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Unit 5 ACNB contract types Assignment
Diploma in Business
Unit Number and Title
Unit 5 ACND contract business types assignment
In the given tasks, the main elements required for the formation of contract is evaluated.
A contract is the combination of few elements which is necessarily required for its formation. Generally speaking, a contract is an agreement which is established amid the parties for exchange of benefits. So, if all the contract elements are analysed individually, then, the same are: (MacMillan & Stone 2012)
- When one party (offeror) desire to tae or forgo any activity and he wish that is intention is carried out by some other person (offeree) then he has to transfer his intention, orally, in writing or by conduct, to an offeree and this communication in law is called and offer (Centrovincial Estates v Merchant Investors Assurance Company (1983) & Carlill v Carbolic Smoke Ball Company (1893).
- The offer when received by the offeree makes an obligation on such an offeree to abide by the same or disapprove the same. When an assent is provided to the offer then an acceptance takes place (Brogden v Metropolitan Railway Company (1871). This acceptance should correspond to an offer to be valid and can be made orally or in writing (Vitol SA v Norelf Ltd (1996)).
- The offer and acceptance must be exchanged by those parties who are major and are of sound mind.
- Every offer plus acceptance must be bound by some king of benefit which is consideration in law. It is only consideration which makes the contracts binding an enforceable (Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd (1915)). A consideration is basically a gain which is provided by the promisor to the promisee because the promisee is taking actions on behalf of the promisor.
- The parties regardless are in domestic or commercial relationship must have legal intention Balfour v Balfour (1919). The presence of legal intention only makes a contract binding otherwise not.
- Face to face contracts: Contracts made on the face of the parties are face to face contracts. The parties sit next to each other and communicate the terms of the contract. So, normally such kinds of contract are oral in nature.Since the term is oral in nature so it becomes difficult to prove the terms exactly as it is human tendencies to forget things. So proof of exact term may become difficult. (Steptoe 2008)
- Written contracts: Parties when make contract on paper by writing down all contract essentials and terms are written contracts. There are no oral terms but everything is written and a document form of contract is made. Since the parties write down each and every term before any contract formation, so, courts are not at difficulty to interpret the same when any dispute arises. Thus, it is advisable that written contracts should be made wherever possible. (Pettigrew 2012)
- Distance selling contracts: Contract made by the parties without sitting and remaining physically present are distance selling contracts. The same can be made on telephone and thus orally and can be made in written form if are online in nature (Gov 2015).
- Conditions: The terms which describe and define the core of any contract, then such are conditions. These are so important terms that give true meaning to the contract and intention of the parties. The basis of contract formation is conditions only. The gist of the contract is behind conditions itself (Poussard v Spiers (1876). But, if somehow, these contract foundations are not performed by the parties, then, the basis or core of the contract is lost. In such situation, the aggrieved have two kinds of remedies that can be availed, that is, apart from claiming damages from the defaulter; the aggrieved has every right to terminate the contract. (Elawresource 2016)
- Warranties: When a contract is made then there are two types of terms that generally prevail. The same are conditions and the other is warranties. Conditions are extra important and warranties are though important but are not core to the contract. Warranties are those which are required by the parties but are not the main theme of the contract. The contract will not lose its essence if a warranty is not performed (Bettini v Gye (1876). So, any violation of the term will only allow suit for damages and there can be no contract cancellation. (Elawresource 2016)
- In-nominate terms: There term which is treated as condition or warranty contingent upon how the same is treated and the situations in which it is violated are in-nominate terms. If the term is treated as condition then damages can be claimed from the defaulter and the aggrieved has every right to terminate the contract. But, if the term is treated as warranty then any violation of the term will only allow suit for damages and there can be no contract cancellation (Hong Kong Fir Shipping v Kawasaki Kisen Kaisha (1962). (Elawresource 2016)
- Exclusion clauses: The clauses which forgive the liability of one party with the approval of another when some pre determined event takes place then such clauses are called exclusion clauses. These kinds of clauses are valid provided both the parties have relied on the clause and if one party is relying on the clause then efforts must be made by him so that other party is also get acknowledgment of the same reasonably (Chappleton v Barry UDC (1940)).
