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Unit 5 Impact of Contracts ACNB Assignment
A contract is relationships that may be wither to regulate the transaction of social nature or commercial nature. Not all transactions are regulated by the contract law. The relationship of the parties and the enforceability of the contracts is required to be studied. The impact of types of terms determining the nature of the contract is to be analysed. The effect and enforceability of the contract in case of different natures is required to be defined. An analysis of the nature of breach and its effect of the relationship between the parties is to be presented. The nature of tort with respect to liabilities so arising under the legislation is to be classified in reference with the case laws. The case scenarios are to be solved based on the information knowledge so collected while studying the assignment.
1.1: Explain to Peter Abraham how a contract is formed and the importance of the various elements which has to be present to form a contract
As per the view of Andrews (2011), the contract between the two parties is recognised as the effective relationship between the two or more than two parties so that the common purpose or the individual purposes of both the parties will be fulfilled in a proper manner and successfully. Therefore, before entering into the contract between the parties, it is required to determine the nature of the contract based on the situations and the nature of the different elements involved. The elements can be referredregarding making a successful offer, accepting the offer and also exchanging the views and the intentions to enter into the contract to fulfil the personal goals. So, entry into the valid contract refers to the concept of accepting the offer by the parties involved with that. The offer o the offers determined should be clear enough to be understood by everyone in the offer, and also there should not be any hidden concept involved in the offer so that they can be claimed at the later point of time. There is two broad categories of the offers such as General offer and the special offer.
The offer is perceived as the acceptance when the party or the parties involved in the offer reflects their willingness to be the part of the offer to get mutually benefitted. The acceptance by these parties should be crystal clear with the proper communication between them. For the effective establishment of the contract, the contract should be made for the fixed period with the clear message involved with it. In the case of few contracts such as the offer to the world, the accepted elements are waived off to conclude the acceptance of the same. The postal rules and the regulations are applicable if the offer is expressed with the help of the post for the massive awareness (Adams, 2008).
The exchange of the valuable elements is always the part of the every contract between the parties. The elements are always required to be restored. The value offering through the offer is required to be maintained to influence the parties to be the part of the effective contract. The offers should be either regarding the monetary offer or the non-monetary offer regarding the promise ofoffering the valued services in an effective manner. The parties involved with the offer should be well versed with the intention of the contract that has been formed between them. The enforcement is not allowed as per the rules and regulations by any of these parties involved as per the norm. The contract for the commercial purposes, the intention for the enforcement is applicable, and it is also recognised as the social contracts.
All the parties involved with the contract should be clearly understood the actual meaning and the contents of the offers as well as the contracts. The capability of understanding of the effectivecontract can be derivedfrom the set of people those are financially and mentally not stable. Therefore, it is required to check the mental and the financial condition as well as the status of the age before they are entering the contract. If the minor is entering into a contract, then it may be the voidable option of the parties involved in the contract. The capacity to enter into the contract means that the person is able to understand the consequences of the contract and the purpose for entering into the same. The capacity of a person is defined as the mental, legal age and financial status of the person in order to determine the ability to participate in the contract. If a person is a minor or financially unsound or mentally ill then he would be incapacitate and would not be able to enter into a contract. Such contract will be considered to be void.
Every contract should have the element of the consideration to make sure that the same is enforceable under the law. A contract without promise is called a promise. A consideration ensures that the contract maintains an exchange of something of value between the parties. It is important that the consideration is paid under the contract to maintain the legality. A contract should also be clear in intent when being entered into by the parties. The contract has to be clear in intent in order to imply the enforceability under the law. The intent to enter into the contract lays down whether the same is enforceable or not. The contracts of commercial nature are enforceable under the law even if the same is not mentioned in the contract. Whereas the social contracts are not enforceable unless the same is mentioned in the contract.
In case of breach it is required to establish the privity of contract is to be established. The privity of contract is considered as the right of the claim in case of breach. Only the parties to the contract would be able to claim the damages in case of breach. No third party may be able to claim for the same. If the contract is for the benefit of the third party then the third party may claim as a beneficiary of the contract.
1.2: Discuss the impact of forming contracts
As per the view of Meyer (2010), the contract between the two partiesis termed as the Face – to face Contract. Both the Written and the Oral conversations are the required for of the contract. In this manner, the written contracts are more enforceable than the oral contract. The written contracts are recognised as the most valid and the safe contract. But in maximum cases, the face to face contracts are known as the Oral contracts. But, as the written terms and conditions are not present in such cases, therefore, such contracts are enforced under the law of the lack of the validity. Because the face to face contracts are not present in writing, such contracts are difficult to be established for the lack of evidence. The contracts are not present in writing cannot be determined in terms of the basis of the contract and the terms that were included in the contract. The face to face contracts be established on the basis of hearsay that is not a concrete evidence. The general concept of the contracts is referred as the signed documents with the written evidence. Therefore, entering into such contract involves the presence of the general discussed rules and regulations between the parties which are clearly understood by both the parties in an effective manner. Breaching o the contract is not frequent for the written contracts than the oral contracts. The written contract are easier to be established in the court of law because the written terms may be presented in the court of law as an evidence. Thereby, the evidence is conclusive proof of the contract the same re enforceable under the law.
