Unit 5 Element of Contract in Negligence Business Assignment

Unit 5 Element of Contract in Negligence Business Assignment

Unit 5 Element of Contract in Negligence Business Assignment


Diploma in Business

Unit Number and Title

Unit 5 Element of Contract in Negligence Business

QFC Level

Level 5


In the present assignment the impacts of different types of contracts is studied in order to represent the structure of the contract. The various elements included under a contract are discussed in order to derive it meaning and effect on performance of the contract. The liabilities arising under the contract are to be determined in detail. The contractual liability is to be determined with reference to tortuous liability. The tort may be of varying kinds such as the negligence, nuisance and trespass. The element of contract in negligence business strategy on the study of vicarious liability and tort of negligence.

Task 1:

1.1: Peter Abraham is contractor and for the business to carry forward the basic elements of a contract that form part of a contract are to be enforced between him and the contracting parties.

An offer is a part of the contract that leads the first step in its formation. The offer is a statement containing the terms on which the contract is being offered. The contract is required to be first offered by the offeror. The offer should be clear in meaning and intent. It should be provided in a way that the offeree can gather the purpose of the contract. The offer should move from the offeror towards the offeree. The offer shall be clear and be different from invitation to offer and offer to the world. The invitation to offer is regarded as the statement presenting the fact that the contract maybe entered by the parties in order to be able to present an offer to initiate the contract.(Andrews, 2011)

Acceptance is regarded as the statement of consent provided by the offeree for the offeror. Under the case of the regular offer made in writing or a conversation the acceptance is to be made within a reasonable time agreed to between the parties. The acceptance just like the offer should be clear and precise and shall move from the offeree. The acceptance may be partial or whole. If the acceptance is partial then it is regarded as a counter offer in terms of providing altered offer by the accepting party. The process of counter offer may go on unless the final offer is wholly accepted. The contract is said to be formed wherein the acceptance is made by the party. The acceptance may also be waived off in the case of the offer to the world. This is because the offer is clear in meaning that the certain act is to be performed in order to enforce the same. Thereby, the acceptance is considered to be performance of the action without intimation because it would be automatic. Every acceptance is to be made through an acceptable means of communication for the contract. It may be through post, orally or in writing. If the same is through post as soon as the acceptance is posted it would come to force. Thereby the acceptance results in creation of the contract. (Adams, 2008)

Consideration is an important part of the contract as it helps in determining the validity of the contract. The consideration is exchanged between the parties in order to ensure that the contract so formed is restoring the value so suffered in loss. The consideration ensures that a contract is enforced and the same creates a value in order to ensure the enforceability with a purpose. The consideration shall be so that it isn’t just in terms of the duty of contract or social obligation, shall be sufficient and move from the offeree.

The parties to the contract should ensure that the purpose and intent to enter into the same is clear between the parties in order to make the contract enforceable under the law. The contract of commercial nature are assumed to be enforceable under the law in order to ensure that the same are being performed. The contracts of social care are however assumed to be not of enforceable nature unless the same is provided since the same arise from personal will and not legal in particular.

The parties to the contract should be of capacity when it comes to being eligible to form a contract. The parties are to be of capacity shall have a sound mind, be of legal age and financially stable. The parties shall be so at the time of entering into the contract. The contract shall beensured to being entered into by such parties in order to create a validity. If the parties at the time of entering into the contract were not of capacity then the contract may be voided by the other party. The parties should agree to the term of the contract by free will without any outside influence. (Finch, 2007)


Face to face contracts are of such nature whereby the parties to the contract have interacted in person with the other that the offer is made in person with the other party. The conversation shall contain a stamen made by offeror stating the terms of the contract. The acceptance may be made within the same conversation or at a time discussed in the future after the conversation has ended. Such contracts are oral in nature and thereby the actual terms and conditions are difficult to be established under the court for the enforceability.

Written contracts are thereby determined to be that present in writing. Under such contracts the offer is made in writing that is agreed to in writing as well. The contracting parties ensure that the contract is agreed to in writing. The contracts are also discussed but also presented in writing in order to establish the common intent to be represented at a later stage in case of dispute. As the contracts are present in writing they are easier to be established under the court to enforce the same. (Meyer, 2010)

Certain contracts are entered into by the parties from a distance without any oral interaction or written for that matter. Such contracts are entered into from a telephonic conversation and the internet communication. Online contracts are one example of a distance selling contracts. The contracts so made between the seller and the purchaser the seller should provide the details and contents of the delivery in terms of taxes, days of delivery, expiry dates and returns details. The distance selling regulations govern such contract.

