Unit 5 Aspects of Contract Negligence in Business Law Assignment

Unit 5 Aspects of Contract Negligence in Business Law Assignment

Unit 5 Aspects of Contract Negligence in Business Law Assignment


Diploma in Business

Unit Number and Title

Unit 5 Aspects of Contract Negligence in Business Law Assignment

QFC Level

Level 4


Information related to the aspects of contract that help in identifying the terms which are involved while forming a contract will be discussed in this report. The report will help in understanding the importance of determining different types and nature of contract. It will help in understanding the terms and relation with the performance of the contract, study of the elements which helps in formation of the contract are also to be analyzed. The different type of liabilities under the law of tort are also provided to study the impact of the performance and non-performance of the duties.

Unit 5 Aspects of Contract Negligence in Business Law Assignment

Task 1

LO 1.1

Peter Abraham is an independent contractor who is willing to know that the contract which is formed between the parties is formed in the presence of various elements which helps in forming the standard contract. The elements are as follows:
Offer:The statement that helps in allowing the party to present the terms of the contract is known as offer. Offerer is the interested party that provides the offer. It is necessary that the offer which is being made by the offer shall be clear to understand and should have proper meaning. Notice should be made that the offer that is to be presented should be different from an invitation to the offer. It is necessary that intent to present the offer should be clear so that contract could be created. Invitation to the offer is the aspects that are being to anyone who can understand its meaning and interpret the message easily (Collins, 2008). Purpose of the invitation is to create the awareness of the possibility that could help in generating the contract for the said purpose for the said party that is interested in creating a contract. Mere possibilities could be created by availing the invitation to offer but it is not intent to create a contract. According to the case of Carlil v Carbolic Smoke Ball an advertisement in the newspaper or the display on the shop window can only be considered to be an invitation to the offer and not an offer.
Acceptance:If the party present shows the acceptance of offer then the condition of contract could be formed. To create the contract acceptance of the parties is created in the form of agreement so that aspects of contract could be formed among them. It is necessary that the acceptance should be clear in intent and should be used with the clear and in understandable language. One of the essential elements to form the contract is acceptance. It is necessary that the acceptance should be made by the offeree (Collins, 2008).
Such type of activity helps in allowing the parties to create the contract. Communication in such cases could be made in the form of mail, telephone, posts and various other means which provide clear and understandable communication. In case of port when the offeree posts the letter the acceptance should be considered from that date only, notification of the acceptance for all the contracts is not necessary in such cases. Only for the selected terms are made in such type of contracts as all the aspects are not required to be accepted. In these cases offeree make the counter offer on the original offeror in which offeree becomes the offeror. Hence, to form the contract complete acceptance of the offer is required in such cases.
Consideration:Consideration is the value in which certain values are attached with the acceptance and the offer. It is necessary that the consideration that should be made by the party should be valid and be sufficient to present the part of the duty. The exchange between the parties which undertakes all the risks that could incur in the contract and could be compensated to make the arrangements is known as consideration. Consideration could be an interest or a profit. It is necessary that the consideration that is being made should create the relationship between the restore of the values and the loss that is being occurred in the arrangements. Validity of the contract that is being created is being assured with the help of consideration.
Intent:Enforceability under the law could be created by the parties to form a contract with the help of intent to enter into the same. There are two types of contracts that are identified under the law which are commercial and social contracts. When the parties indulge into the contract for the single purpose and do not trust each other then the commercial contract is formed which is formed in a written form (Giliker, 2010).  The contracts which are formed between friends and family and are assumed which are not enforceable by the law because in such cases parties entering into the contract knows each other and have trust and faith as the base for the enforceability.
Capacity:Capacity helps in determining that the parties are capable to enter into the contract and will be able to fulfill all the aspects that are enforceable by the law, and the parties who do not have the capacity cannot interpret the meaning of contract. Capacity to enter into the contract is determined in various aspects like age, soundness of the mind, and the financial status of the party willing to enter into the contract.
Privity:Under the contract it is not necessary that it always get fulfilled by making an agreement between the parties. Breach in the contract could occur when the parties fails to fulfill all the aspects of contracts. Such type of condition allows the parties to recover for the damages for which the contract is being breached. To sort out the breach it is necessary that the affected party should claim for the breach. An assurance could be made by the privity that parties entering into the contract owes each other and have the right to claim for the damages so occurred by the breaching party (Meyer, 2010).

