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Unit 5 ACNB Case study Assignment solution
Diploma in Business
Unit Number and Title
Unit 5 ACNB Case study
A contract is said to be a document containing the terms of the contract that are agreed to between the parties. The contract is said to be valid on analysis of the presence of the marketing essentials elements for the creation of the contract. Every contract is to be standard for formation and shall contain the different types of terms that validate the creation of the contract. The breach of these terms shall give rise to liability. The liability arising under contract and that of tort are civil in nature. These liabilities are to be distinguished in order to complete the study of the assignment. The different types of liability present under law of tort are to be discussed as well.
The case study explains that Peter Abraham had planned to run a private business whereby he would be the sole owner being the contractor. While running a business a person comes across different types of contracts. It is important to realise that every contract has same elements in order for it to be classified valid and enforceable under the law. Such elements of the contract may be as follows:
Whereby a party makes a statement providing the terms of the contract is regarded as the offer. the offer is said to be the statement that initiates the contract and is clear to understand. The offer shall contain all the terms that may form the basis of the contract. When the offer is being made it shall be clear that it is indeed an offer and not just invitation to offer. This would imply that the offer made is allowing the offeree to evaluate the creation of the contract. The invitation to offer however means that the person is allowing the interested party to evaluate the benefits of making an offer for the respective invitation. It merely intimates about the possible outcome if the contract is created. Thereby, it motivates to invite offers. (Adams, 2008)
When an offer is made the offeree may be able to either accept or reject the offer. If the offeree accepts the offer a contract is created. The acceptance so made shall be clear in meaning and simple to understand. When the acceptance is made the same shall be complete and be direct towards the offer. If the offer is only partially accepted it would be termed as a counter offer. This would imply that the offeree is initiating another offer and voiding the previous offer. Therefore, unless the final offer is accepted the contract is not formed. (Andrews, 2011)
When the acceptance is being made it is important that it shall be through a means of managing communications recognised under the contract and the parties. The possible means of communication may be that of the post, writing, oral, telecommute, fax and such other aspects. According to the postal rule of acceptance the same may be considered valid when the letter of acceptance is posted. It is to be noted that under the case of unilateral contract the offer so made shall not require the element of acceptance. This means that when the offer is made, the same allows the parties to perform an action in order to create a contract. the said action is termed as the acceptance and creates the enforceability of the contract. Thereby, the offeror waives off the requirement of being intimated for the acceptance by the parties performing the act.
Every contract requires the presence of the consideration in order to make the contract valid. The amount of consideration involved allows the party to be restored with the loss so suffered from participating in the contract. The contract is said to be valid as long as the consideration is present. If the consideration is absent the contract may not be considered valid under the law. The consideration amount shall be sufficient if not adequate, not arising from the existing duties and be present in nature. (Finch, 2007)
To derive the enforceability of the contract it is important to derive its intent. The intent to enter into the contract allows the party to classify the contract for the intent. If the contract is for commercial nature the contract is said to be enforceable under the law automatically. But the contract is not enforceable if the same is for social nature. This would mean that the social contracts are said to be the private contracts and only enforceable if the same is determined under the contract.
For every contract it is important that the parties to the contract are of capacity in order to derive its creation. The capacity of the parties validates the existence of the contract. If the contract so created is not by the parties of capacity then the contract is said to be void. The capacity of the parties may be determined through the age, mental stability and financial status. This would mean that any party not being so at the time of the contract would render the contract void.
The different types of contract that Peter Abraham may be able to enter into are as follows:
- Contracts that are created in the presence of each other are said to be face to face contracts. These contracts are namely oral contracts and created from a conversation. Whereby the offer is made through the conversation the acceptance shall be notified within the same conversation of a different one as discussed between the parties. The contracts of such nature are difficult to be determined under the law as the terms cannot be established clearly for not being proven and lacking evidence. (Meyer, 2010)
- Contracts that are created through an exchange of the written offer and acceptance is regarded as the written contracts. the terms of the contract are consented through the signatures of the parties. As the contract is written and agreed by the parties the enforceability of these contracts is easier than that of oral contracts. These contracts may be represented in the written form in order to be sure of the terms that were agreed to between the parties.
