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Unit 5 ACNB terms contract assignment help
Diploma in Business
Unit Number and Title
Unit 5 ACNB Terms Contract
ACNB terms contract assignment is based on all the legal principles that are required in contract formation in business.
LO 1.1 Elements of contracts and its importance
If a party wishes to make a contract then he must comply with all the legal principles that are required in contract formation. A contract is an agreement which has an approval of law along with legal intention, consideration and capacity. So, the basic contract requires: (Allen & Overy 2016).
- An offer – The offeror when desires that certain act/omission must be undertaken by an offeree then the communication of such desire, either orally or in written form, is called an offer ((Carlill vs Carbolic Smoke Ball Co (1893) & Harvey v Facey (1893). (The Law Teacher 2016)
- An acceptance – The offeree upon receipt of an offer when confirm the same and grants his approval then such approval is acceptance in law and can be made orally or in written form ((British Steel Corp. v Clevenland Bridge and Engineering Co. (1984). When the offeror acknowledges the acceptance then the same is deem to be complete (Payn v Case (1789).
- Consideration – Every promise that is exchanged amid offeror/offeree is bounded by some kind of benefit which makes the agreement enforceable and is called consideration Foakes v Beer (1884).
- Capacity– The persons making the contract are capable only when attained the majority age and are mentally sound.
- Legal intention –there must be legality in the parties intention prior making any contractual relationship (Balfour v Balfour (1919). This legal intent is present in commercial and not present in family relations, but, this presumption is rebuttable. (Furmston & Tolhurst 2010). The importance of all the contract elements lies in the fact that a contract can only be formed in the presence of all elements. If out of five elements even a single element is not performed then such contracts has no legal sanctity.
LO 1.2 Impact of forming contracts
- Face to face: When a contract is made amid the parties who are facing each other by remaining physically present then such contract are face to face in nature. These are normally oral form of contract and the terms and conditions of the contract are decision making. The impact of these face to face contracts is not very strong. All the terms are oral and thus can be varied without any check and balances, so, it is very difficult to prove the same when any dispute arises. So, it is not advisable to undertake these kinds of contracts more often. (ElawresourceUK 2016)
- Written contract: The contracts which are non-verbal in nature and which are written down in a documented manner then the contracts are written kinds of contracts. The impact is strong because the terms are written and cannot be easily varied like in face to face contracts. (Pettigrew 2012)
- Distance selling (telephone, internet);When the people who are making contract are at distant from each other and cannot see each other. These can be made orally on telephone or can be establish in documentation form on internet. If are on telephone then the impact is weak as the terms cannot be provided in court but if the same are made online then the terms are in written form and are easy to prove the same. (The Law Teacher 2016)
LO 1.3 Analysis of terms
- Condition: Those terms which are the basis upon which a contract is formed are called conditions. It is because of condition that a contact subsist and is the core of any contract Poussard v Spiers & Pond (1876). If these conditions are not performed then the contract essence is shattered and the contract is not in the position to be performed. In such scenario, the party who is aggrieved may make the contract redundant and sue the defaulting party for all the damages that is suffered by him because of breach of the condition.
- Warranty: Those terms which are not considered as the foundation of the contract, then, such term are called warranties. These are not the root of the contract and even if the same are breached by the parties then also the contract is capable of performance Bettini v Gye (1876). However, the party who is aggrieved has every right o claim damages from the defaulting party but cannot cancel the contract.
- In nominate terms: At times a term becomes foundation of the contract and at times a term is considered as supplementary to a contract, thus, the terms which defines its nature deepening upon how it is treated is called in-nominate terms The Hansa Nord (1976). The effect of these terms depends whether they are treated as conditions or they are considered as a warranty.
- Exemption clauses (including legality): When the liability or obligation of a party is excluded by relying on a contract clause then such clause is termed as an exclusion clause. These clauses are mutually made part of the contract and are applicable when the specified situation arises Chappleton v Barry UDC (1940). When a particular event occurs which results in raisin liability of one party then the same is not imposed because is excluded under the exclusion clause. (Inbrief 2016). However, the validly of the clause lies in the fact that the same is relied upon by mutual assent of the parties and if one party is incorporating the clause hen the clause must be brought within the notion of another party by reasonable means.
