Aspects of Contract Business Assignment Help

Introduction

If we go by this report, we can meticulously observe the conceptual application of law of tort and the law of contract. Hence, the report is at its attempt to justify the usefulness of both these laws. Further we will try to explain the elements of the law of tort and contract; this also comprises of the legal principles associated with the mentioned laws. Moreover, this is also a trial to differentiate between these two laws and further, resulting in a clear conclusion of the concept of negligence and  Even we will try to differentiate between the law of contract and law of tort and enlighten the concept of negligence and derivative liability aided by the case laws.

Task 1

P1 Impactful factors In Business Scenario: Effects on Contracts

P1.1Effects on contracts:  Usefulness of Essential elements

A valid contract can be defined as a legally enforceable agreement between multiple persons and there is an assurance or promise of a deed performed expecting a benefic return.  Following are the elements necessary to build up a contract that is valid: (Willes & Willes, 2012)

Offer: There should at least a couple of parties in a valid contract, where one is making an offer (offeror) and the other is accepting it (offeree). Thus, for a valid offer, the party making it must express his willingness to do or not to do something. For example, Charlie and John are two colleagues and if Charlie offers to John that he will sell his car to John for 5000 pounds, then this is an offer of sale.  (Willes & Willes, 2012)

Acceptance: if an offer is accepted without any further terms inflicted on it, it is the policy of acceptance. It can be done either verbally, or in written form. This can also be an action that clearly denotes one action as the eagerness to accept the offer. For example if John agrees to buy the car from Charlie than it is an acceptance of the offer of Charlie. (Willes & Willes, 2012)

Lawful Consideration: A worthy consideration is a must if you want a contract to be binding. You may assure or promise to do or lend something without any wants to be fulfilled in return, but it’s not something to be termed as ‘valid’. For example 5000 pounds for the car is the consideration for Charlie and car is consideration for John (Willes & Willes, 2012)

Legal relationship: parties to a contract must intend to constitute legal relationship. It means as soon as the contract is formed the parties are legally bound to perform it and if anyone of them fails to do so it would be result to violation of contract. For example: you may find that there is a commercial contract between Charlie & John from the given depiction; they are in a position that they are bound to perform or abide by the contract rules. (Willes & Willes, 2012)

Competency of parties: The parties involed in a particular agreement must be willing and competent. Such is a being from the age of majority and possesses a sound mind. Hence, he/she can never be disqualified from stepping up for a contract, as far the law or legal impications are concerned. Same is the case when both Charlie and John are adults and are mentally stable to enter into a contract. (Willes & Willes, 2012)

P1.2 discuss the impact of different types of contracts

Written contract: This is the contract that has been agreed upon between two or more persons in written form. This should comprise of all the factors of a valid contract. Moreover, each party All factors involved in the agreement is required to express their consent with their signature.

Verbal contract: This is the consent presented by the involved parties over an agreement orally (verbal communication). It is more of an informal kind of consent, although it holds almost equal importance as a written agreement. Legally, its value is not very high, hence, they are known as half or quasi contracts.

Distant selling contract: This is a contract that is conducted between a consumer and the supplier. This is performed under a regulated system or distant sales (also known as service provision scheme). The supplier makes sure that the contract is finally agreed upon with the visage of distance communication. He ensures the completion of the contract.

P1.3 discuss the terms in contract with reference to their meaning

Following are the formalities in terms of the formation of simple contracts:

Express terms: these are the obligations over the parties of the contact arising over the formation of the contract either in oral or written form.

Case law on express term: Rabin v Gerson Berger Association Ltd , (1986)

Implied terms: There certain terms which are not actually mentioned or imposed by the involved parties while signing the contract. These are imposed by the court, as they are considered to be quite important. They are known as implied terms.

Case law on implied terms: Rowland v Divall , (1923)

Exclusion terms: These are the terms that are included in the written contract. In this, the party claims not to be responsible for certain occurrences.