1.3: Peter Abraham should focus on the types of terms included under the contract in order to realise its effect on the performance of the contract. Following are the types of terms included under the contract:

Condition are considered to be the most important part of the contract since they represent the performance of the contract and assure the complete fulfilment once performed. Thereby, conditions are directly related with the contract and is important to perform in order achieve the performance of the contract. If the condition is not performed that would mean the contract is not performed leading to voiding the contract by the affected party. A warranty is considered to be the statement performed in support of the condition being indirectly related to the performance of the contract. If the warranty is not performed the contract would not be voided. However, the party to the contract would be affected as it would obstruct the performance of the contract thereby entitling them to the damages, injunction or special performance. (Richards, 2006)

Sometimes the nature of the terms is not as clear as it should be. The effect of the terms may be different under varying situations. The change in effect under different situations would result in categorising as such terms being innominate in nature. These terms present cause different effect as being condition or warranty depending on the type of breach and the relative directness. An exemption clause is determined to be such that it limits the liability in case of breach. The breach of any nature cannot be excluded from the contract. The contract cannot havean exclusion clause excluding the liability for death or injury so caused from the performance of the contract. The exclusion clause is to be included in the contract by mentioning the same under the contract or notice or previous dealings. The exclusion clauses are to be common between the parties in order to enforce it. (Collins, 2008)

Task 2:


Case 1:

According to the case facts it is given that the Carol possessed an apartment that was unfurnished. Carol thought of approaching Gumtree that had posted an advertisement in the newspaper stating that someone was moving out and wanted to sell of the brown couch for the cost of 600 Pounds. The said advertisement as accompanied with a photo. It is observed that the advertisement so posted by Gumtree was for the invitation of the interested offeror that would be willing to make the purchase. The advertisement posted was clear in its statement and purpose that it was inviting offers. The price so quoted was as per the seller that wasn’t final and could have been negotiated. Carol being interested in making the purchase wrote an e-mail stating that she wanted to make the purchase. This particular action of sending the e-mail would be an offer. If the seller agrees to enter into the contract and sends an acceptance only then will a contract would be formed otherwise it may be stated that no contract is formed. (Giliker, 2010)

Case 2:

Accordingly, the case study provides that Devi was interested in working with an IT firm. Since his father was a powerful man in the business enterprise world he had particularly asked his father not to participate in influencing the higher management at the firm to hire him in particular. He had gone for the interview and came back. The firm had discussed the situation and hired him for the position. An offer letter had been sent across to Devi for the position of cyber-security on 12th April. However, Devi’s dad had offered to the company that if it hires his son then he would pay 150,000 Pounds for the same. As Devi had already been hired on 12th April the offer so made by his father would an invalid one as the act so to be performed under the offer had already been performed. Thereby, any acceptance so made by the company would amount to maintaining an invalid contract. Therefore, no contract is present between Devi’s dad and the company. (Vettori, 2007)


Case 3:

It may be determined that a couple had gone to a restaurant to have dinner. They were made to check in the coats at the reception. On entering the restaurant they were handed over a slip that determined that the restaurant would not be liable for the loss so occurred to the belongings kept at the reception. The couple after finishing the meal realised that the wallet was left at the reception in the coat. The wallet cannot be found when checked. The restaurant now determines that it owes no duty or obligation towards the couple for the protection of their belongings. It is analysed that the couple had been handed over after the coats were checked in and not before the same took place. It would be determined that the exclusion clause would only be included under the contract if the same are included before making the transaction and pointing it out specifically to make the other party aware of the clause. This would mean that the exclusion clause mentioned by the restaurant would not be a valid clause and the restaurant would owe the responsibility of the maintenance of the belongings and pay for the loss so suffered by the couple. (Cooke, 2007)

Case 4:

