Unit 5 Aspects Contract Law Negligence in Business Assignment Solution

Unit 5 Aspects Contract Law Negligence in Business Assignment Solution

Unit 5 Aspects Contract Law Negligence in Business Assignment Solution


Diploma in Business

Unit Number and Title

Unit 5 Aspects Contract Law Negligence in Business

QFC Level

Level 4


A aspects contract law negligence in business assignment is formed when two or more parties come together for the common purpose and exchange consideration in the name of the purpose. The contract would only be valid if the same is intended commonly by the parties in the presence of the basic elements. The important terms and types of the contract are to be studied in the following assignment. The liability so arising from the breach of the contract is to be contrasted with that of the tortuous liability. The types of liability under the tort are also to be highlighted while studying the assignment.

Unit 5 Aspects Contract Law Negligence in Business

Task 1

1.1 Peter Abraham while creating contracts should ensure that all the elements of a valid contract are included in the contract. No matter which type of contract is created, the elements to be present in the contract are common in nature. These elements are further discussed below:

A statement made by the offeror towards the offeree to propose a contract while determining the set of terms is said to be the offer. The offer so provided should be clear in meaning and interpretation. The offeror should ensure to use simple language to create a better understanding of the same. The offer so made shall be towards a specific party the offeror wants to create a contract with. The offer so made should be different from the invitation to offer. The invitation to offer is a stamen that determines the party’s intent to create a contract if the appropriate offer is made. The invitation is in consideration with the offer and to express the possibility to accept the same if the appropriate offer is presented. Therefore, while entering the contract the acceptance of offer is required and not the invitation to offer. The advertisements and the shop displays may be the invitation to offer. (Adams, 2008)

For a contract to be created it is important that the offer so made is accepted by the offeree. The contract to be created depends entirely on the acceptance of the offer. It should be clear in effect and interpretation. The acceptance shall be duly made for the entire offer and not just parts of it. The acceptance so made for the offer when made partially amounts to a counter offer being made by the original offeree. This determines that the counter offer is made to be again accepted entirely by the original offeror. This process goes on as negotiations and ends when the final offer is accepted or rejected entirely. The contract o created should be for all the terms laid down in the offer. When acceptance is being made the offeree should do the same according to the means of communication agreed by the parties under the contract. The acceptance may be made through the post, telephone, mails and such other communications. Accordingly, postal rule suggests that the acceptance comes into action as soon as it is posted. However, not all contracts require the element of acceptance. Whereby, the offer is made to the entire world, it contains the terms of the acceptance through performance of a certain act. The contract is said to have been formed when the said act is performed. Thereby, the offeror waives of the requirement of intimating the acceptance for the offer. (Andrews, 2011)

Under a valid contract, it is required that the parties have suffered a loss and compensated each other with a consideration through the same transaction. Such an exchange of values is the consideration of the contract. It ensures that the contract so created is valid under the law. The consideration should be present, sufficient and not a part of exiting duty. The consideration may be paid accordingly for it to function timely.

The parties to the contract should discuss the purpose and nature of the contract at the time of forming it. This would mean that the contract so created is done so to serve a specific purpose and would allow the parties to determine its enforceability under the law. For commercial contracts the parties do not have to determine its enforceability under the law as it is already assumed. Under social contracts the parties may have to determine the enforceability under the law as the same is not assumed. This is because parties for commercial contract do not have a prior relationship like parties under social contracts.

When a contract is created, the parties should ensure that they are of capacity to create a valid contract. The capacity of the parties is determined based on the legal age, mental capacity and the financial ability to create a contractual relationship. Therefore, if the parties to the contract are not of capacity at the time of creating the contract it would be determined as an invalid contract and the affected party would be able to void the contract. (Finch, 2007)

1.2 The different types of contract that may be created by Peter Abraham while practicing his profession may be as follows:

The contract whereby the parties present the offer and acceptance in each other’s presence is known to be the face to face contract. These contracts create a binding contract between the parties as the offer is made through a conversation wherein the acceptance may either be made under the same conversation or a different one as discussed between the parties. The contract is said to be valid and is time saving as it may be created immediately. However, the enforceability of these contracts is difficult to be established as the creation of the contract is not easily established for the lack of evidence. (Meyer, 2010)

The contract whereby the parties create a contract by representing the offer and acceptance through the written exchange of terms. These terms are discussed and presented in writing by the offeror whereby the offeree agrees to the contract by presenting signatures for the same. These contracts are sound and easier to create the existence since the terms are represented in writing. However, as the contract involves more formalities the creation of the same is time consuming.