 Case law on exclusion term: Thornton v Shoe Lane Parking Ltd, (1971)

Condition: Condition terms are crucial that lends the power to a party to put a halt or end the contract on its violation. The party can even ask for damages.

Case law on condition: Poussard v Spiers , (1876)

Warranty: This is a minor term involved in the process of a contract. On its violation, a party can claim damages but have no right to diminish the contract.

 Case law on warranty: Bettini v Gye , (1876)

In nominate term: A contract can be classified as a condition or a warranty, both. This is an implied feature of a contract. It is decided on effect of the term of contract, or in intermediary term; this is also valid when the parties involved are not able to decide on certain terms, then the court is deemed to decide.

Case law on in nominate term: Hong Kong Fir shipping v Kawasaki Kisen Kaisha , (1962)

Task 2

P2 explain the elements of contract in connection with the business situations

P2.1 explain the elements of contract in connection with the business situations

Business situation 1

Facts: Miss Kaur, who was a collector of luxury watches and pen, sees a notice for the auction of Mount Blanc limited edition pens in Antiques news. Hence, she decided to carry out a journey of 264 kms to attend the auction; however, it gets cancelled. She spots a pen much similar to the limited edition pens at a shop. There, it was priced 1,050 pounds. The shop assistant, Harry was ready to sell it to Miss Kaur at a bargained price of 950 pounds, however, she would not pay more than 800 pounds for the same. To think over it, she took a short leave with Harry’s consent, during her lunch time. When she came back, she was really disappointed when she found that the pen had then been sold to someone else at 1000 pounds.

Issues: This gives rise to two issues, firstly whether Miss Kaur was in a eligible position to take action against the auctioneer and secondly, if she is legally correct to impose an action on Harry.

Legal solution:the first issue is whether an action lies against the auctioneer by Miss Kaur. Legally, auctions are not considered as offers, rather they are treated as an invitation to offer. It states that the host inviting the guest to attend the auction is not legally bound by it. Therefore in the present case, even if Mrs. Kaur had accepted the invitation, still the auctioneer is not bound to sell the pens to her and nor he is liable for the expenses Mrs. Kaur had spent over travelling. This concept was discussed in following case:

Payne v Cave, (1789): Generally, an auction may be considered as a treat rather than being an offer.

The second issue was whether an action lies against Harry by Mrs. Kaur. In this case, no action lies against Harry, as it was not a legal contract between Mrs. Kaur and Harry. As auction is treated as invitation rather than being an offer, no legal bounding arises in this, since, any acceptance is not made by either the host or the guest. Displayed goods are invitation to treat this concept is explained in Pharmaceutical Society of (Great Britain v. Boots, 1953)

Business situation 2

Facts: in September Charles bought a building so that it can be converted into a guest house and he wanted the guest house to be ready by 1 March, so Charles signed a contract with Murphy for converting his building into guest house, The price was fixed for an amount of 50,000 pounds out of which 20,000 pounds were paid in advance. Later on Murphy said that he would not complete the renovation unless Charles does not agrees to pay him 10,000 pounds extra and Charles agreed to this but, refused to make any additional payment.

Issues: Does any legal right arise against the promise of Charles by Murphy?

Legal solution: If we consider the legal implication of this case, we can deduce that Charles is not deemed to pay the additional amount of 10000 pounds to Murphy, as the agreement stated the agreed price to be 50,000 pounds without the mention of additional payments. This is supported by Stilk v. Myrick , (1809) that a person who is already obliged to do a work will not be entitled to claim for more amounts than was already assigned.

Business situation 3

Facts: Mia was a self-employed builder and his brother, Hakim had asked him to renovate the bathroom and a roof in his property with the promise of paying 2000 pounds for the same. He was also asked by Mia’s friend Jane to do some work on a payment of 1000 pounds. On the accomplishment of the task, he was refused to be paid for his work by both, Jane and Hakim by saying that this was an experience gaining work for him.

