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Unit 5 ACNB Contracts and Elements Assignment
Diploma in Business
Unit Number and Title
Unit 5 ACNB Contracts and Elements
The contract may be regarded as a relationship between two parties for a specific purpose determined under the contract. For a contract to be enforceable and valid, it should various elements at the time of signing the contract. The Unit 5 ACNB Contracts and Elements Assignment is aimed at studying the different elements and types to gather a better understanding of the case studies provided. The affects of breaches under contract law and law of tort on the concerning parties has to be distinguished in the following assignment. The different types of liabilities under tort such as negligence and vicarious liability are to be analyzed according to the case studies provided.
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.
Under a standard contract the offer is made by the offeror to the offeree that contains the terms of the contract that may exist between the two parties. Such parties are two or more depending on the purpose of the contract. An offer should be clear and precise and be different from an invitation to offer. An invitation to offer means that the person so posting an advertisement and promotion is inviting offers from parties so interested in entering into a contract. The offer may be concluded through either acceptance, rejection, counter offer, withdrawal, lapse of time or death. For a contract to be formed it is important that the party that is made an offer accepts the same then it will amount to a contract. An acceptance shall be communicated and express. Whereby the acceptance is being communicated through post it should be valid as soon as it is posted. (Adams, 2008)
For a contract to be valid it is important that the same is made with an involvement of a consideration. It signifies that the contract so causing a detriment to each party is restored within the same transaction. Therefore, the contract to be valid requires a consideration that is exchanged between the parties. For a consideration to be valid it is required that it is sufficient, moves from the promise, is not an existing contractual or social duty and is not of past nature. The parties should be intending to contract as well. This would mean that the parties require the specific purpose and nature of the contract to make it enforceable under the law. The social contracts are not considered to be enforceable under the law unlike commercial contracts. This is because the intention of commercial contract is assumed to include the enforceability under the law. Parties entering into a contract should be of appropriate capacity at the time of entering into the contract. This would mean that the parties should be of majority of age, free of mental illness and of financial capacity to enter into a contract. If the parties are found to be of incapacity when entering into the contract then it would be considered as void ab initio and the damaged party may have the right to void the contract in certain cases. (Andrews, 2011)
1.2: Discuss the impact of forming contracts
- Face to face contracts: In a contract whereby the parties sit in the same room while entering the contract are regarded as the face-to-face contracts. The presence of the parties to the contract shall be close and known to the other party. Such contracts terms and conditions are likely discussed before entering into the contract and may either be writing or oral depending on the preferences of the parties. The contracts of such nature are easier to easier to be established as they provide a certainty that the terms and conditions were primarily discussed from the proximity. These are time saving and efficient to be enforced under the law. (Finch, 2007)
- Written contracts: The contracts that are entered into in writing are known as the written contracts. The terms and conditions are primarily presented in writing and accepted through signatures as well. The intent to enter into the contract is common and purposeful. Although, it is a time consuming process it is easily enforceable for being present in the written form. Therefore, the consequences of the breach in case of such contracts is severe and cumbersome.
- Distance selling contracts: When the parties are not present in the same room yet the transaction of sale takes place, then such a contract is regarded as a distance selling contract. The exchange of goods and services takes place with the price illustrated by the offeror and agreed by the offeree from different places. These may either be in writing or verbal form. It is required for the distance seller to display the name of business strategy, contact details, price and description of the goods at the time of the sale. It should also include the intimation of expiry of the goods after 14 days in case of replenish nature. The delievery arrangements purchase made and the address for complaints shall clearly be stated to the distant buyer. The transaction of such nature is governed by the Distance Selling Regulations of 2000. (Meyer, 2010)
1.3: Analyze terms in contract with reference to their meaning and effect
- A condition is considered to be the most important term under a contract. This would mean that when the term is not performed the contract would be voided at the option of the damaged party. Condition is the basis for the parties entering in the contract. However, the condition may be of different types such as the condition precedent, condition subsequent and condition concurrent. Such conditions are performed at the different steps of the contracts as determined and discussed by the parties to the contract. Under a sale of goods contract if the seller has not sold the goods as demonstrated in the sample then the buyer has the right to void the contract.