The contract whereby the parties to the contract are not present at the same place and the contract is still created, it is regarded as a distance selling contracts. The contract shall be made for selling an item to be purchased by the party under the contract. The contract may be created through mail, advertisement, online, letters, deposits, telephone, fax and other such communication mediums. The seller is obligated to ensure that the details of the contract in terms of the product value, delivery and such other aspects are provided at the time of the sale.

1.3 Every contract so created shall include the terms of a standard contract to be valid in nature. The inclusion of these terms is important to determine the performance or breach of a contract. Peter Abraham may classify the terms of the contract accordingly to claim damages in case of breach:


Terms that include the purpose of the contract are considered as the condition of the contract. These terms are to be performed so that the contract may be fully performed to achieve the motive of creation. The condition are directly related to the performance of the contract therefore, the breach of condition is considered to be the breach of contract. If the contract is breached for condition, the affected party may be able to void the contract and claim damages for the loss suffered. (Meyer, 2010)


Terms that are secondary to a contract are warranties. These terms are present in the contract to create the functionality of the contract by supporting the performance of condition. The contract is performed when both the condition and warranties are performed. However, when the warranty is not performed the entire contract cannot be voided and only the damages may be claimed for by the affected party.

Innominate Terms

The terms that cannot be classified as either condition or warranty are known to be the innominate terms. These terms are likely to be condition in one situation and a warranty to another. This is because the importance of these terms switches from situation to situation. Therefore, the effect of these terms may be studied based on the situation. If the effect interferes with the performance of the entire contract, then it is a condition and if not it is a warranty.

Exclusion Clauses

Terms that involve the restriction of the liability in case of non-performance of the contract is regarded as the exclusion clause. These clauses are to be maintained in regards with the purpose of the contract. The contracting party involving the exclusion clause is responsible to inform the other party about the same. Accordingly, the UCTA restricts the parties from providing exclusion clauses limiting the liability in case of injury or death so caused during the performance of the contract. The common-law rules allows the parties to provide exclusion clauses through the signatures, previous dealings or notices. Therefore, the validity of the exclusion clause is dependent on the inclusion of the same. (Adams, 2008)

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Task 2


Case 1

The case determines that the advertisement is posted by the couch owner for its sale. The same advertisement is intended to represent the intention to sale and not the offer to sale. The advertisement is an invitation to offer. When Carol approaches the seller, it is classified as the offer that is made for the same price as advertised for. The same is to be accepted by the seller in order to create a contract. If the contract terms are not accepted the contract is not formed. Therefore, no contract is formed unless the acceptance is made.

Case 2

The case determines that the IT firm was hiring for a professional and Devi wanted to interview for the position. The interview had gone well and Devi had qualified for the profile. However, he had asked his father to not participate in the hiring process. Devi accepted the offer on 12th April. The father made an offer to the company to hire his son at the cost of 150,000 Pounds. It was determined that as the contract had already taken place the consideration offered is for an even of past and invalid. Therefore, no contract is created between the company and the father. (Collins, 2008)


Case 3

The case derives that the restaurant had asked the couple to keep their coats at the reception when coming in for dinner. They handed them the ticket after the coats were checked in that the restaurant will not be responsible for the losses so occurred from the presence of coats at the reception and the possessions. After the dinner when the couple checked in for the wallet in the coat it was missing. The loss of wallet was not undertaken by the restaurant. It may be observed that the clause so mentioned under the ticket is of the exclusion clause. The same shall not be valid as it was included after the contract had already being created. It is also the duty of the party including it to inform the other party about it presence. Since neither is valid the exclusion clause would not be relied on and the restaurant will responsible for the loss so suffered from the loss of the wallet. (Adams, 2008)