 Issues: Can Mia demand the money that had been promised by Jane and Hakim?

Legal solution: the presumption of the court is that in social relations, the agreements are not formed with legal intention, but this assumption can be removed if the facts permit the same. Similarly, in this case even if an oral agreement is concluded between relatives but the intention of making the agreement was commercial in nature and over the promise of consideration in return Mia had worked for Hakim and Jane. Similar facts are explained in Edwards v. Skyways, (1964) the court held that the contract was made in a business context, similarly in present case the agreement between Mia and Hakim and Mia and Jane were made in business context, therefore Mia is eligible to claim the deserved amount from both Hakim and Jane.

P2.2 examine in the law in terms of different contracts

(FPTECH, 2006)

Here we have chosen a technical service agreement of fP technologies that is referred as the supplier in the agreement and the other party will be the customer. Following are the terms of contract (FPTECH, 2006):

Express terms: If one goes by the above mentioned contract one can deduce that the expressed terms are given in the fourth paragraph with the heading, STANDARD TERMS AND CONDITIONS. In this, it is clearly mentioned that the customer gives his/her consent to the supplier’s Standard Terms and Conditions. Form 100 which is herein incorporated with reference to this Agreement. There are other express terms that explain the pricing services & payment are mentioned below thereafter. Along with this, ‘Contract Terms’ state that the contract will remain in force and will be valid for a period of 1 year. If the contract is not terminated by either of the parties 30 days from the date of renewal that too in writing, the contract is deemed to renew itself for another 1 year.

Implied terms: if ‘Technical Support Service Agreement’ is signed by a customer, then it implies that the customer is to be legally bound by the FORM 100 terms.

Warranty: warranty has not been made by the supplier, neither in express nor in implied form, with regard to the provided services.

Exclusion clause: The above mentioned contract says about exclusion terms in the paragraph with the heading LIMITATION OF LIABILITY. It says, “ In no event will the supplier be liable to customer or any other individual or entity connected with customer for any claim, loss, or damage or any kind or nature, whatsoever, arising out of or in connection with the performance of this agreement. Any interruption or loss of service or use of the software, or any files, data, or other direct, indirect, special, incidental, consequential, or loss or damage of any kind or nature resulting from the foregoing, and notwithstanding any failure of essential purpose of any limited remedy should not be assumed by the supplier.” (FPTECH, 2006).

It is a valid exclusion clause as it excludes both the parties from any kind of liability arising out of the agreement.

Express term: express terms are the obligations that may arise when two parties enter into a contract. This may be oral, or in written form as well. (INSITE LAW (INSITE LAW MAGAZINE, 2014)MAGAZINE, 2014).

Case law on express term: Goss v Lord Nugent, (1833)

Implied term: the terms atht are either implied in fact, or by law are known as implied terms. The term ‘implied by fact’ is a term that is assumed by court to be agreed by the involved parties. ‘Implied by law’ is a term that is imposed by the court in the involved parties irrespective of the concern that whether the perties would agree to it or not.

Case law on implied term: Niblett v Confectioner’s Materials Co Ltd, ( 1921)

Exclusion term: these are the terms which states that one party is not responsible for any liability arising out of the contract.

Case law on exclusion term: (spurling v. Bradshaw, 1956)

P2.3 examine the effect of different terms in given contracts using business scenario given below

Business situation 4

Facts: In this scenario, Miss Y had been assigned as a research assistant on a salary of 25,000 pounds by X. The agreement was for three years that was signed between X and Y. There were two clauses included in the agreement, firstly, according to clause 6, Miss Y needs to dress smartly, where trousers would not be accepted; the second clause states that the research assistant (Miss Y) needs to work for a duration of time, respective of the kind of assignment given to her. On first June, X had asked Y to provide some interpretative data analysis and statistics for a meeting to be held on 2^nd June, at 9 am. Y could not finish the assigned work even after working till midnight; hence, the next day, she reached the office on 7 o’ clock with the unfinished task. Moreover, she was wearing trousers the same day; X entered the office and spotted her breaching the code of conduct according to the signed agreement and she was dismissed in front of everyone.