- A warranty is regarded as an important term to a contract but the non-performance does not mean that the contract may be voided. The non performance of the warranty would mean that the damaged party may either claim an injunction, damages or specific performance. The warranties are second most important part of a contract. On non-performance the damaged party may not discontinue the contract. Such warranties may be presented in regards with implied warranties, lifetime warranties, performance warranties and special warranties. (Andrews, 2011)
- In certain situations it is difficult to determines the nature of the term in question with regards to the situation so arising. Therefore, the nature of such terms is determined according the effect arising from the breach of a term. It is analyzed if the effect of breach would affect the nature of the contract then it is a breach of a condition. Otherwise it would be considered as a warranty.
- When a term restricts the actions to be undertaken in case of the breach of contract then such a clause is regarded as an exclusion clause. The nature of the term is to limit the liability so arising under possible circumstances. The exclusion clauses need to be included in a proper manner that are fair and reasonable. Any limitation with aspect to death or injury is invalid. It may be included under the contract through signatures, notice or previous course of dealings. The construction of the clause may be according to the most affected party and may be undertaken in the narrow or broad interpretation. (Adams, 2008)
2.1: Apply the elements of contract in the given business scenarios below
Case 1: In the present case it is determined that an advertisement for the sale of couch in the newspaper was published. The couch was available for sale but not the purpose was not to sell but invite offers. Therefore, the advertisement would be regarded as the invitation to offer and not an offer itself. Carol has stated to be interested in the couch and therefore made an offer by sending an e-mail. Carol had merely presented the offer at a certain price to the owner of the couch. Therefore, it is now the decision of the couch owner to either accept or reject the offer. As no acceptance was communicated, no contract is said to be formed between the parties Carlill v Carbolic Smoke Ball Co. (Collins, 2008)
Case 2: Devi was interested to work with a cyber-security company. However, he did not want his father’s interference with the interview process. On successfully passing the interview, Devi was made an offer of employment on 12th April which was accepted by him. Unaware of the fact, the father further extends an offer of 150,000 Pounds to the company in order to hire his son for the profile. The same was accepted by the company and is now the sum is being demanded from the father for the purpose of employing the son. It is to be noted that consideration of past nature is invalid. As the son was already hired from the interview on the 12th the amount so offered under the contract by the father would be invalid. Therefore, the contract so entered into on the 13th is considered invalid Mills v Wyman. (Vettori, 2007)
2.2: Apply the law of term in the following contracts
Case 3: In the present case, it is essential for determining the contract type and the validity of the terms of the contract. It is presented that the couple on arrival at a restaurant checked in their coats and doing so were handed over the slip for the same. The coat contained the wallet. However, it was determined in the slip that the restaurant would not be liable for the loss of any valuables so kept in the coat at the time of checking. After having the meal when the couple approached for the wallet in the coat, they realized that it was missing. The restaurant then pointed it out that the it wont be responsible for the loss as determined in the slip. It may be noted that the exclusion clause limiting the liability in case of theft or loss is fair an valid according to the UCTA, 1977. However, the clause was not presented when the coats were being checked in but only after they were already checked in. Therefore, the exclusion clause did not form part of the contract. Therefore, the restaurant would be liable towards the loss so suffered by the couple L’Estrange v Graucob. (Andrews, 2011)
Case 4: In the present case, it was determined that the tenant had made some additions to the property rented by him. The property owner in return had promised not to increase the rent of the property for the next five years. It was found out that the property owner had passed away the next year. The successor of the property thereby decided to increase the rent of the property. It is required in the present case scenario to determine the validity of the promise and the contract of tenancy. The new property owner refuses to pay the value of additions extended by the tenant that in turn increased the value of the property. Under the contract of tenancy, it is determined that the tenant has the right to claim for the amount spent on the property for permanent improvements from the property owner. The property owner further has a duty to pay the same to the tenant. Therefore, the this term would be considered as an implied term that has to be fulfilled even if the same is not mentioned under the contract. The property owner is required to refund the amount spend on improvements by the tenant Hutton v Warren. (Meyer, 2010)
2.3: Evaluate the effect of different terms in the given scenario.
