Unit 5 ACNB Contract formation methods Assignment

Unit 5 ACNB Contract formation methods Assignment

Unit 5 ACNB Contract formation methods Assignment


BTEC Higher National Diploma in Business

Unit Number and Title

Unit 5 ACNB Contract formation methods

QFC Level

Level 5


For an agreement, it is essential that it is communicable under law to become a valid contract. All contracts can be termed as agreements but all agreements cannot be termed as contracts as some of the agreements are not enforceable under law and thus becomes void. There are many elements that arecompulsory for an agreement to become a contract. The law in business contracts can be defined as the principles and guidelines that are developed and authorized by the state and federal governments. These corporation bodies are responsible for developing and enforcing the law within the jurisdiction of business.This ACNB Contract formation methods assignment is developed to have the information about the negligence of contract in business. A business contract is basically a promise of commencing through the official commitment under the business law which must be lawful and enforceable. Within the jurisdiction of business context, there are many laws available but the most common and widely used law is contract law. A contract can also be termed as the commitment of an individual or a partnership firm or any business bodies that is commenced for the transactions of their resources. An oral contract can be implemented in business firms but a written document about the contract solidifies its nature and its operations. A written document about the legal procedures is essential as it states the expectations and promises done by both the parties in a legal and lawful document. 

This assignment will examine the principles and elements of the business law that are required to develop a lawful contract under different business scenarios. The study will provide the information about the liability in the law of tort and its characteristics. It will also outline the aim and objectives of tort along with two different aspects, namely, vicarious liability and negligence. This discourse is prepared to determine the essential fundamentals that are required to develop a lawful contract and the liability of the parties during the negligence of business.   

Unit 5 ACNB Contract formation methods Assignment

Task 1

LO 1


For an agreement, it is essential that it is communicable under law to become a valid contract. All contracts can be termed as agreements but all agreements cannot be termed as contracts as some of the agreements are not enforceable under law and thus becomes void. There are many elements that are compulsory for an agreement to become a contract. The business law can be defined as the principles and guidelines that are developed and authorized by the state and federal governments. If any of the elements are missing from the agreement then it is not enforceable by law and thus cannot become a valid contract. For starting and initiating a contract, the foremost thing that is required is offer and acceptance of a promise(Cornford, 2008). Under this, one party makes a valid offer for giving something or having something that is legal and the other party whom the offer has been produced has to accept the offer with a valid consideration. This is the first step for the commencement of a legal contract. The consideration must be lawful before the eyes of the governments; otherwise, it will become void. 

In the business world, people need to get engaged in different types of contracts for the commencement of the business and sometimes many problems arises in its implementation. The activities of one party without the intention or acceptance of the other party can bring damage to the business. If any kind of breach happens to any individual during the business activities, then the losing party can go to court for getting compensation from the other party. It is necessary for the people to make sure that all the essential elements are available in the agreement to make it a valid contract. Some of the essential elements of a valid contract are described below:

  • Agreement: In every contract, there must be an agreement between two parties where one party has to make some kind of valid offer and the other party have to accept that proposed offer with a valid consideration.
  • Consideration: For an agreement to be valid there must be a presence of a valid consideration. It is the element on which the agreement is formed. For an agreement to be imposed there must be exchange of something(McLean, Mason and McLean, 2004). The amount or subject of consideration varies according to the terms of the contracts.
  • Intention: The matter of the agreement must be lawful before the eyes of the business law. There should be the presence of intention for creating the agreement among the parties.
  • Capacity: Parties involved in an agreement must be capable enough to meet the conditions of the agreement. Infants and mentally disorder individual are not permissible to meet to get engage in the agreement.
  • Consent of the parties: Each party involved in the agreement must be involved by their own willingness. No one can force anyone for getting involved in an agreement.
  • Written document: Though a contract can be enforceable in oral terms but a written contract is best in conducting a contract so that in future no problem of misconduct happens.
  • Certainty: For an agreement to be valid, it must be certain and specific.
  • Remedies for breach of contract: A court can give remedies to the party who has been affected by the breach of contract by the other party.