Issues: Does Y have any legal right against her dismissal?

Legal solution: The present situation deals with the warranty and conditions. This is discussed below:

Condition: a condition is a very important term of a contract; if it is violated by one party then the other party gets the right to dismiss the contract. He can also claim damages regarding the breach made. (Pearson education limited, 2003)

Case law on condition: Poussard v. Spiers , (1876) in this case the employment contract was terminated on the basis of breach of condition (E-LAW RESOURCES, (n.d.)).

Warranty: This refers to the minor terms of a contract. Having less significance, it can not be said to be of centralized value to the content’s existence. Over the breach of a warranty, the party can claim damages, however, cannot end the contract completely.

Case law on warranty: Bettini v Gye , (1876) here the court held that employment cannot be terminated on the basis of breach of warranty term E-LAW RESOURCES, (n.d.)).

In nominate terms: it is an implied term of contract which can either be termed as condition or a warranty depending on the effect of the term on the contract. This if parties are not able to decide then the court will decide the same.

Case law on in nominate term: (Hong Kong Fir Shipping v. Kawasaki Kisen Kaisha , (1962) (E-LAW RESOURCES, (n.d.))(pearson education limited, 2003)

By referring to the above terms, clause 6 can be actually classified as a warranty term as it is not in direct reference to the work. Moreover, it has less significance as well. But, clause 7 is a condition that has been framed considering the nature of the work that is assigned to Miss Y. So, we can deduce that by wearing trousers in office, Y has only violated clause 6; in that case, she had reached office early, in order to complete her assigned task. Hence, in a way, she can claim damages for the dismissal, as her termination was completely valid. Since her dismissal in front of the office members has caused her humiliation, it is her very right to tak action against X, as there fairness was not maintained in her case.

Task 3

P3 examine the principles of liability in negligence in business activities

P3.1 examine the comparison between the liability in tort and contract

Contractual liability: Contracts are legal agreements made between persons or merchants. Here the liability arises over the breach of the contract by any parties. Parties freely give their will for the formation of the contract knowing the liability arising out of it. In a contract, the damages are liquidated in nature which means they can be calculated before the breach of the contact (Clarke, 2014)

Tortuous liability: tort law, whereas covers the situation where the party intentionally harmed or injured the other person. It includes those situations also where the harm is caused without intention, such as negligence claims or strict liability claims. In tort the damages are not of liquidated nature as they cannot be calculated before a tortuous liability arise (Clarke, 2014)

P3.2 explain the nature of liability in negligence

Negligence is a part of the law of tort. It can be stated in ordinary terms as avoiding or exclusion of an act that an ordinary man would do, in the course of prudence or something that a prudent man would not do. In civil relation terms, “Negligence is termed to be an inadvertent imperfection, in discharge of a legal duty, as immediately produces, in an ordinary situation, causes damage to another. In negligence the relationship is not contractual in nature rather it is made by the courts (a treatise on the law of negligence, 1874).”

The essential element in negligence is the duty of care which simply means that if a defendant’s act is dangerous than a reasonable care should be taken by keeping in view that no harm is caused.

The factors which should be taken care of are that :

1. Firstly, the harm should be able to be predicted reasonably.

2. Secondly, there should be some juxtaposition between the defendant and the plaintiff.

3. Thirdly, when duty is imposed over care on the defendant, it should be fair, reasonable, and just.

Relevant case law: (James McNaghten Paper Group Ltd v. Hicks Anderson and Co , (1991) ) (accaglobal, 2014)

