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Aspects of Contracts and Negligence for Business

Different types of Contracts & their Impact

INTRODUCTION

In order to formulate a valid contract among the parties government enforce different laws and regulation that need to be abide by parties (Blum, 2007). In case if parties are not following the rules and regulations that are abide by the government then parties are not in the position to formulate the valid contract. Presently, the report focuses on different case scenarios that will support in understanding the essential elements that are required in the business to formulate a valid contract. In addition to this, report will also highlight the principles of liability in negligence in business activities.

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TASK 1

1.1 Essential elements for the formation of contract and their importance

For the constitution of valid and enforceable written agreement there are various aspects as well as elements that are mandatory to be satisfied that is-

Offer- Offer is consider as proposal of commitment that is provided by party to other. It must be specific and achievable to execute. However accordant with the case of Pharmaceutical Society of Great Britain v Boots, invitation to treat does not have legal status of offer because it is merely a way of showing intention to create contractual relationship (Elements of Law of Contracts, 2012).

Acceptance- It is consent given by the party to whom offer was made. It must not be supported by significant modification or condition else it will consider as counter offer instead of acceptance.

On the other hand, as per the case scenario invitation to treat is different from the offer as offer that is accepted by the parties will results in biding contract on the other hand, invitation to treat in the scenario is that offer is not been accepted (Cross and Miller, 2011).

1.2 The main types of contracts and their impact

Face to face contract

This kind of contract is mainly selected by the individual or business to achieve the day to day requirement and activities. This type of contract is merely formed through verbal communication (Giliker, 2010). Thus, all the parties in face to face contract is physically present while discussing or negotiating the contractual terms. The impact of face to face contract is that parties quickly respond to the offer provided by the party that results in taking quick decisions.

Written contract

This is almost formal agreement that is commonly used by business enterprise. Under this type of contract business prepares the written deed and agreement that define the specific condition and terms that must be performed by the agreeing parties (Haarala and et.al., 2010). In addition to this, in the situation if party has not delivered the satisfactory performance then the party is liable to pay damages and remedies to aggrieved party.

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1.3 Apply various elements of contracts

From the above scenario, there are various elements of a contracts that is there is offer provided by Bill to Cathy and the valid acceptance of the offer by Cathy. However, in return Bill has provided counter offer that he would accept offer in £90000. but Cathy has not replied to the offer provided by Bill.

Thus, from the above situation it can be consider that the contract between the Bill and Cathy is not valid because first Bill has offer to Cathy but she counter offer it by another terms (Hodgson and Lewthwaite, 2001). Thus, the first offer provide by Bill has been revoked and it is not being considered as valid contract.

TASK 2

Case Scenario,

The case scenario states that opera singer Joyce DiDonoto entered into an contract that states that she will perform for 3 months for the reputed hall company. But she become ill before the opening night and was unable to perform for the four days. Thus, company replaces the opera singer. Afterwards, she enters into the contract for the another company and become ill and missed the rehearsal. Thus, again company replaces the signer with another and Joyce sued for the breach of contract.

Another case state express and implied terms that is parties entered into an agreement hwere Scammell supply van for £286 on hire purchase for the 2 years and Ouston was to trade in his olf van £100. with the certain disagreement Scammel refuses to supply the old van. On the other hand another case state that claimant has planted corn and barely on the field. Before the field was harvested he was terminated from the field. Thus, the claimant has propose bill to defendant for their services and cost of seeds spent on the farm. Therefore defendant refuses to pay as nothing was stated in the tenancy agreement.

2.1 Terms on contracts their meaning and impact of such terms reference to the case above

There are different terms that are imposed within the contract so that parties to the contract must fulfill the terms to render adequate performance (Nysten-Haarala, Lee and Lehto, 2010). Basically there are two terms within the contract that is-

Expressed terms- These are considered as those terms on which parties to the contract mutually agrees upon and parties are required to perform activities accordant with the impose terms in the written agreement. The expressed terms mainly include condition, warranties as well as Innominate terms.

Implied terms- These are the terms that are impose by the court of law or legislation that need to be abide by the parties who are agreeing to formulate the valid contract (Palmer, 2014). The implied terms are not expressly stated they are inserted by the customers.

2.2 The effect of expressed and implied terms using the above case

From assessing the above cases there were expressed and implied terms in the contract that is Scammel has entered into the contract for supplying the van to Ouston thus, due to disagreement Scammel refuse to supply van. Thus, it has been clearly stated that both the parties have entered into the contract.

On the other hand, there were implied terms entered into the tenancy agreement by the customs and court of law that is claimant is being eligible to claim for their services that they renders on the farm by planting corn and Barley seeds in the field (Sweet and Schneier, 2012).

TASK 3

Case Scenario

As per the case scenario Albert wishes to rent flat from Brad and has provided all the accountant's detail. Brad has provided the information to Charles with reference to Albert's financial position. However, Charles got confused Albert with the other client and has provided positive review regarding their financial position. As, in the situation Albert was heavily indebted. On the statement provided by Charles, Brad has rented his flat to Albert. After sometimes he escaped by making arrear.

