Unit 5 Aspects of Contract and Negligence for Business

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The aim of this unit is to provide learners with an understanding of aspects of the law of contract and tort and the skill to apply them, particularly in business situations.

Unit abstract

The unit introduces the law of contract, with a particular emphasis on the formation and operation of business contracts. Learners are encouraged to explore the content of these agreements and then develop skills relating to the practical application of business contracts, including offer, acceptance, intention, consideration and capacity. Relevant case law examples will be covered. Learners will consider when liability in contract arises, the nature of the obligations on both sides of the contract, and the availability of remedies when a contract is not fulfilled in accordance with its terms.Additionally, the unit will enable learners to understand how the law of tort differs from the law of contract and examine issues of liability in negligence relating to business and how to avoid it.

Learning outcomes

1 Understand the essential elements of a valid contract in a business context

  • Essential elements: offer and acceptance; intention to create legal relations; consideration; capacity; privity of contract (note vitiating factors are included in Unit 27: Further Aspects of Contract and Tort)
  • Types of contract: face to face; written; distance selling; impact
  • Types of terms: condition; warranty; innominate term; express; implied; exclusion clauses and their validity

2 Be able to apply the elements of a contract in business situations

  • Elements: application of relevant principles and case law to business scenarios
  • Specific terms: contents of standard form business contracts; analysis of express terms, implied terms and exclusion clauses in a given contract
  • Effect of terms: breach of condition, warranty and innominate terms; legality of exemption clauses; outline of remedies; damages

3 Understand principles of liability in negligence in business activities

  • Negligence: differences to contract; duty of care; breach of duty; damage – causation and remoteness of damage; personal injuries; damage to property; economic loss; occupier liability
  • Liability: employer’s liability; vicarious liability; health and safety issues

4 Be able to apply principles of liability in negligence in business situations

  • Negligence: application of the legal principles of negligence and relevant statutory and case law to business scenarios including: personal injuries, damage to property, economic loss, occupier liability; defences; contributory negligence; remedies


ANDREWS, N. (2011) Contract Law. Cambridge: Cambridge University Press.
DIGNAM, A. and LOWRY, J. (2012) Company Law. Oxford: Oxford University Press.
FRENCH, D., MAYSON, S. and RYAN, C. (2012) Company Law. Oxford: Oxford University Press.
HONEYBALL, S. (2012) Employment Law. Oxford: Oxford University Press.
PARTINGTON, M. (2013) Introduction to the English Legal System. Oxford: Oxford University Press.


New Law Journal
International Journal of Law in Context


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