The sale of the goods and the services through the online media is terms as the distance – selling the contract. The writing to the purchaser with the valid terms and conditions are required in such cases. Such contracts are regarded to be written contracts as the buyer and the seller enter into the contract through exchange of terms and signing of the document so agreed to under the contract. The contract is easily established as the as the same may be presented in the court of law. The contract is to be entered into through Distance Selling Regulations of 2000.The contract should include the terms and conditions including the quantity of the product, quality management of the product, tax details, date of delievery and such other terms.The product or the service providers should mention the price, the manufacturing date with the warranty date with the discount offering (if any). At the same time, the delivery details also are required to be mentioned in the list of the terms and conditions. The alternative steps in the case of the loss also should be the part of the contract. The Distance selling regulations should be maintained in a proper manner.(Andrews, 2011).
1.3: Give an analysis of the following term in contract concerning their meaning and effects as it may apply to Peter Abraham
The condition of the contract is well defined as the importantterms which should be derived to understand the proper meaning of the dealings between the parties. These terms are required to be performed by both the parties so that the proper execution of the contract will be fulfilled. The condition precedent, condition subsequent, and the condition concurrent are the base of the conditions in a proper manner. The conditions form an important part of the contract as they are primary in nature. The conditions are to be fulfilled in order for the contract to be fulfilled. The conditions if not performed may void the contract as the purpose would be unachieved. (Adams, 2008).
A warranty is referred as the performance of the contract, but the non-performance of the contract is not termed as the violation rather it deals with the alternative solution to maintain the contract norms. The proper remedies should be offered in such cases. For few cases, some terms are not clear to understand the actual purpose of the contract. In such cases, these are categories as the non-performance contract. The breaching of the contract is called the violation of the condition, but not the violation of the warranty as the warranty is associated with the term of the remedy offering. The warranty is not regarded as the breach of contract as they are secondary in nature. In case of breach of warranty the damaged parties are able to claim the damages, specific performance and injunction. Sometimes some terms are neutral in nature unless the breach occurs. Such terms are neither conditions nor warranties because the effect of such terms is different under different situation. In case the effect of the term in a situation affects the nature of the contract then it’ll be a condition and if it doesn’t then it’ll be a warranty. The terms of such types are considered to be innominate terms. The remedy for such terms is decided in relevance to the breach of the contract. If the term is a condition then the contract will be voided and if not then the damaged parties may be able to claim the damages, injunction, or specific performance.
2.1: Apply the elements of contract in the given business scenarios below
Case 1: According to the case facts it is observed that a couch was advertised under a newspaper towards which Carol was interested to make the purchase. The price of the couch with description was posted stating that the same may be available as described. The advertisement so posted in the newspaper would be regarded as the invitation to offer and not an offer itself. This is because an invitation to offer ensures that the information regarding the availability of the product is communicated for the price so that the interested buyers can approach the seller. Carol on being interested decided to send an e-mail to the seller. Carol had agreed to pay the same price as advertised for. As carol did not receive any e-mail accepting the offer the contract could not be said to have been entered into. A contract may either be accepted or rejected or countered. As the offer was not met with any response it would be said that no contract had taken place Carlill v Carbonic Smoke Ball Co. (Collins, 2008)
Case 2: According to the case study, Devi wanted to join the company as a cyber-security professional. As his father was powerful man he had instructed him to stay out of the recruitment process. The interview had taken place with the company which was cleared by Devi. It was stated that the offer letter was issued an accepted by Devi on 12th April. It was derived that Devi’s father was also keen on his son getting the job. Unaware of the offer so made the father decided to offer the company 150,000 Pounds to hire the son. The offer was made on 13th April. As the event for which the offer was made had already taken place, the consideration would be regarded as a past consideration for which contract so entered would be invalid. The contract being invalid cannot make the company claim for the amount so offered for the performance of an event already taken place Mmills v Wyman. (Vettori, 2007)
2.2: Apply the law on terms in the following contracts
Case 3: The case aims at studying the aspect of exclusion clause within a given contract. A couple had gone to a restaurant for dinner. When the couple was entering the restaurant it was observed that they were asked to check the coats at the reception before entering the restaurant. After the coats were checked they were handed over a slip determining the exclusion clause that in case of loss or theft of the coat or the contents, the restaurant would not be held liable. When the payment had to be made it was determined that the wallet was in the coat that was checked into at the entrance. When the same was checked for it wasn’t found. The restaurant claimed the enforceability of the exclusion clause in the slip. It may be determined that the exclusion clause are only included in the contract if they are through signatures, notice or previous course of dealings. The clause was entered in the present case after the contract was entered into. The slip would not form the part of the contract and therefore the restaurant would be liable towards the couple for the damages so caused L’Estrange v Graucob. (Andrews, 2011)
Case 4: In the given case study the tenant had conducted the repairs for the premise so rented by him. The land lord had in turn promised not to increase the price of the rent for the premises for the next five years. One year later the landlord died and the subsequent landlord so inheriting the property decided to increase the price of the property. It was determined that the new land lord denied to pay for the improvements so carried out by the tenant. The tenant under the tenancy contract has the right to claim for the improvements so made by him on the rented premises as the same is an implied term under a tenancy agreement as well as the right of the tenant. Accordingly, the new landlord would have to pay back the amount in proportionate to four years’ worth as the first year was uncharged with the addition to the rent prices by the old landlord Hutton v Warren. (Meyer, 2010)
2.3: Evaluate the effect of different terms in the given scenario
Case 5: As determined it is required to know the type of term is being breached. This is because the breach leads to determining the kind of remedy to opt for. In the given case study it is observed that a policy was to be undertaken by a person for the theft of the car. The policy holder was asked to fill out a form in order to apply for the policy. The form contained questions regarding the previous claims for theft in the last five years that were denied by the policy holder despite of being false. As the questions asked in the form were the basis of gaining the policy they will be considered as a condition. The denial of wrong nature in the forms would be regarded as a breach of condition as the terms were directly in influencing the policy contract. Therefore, the breach of condition would allow the company to void the policy and not pay for the claim made Poussards v Spiers. (Andrews, 2011).
