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Unit 5 Aspects of Contract and Negligence in Business Assignment
Diploma in Business
Unit Number and Title
Unit 5 Aspects of Contract and Negligence
This report tries to find out the relevance of law of contract and law of tort in the present business strategy. We will discuss in this report the different types of contract and their impacts also we will discuss the terms in a contract and their importance in the contract. In this report we will also discuss the law of tort, law of negligence and also the law of vicarious liability. In this report we will also discuss eigth business scenarios and their answer according to the law of contract and law of tort.
P3 TO UNDERSTAND THE PRINCIPLES OF LIABILITY IN NEGLIGENCE IN BUSINESS ACTIVITIES
P3.1 TO CONTRAST THE LIABILITY IN TORT WITH CONTRACTUAL LIABILITY
A tort is a part of the civil law and this occurs when no other codified law is available for the remedy of the plaintiff who had suffered a legal injury
In the law of tort the plaintiff generally does not has any previous relationship with the defendant
In tort to be liable the person must have breached his duty of care which caused injury to another person.
A contract is a part of the civil law where two parties enter into an agreement and agree that it will be binding on them.
In contract both the parties to the contract have a previous relationship which is created through contract.
In contract to be liable one of the parties must have breached the terms of the contract only then the person is held liable
P3.2 TO EXPLAIN THE NATURE OF NEGLIGENCE AND ITS LIABILITY
According to law negligence is a form of holding a person liable when he fails to take due care and as a result causes injury to another person. There are four factors that should be present for a person to be held liable in negligence (GILLIKIN, Jason, 2014).
The first factor is that the defendant must owe some kind of duty to the plaintiff or the public at large. The second factor is that the defendant must have failed to honour that duty of care. The third factor is that the plaintiff must have received or suffered some type of an injury which can be physical, emotional of financial which was as a result of the breach by the defendant. The fourth factor is that a reasonable person could have the idea or the damage was foreseeable to see that an injury could have been suffered because of his action. When all these factors are present then a person is held liable under negligence (GILLIKIN, Jason, 2014).
Case on negligence is(Donoghue v. Stevenson, 1932)
P3.3 EXPLAIN HOW A BUSINESS COULD BE VICARIOUSLY LIABLE
Vicarious liability is a liability that occurs when one person is considered to be responsible legally for the wrongful torts of another person. This liability is present between the relationship of a master and servant, principal and agent and employer and employee (DRUKKER SOLICITORS, 2013).
In case of the relationship between the employer and the employee the wrongful tort is deemed to be done by the employee in the course of his employment if:
It is a wrongful tort that was authorised by the employer or
It was a wrongful tort and an unauthorised mode of doing an act that was authorised by the employer.
Case on vicarious liability is (Lloyd v Grace, Smith & Co , 1912)
P4 APPLICATION OF PRINCIPLES OF LIABILITY IN NEGLIGENCE IN BUSINESS SITUATIONS
P4.1 APPLICATION OF LIABILITY IN NEGLIGENCE IN BUSINESS SITUATIONS
BUSINESS SCENARIO NO.5
A UK Ship was taking on oil in the Sydney Harbour when oil was spilled into the water and the oil drifted to a wharf 200 yards the distance where welding equipment was being used. The wharf owner continued his work as he was advised that sparks were less likely to set fire to furnace oil and safety precautions were taken, but a spark fell into a piece of cotton which was floating with the oil and this caught fire and damaged the wharf.
We need to advise the wharf owners if they can sue the chatterers of the ship.
A liability in negligence will only be enforceable if the cause of the damage was foreseeable by the defendant and if the cause of the damage was too remote than the defendant would not liable as was held in The Wagon Mound no 1 , (1961). In the present scenario also we can see that the chatterers of the would not have any knowledge about the duty of care towards the wharf owner therefore the wharf owner do not have any legal right to enforce the duty of care upon the chatterers of the ship.
BUSINESS SCENARIO NO.6
Shell had employed Bell for the maintenance of the vehicle and Bell had only one eye. Normally protective goggles were not issued to the employees as the risk of an eye injury was very less. A metal chip flew into bell’s eye and blinded him completely as the metal had hit the good eye of Bell.
Whether Shell will be liable?
The employer has a duty of care towards his employees and he should provide the employees with a safe working environment. The employees also have the duty to provide the employees with safe equipment if they are dealing in a dangerous work. In the present case Shell was negligent as he did not provided protective goggles as Bell had only one eye therefore Shell should have been more careful as his negligence had cost Bell his eyes and now he was completely blind so he will be liable negligently and the same was held in Paris v Stepney (1951).
P4.2 APPLICATION OF THE ELEMENTS OF VICARIOUS LIABILITY IN GIVEN BUSINESS SITUATIONS OF THE BUSINESS SCENARIO 7 AND 8
BUSINESS SCENARIO NO.7
Alf was a warden who was employed by Safe Care homes; it was a company that used to run care homes for children. Alf was accused of sexually abusing the children of the care home in which he was the warden. The Safe care home is being sued under vicarious liability.
We need to advise Safe care homes whether the company would be liable vicariously for torts committed by Alf.
Vicarious liability is a liability in which the employer is considered to be liable for the torts of the employees, previously the employer were not held vicariously liable for the sexual wrong done by the employees but the recent case laws have changed this and now the employer is also held vicariously liable for the sexual offences of the employees as the employer has a duty of care to provide a safe business environment and in the present case Safe Care Homes will be held vicariously liable because they had the duty of care towards the small children who were vulnerable and this was held in Bazley v. Curry (1999), that an employer will held vicariuosly liable for the sexual offence of the employees.
BUSINESS SCENARIO NO.8
Amos Bridge was a pump attendant who was employed by AB and Sons Garage; one day when Amos was on duty he had an argument with MR. Khan and he also hits him on the chin. Now Mr. Khan had sued both the employer and the employee.
We need to advise the manager of AB and Sons Garage that whether the company will be vicariously liable for the torts committed by Mr. Amos Bridge
An employer is held vicariously liable for the acts of the employee if the act of the employee was in course of his duty and it was not a personal act. Similarly in the present case AB and Sons will be held liable because Amos tort was committed when he was on duty and his act was not personal because he thought that Mr. Khan would run away without paying for the diesel, therefore AB and Sons will be liable as was held in Gravil v Carroll (2008) where the employer was held liable for tort of the employee.
This report tries we have tried to understand the relevance of aspects of contract and law of tort in the present business situation. We have discussed in this report the different types of contract and their impacts also we have also discussed the terms in a contract and their importance in the contract. In this report we have also discussed the law of tort, law of negligence and also the law of vicarious liability. In this report we have also discussed eight business scenarios and their answer according to the law of contract and law of tort and we have tried to find their solutions based on case laws and relevant laws.
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LLEN & OVERY. (n.d.). BASIC PRINCIPLES OF ENGLISH CONTRACT LAW. [online]. [Accessed 3november2014]. Available from World Wide Web: <http://www.a4id.org/sites/default/files/user/documents/english-contract-law.pdf>
Balfour v Balfour  2 KB 571.
Bazley v. Curry  2 SCR 534.
Bettini v Gye  QBD 183.
Chappell & Co Ltd v Nestle Co Ltd  AC 87.
Curtis v Chemical Cleaning and Dyeing Co.  1 KB 805.