Legal business contracts are formed with different means with the help of different terms and conditions. These terms and conditions help the agreement to become a valid contract in an efficient way. Always before initiating a business contract, one party introduces his or her terms and conditions and the other party has to accept or reject the offer with his or her own willingness. Both these parties are bound by the terms defined in the contract.

  1. Face to Face: A contract which is conveyed with the face to face interaction is generally void and is not valid. For initiating a valid contract, it is necessary to produce a legal document about the details of the contract(Lindemann, Kadue and Lindemann, 2012). An application which is developed with face to face interaction is not valid as the formation of the contract cannot be imposed for legal terms. A face to face developed contract is also not applicable as appropriate documents that are required for the specification of the contract are missing.
  2. Written Document: It is the form of contract in which the enraged parties forms the agreements in writings. It is usually termed as a valid contract. A contract which is written in a legal document is signed and also submitted to a licensed lawyer. It is also considered legal as it contains the seal and marks of the legal terms(Schmerler, 2008). So it can be termed that parties must develop and produce a legal document before entering into a contract as it will be safe for them from the contrary result that comes from the violation of the contract.
  3. Distance selling: It is a method in which the contract is formed amongst the involving parties through the communication medium such as telephone, internet, etc. This type of contract can be formed with the help of communication medium like cell-phones or with the help of verbal interaction over the internet(Legislation.gov.uk, 2016). This mode of developing a legal contract is considered invalid as on this medium no legal documentations can be produced on the security that is relating to the breach of contract. The agreements that are initiated over direct selling lacks the support of legal documents so it is usually termed as an invalid contract.


  • The content of the agreement: When an individual is trying to get involved in a valid contract, he or she must have the clear idea about the content that he or she is going to impose in the agreement. The content or the subject matter of a contract differs from contract to contract that is mainly developed on the terms of the involving parties(E-lawresources.co.uk, 2016). Though there are some common issues that need to be present in the agreement like the provision of the content, terms and conditions, fees, and charges, warranties, the relationship among the involving parties, payment procedures and termination.
  • Condition: It is considered as the essential elements that help in the formulation of the contract.It is the most important among the permissible associations of the contracts. To capture the impacts of breach of the contract, it is important to portray the aspects of expulsion(Netk.net.au, 2016). If conditions are involved in any contract, then it is easier for the guiltless party to gain strength against terminating the contract and also help them to gain remedies legally for the loss they have incurred due to the breach of the contract.
  • Warranty: It is mainly termed as an aided responsibility in the fundamentals of contract law. Though it is not necessary in the formation of the contract but it acts as a formation of the contract(Austen-Baker, 2011). The result of breaching a warranty is same as breaching a condition mentioned in the contract. It allows the innocent party to claim compensation in a permissible way, but the party does not gain any strength to terminate the contract.  
  • Innominate terms: for considering a legalized implication of the contract, innominate terms are represented which are not presented in condition terms or warranty terms(Smith, 2011). In the breaching of innominate terms, claiming the compensation is applicable but that depends on the effects formed by the breaching of the contract. 
  • Exemption clause: In business contract law, the involvement of the exemption clauses is presented where the engaged parties have restricted control over the responsibilities of the contract(Cooke, 2009). It is subdivided into two different categories, namely, true exclusion law and the limited clause.

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Task 2

LO 2     


Case 1

For the formation of any contract, it is important that one party makes some valid offer, and the other party has to admit that proposed offer with a valid consideration(Casebrief.me, 2016).From the given situation in the case 1, it can be identified that the scenario of the case shows the reflection of the invitation to the treat related to the offer that is placed under the given contract. The vendor or seller in the case scenario can be considered as anofferor and Carol can be considered as an offeree. From the study of the case, it can be identified that Carol approaches to make an acceptance to the given offer.  There is no formation of a lawful contract as the advertisement can only be termed as the proposal to the public. There is also no document form which is a vital element for a valid contract. Another thing that is missing in the given case to consider it as a contract is the mutual consent of the parties. There was no mutual understanding available in the given case scenario.

Thus from the above, it can be justified that an acceptance of an offer cannot be legally imposed and termed as a contract. In business law, preparation of a written lawful agreement and mutual understanding and consent of the engaged parties are the foremost element that is required for initiating a contract. So, in regards to mere managing communications between the parties, there is no formation of any agreement. For the described case situation, the case of Partridge versus Crittenden (1968) can be followed by this discussion.