Case 5: The present scenario aims at discussing the importance of contract terms under a contract with reference to the type of term. It may be determined from the scenario that a policy holder while filling out a policy form had actually misinformed the company on certain questions regarding the previous claims so made by the policy holder for the theft. On investigating the matter of theft of the car, it was found out that the policyholder had provided the company with the wrong information. The terms so considered in the present, case is directly related with the purpose of the contract and the same was misinformed. Therefore, the breach so occurring would be considered for that of a condition. As the proposal, form was an important part of acquiring the policy for the car and the same was elemental in determining the validity of the policy it would be a breach wherein the company would now be capable of voiding the contract altogether Poussards v Spiers (Andrews, 2011)
Case 6: Under the present case it could be said that the policy holder had caused a misrepresentation of the terms to the contract. This is so because when filling out policy form the policy holder had given the wrong information regarding the policy questions that were important to be included when making an investigation. Therefore, as the answers were not correct and actually differed from the reality it would be a breach of condition. The same would be considered as a misrepresentation because the policy holder had filled out the information of knowledge the reality of the car and its conditions and previous claims. Therefore, the company may be able to void the contract for the same as well Bisset v Wilkinson (Rischards, 2006)
3.1: Explain the similarities and differences of liability under tort and contractual liability using an example
The liability under the law of tort and contracts differs on various grounds. The liability so arising is strict in nature and is required to be presented and not proven under either legislations. This is because the breach is sufficient to be compensated in the two branches of legislation as the breach is either personal or social. The liability arising is from an acceptance of duty pending in performance towards the promise. (Vettori, 2007) Following may be some differences between the two branches of law:
- The liability under law of tort is not quantifiable and may vary whereas the liability under contract law is quantifiable and measured against the consideration amount.
- The liability under the law of tort s derived from the motive whereas the motive is not considered under contract law. (Bell, 2013)
- The rights in question under law of tort are that of right in rem and the rights affected under law of contract is of right in personam.
- The causation under tort is considered whereas the same is not considered under law of contract.
- The scope of liability under law of tort is wide whereas the scope in law of contract is limited.
- The available remedies under law of tort is of compensation whereas the remedies available for law of contract is that of restoration and restitution.
- The parties do not have an existing relationship whereas the relationship between the parties is defined under the contract. (Giliker, (2010)
- The parties affected may claim for compensation under law of tort but only the parties to contract may claim for compensation under law of contract.
- The elements that are considered for a tort is that of remoteness of damage or causation whereas the elements so considered under law of contract is that of offer and acceptance.
3.2: Explain the nature of liability
Liability is regarded as the obligation arising to repay the damage so caused from the breach of an existent duty. When the person is injured from the act of another person that was expected to be avoided in the first place gives rise to a liability for negligence under law of tort. The liabilities may arise for the suffering so caused, loss of wages or such other injuries. For tort of negligence to arise, the duty of care so existent against the society should be breached. The breach shall be so serious that it leads to damage in terms of physical, psychological or monetary damage. The damages so arising may be because of the ignorance, failure to perform or forgetfulness. The example of tort of negligence is that of the reckless driving by the driver for being drunk. In such a situation the driver is not undertaking duty of care and risking the safety of the pedestrians and other people and car on the road. (TAN, 2008)
In the case of Donoghue v Stevenson it was determined that the while undertaking the duty of care the same shall be undertaken against the society not only the direct consumers. The manufacturers were required to keep in view the care for the possible consumers and not only the purchasers as a consumer is considered to be objective and not subjective. Therefore, the direct cause and the remoteness will be sufficient to create the liability. Furthermore in the case of Caparo Industries the three fold test to determine the negligence and the liability so arising. The causation shall be direct between the cause and effect of the negligence. The damage so arising shall be at least remotely related to the negligence. The act and the effect shall be in such proximity that the effect may be established. The duty of care so discussed should be foreseeable to be undertaken which when breached shall give rise to the liability. (Cooke, 2007)
3.3: Explain how a business can be vicariously liable
The liability of vicarious nature is related with the liability for the breach of duty of another person. Vicariously one is only liable when the two share the relationship of performance of duties. These duties are delegated to the other party to perform on the delegator’s behalf for that when breached would be the responsibility of the delegator. The most common relationship wherein the vicarious liability exists is that of employer-employee relationship. This is because the employee is hired specifically to perform the various tasks so delegated for the employer. The berach would only be the responsibility of the employer when the same is out of the official duty. The employer would not be liable for the breach of duty of care from personal actions.