P3.3 examine how a business can be vicariously liable

Even if any person has not done anything wrong but can be at times held responsible, according to the doctrine of vicarious liability. Such a responsibility can arise out of some special relationships i.e. employment relationships, family relationships or joint ventures. Respondent superior – when a superior is held responsible for the acts performed by their subordinate, or, in a wider sense, when he/she has the responsibility of any third party that had the “right, ability or duty to control” the activities of a violator. Relationship between a employer and an employee is generally common in vicarious liability. If there is some action performed during the tenure of employment, or linked or associated with an act (to the level when he/she can be considered performing the task), then the employer can be considered under the doctrine of vicarious liability. (casebriefs, 2014)

Case law on vicarious liability: Century Insurance v. Northern Ireland Road Transport Board , (1942)the employer is held liable by the court for the tort of his driver who resulted with a crime by lighting a petrol pump with a matchstick.

Task 4

P4 examine the principles of liability of negligence in business situations

P4.1 explain the elements of tort of negligence and defences in different business situations using the scenario 5 and 6 given below

Business situation 5

Facts: The damage was caused to a wharf by a ship from UK which was carrying oil over the sea. Accidentally, it spilled some amount of oil in the water; it got drifted to a wharf which was at a distance of 200 yards. More importantly, wielding equipment was being employed, which led to a spark that fell over a cotton piece floating over the spilled oil. This resulted into fire, causing heavy damage to the wharf.

Issues  Should the chatterers of the ship be responsible for the damages occurred to the wharf’s owner?

Legal solution: the present situation deals with negligence and for making a person to be held liable for negligence the duty of care towards the defendant should be tested first. If some predicted damage is suspected, the defendant is faulty for the damage, irrespective of the extent of the damage. Therefore in the present situation also the damage caused to the owner of the Wharf was not foreseeable by the owner of the ships, as it not reasonable for them to judge the duty of care towards the owner of Wharf. Hence the ship owners are not liable for negligence. This concept of remoteness was discussed in The Wagon Mound no 1 , (1961) it was held that the test is whether the damage is of a kind that was foreseeable.

Business situation 6

Facts: A person named Bell had been employed by Shell for the job of vehicle maintenance, who had only one eye. Normally, protective goggles were not offered to the employees. One day, a chip of metal went into Bell’s eye, leaving him blind.

 Issues: Can Bell claim damages from Shell?

Legal situation: Bell is liable for damages from Shell. This is because there is a breach of duty. One of an employer’s duties is to provide a safe environment to the employees. The employer should have provided eye protective glasses to the employer, considering the seriousness of the job. because The seriousness caused to Bell would have been greater than if the same would have been taken place with someone with two eyes. The duty is owned to the particular claimant not to a class of person of reasonable workers. Paris v Stepney , (1951) similar facts are held in this case.

P4.2 examine the elements of vicarious liability in given business situations given in business situations 7 and 8

Business situation 7

Facts: Alf was working in a care home as a warden and he was employed by Safe Care Homes, Alf has been accused of sexual offence against the boys that were under his care. The parents of the children were suing Safe Care Homes under vicarious liability.

Issues: Does the offence committed by Alf makes Safe Care Homes vicariously liable?

Legal situation: Bazley v Curry , (1999), in this case it was held that a non-profit organization may be held vicariously liable in tort law for sexual misconduct by one of its employees. Vicarious liability is generally appropriate where there is significant connection between the creation or enhancement of risk and the wrong that flows from the risk. In the present situation, because Alf was left alone for long periods of time with the boys and was placed by the foundation in a position of power over them, it can be said that there was a strong connection between what the employer was asking the employee to do and the wrongful act committed. The Safe Care Homes is therefore found vicariously liable for the act of Alf.

Business situation 8

Facts: Amos was a pump attendant under AB and sons garage and while he was on duty he had an argument with Mr. Alex Khan who was a customer and now Mr. Khan was going to sue both Amos and the AB and sons garage.

Issues: Does the offence committed by Amos makes AB & Sons company vicariously liable?