LO 1.2

Different parties holding different expectation and arrangement come across in the contract while forming a contract according to Peter Abraham. There are various types of arrangements which could be made with the help of various contracts which are:





Face to face contract

Contract which is being formed between the parties in which presence of each party is equally important. Presented parties entering into the contract discuss all the terms with the help of conversation such type of conversation is termer as face to face conversation. With the help of an offer such type of contracts are formed and at the same time or at different the acceptance is to be shown which depends upon the terms which are being discussed among the parties (Richards, 2006).

Benefits of the contract is that it is less time consuming process because it is an instant process and involve less paper work (Giliker, 2010).

Limitations of face to face contract are that no written evidence is available in the contract which reduces the concreteness as no evidence could be presented at the time of breach.


The contracts in which terms and conditions are presented in the written form are termed as written contract. The contract involves written sign of the parties which helps in enhancing the validity of the contract

Written contract are enforceable by law as all the terms and conditions could be presented directly to the court of law.

It is a time consuming process because enforceability of the written contract takes time so that full assurance of the creation of the contract could be made.

Distance selling contracts

The contract in which parties indulging in the contract are not of the same place, it could be possible that the parties are available in two different states or countries. The contract does not require any written agreement as the parties willing to enter into the contract can just enter with the help of telephone, online mail, letters, etc. In this contract it is necessary that the seller should avail all the information such as product details, payment methods and delivery arrangements at the time when the contract will be created (Cooke, 2007).

The contract could be entered by the parties from any part of the world as it is not necessary that the parties should first meet and decide to form a contract (Collins, 2008).

It could be possible that the creation could take time which depends upon the uncertainty in the means that are chosen by the parties to communicate such type of contract.

LO 1.3

It is necessary that assurance should be made by Peter Abraham while creating the contract it becomes necessary that its terms and remedy should be determined at the time of the breach. Below table will help in delivering better understanding to him:





There are several terms under the contract that are of primary in nature these terms are considered as condition. It is necessary that these terms should be performed because they are directly linked with the purpose of the term. 

Non performance of the condition may void the contract in which the affected party could claim for the damages. Reason behind it is that the breach of condition is a breach of contract as it defies the purpose of the contract.


Warranty is the term that is a part of the contract which facilitates the performance of condition. Performance of such terms is necessary in order to ensure that the condition could be fulfilled.

Non performance of the warranty is considered as the breach of that particular warranty only and not the entire contract. It helps in allowing the damaged party to claim for the damage but not void the entire contract.


The terms which are not clear in its meaning are termed as innominate terms. Meaning of these terms differs according to the situation (Collins, 2008).

When the any kind of wrong or breach is committed then only the effect of such terms are ascertained. It is necessary to study the importance of term in relation with the breach. Hence, in such cases breaching the condition could void the contract and breaching the warranty could result in claiming of the damages.


There are several terms that are included in the contract which helps in limiting the liability of the contract for the non performance such type of contract is known as exclusion clauses. It is necessary that these terms should include signature, previous course of dealings or notice. The person who includes the exclusion clause is termed as responsible to notify the part regarding the contract.

Acc. To UCTA, the exclusion clause should only be included with respect to the performance of the contract which should not be for death or injuries so caused under the contract.


There are certain terms that are not determined in the contract but still are applied to the contract are termed as applied term. These are the terms that are implied under the custom or law or previous dealings

It could be possible that applied term may either be a condition or warranty. These terms have their effects which are according to the breach of the term in the contract (Richards, 2006).

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Task 2

LO 2.1

Case 1

The case is related with the seller who has advertised the sale of couch in which all the details related with the couch were provided. The advertisement provided by the seller will only be considered as the invitation and not an offer. In response Carol has sent the mail to the selling party in which her intent was presented to form a contract for the purchase of the offer. This mail will be considered as the offer made by Carol to the seller. No details related with the acceptance of the contract were determined. Hence, in such condition if same will be accepted then the contract would have been formed but no acceptance was made it means no contract was formed case discussed under Partridge v Crittenden (Vettori, 2007).