Case 1 – Agreement
The offers wish/intention made to an offeree is an offer and when such wish/intention of the offeror is permitted, then it is acceptance and it results in a binding agreement amid the parties. Bu, when no offer is made but invitation is made by a person and he expects to receive offers then it is an act of invitation to treat. The inviter than approves the offers made by public resulting in binding agreement amid them. in law, an advertisement, display of goods, etc are is an act of invitation to offers and not offers Pharmaceutical Society of Great Briton v Booths Cash Chemist(1953). (McKendrick 2011). Now, Gumtree has made an online advertisement which is an action of invitation to treat and thus Gumtree must act like an offeree. Carol has made an offer against the invitation of Gumtree (Partridge v Crittenden(1968). But, the offer of Carol was not accepted by Gumtree. So, there is no corresponding acceptance by Gumtree. Thus, no contract is made between both of them.
Case 2 – Consideration
Now, Every promise that is exchanged amid offeror/offeree is bounded by some kind of benefit which makes the agreement enforceable and is called consideration (Pao On v Lau Yiu Long (1980). But, only present/future promises can be uphold with the help of consideration If the benefit supports past action then it is invalid in law and cannot be enforced against the promisor. (The Law Teacher 2016). Now, Devi was appointed by George on 12th April 2015. Preston (father of Devi) is not aware of the appointment of Devi. So, in order to get him appointed, Preston has written letter to George and submitted that he is willing to gave a contract worth £150,000 if Devi is appointed by him. The letter is written on 13th April. But the promises which is made by Preston is supporting a past action, that is, the appointment of Devi which was already done one day before he letter was written by Preston. So, the consideration which is moved from Preston is against a past action is not enforceable in law. So, Preston can’t be forced by George o fulfil his promise.
Case 3 – Exclusion clause
In any contract, there is one term which excludes the liability of the parties upon the happening of some kind of continent event. Such terms are called exclusion clauses. Exclusion clauses are important clauses in the contract which must be made part of the contract mutually by the parties in order o be binding. These clauses limit or exclude the liability of one party which is arisen when creation contract term is violated by such party. But the liability which arises because of such breach is already excluded as per the contract terms at the approval of the non-defaulting party (Watford Electronics Ltd v Sanderson CFL Ltd(2001). But, when any party is relying on the clause individually then it is his duty that such clause should be all adequate means be passed to the other party in order to make the clause binding. If no reasonable actions are undertaken then the clause is not applicable upon the parties (Thornton v Shoe Lane Parking (1971).
Now, the couple handed over their coat which contains £500. The porter provided them with a ticket which contains a clause which excluded the liability of the restaurant and on its back which saes that “all valuables must be removed from the jacket pockets as the restaurant will not be held responsible for items missing or stolen”. This clause was relied upon by the restaurant individually and thus it must bring the clause within the notice of the couple with resemble means. However, the restaurant made not a single effort so that the couple is aware of the clause, so the clause is not binding upon the parties and the couple take legal action against the restaurant for the loss of the money from the coat.
Case 4 – Implied term
In any contract, when the parties themselves decide the terms of the contract hen such terms are express terms. But it is not the parties who decide the terms and the same are followed by them in law, custom, etc then the same are implied terms (Bannerman v. White (1861). (Weitzenböck 2012). Now, Zehphra and Aaron made a contractual relationship wherein the warehouse of Zehphra was taken on rent by Aaron and he has made enhancement upon the same. Zehphra agreed that no rent will ne raised for five years. But, when Zehphra dies, then his property is inherited by Yeti who increase the rent. In implied law, the terms of the contract must be complied with any subsequent party. So, Yeti is under an implied obligation to follow the express terms amid Aaron and Zehphra. Thus, Aaron can sue Yeti if he increase the rent of the warehouse and can claim compensation.