- Contracts that are created by the parties from distance without being present in front of each other are regarded as the distance selling contracts. These contracts are formed through online, exchange of letters/mails, fax, mail order and such other means of communication. These contracts are present in written format and obligates the seller to make the delivery and payment details provided to the consumer. Therefore, these contract are easier to be established in terms of enforceability as every detail may be clearly determined. (Richards, 2006)
The contract terms that make it valid are to be considered under every contract in order to derive its validity and performance. The following terms shall be referred to by Peter Abraham that would allow him to assess the performance and breach of the contract:
- Any term that states the purpose of the contract is to be considered a condition. The condition may be regarded as the primary part of performance under a contract and the non-performance cannot be risked for the parties. If the contract conditions are not performed, the contract may be considered void and the party suffering from the non-performance would be able to claim for the damages from the wrong-doing party. The contract is said to be the breached and voided from breach of condition.
- A term that supports the performance of the condition is regarded as the warranty of the contract. This would imply that the parties to the contract are bound by the warranties but the non-performance of the same would not let them void the contract all together. This would imply that the parties so affected may only be able to claim for specific performance, damages and injunction. (Collins, 2008)
- Whereby the aspect of the term is not certain it is considered to be an innominate term. The innominate terms are either conditions or warranties depending on the performance of the term under a given situation. If the effect is permanent it will be a condition and if not then it will be a warranty. Therefore, the nature of term is decided once the breach is committed.
- Terms that are provided in the contract to exclude liability in case of non-performance is said to be an exclusion clause. This would mean that the contracting party may limit the liability in case of not being able to perform. The term limiting liability for the injury or death caused is considered invalid. This is because the same is not allowed under the UCTA. IT should be noted that these clauses shall be included through previous dealings, notices or signatures.
In the provided case study, it is observed that an advertisement and promotion was posted regarding the sale of the couch. Carol was in the market looking for a couch when she came across the advertisement. As per the study provided above it may be determined that an advertisement is regarded as the invitation to offer and not an offer. The invitation is posted for the interested buyers to make an offer. When Carol approaches to buy the couch at a given price she would be said to be making an offer. Any offer when presented may either be accepted or rejected. If the advertiser accepts the offer it will be a contract and if not, then no contract could be said to be formed. (Adams, 2008)
In the present case study, it is observed that a firm was hiring for the position of the cyber security specialist. Devi wanted to interview for the same. After the interview he was informed that he has been hired and was presented with an offer letter on 12th April. The same was accepted. He although had informed his father to not get involved in the hiring process in any manner. The father however offered the company to hire his son at a price of 150,000 Pounds. The same was made on 13th April. The contract so formed between the father and the company is said to be invalid as the terms of the contract are for past consideration. As the act of hiring the son had taken place a day before, the contract so formed the next day would be invalid. (Andrews, 2011)
The case scenario provided illustrates that the restaurant had made a couple who had come for dinner, keep their coats at the reception. The couple after doing so were given a ticket that contained a clause stating the restaurant would not be liable in case of loss of item from the reception. When the two of them were finished with dinner and wanted to make the payment they realize that the wallet was in the coats at the reception. However, the same was not found to be there. The restaurant now denies to compensate for the claim. It is determined that the slip so provided by the restaurant did not form part of the contract. As the same was handed over after the contract was formed it would not be considered applicable or valid. Also, when the contract is being formed, party including the clause would be responsible for notifying the presence of the same. Therefore, the said clause will not be applied to the case and the restaurant would be liable to pay for the damages for the loss so suffered.
