Delivery in day(s): 5
Unit 5 Various Elements and Aspects of Contract Law Assignment
Diploma in Business
Unit Number and Title
Unit 5 Various Elements and Aspects of Contract Law
A relationship between two parties under law may be determined under the contract legislation or law or tort. The relationship under the law of contract is determined whereas the same is not the case under tort. The present Unit 5 Various Elements and Aspects of Contract Law Assignment aims at studying the various elements and aspects that are considered under the two branches of law. The contract may be present in different forms. The liability may arise if the contracts are not performed accordingly. The liability arising under law of contract is to be distinguished from the one arising under tort. The liability under tort may be of different types such as negligence and vicarious liability.
1.1 Examine the validity of the essential elements required for the formations of a contract in the scenario given above.
- Offer: An offer is the ground of the contract that is being entered into by the parties which helps in further processing of the contract. In the given case Giovanna had send an email to James for the price of 4500 Pounds, this email will be considered as the offer made by Giovanna to James (Andrews, 2011). It is not necessary that every contract should begin from an offer. In some cases first step in the contract occurs with an invitation in which offer is invited by the seller from the buyer who is interested in purchasing the product. An advertisement was presented by James in Journal to invite the offer. Case discussed under Carlill v Carbolic Smoke Ball Co.
- Acceptance: Acceptance is the step which shows that the parties are interested to enter into the business law. In this step the parties to which offer is made accepts the terms and conditions to enter into the contract. In this case no contract will be said to be entered as no acceptance was made by either James or Giovanna. Case discussed under Hyde v Wrench (Andrews, 2011).
- Consideration: Under a contract certain amount is exchanged that amount so exchanged is known as consideration. For consideration it is necessary that the exchange should be made in values between the parties entering into the contract case discussed under Dunlop v Selfridge. In the given scenario amount offered i.e. 4500 Pounds will be considered as a consideration. This consideration validates the existence of the contract (Adams, 2008).
- Intention: The enforceability of the contract under the law can be determined by the intent to enter into it. If the parties enter into the contract for social purpose then that contract will not be enforceable by the law. On the other hand if the contract will be entered by the parties for commercial purpose then that contract will be enforceable by law.
- Capacity: Eligibility of the parties to enter into the contract is known as capacity. On the other hand contract will be termed as invalid if the party entering into it is not of sound mind or in conscious stage.
1.2: Identify and explain the main types of contracts that may be entered into in UK by individuals and businesses. Provide example of each type.
- Express: Discussion regarding the contract that can be entered into by the parties then that discussion regarding the contract will be termed as express contracts. After discussion held regarding the contract if the contract discussion will be found to be common then the enforceability of the contract can be presented under the law. Contract of employment can be taken as the example of such contract.
- Implied: There are certain implications presented in the contract even if they are not discussed those implications are termed as implied contracts. These kinds of contracts may exist under the legislation or the customs (Meyer, 2010. These kinds of contract are easy to be constructed and enforced under the law. Warranty is an example of such contract.
- Written: Contracts presented or entered into a written form are known as written contracts. In this case the terms and conditions presented in the written form in a contract are only enforceable under the law. Sale of the property is one of the examples of written contract.
- Verbal: There are certain contracts that can be entered into by the parties by just verbal communications those contracts are known as verbal communications. Offer and acceptance are to be made verbally within the time limits prescribed for the contract. Contract of services is an example of verbal contract (Meyer, 2010.
- Distance Selling: Distance selling is a type of contract in which parties from different parts of the world enters. From different places of the world terms and conditions regarding the contract are presented and for seller selling the product from other part has to mention all the terms and conditions related with the sale. For example, online selling.
1.3 Critically discuss the following: express terms, implied terms, innominate terms, conditions and warranties, with reference to relevant case law where applicable.
- Express Terms: Before entering into the contract there are several terms that are to be discussed by the parties those terms are known as Express term. According to the parole evidence rule court decides express terms in case of oral or written contracts. Case discussed under Adamastos Shipping Co. v Anglo Saxon Petroleum Co.