Case 2

The case is relayed with Devi who was called for an interview in a firm in which he asked his father not to involve in the matter. After interviewing Devi got selected in the same on 12th April. Devi’s father did not want to demoralize his son so he made an offer to the company on 13th April in which he stated the intent to pay certain sum of amount in return of hiring his son as the employee for the position. In this case offer which was made by Devi’s father was for the event which has already been occurred in such case the contract so formed is invalid which cannot be enforced by the company, case discussed under Lampleigh v Braithwait.

LO 2.2

Case 3

The case is related with the couple who has entered into the restaurant and was asked to keep their coats at the reception. While they were putting their coats they were allotted the ticket by the restaurant in which it was stated that the restaurant will not take any responsibility for the things that will get lost from the coats case of Chapelton v Barry Udc. After some time the couple realized that the wallet was kept under the coat and went to search the wallet from the coat. Couple fails to find the wallet from the coat as it was missing from there. In this case couple cannot claim for the damages from the restaurant because restaurant has provided the ticked which included the exclusion clause. In such case exclusion clause stated by the restaurant will be termed as valid case discussed under Olley v Marlborough Court (Nel, 2004).

Case 4

The case is related with the tenancy who made the expenses in renovating the property for which tenant agrees to keep the rent as it is for next 5 years case discussed under Currie v Misa. After some time tenant died after which the new land lord hike the prices of the rent of the property, In such situation tenancy has the right to claim for the expenses that were incurred in the renovation work as it has helped in increasing the value of the property and has the right to discontinue the contract for the rejection of the new terms case discussed under Dunlop v Selfridge.

LO 2.3

Case 5

The case is related with the policy holder and the policy company in which policy provided by the company will be termed as invitation to offer. In this situation filling out the form of the policy will be considered as the offer agreed on the other hand agreement of the company will be termed as contract. In such case terms in the policy will be termed as terms of contract. In this case one term was regarding the pervious claims made by the party for the theft in last five years and the answer to the question was incorrect. In such cases misrepresentation of the details is considered as the breach of the contract. Hence, in such case company has the right to void the contract and not provide the compensation to the policy holder (Cooke, 2007).

Case 6

The case is related with the policy terms which were related with the pervious claims made for the theft and change of the original parts of the car by the policy holder. In this two terms were not provided accurately by the policy holder, In this case the terms which were breached were condition and warranties in which misrepresentation was done by the policy holder which was found in the investigation. In this case misrepresentation of the policy will be termed as the breach of condition on the other hand originality of the part will be termed as breach of warranty. Hence, in such case company has the right to void the contract and discontinue it because of the misrepresentation of information while forming the contract.

Task 3

LO 3.1

According to the civil liabilities, following are the difference between the tortuous liability and the contractual liability.

  • The contract allows the parties to discuss the liability and terms of contract before the performance takes place whereas no discussion between the liability in tort arises.
  • The liability in contract arises from the breach of the right in personam whereas the right in rem is breached for the liability under the tort.
  • The liability amount in the contract is decided based on the consideration involved under the contract, whereas the liability in tort is discussed based on the wrongful acts taking place from the breach of duty. (Richards, 2006)
  • The motive for the performance of the breach is not considered under the contract whereas the same is considered under the law of tort.
  • The duty to be performed is towards a specific party under the contract whereas the duty to be performed is towards anyone that may be affected by the breach.
  • Only parties to the contract can claim for the damages whereas the affected party may be able to claim for the damages in tort.

LO 3.2

When the duty of care is breached from the neglect or ignorance the same is the act of negligence. The negligence being caused shall affect the parties in a manner that it causes them damage and harm. The same damage shall be measured in terms of the physical, psychological or monetary damage. The act of negligence has defences that may be applied to the situation such as the contributory negligence, volenti-non-fit injuria and minor negligence. (Vettori, 2007)
In the case of Donoghue v Stevenson, it was determined that the manufacturer in the market research will owe the duty of care towards anyone who is able to be affected from the wrongful act. This would mean that the manufacturer has a duty not for the immediate neighbour but the entire group of people capable of consuming the product. This is a landmark case in laying out rules for the manufacturer’s liability.  In the case of Caparo Industries it was also discussed that the tort of negligence is recognised to be so when the three elements are present while it takes place. The remoteness of damage implies that the performance of the act and the damage shall be least related. The causation element applies that the cause and effect of the two should be direct. The proximity implies that the two shall be located accordingly so that the cause and effect may be established. It was also determined that if the liability may be  established if the performing party had a reason to believe to undertake the precaution and duty and was unsuccessful. (Giliker, 2010)