In a contract, those contract terms which are the basis upon which a contract is formed are called conditions and if these conditions are not performed then the contract essence is shattered and the party who is aggrieved can cancel the contract and take legal actions against the defaulting party for all the damages (Poussard v Spiers (1876). (Elawresource UK) So, the most essential term which was the basis of the contract amid the policy holder and the company was whether any accidents/claim was ever raised by the holder/anyother person in last 5 years which was falsely replied by the holder. But, this term is a condition and is very important in insurance dealings. So, the company has right to terminate the contract and sue the holder for damages because condition if the contract is breached by the holder.
In a contract, a term can become the foundation of the contract called condition and at times a term is considered as supplementary to a contract called warranty. If conditions are not performed then the party who is aggrieved can cancel the contract and take legal actions against the defaulting party for all the damages. And if there is violation of warranty then only legal action for damages can be taken.Now, there are two terms -
- The first term that whether any alterations or modifications is denied by the holder. This term a non-essential terms and is thus a warranty. Since, the holder has violated the said term so only damages can be claimed by the company and contract cannot be cancelled (Bettini v Gye (1876).
- The second term is very essential in the contract which is made amid the insurance company and the holder. This is the contract essence and is thus a condition and since this term is not rightly answered by the holder so, there is breach of the term and the company has right to terminate the contact on this account (Poussard v Spiers (1876).
There are two important laws that are part of civil laws, that is, contract and tort. But, the effect of contract liabilities of both these laws has contrasting features. First, the liability is very strict in contract because the same is determined as per the terms of the contract but the liability is fault based in tort because it is the defendant’s fault that defines the liability; second, the liability is calculated in contract but the liability is uncalculated in tort; third, the liability is decided by the parties as per the contract terms but the liability in tort is decided by the court in the law of contract. (EssayUK 2016)
In Donoghue v Steveson (1932), the law of negligence was developed. The law of negligence signifies any loss or injury caused by the acts of the wrongdoer will make him negligent provided the loss is reasonably foreseeable by the defendant and the plaintiff is the neighbor of the defendant. Thus, the basic essentials of the negligence are: (Web 2016). Every defendant has a duty to provide care while undertaking any actions. If because of his actions any damage is inflicted on the plaintiff, in such situation, the defendant is considered to not comply with his duty Home Office v Dorset Yacht Co. Ltd.(1970). But, the duty of care is imposed on the defendant only when the loss which is anticipated by his acts and omissions is reasonably foreseeable and the plaintiff against whom the duty is guided is his neighbor, that is, they are closely connected with each other ((Caparo Industries plc v Dickman (1990) & Junior Books v Veitchi (1983). (Maclntyre 2007).
This duty of care should be catered by complying with the level of standard which is needed in a situation. But, non compliance of the basic level is equivalent to violation of duty in law (Blyth v Birmingham Waterworks Co (1856). The breach should result in loss to the plaintiff. The loss should not be remote and must be reasonably anticipated by the defendant Jeb Fasteners Ltd v Marks, Bloom & Co(1982).
In tort law, there is another concept which is called vicarious liability. In vicarious liability, the loss which is caused by an employee during his employment is imposed upon his employer. This transfer is liability from the employee to employer is the main essence of the vicarious liability. The main elements to prove vicarious liability are: (LawMentor 2016) That the liability is only applicable when the parties are in employer-employee relationship Mersey Docks & Harbour Board v Coggins and Griffiths (1947). That the loss which is caused by the employee must have resulted during the course of the employment Netheremere Ltd v Taverna & Gardiner (1984)). That the actions of the employee must be governed by the directions of the employer Limpus v London General Omnibus Co (1862). There is no independency in the actions of the employee.
Whenever any defendant is held to be negligent it is necessary to prove that such defendant has a duty to provide care to the plaintiff against all f his acts and omissions. The duty is imposed upon him against all reasonably foreseeable harm and is against those plaintiff who are closely connected with him and thus are in proximate relationship with him Muirhead v Industrial Tank Specialities (1985). When the defendant does not carer with his duty, that is, he does not met with the level of care that is required, then, the duty is considered to be breached. This violation of duty must cause damages which is not remote in nature. (Web 2016).