According to the case study it is presented that the landlord had rented out the warehouse to a tenant. The warehouse required certain improvements that were carried out by the tenant. In turn of the repair the landlord determined that he would not increase the rent amount for the next five years. It was so because under tenancy agreements it is an implied term that the landlord would be responsible for carrying out improvements and if the same are done by the tenant the sum shall be reimbursed to the tenant. The landlord had passed away a year later. The new landlord had stated that the rent is increased and if the tenant isn’t going to pay the same he would be evicted. It may be stated that the new landlord has the right to change the conditions of the contract but the same is not necessary to be accepted by the tenant. If the tenant is not certain of the changes he may leave the premises and claim for the costs so contributed to the warehouse since the same has been bared by the tenant. (Adams, 2008)


Case 5:

Under the provided case study it is determined that the policy while being issued is checked on the basis of the answers filled out by the applicant for the questions. The questions so aske are the basis of the driving the car or accident having being occurred in the past. It was also asked whether any claims were made for the car in question the same were denied to. However when the accident occurred it was determined that a theft claim had been made for the same car in the past five years. As such a term was presented in writing and directly related to the purpose of the contract it would be considered as the misrepresentation of the condition and breach of contract which would allow the company to void the policy completely. (Cooke, 2007)

Case 6:

Under the case provided it may be determined that the policy was to be acquired based on answering few questions so asked by the company in the form. The questions were related to the car part installations and the previous claims so made in the past five years. The same would be required to fill out in honesty. However, the same was lied about by the party applying for the policy. It may be stated that ignorance of facts is not a valid argument. At the time of answering the questions the applicant should have had the full knowledge of the car and he had not disclosed the same accurately. Thereby, the questions so asked under the form were of primary nature and the same should have been determined according to its actual state. The answers would be said to have been misrepresented and the same would be sufficient for the company to void the contract of policy. (Morgan, 2011)

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Task 3:


The liability under the law of tort is raised in regards with the breach of the duty so present under the society for having an effect on the neighbour. Such liability may arise from the duty already owed to the society. The liability under contract law arises from the duty already agreed to under the contract and extends only to the parties to the contract. The liability under law of tort is discussed based on the court’s decision considering the different factors. The liability under the contract is discussed depending on the amount of consideration involved under the contract. The rights so breached under the law of tort is that of the right in rem whereas right in personam is breached under the contract law. The factors to be considered while considering the breach under law of tort are that of remoteness of damage and causation whereas the factors so considered under the contract are that of offer, consideration and intent. The parties under the tort are connected through the wrongful act without any prior relationship whereas the parties under contractual wrong are already under the contractual relationship having a certain regards for the performance of the contract. (Bell, 2013)


The law of tort in case of negligence states that the duty of care that is already existent to be performed by a party towards another person is breached for a certain purposeis known as tort of negligence. The tort is considered to be that of breach of the duty already owed by the person carrying out the act. The duty of care when breached should have such an impact on the affected party that the damage is measured in terms of the monetary loss, psychological affect or physical damage. The party so committing the breach does no from non-performance of the duty for the negligence, irresponsible behaviour or such other factor that leads to skipping the same. The damage should be such that it affects the party directly causing a serious damage. (TAN, 2008)

According to the case of Donoghue v Stevenson it was determined that the cause and effect of the uses of the product shall be direct no matter if the same was a purchase made by the affected party or not. This is so because while introducing a product the manufacturer owes the duty towards the possible user that may in turn use the product and not only the one purchasing it. The party being affected from the use of such product may be considered as neighbours because users have the direct impact of the breach of duty of care. Under the case of Caparo Industries it is determined that the duty of care so breached shall be studied with three factors such as the remoteness of damage, causation and proximity. It was also determined that whereby a damage is expected to be caused or could be foreseen the same shall be undertaken by the party that might be responsible for the damage. (Meyer, 2010)


Accordingly, the vicarious liability is determined to be that liability so due in regards with performance of a wrongful act by another person. The liability is raised because the effects of the performance of the act if done right would be borne by the person delegating the duty. The duty so referred to is found under the relationship of the employer-employee. The employer is generally concerned with delegating the duty and the employee performs the same in order to earn a regular income. However, the employer would derive the benefits of the employee’s performance. The employee when committing the wrongful act should ensure that the same is being done while performing the official duty and not the personal actions.