LO 3.3

Sometimes a person undertakes certain duties in return for a certain compensation for the same. The effect of the duty is not enjoyed by the person and therefore, the liability would also no be entertained by him on terms of negligence. This type of liability falls on the person making the other person do the said act. This is called being vicariously liable. The rule of vicarious liability is that the two shall be related and the relationship should be form the delegated duty. Therefore, if the person responsible to perform has been unable to do so, the liability so arising from the non-performance shall be the responsibility of the benefitting party. This liability mostly is present under the relationship of employer and employee. The employer will only liable if the duty so breached is while performing the official duty and not the personal duties.
Under the legislation of the Health and Safety at Work etc. Act, it is determined that the employer is required to undertake the precaution for the safety of the employees at the premises. When the precautions are undertaken, it is to be determined that the equipment used are safe, valid facilities are provided in term so f water and sanitation. Emergency drill shall be practiced and the other such precautions relevant to the premises are undertaken. It is also necessary for the occupier under the Occupier’s Liability Act to maintain the safety on the premises from the risks associated that may cause the visitors harm when visiting the premises. The protection shall be maintained towards the visitors of all types such as the permanent, temporary, trespassers, authorised and non-authorised. (Nel, 2004)

Task 4

LO 4.1

Case 7

The provided case determines that the doctor was an employee at the hospital. The hospital here assumed the role of the employer. The employee must ensure that the duties so assigned by the employer accordingly. The patient approaching the doctor is approaching the hospital as the doctor is an employee at the hospital. The doctor did not perform a check-up and then prescribed the medicines to the patient. The same medicines were taken by the patient. He was however, found to be dead the next morning. On investigation, it was found that the patient had died because of the toxic mould but no the medicines. It is found out that the doctor had a duty of care towards the patient to perform a check-up and then only prescribe medicine. The professional negligence so undertaken is because of the specialised knowledge so possessed by the doctor. The hospital in turn pays the doctor to make use of the special knowledge. As the negligence, so undertaken has been conducted while performing the official duty, the liability would be that of the hospital for being the employer. (Nel, 2004)

LO 4.2

Case 8

In the provided case study, it is determined that the driver had been employed as an employee for the company. The official duty so discussed herein, is that of picking up a client form the airport. The client was waiting for the driver to pick up when he arrived drunk on the job. On their way, back, the driver lost control of the car and was unable to balance on time causing a crash and damaging the car and the client. It was found that as the driver was an employee of the company when the accident happened the employer would be vicariously liable for the accident so caused. This is because the job so assigned for driving the client back was when the accident took place. The case of Rose v Plenty illustrates that a certain act that leads to the negligence should not be so significant that it becomes the sole reason. The act of drinking was not so far from the duty assigned thereby creates a vicarious liable.

Case 9

According to the provided case, the organisation, namely the supermarket had asked another organisation to maintain the safety of the premises. One such employee was unloading certain pallets on the premises and when he slipped and the pallet fell on another employee causing him injuries. The supermarket had asked not to be responsible as the responsibility of the safety was with another organisation. The case of Mersey Docks determines that the employee having more than one employer will be controlled by the respective employers accordingly. He employer directly in control of the event of accident would be liable. In the present case as the supermarket was where the accident took place, the supermarket will be liable for the injuries so caused to the employee being vicariously liable. (Richards, 2006)


It is necessary that the offer so made by the offeror should be presented in simple language and should not cause any type of confusion among the interested parties. It is necessary that the discussed communication should be done so as to ensure that acceptance is been shown by the party. When two parties indulge into a contract it is necessary that they should have a proper set of capacity to form a particular contract. When two parties indulge into a contract it is necessary that they should have a proper set of capacity to form a particular contract.  The elements considered under the contract are that of offer, acceptance, consideration whereas the elements considered under tort are that of the remoteness of damage and causation.  Under tort the duty so owed to the society is for the care and safety to be undertaken by every party in respect to the maintaining a healthy and safe business environment for everyone. The liability for the act of negligence may not always fall on the person performing the same act.