Case 1: The two basic essentials which are required in any aspect of contract formation is offer and acceptance. When offeror desire to take/forgo any activity then he has to transfer his intention to an offeree who may provide his assent which results in acceptance of an offer and formation of an agreement (Day Morris Associates v Voyce (2003)).
However, an invitation to offer is when no offer is made by a person but he receives offer from people because people has relied on the advertisement, auctions, tenders, etc issued by the inviter (Partridge v Crittenden (1968)). Then, when inviter approves the offer of people then it results in contract formation. (McKendrick 2011)
Now,Gumtree has advertised the sale of couch. So, Gumtree is an inviter. Carol offered his intention to buy the couch, so, Carol is an offeror. Now, the offer was never accepted by Gumtree in any manner. Since, there is no acceptance to the offer of Carol so there is no contract formation between the two.
Case 2: Consideration is one of the marketing essentials in the formation of the contract. It is only consideration which makes the contracts binding an enforceable. A consideration is basically a gain which is provided by the promisor to the promisee because the promisee is taking actions on behalf of the promisor (Re McArdle (1951)). But, no consideration is valid for past actions. An act already done and later supported by consideration is not valid and makes no enforceable promises. (Poole 2012)
So, George gave employment to Devi on 12th of April. But, unaware of the same, on 13th, Preston with an intention that Devi gets employment with George makes a promisee that if employment is provided to Devi then he will make a contract with him. However, the promise made by Preston is against such an action which is past as already performed. So, the promise of Preston is no good consideration as is past.So, George has no contractual relationship against Preston.
Case 3: There are various clauses that are made part of the contract. One of the significant clause is exclusion clause. In such kind of clause the liability of one party when raised is forgiven and he is hold not accountable for the same because the party who is imposing liability has agreed to the same (Parker v South Eastern Railway (1877)). But, such clause in order to become valid must be in the knowledge of both. If the affecting party is not aware of the same then the relying party should make every effort so that the clause is brought the aggrieved party knowledge. (The Law Teacher 2016)
Now, the restaurant is providing receipt against the goods which is provided by its customers. A porter is authorised to keep the good and provide the receipts. An exclusion clause is mentioned on the receipt according to which no liability for theft/seal makes any obligation on the restaurant. The couple wallet is lost from his coat. Now, the restaurant cannot rely on the clause because he clause was made part of the receipt unilaterally and the coupe was not aware of the same nor any efforts are made to bring the clause in the knowledge of the couple.
So, couple can sue the restaurant for their loss.
Case 4: Every contract term is either express in nature or implied in nature.A term is express when the parties to the contract themselves decide on the terms but the term is an implied when the term are made part if the contract under the scanner o custom, law, tradition, etc. so, both kinds of terms are very important in contract and should be performed equally (Bannerman v. White (1861). (Weitzenböck 2012)Now, Zehphra made a contract with Aaron wherein it was expressly specifies that a warehouse of Zehphra is provide to Aaron and a he will pay a rent for the same . Also, Aaron has made repairs in the warehouse so Zehphra is willing not o raise the rent for next five years. These express terms are binding upon the parties.But, the warehouse is inherited by Yeti. He then intends to increase he rent. It is submitted that he cannot do so as per implied business law terms. It is an implied law that right and obligations are also inherited along with the property. So, if Yeti tries to increase the rent then Aaron can take due course of law and sue Yeti for his expenses.
Case 5: In the given factual scenario, the insurance company before making any contract has asked he holder regarding any accident or like claim in the last five years by the holder himself or any connected person. This term was replied by the holder but is not true (Poussard v Spiers (1876). It is submitted that this term must be treated as a condition. A condition describe and define the core of any contract and are important terms that give true meaning to the contract if these terms are violated then the aggrieved can claim damages from the defaulter and the aggrieved has every right to terminate the contract. (Weitzenböck 2012).So, the holder has violated a condition because the term was the very essence of the contract. So, company can sue for damages and cancel the policy.