The case scenario provided states that the tenant and the landlord had entered into the contract for the purpose of the renting the premises. The tenant to enjoy the premises as per the requirement had made some adjustments that cost him a certain amount. As the tenancy agreements imply the landlord to reimburse the tenant with the amount so spent, the landlord instead agreed to not increase the rent of the place at any time for the next five years. However, the landlord died the next year and the new landlord decided to increase the rent previously agreed on. The tenant now does not want to continue the tenancy due to change in terms. He may now be able to not accept the terms and terminate the contract. The amount so spent on the improvement shall be claimed from the landlord for the remaining amount of time of duration four years. (Finch, 2007)
According to the case study, the contract so formed between the parties is for the policy of the car. Herein, the policy company invites the people to apply for the policy through an application form. The people applying for the policy are said to be making an offer to the company that after inspection would be accepted by the company to successfully bound the two. The policyholder has to answer to the questions in terms of the usage and condition of the car. One such question asked under the form is for the previous claims so made by the parties if any for the same car in the past five years. The policy holder had not provided the correct answer. As the answer to the question is wrong the policy may be considered breached. This is because the terms so asked under the policy form are directly related to the purpose of the policy for the car. The wrong answer would lead to breach of the condition and the company would be able to void the contract for the breach of condition.
According to the case study, the policy form was presented to a party to apply for the same for a car. The applicant had to answer several answers under the form related to the car. The terms so presented under the policy form would be considered to be either condition or warranty that would be offered to be accepted by the company. The terms regarding the originality of the parts of the car and the previous claims so made by the owner shall be revealed appropriately. The terms regarding the previous claim are directly related to the policy and is considered to be a condition. The term for the originality of the parts was in support of the policy and the same shall be considered to be a warranty. However, the two questions were misrepresented and not answered accurately. The same misrepresentations were for the policy terms that would be considered as a breach. Therefore, as the terms are said to be breached the company would be able to void the policy for misrepresentation. (Meyer, 2010)
The civil liability so created is strict in nature. Therefore, the liability so arising under the tort and contract is considered to be strict in nature. This would imply that the liability once created is to be provided for by the party causing it. The liability once created cannot be escaped and the same is to be fulfilled accordingly.(Giliker, 2010) The liability under both areas of law is considered to be similar when it comes to performance. However, when the liability is created the difference in two arises. These differences are studied under the following table:
Liability in Tort
Liability in Contract
The parties under the tort are not related
The parties under the contract are related
The wrongful act so committed is not discussed by the parties
The wrongful act is discussed between the parties.
The right so breached is the right in rem
The right so breached is right in personam
The liability under tort is determined based on the situation
The liability under contract is determined based on the consideration amount involved.
The elements considered to determine breach are remoteness of damage, causation, proximity. (Cooke, 2007)
The elements considered to determine the breach are that of the offer, acceptance, consideration.
The terms of breach are not discussed between the parties
The terms of breach are discussed between the parties.
The tort of negligence is said to be the tort that is committed by the parties from the breach of the duty. The reason of breach shall be negligence of the party from forgetfulness or ignorance. The duty so involved to be breached is that of the duty of care that provides to undertake care to ensure safety of the neighbours in a society to maintain the order and security. The duty of care when breached is considered to be a tort that when committed shall give rise to the damages. The damages so caused should be so serious that it causes harm in terms of the physical, psychological or monetary loss. The tort of negligence is an absolute liability is to be fulfilled by the parties committing it. The liability is binding as soon as the breach is performed.
