Understanding Aspects of Contract and Negligence of Business

The report presented here with comprises of different types of contracts in different business strategy. Firstly, it gives a detail explanation on employment contract which is between an employer and an employee, as to what are the contents of employment contract, what are the duties of both parties under such contract, and how the law gives enforcement on breach of those defined terms in contract. After that, the report explains the contract between a buyer and seller as to what terms and contents of their contract are binding and what liabilities are imposed on parties for breach of those agreed terms. These contracts are mainly a part of the business run by one person known as the sole trader. The report further explains the registration and dissolution process in sole trade. Finally, the report ends by giving a clear understanding on all parts of the contract and on all types of businesses.

Task 1

1.1 valid contract in business context

a) Describe the main principles of contract between Linda and her employee

To understand the basic principle of the contract between Linda and a potential employee, we need to understand the basic concepts of a contract. (MEEHLE, suzanne, 2014)
A contract is an agreement between two parties which is legally binding on them. There are six main elements of a contract and they are as following:

Offer: it is the beginning of a contract because it is the first intention of a proposal by the offer or to the offeree to enter into a contract based on some certain terms.(MEEHLE, suzanne, 2014)

Acceptance: this is the second step where the offeree agrees to the proposal and accepts the terms of the offer. (MEEHLE, suzanne, 2014)

Consideration: it is the reason for which the contract is entered by the parties to the contract. It can be anything which holds some value legally and it can be a thing, a promise, a right, a service.(MEEHLE, suzanne, 2014)

Capacity: every person who enters into a contract must have the legal capacity which is the soundness of mind to understand the contract and also the person must have completed his adult age, which means he must be an adult according to the law. (MEEHLE, suzanne, 2014)

Intention: it is also one of the most important elements of a contract as if the contract is not entered into with the intention to be legally bound by it then the contract will not be valid legally and cannot be enforced by law. (MEEHLE, suzanne, 2014)

Legality of subject: another element is that in order to be valid the contract must be formed for a legal purpose and subject and if the contract purpose is illegal then it will not be valid. (Chron, 2014).

Now in the present contract between Linda and the Employee, there will be an offer letter, an employment contract and a written statement of employment. In the contract the name of the business environment, the duration of the job, the salary of the job, the working hours need to be there in writing. Also the name of the business, the name of the employer and the employee should also be written in the employment contract (GOV.UK, 2014).

b) Legal terms that should have been entered into the contract

There are some terms those form an important part of the contract. The terms have been discussed below:

Express terms:the terms that are written in the contract and both the parties have agreed to those terms beforehand. In the present contract the terms like the employment conditions, the rights of the employee, the responsibilities of the employee, the duties of the employee, would be the terms that should be entered into the contract by Linda (The contract of employment, (2015).

Implied terms: the terms that are imposed by the laws or the courts are known as implied terms, these terms are considered as the part of the contract even when they are not written in the contract. In the present contract like maintaining the decorum of the job, not damaging or misusing the salon assets are implied terms (The contract of employment, (2015).

c) How can Linda Tackle the attitude of the wholesaler with the help of the law of contract.

In the present scenario, Linda can take the help of the Unfair Contract Terms Act 1977, which protects the innocent party from unfair terms. According to this act, a term that gives a better bargain to one party and a term which puts more rules and responsibility on one party will be considered as an unfair term. This act also deals with exclusion clause which says that a party cannot exclude itself from death or injury caused due to any reason, from injury or damage caused due to negligence and also from the liability that arises from faulty goods (E-LAW RESOURCES, (n.d.)).
In the present scenario the products of the wholesaler are of bad quality so he cannot escape from the liability of the faulty goods and also he cannot force Linda to continue to use the coloring agent which is causing injury to people in the form of allergy. Therefore in the light of The Unfair Contract Terms Act 1977, Linda is not bound by the unfair terms and the wholesaler is liable to give a refund or replacement of the bad quality product, and also Linda can terminate the contract.

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