Case 4

In the case study, it is determined that the parties are under the tenancy agreement. The tenant had spent a certain amount in order to fix the premises. The amount so spent is to be reimbursed by the landlord as per the implied term of a tenancy agreement. Therefore, in return, the landlord had promised to keep the rent as it is for the five years to come. The landlord died and the new landlord changed the contract terms and increased the rent. The tenant would be able to claim for the amount so spent by him and terminate the lease for not being the same as the one agreed to when creating it. The landlord would be making a new lease and of renewing the old lease as it would cease for the death of the previous landlord. (Andrews, 2011)


Case 5

As per the case study provided it is determined that the policy company had provided the applicant with a paper containing the terms and conditions of the policy. The same would be considered as the invitation to offer. The same when filled out and sent back is considered as the offer made by the interested party. The offer if then accepted by the policy company would be termed as a valid policy. The policy form contains all the term of the contract including the conditions and warranties. One such term is that of having made a previous claim for the theft of car in the past five years. The same was answered falsely. The term being directly related to the cause f policy is termed as a condition. As the same term is misleading and misrepresented it is termed as the breach of the condition. Therefore, the policy company would be able to void the contract for the policy.

Case 6

The case provided determines that the policy company hands out a policy form as an invitation to offer in order to allow the interested parties to make the offer by filling out the form and everting back to the company. The policy holder had answered two questions falsely for the purpose of the policy. The term for the previous claim so made for theft and the originality of the car parts is considered as the policy terms not answered correctly. This determines that the terms so breached are both conditions and warranties. The condition is that of previous claim since it is directly related and the term for originality of the parts is secondary and thereby a warranty. The misrepresentation is said to be the term such as the original nature is kept hidden intentionally to mislead the party. If the same creates the contract it forms a term for the contract. As both the terms were misrepresented a breach has occurred. The company would be able to claim for the  damages for the breach of warranty and void the contract for the breach of the condition. (Meyer, 2010)

Task 3


The liability arising under the contract law is different from that of the tortuous law. This is because the tort does not allow you to prove the wrong so suffered but just the committing of it is enough just like the case of the contract law. The contract and tortuous law imply a strict liability whereby the liability once created shall be fulfilled by the person committing it without any proof. The liability and the circumstances may be different but the element of performance is the same under the civil liability. The differences that may be present in the two types of liability are as follows:

  1. The liability arising under contract is towards the specific parties whereas the liability arising under the tort is towards the society.
  2. The right so breached under contract is the right in personam whereas the right breached under tort is of right in rem. (Vettori, 2007)
  3. The liability under contract is determined based on the consideration amount whereas the liability under tort is determined based on the court’s decision
  4. The contract allows the parties to discuss the terms of breach whereas no such discussion is undertaken by the parties in tort.
  5. The liability under contract is decided based on elements of formation whereas the liability under tort is determined based on the elements of commission of the wrongful act.
  6. The liability in the contract is predetermined whereas the liability under tort is to be decided by according to the situation. (Bell, 2013)


The tort of negligence is said to be the tort that is committed from the breach of a duty already present in the society. The duty of care is to be undertaken when a person is performing a certain act that may under the normal circumstances affect the safety of other people that may be present around the performed act. The risk of damage creates the duty of care. When the duty of care is ignored or not undertaken due to forgetfulness or negligence it is termed as the breach of duty of care This breach shall be so serious that it affects the party by causing some damage measured in terms of monetary, physical or psychological loss. This type of liability is recognised as a tort of negligence under the law of tort.