Case 2

For an agreement to be valid there must be a presence of a valid consideration. It is the element on which the agreement is formed(Burrows, 2011). For an agreement to be imposed there must be an exchange of something. The amount or subject of consideration varies according to the terms of the contracts. Fromm the understanding of the meaning of consideration and the given case situation, it can be identified that there is no formulation of any valid consideration. In the given case, Devi, who is the father of Preston, has given an offer to George, the owner of the IT company in which Preston is likely to get the job. Devi here can be described as promisor, but George cannot be termed as promisee, as the offer proposed by Devi has become an offer of the past because IT company owner had already recruited Preston. It is also important to mention here that George cannot lawfully pressurize Devi for fulfilling his offer as the consideration made by him has been expired.

From the above discussion and from the understanding of the case Roscorla vs. Thomas (1842), it can be identified that the consideration in accordance to the creation of the contract can be connected with the ability to change the settlement into negotiation. The description given in the case delivers the negotiating situation in which Devi can be taken as an offeror and the proposed amount is termed as an executed consideration(Cornford, 2008). It is also important to note that in a contract it is important that one party gains some disadvantage and the other party gains some advantage.


Case 3  

After studying the brief case situation, it can be identified that the couple and the owner of the restaurant are the two involving parties of the given case. It is important to note from the description that there was no appearance of any delivered message or communication between the porter and the couple about the liability of eating in the restaurant for the materials. The porter only delivers a paper regarding the liability of the materials in the restaurant without getting engaged in any communication with the couple.

This case comes under the section of exclusion clause of English contract law for which the main objective is to give obstacles to the obligation of the penetrating partner and the best example of this case is the case of Thompson versus Shoe Lane Parking (1970). As there is no presence of communication between the two involving parties, it can be imposed that the owner of the restaurant cannot totally rely on the exemption of exclusion clause for defending his side(Andrews, 2011). Just submitting or delivering a liability issue is not enough to gain the exclusion clause.    

Case 4

Implied terms are designated for preparing the avoidance rule formulation of the contract (Young, 2010). From the given case situation, it can be identified that Aaron and Sephra are the two engaged parties in the given case. It is found that the contract formed between them was legal and with their mutual consideration but it was terminated due to the sudden death of one party. Aaron has made some noteworthy changes the possessed borrowings. As the agreement was thoughtlessly finished, he can demand compensation regarding the expenses mad by him to the borrowings. From this case situation, the best illustration would be the case between the Liverpool City Council vs. Irwin (1977).


Case 5

It can be identified from the given discussion in the case that the policy holder has not received the awaiting theft privilege, but it is also important to note that the insurer who is involved in the case has no authority to reject the current policy. It can also be identified that the policy holder has not given any incorrect information as the situation of any past policy cannot be taken into considerationfor the current policy. It is necessary to present here that there are some key fundamentals that are related to the voidable contract in which the party has the permissible right to impose the lawful agreement but the innocent party cannot be forced to get involved in the lawful agreement. It is also important to portray here that in attendance of the conditions in which the engaged party are involved need to consider the transaction, as the contract is void.  

Case 6

The given case delivers a very complicated case situation, in which the lawful consideration of the policy holder who is involved in the policy of a car protection is involved. It can be identified from the case that the policy holder has delivered any incorrect information in the announcement of the document given by the insurer(The Law Handbook, 2015). The incorrect information provided by the policy holder indicates that there were claims made in the given time frame of the past. Though it is still rightly measured as an error due to which the policy maker gained a legal right where he or she can terminate the policy of the car.Furthermore, it can also important to convey that a lawful agreement doesnot depend on a mistake that in later can be presented as a defense. It is also important to note that the sorts of ‘Reasonableness of the reliance’are also involved in the violation made by many other factors.