- Implied Term: There are certain terms that are not included in the contract or it could be said that they are not discussed by the parties, those terms are known as implied terms. For example when the goods are sold contract is made in which certain terms are not presented those contracts are known as implied terms. Case discussed under Re Moore &Landauer (Collins, 2008).
- Condition: There are certain terms included in the contract without which a contract does not exist those terms are known as condition. Conditions are important because non performance of such terms will lead to lose the meaning and will be repudiated by the affected party. Case discussed under Poussard v Spiers.
- Warranties: There are certain terms in the contract non performance of which does not result in repudiation is considered as warranty. Warranties are of different types which are availed according to the contract; it may be a lifetime warranty or the specific warranty. Case discussed under Wall v Silver Wing (Finch, 2007).
- Innominate Terms:There are certain terms that differ on the basis of the nature on account of breach, effects of such breach on the contract are regarded as innominate terms. Nature of innominate term is dependent on the type of breach occurred according to the contract entered by the parties.
2.1: Apply the elements of contract in the given business scenarios below
Case 1: In the given situation it is determined that an advertisement for a couch was posted in the newspaper. Carol came across the advertisement and realised that she would be interested in buying the same. The advertisement and promotion included the details of the couch. It would be regarded as the invitation to offer and not an offer. This is because it is posted to invite the offers from the prospective buyers. Carol had posted an e-mail for the purchase of the couch. Although Carol did not hear back from the seller. It may be said that no contract is found as no acceptance was communicated. An acceptance has to be communicated through an acceptable means of communication and as the same was not found not contract was formedCarlill v Carbolic Smoke Ball Co.
Case 2: In the given situation, it may be determined that the person named Devi was interested in a position with a firm dealing in cyber security operations. He had applied for an open position and had given the interview. Before the interview it was instructed to his father not to interfere with the interview process. The interview had taken place and Devi was offered the job on 12th April. The father however, worried for the son and had offered the company an amount of 150,000 poundsfor hiring his son. The offer so made by the company was accepted by Devi on the same day. Therefore, as the terms offered under the contract to the company for the amount of consideration would be invalid as the offer was made on 13th April, by which the act for which the amount was offered had become a past event. As the consideration is of past nature it would be considered invalid and the contract would be invalid as well. The company thereby cannot make any claim from Devi’s father.
2.2: Apply the law on terms in the following contracts
Case 3: According to the circumstances it may be derived that the couple had gone to the restaurant for having dinner. They were made to check in the coats at the reception. When the coats were checked in it was found that the receipt was handed over that contained an exclusion clause regarding the avoidance of the responsibility for the loss or damage of the coats and the things checked in along with it. After finishing the dinner when the check had come they realised that the wallet was kept in the coat that was checked in. When they went back to collect it in order to pay for the meal it was found that the wallet was missing from the coat. They want to claim the damages from the restaurant for the same. It may be determined that the receipt so handed over was provided after the contract was already entered into by the parties. Therefore, as the exclusion clause did not form the part of the contract it would not be enforceable making the restaurant liable for the loss so suffered by the couple.
Case 4: In the given situation the tenant had rented a place owned by the landlord. The minor defects at the premises were installed with improvements by the tenant. The tenant was promised that the rent would not be increased for the next five years. It was found that the tenant had died a year later. The person inheriting the premises decided to increase the rent. It was then brought to his attention to pay back the amount that was spent by the tenant on the improvement of the premises that resulted in the appreciation of the property. It can be determined that the under a tenancy agreement the tenant is required to be repaid for the amount so present in order to maintain the premises. Such a term is an implied term and is to be fulfilled by the landlord. Therefore, it may stated that the landlord is obligated to pay back for the amount remaining for the four years for which the possession is inherited.
2.3: Evaluate the effect of different terms in the given scenario
Case 5: In the given case study it is determined that the policy was to be acquired by the person for the purpose of theft or damages so caused to the car. It may determine that when the policy was being applied for the policy form was provided to the policyholder that contained some questions regarding the car. As the policy was being undertaken for the car the policy form forms an important part of the contract. The questions so presented under the contract were related to previous claims so made under the contract for the purpose of theft of the car in the last five years. It was determined that the questions so asked were not answered correctly and honestly. The claim had been made was not disclosed under the form when asked about it. This would mean that term had been breached and as it was an important terms it will be regarded as a condition. Therefore, the contract so entered into could be voided by the company for breaching an important aspect of the contract Poussard v Spiers.