Under the Health and Safety at Work etc. Act, it is determined that the employer is responsible to maintain the premises in such a way that it safeguards the employee’s safety. To do so it should be ensured that proper water and sanitation facilities are provided. The equipment so used shall be latest and of standard quality acceptable under the industry. According to the Occupier’s Liability Act, the employer acts as an occupier wherein it is responsible for the safety of the visitors and non-visitors including trespassers. This creates an obligation to inform the visitors about the possible risks at the premise and notify them by putting up a board for the same at a place that is clearly accessible to everyone. (Giliker, 2010)

Task 4:


Case 7:

It is provided under the case study that a patient was feeling unwell and had approached the hospital. However, the doctor was busy so the he had asked the nurse to provide the patient with the over the counter medicines. The patient had shown chest pains and breathing problems which was a cause of concern for the doctor but he did not provide a complete check-up for the same. It was found the next day that the patient had died from the toxic mould in the house. It may be determined that the doctor had a professional obligation towards the patience to perform a check-up before prescribing medicines. The same was neglected thereby it will be regarded as a professional negligence. However it maybe determined that the cause of patient’s death is not the medicine but the toxic mould that led to pneumonia. Thereby, the concerning cause of death was not related to actual cause of death. It is tested through but-for test wherein the cause and effect of the negligence and actual damage is studied. In the present scenario the doctor would be liable for not performing a check-up but not for the death of the patient. The hospital would not be held liable as the death so caused was not from the medicine so prescribed by the doctor. (Vettori, 2007)


Case 8:

In the present case study it is determined that the driver was an employee of the company who had the responsibility to pick up a client and drop her off. The driver had arrived early at the airport and then decided to have drinks before making the pickup. As she arrived he boarded the cab. When they were on their way back the driver was too drunk to drive and caused an accident of the car causing damage to the client as well as the car. It may be analysed that the driver chose to drink on his own and it was not the duty. However, the duty to take the client back was an official duty that was being performed while the accident took place. As the accident took place while performing the duty the company would be liable for the actions of the driver and pay damages to the client and the car owner with whom the car collided. (TAN, 2008)

Case 9:

Under the provided case study it is given that Mr. Jones was a delivery driver. The marketing principles had stated that the duty to maintain the health and safety regulations at the premises is delegated to another company in order to ensure the application of the same. On one day the driver had slipped on the tail gate and threw over the pallets resulting in harming another colleague. It was determined that the accident had taken place within the supermarket. The supermarket now claimed that it would not be responsible for the accident as it was not its duty to perform the health and safety precautions. It shall be determined under the case of Mersey Docks, the supermarket will be liable for the accident. This is because wherein the employee has two employers the original employer would always be responsible for the employee and his actions on the job. It was also held that the employer having the immediate control over the employee would be responsible for the damages so occurred. As the accident had taken place within the supermarket, it would be responsible towards the damages so caused to the employee. (Vettori, 2007)


The assignment focused on studying and analysing the aspects of contract in terms of contractual terms, types of contract and the elements that make a contract. The final extended analysis determines the effect and impact of these factors on the parties to the contract in terms of breach of contract. The liabilities arising under the contract and the tort are provided in contrast to establish the meaning of the liabilities. The differing liabilities under tort such as the negligence and vicarious liability are also presented in order to study the effect of such liability on parties both performing and not performing the wrong.

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Andrews, N. (2011). Contract law. Cambridge: Cambridge University Press.
Meyer, L. (2010). Non-performance and remedies under international contract law principles and Indian contract law. Frankfurt am Main: P. Lang.
Collins, H. (2008). Standard contract terms in Europe. Alphen Aan Den Rijn: Kluwer Law International.
Vettori, S. (2007). The employment contract and the changed world of work. Burlington, VT: Ashgate Pub.
Giliker, P. (2010). Vicarious liability in tort. Cambridge, UK: Cambridge University Press.
Cooke, P. (2007). Law of tort. Harlow: Longman.


TAN, S. (2008). Vicarious Liability. Internal Medicine News, 41(24), pp.36-37.
Morgan, P. (2011). Distorting Vicarious Liability. Mod. L. Rev., 74(6), pp.932-946.
Bell, J. (2013). THE BASIS OF VICARIOUS LIABILITY. C.L.J., 72(01), pp.17-20.