However, any defendant who is held to be negligent ca protect under the defences available in law. The defendant can prove that the loss which is caused to the plaintiff is voluntary caused by him and thus he can protect himself under the defence of volenti non fit injuria. The defendant can also prove that there is contribution which is made by the plaintiff along with the acts of the defendant which has caused the loss of the plaintiff and thus can rely on the contributory negligence defense (Barrett v Ministry of Defence (1995). Now,
Every hospital has a duty that before giving any medicine to any patient he must be checked adequately. The non-adequacy may cause danger to the health and safety of the patient and this danger is reasonably foreseeable. Also, the patients and the hospital are in proximate relationship with each other. Thus, the hospital must cure the disease of Mr Brown adequately in order to avoid any negligent actions. But, the doctor of the hospital has provided medicine to Mr Brown without checking him properly. So, the level of care that must be fulfilled by the doctor is not catered by him causing harm to Mr Brown. Thus, the hospital is negligent. However, the hospital can take the contributory negligence defense and may reduce his level of compensation. The hospital can prove that Mr Brown has not rightly provided information of his health and thus has contributed to his own health. So, there is contributory negligence on the part of Mr Brown.
in vicarious liability, there is a settled law, that whenever any employee carried out his actions in employment course and under the directions of the employer then such acts of the employee are not considered as of his own and any loss which originates from the same must be borne by the employer Rose v Plenty (1976). This shift of liability i the main essence of the law of vicarious liability Phoenix Society v Cavanagh(1997). (Tufal n.d)
Now, the company has appointed the driver and assigned him with the task of bringing their client from the airport. Before picking up the client the driver consume alcohol. Then, after picking up the client while he was returning back, under the influence of the alcohol the driver crashed. It is submitted that the actions of the driver which has caused injuries to the client was within the course of employment. Though the drinking of alcohol is an independent action, but the loss which is caused to the client took place when the driver was within the course of employment. Thus, the client has every right to sue the company for the action of the driver and can claim compensation for the loss caused to him.
In vicarious liability, the loss which is caused by an employee during his employment is imposed upon his employer. The liability can only be imposed upon the employer provided, the parties are in employer-employee relationship; the loss which is caused by the employee must have resulted during the course of the employment; that the actions of the employee must be governed by the directions of the employer and that the acts of the employee are not independent in nature Colonial Mutual Live Assurance Society v The Producers and Citizens Co-operative Assurance Co of Australia (1931). (The law Teacher 2016)
Now, Mr Jones acts has resulted in causing harm to one of his colleagues and he suffered severe injuries. When the loss took place, at that time, Mr Jones was not in the employment of the supermarket. Thus, there is no application of vicarious liability when the person who has caused the loss and the person upon whim the loss is imposed are not in the relationship of employer and employee.
So, the aggrieved person cannot sue the supermarket for his loss.
Allen & Overy, 2016, Advocates For International Development At A Glance Guide To A Glance Guide To A Glance Guide To Basic Principles Of English Contract Law.
Chitty J, 2012, Chitty on Contract : General principles, Sweet and Maxwell, p1012.
Furmston & Tolhurst, 2010, Contract Formation: law and practice, Oxford University Press, p13 – 20.
Kelly et.al, 2014), Business Law.
Weitzenböck EM, 2012, English Law of Contract: Terms of contract.
British Steel Corp. v Clevenland Bridge and Engineering Co. (1984).
Balfour v Balfour (1919).
Bannerman v. White (1861).
Bettini v Gye (1876).
Blyth v Birmingham Waterworks Co (1856).
Barrett v Ministry of Defence (1995).
Caparo Industries plc v Dickman (1990).
Colonial Mutual Live Assurance Society v The Producers and Citizens Co-operative Assurance Co of Australia (1931).
Chappleton v Barry UDC (1940)
Carlill vs Carbolic Smoke Ball Co (1893).