Under the Health and Safety at Work etc., 1974, it is required for the employer to undertake the safety of the employees. The premises shall be maintained with respect to equipments, sanitation facilities, clean water and disposal systems to regulate the health and safety standards. Furthermore, under the Occupier’s Liability Act, the occupier or the employer is required to maintain the safety of the visitors or non-visitors on the premises from the risks so associated on the premises. A notification shall be issued at a place accessible to everyone to notify the possible risks and damages to make an informed decision. (Morgan, 2011)
4.1: Apply the elements of the tort of negligence and defenses in the given business scenarios below:
Case 7: In the present case study it is required to determine the nature of negligence taken place in the situation. It is given that the patient had approached the hospital for having breathing and chest issues. The nurse when informed the doctor of the same he further prescribed the over the counter medicines without performing a check up of the same. The patient was found dead the next day. The primary reason of the patient’s death was found to be pneumonia from a toxic mould at his residence. The damage so cause of death did not arise from the prescribed medicines but the pneumonia from toxic mould. However, it was required by the doctor to perform a full check up in case of chest and breathing problems as the symptoms were serious of a chronic disease. The doctor ignored the same. Thereby, the doctor is said to have committed a professional negligence. (TAN, 2008)
Under such a situation the test of but-for is applied whereby the relationship between the cause and effect is studied. Therefore, in the given case the patient died in close relationship but not direct. Therefore, the proximity of the cause exited but not remoteness. This is because he did not die of the medicines but of some other factor. Therefore, the doctor will not be responsible for the death of the patient but only the professional negligence so committed by him. The doctor would not be sued for the death of the patient. (Giliker, 2010)
4.2: Apply the elements of vicarious liability in the given business scenarios below:
Case 8: In the present case study it is required to analyze the situation with relation to construction if vicarious liability. It is given that the driver had undertaken drinking while on his way to the airport to pick up a client for the company. The driver was still drunk when he arrived to pick up the client. On his way back when he drunk and driving he caused an accident which resulted in huge loss for the car as well as the client. The client now wants to sue the driver as well as the company.
It may be determined that the driver while driving the car was an employee of the company and performing the duties assigned by the company. Therefore, the driver would be said to be performing within the scope of official duties. However the damage so caused by the accident is because of the driver being drunk and not able to judge the driving capability. The driver would still be considered to be performing within the scope of employment. Therefore, the employer would be considered to be responsible for the accident so committed by the driver.
The different factors such as foreseeability and the causation are to be considered. The driver had the reasonable foreseeability and should have withheld driving when drunk. The causation of the accident was directly related to negligent driving. Therefore, the driver is considered to be negligent in the official capacity giving rise to vicarious liability. The company would then be responsible for the actions so committed by the driver. Also, even if the driver is not an employee he may be considered as an agent in the given situation as the driver had gone to perform a specific purpose in the present case to the airport. (Cooke, 2007)
Case 9: It is required to analyze the nature and effect of vicarious liability in the given situation. As presented, the health and safety standards were delegated to another company. When the employee was loading planks on to the vehicle, he slips and fell, dropping the planks over on another employee. The employee was injured from the planks so dropped over him. The supermarket, the primary employer of the employees determined that it would not be liable as the same duties were delegated to the other company. However in the case of Ready Mix Concrete (South East) V MPNI it was discussed that when an employee has more than one employer while performing in the official duty, then the employer having the direct control over the employee when committing the negligence will be responsible. In the present case, the supermarket had direct control over the employee as the planks were being loaded on the law for licensed premises of the supermarket. Therefore, the supermarket will be vicariously liable towards the employee as it would be responsible for the regulation of health and safety standards towards the injured employee.
For a contract to be valid it is required that the parties exchange a consideration between each other to give effect to the arrangement entered into. The contract between the parties shall be entered into based on the different elements such as consideration, offer, acceptance and intent. These elements are important and define the existence of the contract. The different types of contract and its effect are presented under the Unit 5 ACNB Contracts and Elements Assignment as well. The liability arising under breach of contract and tort are determined in comparison. The nature of vicarious liability and tort of negligence is furthermore presented to solve the case studies included in the assignment.
Carlill v Carbolic Smoke Ball Co.
Mills v Wyman
L’Estrange v Graucob
Hutton v Warren
Poussards v Spiers
Bisset v Wilkinson
Donoghue v Stevenson
Adams, A. (2008). Law for business students. Harlow, England: Pearson Longman.
Andrews, N. (2011). Contract law. Cambridge: Cambridge University Press.
Finch, E. (2007). Tort law. Harlow, England: Pearson Education.
Meyer, L. (2010). Non-performance and remedies under international contract law principles and Indian contract law. Frankfurt am Main: P. Lang.
Richards, P. (2006). Law of contract. Harlow, England: Pearson Longman.
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.
We are posting Locus units solutions so scholars can explore the our Assignment Help in UK and get review the quality of our work, The Unit 5 ACNB Contracts and Elements Assignment is aimed at studying the different elements and types to gather a better understanding of the case studies provided,