The  information and knowledge  so derived from studying the contract law is then applied towards solving the case scenarios so presented. The extent of liability is studied with respect to contract law and law of tort that is further determined by providing a distinction. Liability arising from negligence and vicarious nature is analyzed along with the different aspects involved in determining the same. The concepts so studied are then applied towards the case scenarios.

References:

Cases:
Carlill v Carbolic Smoke Ball Co.
Mills v WymanL’Estrange v Graucob
Hutton v Warrn
Poussards v Spiers
Bisset v Wilkinson
Donoghue v Stevenson
Books:
Andrews, N. (2011). Contract law. Cambridge: Cambridge University Press.
Meyer, L. (2010). Non-performance and remedies under international contract law principles and Indian contract law. Frankfurt am Main: P. Lang.
Journals:
TAN, S. (2008). Vicarious Liability. Internal Medicine News, 41(24), pp.36-37.
Morgan, P. (2011). Distorting Vicarious Liability. Mod. L. Rev., 74(6), pp.932-946.
Bell, J. (2013). THE BASIS OF VICARIOUS LIABILITY. C.L.J., 72(01), pp.17-20.