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3.1 Applying elements of tort of negligence and possible defences from different cases

From the above statement Brad is in the position to sue Charles for their neglectful misstatement. As, accountant has recommended Albert as tenant by mistaken with the other client (Appleman, Appleman and Holmes, 2014). However, its the duty of Charles to take care regarding their duties that he must review the financial position of Albert so that landlord can take effective decisions. Therefore, the careless attitude results in breach of duty. There are following defenses that support the defendant not to provide damages for any problem that is-

1.Volenti non fit injuria- It is situation where applicant by their own is in the situation that results in arising risk of harm.
2.Contributory negligence- This defense is applicable in the situation where parties contributes to the neglectful action (Collins, 2003).
3.Ex trupi causa- This defense states that negligent action performed by tortfeasor is justified in nature.
3.1 Contrast nature of liability in tort and contract

Reason for liability

The contractual liability arises when the performance of parties are not accordant with the contractual agreement. The nature of Tort liability arises when the duty is not performed by the parties and results in causing injury to any of the party.

Decisions

Under contractual liability all the decisions are taken on the basis of reviewing contractual agreement and terms (Ramanathan, 2014). In tort liability the decisions are taken by the court through reviewing the injury that is is caused to the party.

3.2 Nature of liability in negligence with reference of Donoghuw v Stevenson 1932

Liability is termed as social control that is enforced by the court in the condition where party has not rendered the adequate performance accordant to the contractual terms that results in occurring injury or harm to the innocent parties (Scott, 2007). On the other hand, negligence is being defined as misconduct or wrong doing under which parties are unable to take care regarding their duties and outcome in injury. In order to understand the nature of liability in negligence the case of Donghue v Stevenson [1932] AC 562 is being referred. Under the nature of liability there are different principles that is-

Duty of care: The foremost principle is that individual while performing their duty must take care so that it may not results in any kind of injury (Spindler, 2011). As per the case precedents of Donghue v Stevenson, Donoghue went to cafe with friend and have ordered ice-cream with beer. After completing the half beer she poured rest of the beer and find decomposed snail emerging out of the beer. Thus, in such situation Stevenson manufacturer of beer must take care regarding their activities while producing beer to avoid the negligence.

Breach of duty: Another principle is breach of duty under which party fails to meet their duty and results in causing injury to the party. As per the case of Donghue v Stevenson decompose snail from the beer represent that Stevenson has breaches their duty (Volokh, 2010).

Causation: This principle of negligence states that the key reason for the harm or injury must be the neglectful or wrong activities performed by the party. With reference to the case of Donghue v Stevenson the injury occurred by the in taking the beer therefore the Stevenson is duty-bound to pay for the injury.

Forseeability: This principle states that the occurred damages must be predictable from the activities that are performed by the tortfeasor.

TASK 4

Case scenario,

1. Bill a local milkman has engaged 14 year boy with him to deliver the milk. Bill has told the boy that they could keep the secret with themselves that the boy works for Bill in delivering the milk. XYZ dairies become aware of hiring 14 year old boy but have not done anythings. As, Bill was delivering milk his careless driving has injured the boy.

2. The owner of vintage vehicles museum has asked his friend to drove Vintage bus to Barnstable where he was taking part in the bus rally. Friend drove the car negligently and result in damaging the car.

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4.1 Discuss whether Bill is liable for negligence and if XYZ dairies can be held vicariously liable

From the above case scenario, yes XYZ dairies is held vicariously liable in the situation as they was aware that Bill has hired the under age boy in delivering the milk and they have not been taken any action regarding the act (Vicarious Liability, 2013). On the hand, Bill is also liable for the negligence action as he has hire a 14 year boy that is illegal in the eye of law.

As per the case scenario, friend who drove the vintage care was not employed at the Vintage Vehicles Museums thus, in such situation owner who has allowed the friend to drove the car is liable for paying the damages. By hiring the friend to rove the car they establish the relationship of principal and agent thus, the owner is liable for the damages to the vintage car.

CONCLUSION

The aforementioned report has clearly concluded that for formulating the valid contract it is essential for the parties to focus on various elements that support them in formulating valid contractual agreement in the eyer of law. The report has also concluded that there are different among the nature of contractual liability with the tort liability.

REFERENCES

  • Blum, A. B., 2007. Contracts: Examples & Explanations. Aspen Publishers.
  • Collins, H., 2003.The law of contract. Cambridge University Press.
  • Giliker, P., 2010. Vicarious liability in tort. Cambridge University Press.
  • Hodgson, J. and Lewthwaite, J., 2001. Law of Torts. Blackstone
  • Ramanathan, T., 2014. Law as a Tool to Promote Healthcare Safety. Clinical Governance: An International Journal. 19 (2).
  • Scott, M.D., 2007. Tort liability for vendors of insecure software: Has the time finally come. Md. L. Rev., 67, p.425.
  • Spindler, J.C., 2011. Vicarious liability for bad corporate governance: Are we wrong about 10b-5?. American law and economics review. pp. 026.
  • Sweet, J. and Schneier, M. 2012.Legal aspects of architecture, engineering and the construction process. Cengage Learning.
  • Volokh, E., 2010. Tort Liability and the Original Meaning of the Freedom of Speech, Press, and Petition. Iowa Law Review. pp. 10-15.
 

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