Legal situation: the present situation also deals with vicarious liability. Here the tort was so connected with the employment that it would be fair and just to hold the employers vicariously liable. An employer ought to be liable for a tort which can fairly be regarded as a reasonably incidental risk to the type of business being carried on. In the present situation also the act was conducted in the course of business, it was not an illegal act, the act was done by the employee, hence the employer i.e. AB & Sons co will be held vicariously liable for the tort done by the employee i.e. Amos. This is supported by Gravil v Carroll (2008)

Conclusion

In the present report, the significance of the law of contract and the law of tort in the business context has been tried to explain. This report enlightens the elements and principles related to the law of contract and the law of tort. We have also tried to differentiate between them and also explained the concept of negligence and vicarious liability with the help of different case Business laws, and legal doctrines.

Bibliography

1. Bazley v Curry ([1999] ) 2 SCR 534 .

2. accaglobal, 2014. KEY ASPECTS OF THE LAW OF CONTRACT AND THE TORT OF NEGLIGENCE. [Online] Available at: http://www.accaglobal.com/in/en/student/acca-qual-student-journey/qual-resource/acca-qualification/f4/technical-articles/key-aspects-of-the-law-of-contract-and-the-tort-of-negligence.html
[Accessed 17 october 2014].

3. Bettini v Gye ((1876)) QBD 183.

4. Bettini v Gye ((1876) ) 1 QBD 183.

5. casebriefs, 2014. vicarious liability. [Online] Available at: http://www.casebriefs.com/blog/law/torts/outline-torts-law/imputed-negligence/vicarious-liability/[Accessed 18 october 2014].

6. Century Insurance v. Northern Ireland Road Transport Board ( [1942]) AC 509.

7. Clarke, P., 2014. Contract and Tort Law. [Online] Available at: http://www.legalmatch.com/law-library/article/contract-and-tort-law.html
[Accessed 17 october 2014].

8. Edwards v. Skyways ([1964]) 1 WLR 349.

9. Goss v Lord Nugent ((1833)) 5 B & Ad 58.

10. Gravil v Carroll (2008) EWCA Civ 689 .

11. Great Britain v. Boots (1953) 1 QB 401.

12. Hong Kong Fir shipping v Kawasaki Kisen Kaisha ((1962)) 2 QB 26.

13. Hong Kong Fir Shipping v. Kawasaki Kisen Kaisha ((1962) ) 2 QB 26 .

14. insite law magazine, 2014. 6. Terms of the Contract. [Online] Available at: http://www.insitelawmagazine.com/ch7termsofcontract.htm[Accessed 17 october 2014].

15. James McNaghten Paper Group Ltd v. Hicks Anderson and Co ((1991) ) 1 AER 134.

16. Niblett v Confectioner’s Materials Co Ltd (( 1921)) 3 KB 387.

17. Paris v Stepney ([1951] ) AC 367.

Payne v Cave ((1789) ) 3 TR 148.

18. pearson education limited, 2003. Warranties, Conditions and Innominate Terms. [Online] Available at: ftp://ftp.awl.co.uk/Longacre/hpeonlinepublishing/johnmatthews/course_refresh/source_files/contract_law/course_units/u08_terms_of_contract/l06_warranties/warranties01.htm
[Accessed 17 october 2014].

19. Poussard v Spiers ((1876)) 1 QBD 410.

20. Poussard v. Spiers ((1876)) 1 QBD 410.

21. Rabin v Gerson Berger Association Ltd ((1986)) 1 WLR 526.

22. Rowland v Divall ((1923)) 2 KB 500.

23. spurling v. Bradshaw (1956) 1 WLR 461.

24. Stilk v. Myrick ((1809) ) EWHC KB J58.

25. The Wagon Mound no 1 ([1961] ) AC 388 .

26. Thornton v Shoe Lane Parking Ltd ([1971]) 2 QB 163.

27. Willes, J. A. & Willes, J. H., 2012. Contemporary Canadian Business Law. canada : McGraw-Hill Ryerson.