In the case of Donoghue v Stevenson the judgement determined that the duty of care for the manufacturer of a product would be extended to everyone capable of consuming the product and not only the immediate consumer that purchases the product. This would imply that the anyone in the market would be able to consume the product and the duty therefore, would extend to each of them in the consumer market. Also, under the case of Caparo Industries, it was determined that the tort of negligence may be scaled against three factors, remoteness of damage, causation and proximity. The wrong committed is to be directly related to the damage, the same shall be reasonably placed in order to cause the influence and be in close circumference to be remotely related. It was also implied that whereby the damage from performance would be foreseen the duty of care would exist. (TAN, 2008)
The liability may not always be direct in nature. The liability so arising may be due for the person not performing the wrongful act. This would mean that the party performing the wrongful act would not be liable to pay for the damages. This allows the party making the wrongful act to be safeguarded from the duty of care as the performance had not been personal but professional. Wherein a party allows another party to perform on its behalf the performing party is not liable. This implies the delegating party to be liable for the same. The wrong so committed shall be for the official nature of delegation. This type of liability mostly arises in the case of employer-employee relationship whereby the employer allows the employee to perform on its behalf so that it may be profited from the act. The wrongfulness of the same shall be beared by the employer. The wrongful act should however be undertaken during the employment for official purposes and not just the personal actions undertaken by him.
As an employer it is a duty to maintain the work place in a manner that the employees are capable of pursuing healthy living. The same is provided for under the Health and Safety at Work etc. Act, whereby the sanitation facilities, drinking water, medical services, and equipment are to be duly provided in support of the same. Similarly according to the Occupier’s Liability Act, the occupier is responsible for the safety of the visitors and non-visitors. This would imply that the premises shall be maintained accordingly and the risk of safety shall be clearly notified on the premises. This duty should extend to permanent visitors and temporary visitors both authorised and unauthorised. (Morgan, 2011)
According to the facts of the case it is determined that the person had approached the hospital as he was not feeling fine. The doctor so approached was an employee of the hospital and the patient was approaching the hospital for the treatment. The doctor being busy was unable to provide a check up to the patient. This in turn determined that the doctor had not undertaken the professional duty. The doctor then asked the nurse to provide him with the general medicines and send him home. The next day he is found to be dead. It would be determined that the patient had died from pneumonia and not the wrong medicines. This meant that the medicines did not cause the death of the patient. However, it may be derived that the doctor was in neglect of the professional duty. The professional duty of the doctor implies that he should not prescribe medicine without a physical checkup of the patient. This is his duty as a doctor even if not been employed by the hospital. Therefore, the doctor is responsible for committing a professional negligence for not undertaking the duty of care towards the patient. However, he would not be liable for the death according to the but-for test as the act and the damage are not related. It may further be concluded that the hospital being the employer of the doctor would be considered to be vicariously liable as the act so committed by the doctor was while performing official duty in the capacity of being an employee. (Bell, 2013)
In the given case study, it is provided that the driver is an employee of the company. The driver was asked to receive the client and drive back from the airport. When he reached the airport the plane had not yet arrived. Thereby, he decided to stop for few drinks. After the plane arrived the client boarded the car and the driver was on his way back to drop the client. As he was drunk from the alcohol he drove negligently and caused an accident damaging the car as well as injuring the client. It would be determined according to the case of Rose v Plenty that however; the driver was driving the car after drinking that is not his duty the damage so occurred did not occur from drinking but negligent driving that was his official duty. Therefore, as the company is the employer of the driver, it would responsible for the loss so occurred to the car as well as the client. (TAN, 2008)
The provided case scenario interprets that the employer namely, the Supermarket had delegated the duty of restoring the health and safety guidelines to a company other than itself. One day when an employee was unloading the van the pallets so carried by him fell out of his hand from a slip and the same landed on another employee causing him injuries. It may be determined that since the employee was working on the premises of the supermarket he was under direct control of the supermarket. Similarly, in the Case of Mersey Docks it was determined that when the employee has more than one employer the employer having the direct control over the employee would be liable for the loss. Therefore, the supermarket would be held liable for the injuries so caused on the premises to the employee. (Morgan, 2011)
The unit 5 ACNB Case study assignment derives an analysis of the different elements of the contract leading to its formation. The same shall be present under variety of contracts as a standard form. Every contract shall contain the basic terms such as condition and warranties in regards with performance or nonperformance to derive the validity of the breach in a given situation. The breach so caused under contract is differentiated from that of the breach of duty of care under tort. The different types of liabilities arising under tort have been provided in order to study its effect on the parties so affected.