Case 6: According to the facts of the case it is presented that the policy holder at the time of filling out the policy form was asked about the previous claims so made for the theft of the car in the last five years and the parts of the car being of original value. The policy holder had not given the honest answers and lied about the facts in the policy form. This would mean that the policy holder had misrepresented the important terms of the contract. The terms so misrepresented are conditions as they directly affect the status of the contract. Therefore, the company will have the right to void the contract abintio for not presenting the actual status.
3.1 Contrast liability in tort with contractual liability.
To develop a better understanding with the liability in tort with contractual liability a case can be discussed which a case of sale of goods is. In sale of goods two parties enters into a contract in which both the parties has to pay something of equal value to each other. The liability that arises from the situation that bounds both the parties for having the situation in common is tortuous liability. In a situation of breach of contract there are several liabilities that could incur these liabilities are, negligence, nuisance, vicarious, etc. (Richards, 2006). Under contract liability arises due when certain terms are not performed by the parties but under tort it arises when the harm is caused in term of business psychology, physical, or economical. If breach causes due to the non-performance of the duty or responsibility then that breach is enough for the rise of liability.
Distinguish between tortuous liability and contractual liability:
- Preexisting relationship between the parties forms the liability under the contract, on the other hand situation arising binds the parties involved for liability in liability under tort.
- Consideration is quantifiable in a contract, whereas in liability under tort it depends upon the situation occurred.
- Under the liability under contract factors like offer and acceptance are considered, whereas, in liability under tort remoteness of damage or causation are considered.
- Breach of contract does not require motive behind the breach but under liability under tort motive of breach should be presented.
- There are certain rights presented in the contract, violating these rights are termed as right of personam. There are certain rights presented in tort violation of those rights are termed as right in rem. For a specific person liability arises in contractual liability, on the other hand for general society liability arises in liability under tort (Morgan, 2011).
- Limited extent is presented in contractual liability whereas tort has unlimited liability.
3.2: Explain the nature of liability in negligence.
When the duty is avoided or not being performed then that is considered as negligence. From one’s existence this type of duty arises under the society. The breach that causes damage is considered as negligence. For example, hitting a pedestrian by a car driver will be termed as negligence, and this kind of activity is also applicable for the entire society. In the case of Donoghue v Stevenson there are certain factors that are laid down, which helps in determining the act of negligence. There should be a direct relationship between the damage so occurs and the act of negligence (Collins, 2008). It was stated that o tie necessary that while product is presented in the market all the aspects should be taken into consideration by the manufacturer , that the product that is being manufactured should not cause any damage to the direct or indirect customers. According to the law it is responsibility that the product manufactured by the manufacturer should be manufactured which should ensure that safety and security of the customers using that product. Such type of breach should be avoided by the manufacturer as such kind of breach could result in negligence of the manufacturer.
Discussion in this will be held in relation with remoteness of damage, causation, proximity and foreseability. Remoteness will take place if the damage so caused is due to the breach of duty and possibility in regular circumstances. Reason behind it is the direct relation of breach with the damage so caused. Proximity arises when the effect and damages arises within the reach of the situation arising with the breach (Giliker, 2010). Liability arising under such case will either arise in a form of gross liability or in a form of comparative liability. Sole person will be found responsible in gross liability and both the parties involved in the damage will be found responsible in comparative negligence.
3.3: Explain how a business can be vicariously liable.
Vicarious liability is the liability that is caused due to the act of other party. In this kind of liability breach occurred, occurs due to the other party by which damages occurs and the ultimate owner has to bear the losses. Most of the time vicarious liability occurs in the case if employer and the person working under the employer. In this situation works that are to be performed by the employer are delegated on the employees working under him. If in case any damage occurs by the employee while performing the duty then the person for which the worker is working will be found liable for the damage. It is necessary that the liability that has arisen from the damage should be related with the formal duties (Bell, 2013). Vicarious liability will occur only in case if the agreement is made between the employer and employee (Cooke, 2007). According to law it is necessary that the environment of the organization should be maintained according to the health and safety standards. Employer should ensure that all the equipment that can help in managing the emergency situation and that can help in maintaining the health and safety of the employees should be availed in the premises.