Case 6: A misrepresentation is considered to be so if it is of the term that is made before the contract was made. Such misrepresentation is not considered to be a breach unless it is for the term that led to formation of the contract. The contract of policy for the car was offered containing form of questions related to the details of the car and the previous policy. The questions were important to the contract as the determine the allotment of the policy. The questions regarded to previous policy claims and the originality of the parts of the car was misrepresented by the policy holder. The misrepresentation so conducted was that for the condition of the contract so entered into. The car was already claimed for in the past five years and the parts of the car were replaced before claiming the policy. This would amount to a breach of contract. Therefore, it may be said that the company will have the right to discontinue the contract for the breach of an essential term important to performance of the policy Bisset v Wilkinson.(Richards, 2006)
4.1: Apply the elements of the tort of negligence and defences in the given business scenarios below:
Case 7: It is required to determine that the effect of negligence shall be direct and proximate to the damages so caused from the avoidance of duty of care. It is observed that in the present case study, the patient had been experiencing serious chest pains and breathing problems when he had gone to the hospital. It was a busy hour and the nurse asked the doctor to see the patient. The doctor asked the nurse without performing a regular check up to prescribe regular over the counter medicines from the pharmacy. The patient took the medicines and went back home. Later the next day it was found that the man had died. It was determined that the reason of death was pneumonia. When the death had occurred the patient was under medication but not for pneumonia. This would mean that there was on relationship between the cause of death and the medicines so prescribed. (TAN, 2008)
It is required to apply the but-for test for the determination of the cause of the death and the liability so arising. According to the but-for test it is analysed that the cause and effect shall be direct and influential even remotely to construct a liability towards the action so undertaken supposedly influencing the damages. In the present case the doctor had not performed a check-up before prescribing the medicines to the patient. This would determine that the doctor is guilty of non-performing professional duty of care. The breach of such duty is regarded as the personal and professional negligence. Therefore, the doctor is responsible for the professional negligence but not for the death of the patient as the medicines so prescribed played no role in the cause of death. (Giliker, 2010)
4.2: Apply the elements of vicarious li ability in given business situations below:
Case 8: It is required to analyse the extent of vicarious liability in case of accidents so occurring while performing the official duties. It may be derived that the driver was an employee of the company delegated with the task of picking up a client from the airport. The driver on arrival decides to have a few drinks before the pick up as the flight had not arrived yet. When the client was received he started to drive back in the drunk condition. Losing his judgement he ended up causing an accident that led to damages to the car and injured the client. The said negligence of duty of care was during the performance of the official duties. The breach was committed but not so far away from the scope of employment Rose v Plenty. The breach so occurring on the job would give rise to vicarious liability making the company liable to pay for the damages of the car as well as the injuries so sustained by the clientLister v Hesley Hall Ltd. (Cooke, 2007)
Case 9: According to the case of Ready Mix Concrete (South East) V MPNI it was determined that the employee having more than one employer when committing the wrong, the employer having the direct control would be responsible for the wrong so committed while performing the job. In the present case study, the employee while carrying out the unloading of the truck accidentally tripped and threw over the plank to another employee causing him injuries. The Supermarket had determined that the other company was responsible for the maintenance of safety on the premises. It may be said that the employer having the direct control over the actions of the employee at the time of accident would be responsible for the damages. As the accident occurred at the premises of the Supermarket, it would be responsible towards the injuries so caused from the accident to the employee for being vicariously liable. (Morgan, 2011)
A contract has to be formed with the inclusion of various elements that are applicable to every contract. A standard contract is to be entered into by parties having the capacity to do so. The difference in the types of contract is determined with regards to purpose and importance of the same. When a contract is formed the types of terms present under a contract define the nature of the contract. The intention to enter into a contract shall be clearly determined at the time of forming the contract. If a contract is breached the damaging party is required to pay for the loss so suffered by the party suffering from the damages. The breach caused under law of tort is to be addressed by the parties causing the damage. There is no prior relationship between the parties other than the one relating them from the accident so taking place. The concepts so derived are applied while solving the case studies.
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.