Accordingly, the manufacturer’s liability was established in the case of Donoghue v Stevenson. It was described that whereby the manufacturer has provided a product to the market he is responsible to ensure that it is safe for consumption by any party capable to do so. The liability for consumers extends to the entire market and not only the consumer making the purchase. This allows the customer to claim for the strict liability once suffered from the breach of duty of care by the manufacturer. Under Caparo Industries it is determined that the liability so arising shall be valid if it contains the elements of a valid negligence. The three-fold test determines that the liability shall be remotely related to the breach so occurred. It shall be within the same distance to cause the possible harm. The harm so caused should be direct in nature to derive the actual liability under the tort. It was also determined that when the party performing an act is able to assess the risk from the performance on a person coming in contact with it, the performing party would be liable to undertake the duty of care and pay for the damages if the same is breached. (TAN, 2008)


The liability arising under the tort may not always be due on the person committing it. When the person committing, the act is not benefitting from the performance would not be considered liable for the act. The person so deriving the benefit would be responsible for the wrongful act and is called vicarious liability. This is because the person performing is not the same as person benefitting from the act and thereby the risk is to be bared by the person benefitting so. This type of liability is mostly existent in the case of the employer-employee relationship. The employer is the person benefitting from the acts so undertaken by the employee to perform. (Cooke, 2007)

The liability also implies that under the Health and Safety at Work etc. Act, the employer is responsible to make the workplace a healthy place to work at to safeguard the wellbeing of the employees. To do the same the employer should ensure the availability of the medical kit, clean drinking water and sanitation facilities on the premises to let the employees enjoy a healthy life. Under the Occupier’s Liability Act, the occupier is obligated to maintain the premises in a way that the people visiting the place are assured of the safety of themselves and the belongings. The occupier has the responsibility to make the premises a risk-free zone and if the same is not so the visitors shall be warned of the risk zones that may cause the visitors the risk to their well-being. The duty is extended to the permanent and temporary visitors that may visit the premises. The duty of care is also towards the trespassers as they would be equally exposed to the risks as a regular visitor.

Task 4


Case 7

According to the case study provided it is determined that the person was suffering from chest pains and had approached the hospital to get himself treated. The doctor that was meant to check him had no time and thereby prescribed him some medicines that were common and easily available. The next day, it was found that he was found dead as he suffered from pneumonia. The doctor so prescribing the medicine is the employee at the hospital. When the patient approached the hospital, he was approaching the institution altogether. The doctor however was a professional for having very specific information and knowledge of the study of medicine. This implies that the doctor would have a specific duty of care independent of the hospital for being a doctor. Therefore, the doctor has a responsibility as an employee as well as being a doctor. While applying the “but-for” test it is determined that causation and effect are not directly related as the cause of neglect does not affect the death so caused. Therefore, the doctor will only be responsible for the neglect of professional nature and not the death of the patient. The hospital will also be responsible for the negligence so caused as the same took place while performing the official duties according to the vicarious liability. (Giliker, 2010)


Case 8

The driver in the case study is the employee of the company. He is being assigned the job to receive a client from the airport. The driver however reaching early, he decides to have drinks before receiving the client. When the client arrived, he was still drunk from the alcohol and on his way back he lost his better sense and caused an accident that resulted in damaging the ca as well as the client. Thereby, it was determined that the driver made a personal choice to have drinks and the employer made no such obligation to do so. The damage so caused was while performing the professional duty as it was the job assigned by the company. The company would have to bear the losses so incurred from the accident.

Case 9

The scenario explains that the Supermarket has allotted the duty to another organisation to ensure the safety of the premises and the employees. One employee while unloading the pallets injures another employee on the premises of the Supermarket. It may determine that the supermarket is the original employer and even if the duty to maintain the safety has been delegated the supermarket is the employer having direct influence on the performance of the duties. Therefore, the supermarket will be vicariously liable towards the injuries so caused as the same were during the performance of the official duty of both the employees. (TAN, 2008)


When a contract is created the presence of the basic elements is necessary to be presented. These important elements are to be present in every contract to make it standard in nature. The elements are studied to observe the validation of the contract and the breach of contract through the breach of the terms so present in every contract. The breach so arising is covered under the civil law like the liability in tort. Both liabilities are differentiated on various grounds. The liabilities arising from the tort are also studied to gather a better understanding of the liabilities arising in the civil law.