Case 6: When it is very difficult to define the term as condition or warranty the terms are called in-nominate term. If the circumstances depict that the term is to be treated as condition the volition will result in contract termination and damages (Poussard v Spiers (1876). But, if the term is only treated as warranty then damages is the only adequate remedy (Bettini v Gye (1876). There are two terms which are involved in the given vase study. The first term is treated as a warranty because the term is asked by the company from the holder and which deals with the information regarding any changes that are made to the specification of the makers. This term is very basic and is not the core of the contract. But, the second term is treated as a condition because the same is regarding information of any claim in the last five years which was wrongly answered by the holder. But the information is very essential and is core to the contract.So, on the basis of second term the contract can be cancelled and damages can be attained for violation of first and second term.
Both the laws i.e.law of contract and the law of tort belongs to civil category. In case of breach of any of these, the liabilities follow. However, there are number of differences between them.In case of tort the liability follows when the duty casted upon the wrongdoer is breached and in case of the contract, the liability follows when there is breach of contractual term.In case of tortuous liability, the parties who had committed wrong and the party who had suffered can be unknown to each other but in case of contractual liability, the parties are known to one another.In case of tort, the liability is fault based and the same is un-liquidated but in case of contract the same is strict one and generally predefined.
The case law of Donoghue v Steveson (1932) is the famous case in the history of law of negligence as it leads to the development of law of negligence. In Donoghue, the concept of neighborhood principal was developed which stated that a wrongdoer is liable to any person who is affected by his acts provided the person is in proximity to the wrongdoer and gets affected by his acts. The basic ingredients to prove negligence are:
- Duty of care -is imposed upon every individual so as to act in such a way that while performing, he must take care that his acts must not cause injury to other. This duty can only be fastened when the loss caused by his acts is reasonably foreseeable Anns v Merton London Borough (1978)). Also, the person towards whom the wrongdoer has duty of care should be his neighbour (Junior Books v Veitchi (1983).
- Breach of duty of care -The duty of care must had been breached when it had not been taken care of by the wrongdoer or the level of care that should had been taken by him would not had been taken by him (Caparo Industries plc v Dickman (1990).
- Damage - Injury must be there to the plaintiff due to breach of duty of care. But damages must be the direct effect of wrongdoer breach and damage caused must be reasonably foreseeable ((Langley v Dray (1998).& Jeb Fasteners Ltd v Marks, Bloom & Co (1982).
The theory of vicarious liability holds a person liable for the acts completed by his employee. The notion of vicarious liability thus shifts the liability from one to another. The various elements that must be satisfied to hold a person liable on behalf of other are: ((The law Teacher 2016)
- The liability follows in case the parties are in superior junior relationship and the superior has control over the junior and the junior works for and under the superior. (Cassidy v Ministry of Health (1951) & Mersey Docks & Harbour Board v Coggins and Griffiths (1947).
- The damage caused by the junior must be during his course of employment. In case the damage is caused by the junior after leaving the employment then the superior cannot be held labile for the acts of the junior ((Limpus v London General Omnibus Co (1862) & Netheremere Ltd v Taverna & Gardiner (1984)).
- The junior must be under the control of superior and his acts should be governed by the superior, then only the junior’s liability can shift upon the superior. (Limpus v London General Omnibus Co (1862)).
- The acts done by the junior must be in his capacity as a subordinate to senior and must not be of personal nature.
Case 7: Under the law of negligence the wrongdoer is liable when he acts without duty of care or by acting with less level of duty of care that would have been applied by him. When the wrongdoer dories not acts with proper level of care then there is breach of duty of care by him Muirhead v Industrial Tank Specialities (1985). The wrongdoer is liable only if injury follows due to such breach. The damage caused must be reasonably foreseeable and there must be proximity between the act of the wrongdoer and the injury caused (Nettleship v Weston (1971).