Vicarious liability occurs in several relationships which could be of a master and servant or can be of a partner and agent. Due to delegation of the work by the employer on the employee working under him vicarious liability occurs in such type of cases. The liability under the master-servant relationship is derived from the Salmond’s test. It defines that working nature of the servant of being for the purpose of the master for most part of the day. Therefore, the master is liable towards the servant. The agent and principal share the liability of vicarious nature because the agent is hired for the performance of a specific task which would be done only on behalf of the principal. Furthermore, as the partners share the profit and loss under a partnership the risks so associated as shared as well therefore, it creates a vicarious liability. (Vettori, 2007).
4.1: Apply the elements of the tort of negligence and the defences in the given business scenarios below:
Case 7: In the present situation it is determined that a person was suffering from the breathing problems and chest pains. When he reached the hospital it was told that the doctor is unavailable to perform the check up and thereby the nurse telephones the doctor regarding the issues. The doctor communicates to the nurse that the patient shall be prescribed with the over the counter medicines. The patient then returns home and it was found out that he had died the next day. The liability towards the doctor and the hospital is to be determined under the situation. On investigation it was found that the cause of the death was not the medicines but the toxic mould that had caused the pneumonia to him. This would mean that there was not relationship between the death and the medicines so prescribed. However, the doctor did not perform a check-up before providing the medicines. The doctor being a professional should have performed a check-up before prescribing the medicines as not performing would be considered as professional negligence under law of tort.
However, it has to be determined whether the liability for the hospital and the doctor exists. It can determine that the liability for the doctor and the hospital would exist but only to the extent of professional negligence for not performing a check-up. The but-for test for negligence may be derived under the present situation whereby the death so caused was not due to the negligence so undertaken but some other reason. This would mean that the hospital will be vicariously liable for the actions so undertaken by the doctor for the aspect of negligence business. Thereby, no liability arises for the death. (Giliker, 2010)
4.2: Apply the elements of vicarious liability in the given business situations below:
Case 8:In the given circumstances the employee of the company was asked to pick up a client from the airport in order to drive him back to the hotel. On his way to the airport he decided to stop over for a few drinks before he received the client. After receiving the client he drove back in the drunk state. It was derived that the car had been part of an accident due to which the car and the client were injured and suffered damages. The liability regarding the accident was to be derived from the accident so taking place. It is thereby stated that the accident so occurring was in the course of employment as the driver was performing within the scope of employment even if the duty was breached it wasn’t so grave and out of the scope of employments. Therefore, according to Rose v Plenty, the company would be vicariously liable for the damages and injuries so occurring in the case.
Case 9:In the given circumstances it may be derived that the vicarious liability may be for more than one employer at the same time. In this scenario the responsibility of Health and Safety standard was delegated to another company in order to keep the premises healthy. While loading and unloading planks the employee had tripped and fallen while injuring another employee present n the premises of the Supermarket. The Supermarket in turn determines that it would not be responsible as the same was not the duty as it was delegated to another company. While studying the case of Ready Mix Concrete (South East) V MPNI it can be determined that when an employee has more than one employer the employer having a direct control would be responsible for the damages. However, the damage so occurring was at the premise therefore, the Supermarket would be responsible. Also, the British Supermarket is the original employer and has the liability towards employee and the damages so occurring on the premises.
A contract has to be present in writing or verbal form between the parties. The relationship has to be defined accordingly in order to derive the enforceability of a contract. It may be entered into by two or more parties. The contract has to follow a standard including the elements of the contract. If the contract is not fulfilled then the damaged party may claim for a liability. A liability may be claimed for a wrong committed under tort as well. The two types of liabilities are differentiated in the given assignment. It is thereby derived that meaning and nature of the liabilities arising under law of tort. the case scenarios are solved with the help of these legislations.
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.
The present Unit 5 Various Elements and Aspects of Contract Law Assignment aims at studying the various elements and aspects that are considered under the two branches of law, We are posting units solutions so scholars can explore the our Assignment Help in UK and get review the quality of our work.