Task 3



Tort is considered to establish in a condition where an individual disagrees the responsibility of law as well as affects the people rights of another person. Tort has been expressed as a lawful obligation of individual as per the English contract laws and regulations(Routledge-Cavendish., 2008). The liability of a person establishes within the tort fundamentals when one person breaches any situation expressed in the contract. Afterward when a breach occurs that party falls within the liability of the contract which is basically on the basis of the agreement of the victim party. Within the lawful consideration of parties involved in the contract, offended is punishable by the lawful terms as well as the person who survives can get the compensation. Every liability which is described in the fundamentals of tort is basically relied on the liability for failure to process the responsibility forced by rules and laws. As per example, if Mr. X creates a contract for purchasing a refrigerator from Mr. Y at $ 2500, if Mr. Y fails to provide the commodity in the given period then he automatically becomes a votive liable individual. Whereas if Mr. X fails to give the full payment in the given period then he automatically becomes viable to Mr. Y. Mr. X has the accountability for regulating the carrier vehicle because if his workers not able to function the work, then he will suffer liability of tort.


The Negligence of business is expressed as a condition where an obliged individual not allowed to functions the task which he should have to do that. It occurs while an individual not able to execute as well as performs his responsibilities due to some reasonable cause. According to the principles of tort, if any individual is included in performing any mischievous activities in his responsibilities then it will be expressed as negligence. There are mainly four aspects which require being concerned in the negligence of tort.

  • Firstly: The offended must have some responsibility to another party.
  • Secondly: The offended should fail in few paths to integrity the responsibility.
  • Thirdly: The requester should survive few type of injury
  • Fourthly: A reasonable individual requires imagining the offender’s breakdown


Vicarious liability is basically the liability of an individual that is referred as principles for the tort operate of another and the individual functions on the principle are referred as an agent. It is the situation of businesses on that an individual can lead to the liability for the omitting of the action accomplished by another person. Vicarious liability actually is the responsibility of the third party for the responsible individual(Routledge-Cavendish., 2008). For example, if a supplier of products of the company calculates while driving and at the same time hits someone then in the fact both the driver as well as its owner of the company are accountable in order to compensate the injuries along with the damages of the injured party. It happens for the liability of torts of another and presents hugely due to the engagement of the parties.

Task 4

LO 4


Case 7

  1. Through the discussion in this particular case, it is quite important that basics and the results of a tort in negligence as well as results at the time when someone not follows his responsibility of carefulness and security(Jewell, 2002). In this case, Mr. Brown was the injured person which proves that he has suffered the result in the coming days during his treatments. The death of the injured person happens due to the toxic effects from his residents. And still certain aspects of the case are considered, his widow can blame the management of hospital for the death of Mr. Brown. By supposing a state of matters where the passing of Mr. Brown happened at the time of admitting him to the hospital, Mrs. Brown can accuse the management of hospital for the liabilities. Moreover, is the nurse as well as if the doctor at the time of duty had reflects any negligence to the patient that leads to the injury of the concerned matter, Mrs. Brown can claim for the damages that she has survived.
  2. According to the case of Mr. Brown, it is showed that he died due to the toxic affects at his residents. The another point of view is showed that there is no reflection in which it can be proved that at the time of responsibility the doctor and nurse can be blamed for any negligence as well as cannot be blamed on the legalized ground. Moreover, it can be seen that in terms of gaining of damages, there was medication provide by the hospital. The center where the doctor accords the nurse about a prescribed medicine to the patient proofs that they have legally presented in their services.


Case 8

According to the English contract law, the legal inferences of vicarious liability are enabling for examining the presented case. This particular case signifies the huge negligence during the time of responsibility so the innocent survived damages can demand legal compensation from the company for which the chauffeur worked and performed for(Extempore.ie, 2016). The innocent individual has the legalized ability and strength for demanding the compensation from the company as the damages occur during the time of responsibility performed for the company. So, the victim person of vicarious liability can claim legalized compensation from the firm for the injuries according to the laws of Civil Liability Act, 1978.

Case 9

According to the English Contract Law, the legalized inferences of vicarious liability in the situation of defense of negligence it is important to consider that vicarious liability is not enabled for implementing in a certain company if any working environment security, as well as health problems, have been vicarious to the other company(Cartwright, 2007). With the help of consideration the case elaborately verified that the innocent individual confronts the damages into the supermarket and still he is not enabled for holding the supermarket owner directly for the losses survived by the victim person because the proprietor of the supermarket has allocated the worker’s safety and security to the other company before.


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