There are certain defences available to the wrongdoer by which he can get away from the liability imposed upon him.
- Volenti non fit injuria is a concept which states that the wrongdoer cannot be held liable when the injured himself assented to the danger.
- Contributory negligence is when the wrongdoer can prove the negligence on the part of injured also and thus the liability is apportioned amongst the wrongdoer and the injured (Barrett v Ministry of Defence (1995).
Mr Brown went to Hospital and complained about chest pains and breathing problem. The doctor was contacted over telephone who prescribes some pain killers. Later Mr Brown died from pneumonia which was caused to him from toxic mould in his house.Now, hospitals have duty to take due care of their patients and to prescribe medicine to patients after due check up. But in instant case the doctor even before checking the patient told nurse to prescribe him with medicines. The duty of care is surely with doctors and thus the same had been breached by doctor by giving medicines without check up and the patient died due to same which is thus the injury caused to the patient due to the breach of duty of care. So, the patient was neighbour and the damage caused was reasonably foreseeable and there is proximity between the acts of the doctor and the damage caused to the patient.
- Case I: So, the hospital will be liable under the law of negligence as it had breached the duty of care vested in it.
- Case II: The defence of contributory negligence can be taken by the hospital as the patient did not provided the full information as there was toxic mould in the patient’s house and the same was cause of pneumonia.
Case 8: Vicarious liability states that one is liable for the acts of other provided the one has control over the other and the other had done the acts on behalf of one and that too within the course of employment. The relationship of master servant, employer employee and principal and agent applies in vicarious liability (McLean v Tedman (1984). The liability under this notion shifts from one to another (Phoenix Society v Cavanagh (1997). ((Lawskool 2011)In the instant case a driver working for a chauffeur company was sent for picking a client at the airport. While waiting there he drank alcohol and while coming back he crashed into lamp post and injured the client who suffered serious injury. The investigation stated that the driver was drunk over the permissible limit.In the instant case the driver drank while he was on duty and thus during the course of employment he did what he was not supposed to do and thus risked the life of the customer and indeed injured him. So in this case the driver was negligent and thus the company under which he was working would be liable as the concept of vicarious liability applies in instant case.
Case 9: Under Vicarious liability the employer is liable to others for acts of his employee when employee acts within the course of employment and during employment causes loss to other. The acts of employee must not be of personal nature and thus must have occurred during discharge of his duty which is being assigned to him by his employer. (Colonial Mutual Live Assurance Society v The Producers and Citizens Co-operative Assurance Co of Australia (1931).As per the given case Mr Jones worked as driver for supermarket. While loading pallets into the truck Mr Jones slipped on tail gate and due to this pallet fell over causing injury to his colleague. Injury was severe one and upon this the injured had sued the supermarket. The supermarket states that the responsibility for health and safety during the period of injury was delegated to another company. (Keith 2012)In the instant case Mr Jones was driving for supermarket and if he was under the employment of supermarket then the supermarket will be liable otherwise not and as supermarket had delegated the responsibility for health and safety during the period of injury to another company then in that case also the supermarket will be sued but it can later on avail the damages from other company as Mr Jones was (assumed) working for supermarket then the company has responsibility for injury that had been caused while Mr Jones was on work.In this case the supermarket will be liable assuming that he was employed by supermarket.
Keith T, 2012, Vicarious Liability, Non-Delegable Duty And Child Sexual Abuse: Is There Another Solution For Sexual Abuse Plaintiffs In Australia After The Maga Decision In The Uk?.
MacMillan C & Stone R, 2012, Elements of the law of contract, University of London International Programmes
McKendrick, 2011, E. Contract law, London: Palgrave Macmillan, ninth edition.
Poole, J, 2012, Casebook on contract law, Oxford: Oxford University Press, eleventh edition.