Unit 5 ACNB Contracts and Liabilities Assignment

Introduction

Unit 5 ACNB Contracts and Liabilities Assignment is prepared in concentration with various contracts and responsibilities attached with each contract. With the help of this report Peter Abraham will be provided the knowledge regarding various aspects of contract. Information related with breach of contracts will be provided like what are the conditions in which contracts can be termed as to be breached. Report will also include the information  management related with law of tort and law of contract. Remedies will be analyzed in this report and will be used to solve the given case studies.

Task 1

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.

There are certain elements of contract that are necessary to be known by Peter Abraham:

• Offer: For an specific terms party shows its willingness to enter into a contract that willingness is known as contract. Offer is a term that shall move from the offeror for which it has intent to enter into a contract. There are two type of offers that could be made by the offeror such as invitation to offer and counter offer. An offer shall be provided in such a manner that it could express and could clearly discuss the nature of contract. A negotiated is offer is known as counter offer (Adams, 2008). Places of the parties get exchanged in counter offer as offeror and offeree. Previous offers are rendered as invalid after each counter offer.
• Acceptance: There are certain terms presented in offer and if the offeree accepts those terms then it is regarded as acceptance. There are various modes available to conclude the offer like acceptance, rejection, withdrawal, counter offer and death. Acceptance shown by the offeree should be clear and precise in nature. Under the contract the rule of accepting the contract is waived off. Contract cannot be accepted by the party just merely by communicating it, it is necessary that a party should accept the contract through a conduct. Discussion held in the case of Carlill v Carbolic Smoke Ball Con (Andrews, 2011).
• Consideration: after bargaining the contract that is being entered into by the parties is known as consideration. In consideration there are certain set of promises takes place between both the parties related with the contract. Parties involved in the consideration receive certain benefits and suffer detriment. There are several things that are to be taken under consideration by the parties like past considerations should not be there, it should be sufficient and move from the promisee. It is necessary that a promisee should be a part of any previous consideration or the contractual duty (Richards, 2006). In such case the part of payment will not be termed as valid for the entire consideration amount.
• Intention: Purpose of the contract is shown by the intention to express the offer. Intention shows the legality of the given contract in given situation. Intention of the contract is differentiated between two aspects that are social contract and commercial contract through the legality and enforceability of the contract. Commercial contracts are enforceable in law whereby social contracts are not enforceable in law until and unless it is provided so in the contract (Collins, 2008).
• Capacity: Capability of the party to enter into the contract is termed as the capacity of that party to enter into the contract. There are various tests available to analyze the capacity of the parties; these tests are financial status of a person, mental capacity, and the age of a person. It is necessary that the parties entering into the contract should be financially sound, mentally sane, and fall in the majority of age. While entering into the contract the parties should remain in full awareness state, they should not be drunk or any medication should not be provided to them.

1.2: Discuss the impact of forming contracts

1. Face to Face Contracts: The contracts that are entered by both the parties when they are physically available are known as face to face contract. It is type of contract in which written agreement is not required; parties could enter into the contract just by verbal conversation only. Face to face contracts is a less time consuming process to enter into the contract. As face to face contracts are in verbal form therefore, it becomes hard for the party to establish it in the court of law (Finch, 2007). These types of contracts are time saving contracts.
2. Written Contracts: The contracts which are entered by the parties with the help of written agreement are known as written contract. It is not necessary that the parties entering in the written should face to face interaction before or after entering into the contract. Generally price of the contract are determined in the written contract which express the nature of it. In such type of contracts terms are expressed and they are enforceable in the court of law (Vettori, 2007).
3. Distance Selling Contract: This is a type of contract in which parties enters into the contract from different places. Meetings and discussions are not required in such type of contracts. Distance selling contracts could be formed from a fair distance between the parties. Online selling could be a good example for the distance selling contract. In online selling company provides the product on its website to which interested parties could accept the offer and could prefer to buy the product from the selling party. In this no discussion was made between the parties only advertisements were provided which influenced the person to buy the product (Giliker, 2010). It is necessary that the distance seller should provide the contract details like taxes applicable to the product, price of the product, description of the goods and services and the delivery methods of the company with the help of which product could be delivered to the party entered into the contract. Distance Selling Regulations 2000 are applicable on such type of contracts. To place the order it is also necessary that the selling party should provide acknowledgement receipts, and language choice which will help in the production of contract.

1.3: Give an analysis of the following terms in contract with reference to their meaning and effect as it may apply to Peter Abraham

1. Condition: There are several terms presented in the contract that helps in determining the nature of contract is known as condition. Any breach in performing the condition will lead to voiding the contract. Every contract have certain set of conditions which differs from the nature and purpose of the contract, these conditions are condition precedent, condition concurrent and condition subsequent (Cooke, 2007).
2. Warranty: Secondary natured terms related with the contract are known as warranty. Non performance of warranty will not affect the contract. Non managing performance of the warranty will not lead to revoke the contract. Restoration of the warranty can be done by claiming the damages, specific performance and injunction. There are various types of warranties which are applicable according to its nature like full warranty, life warranty, specific warranty, and the most commonly used warranty i.e. implied warranty (TAN, 2008).
3. Innominate Terms: In a contract there are several terms available that may or may not be regarded as condition or warranty these types of terms are known as innominate terms. These are the contracts which are classified by the effect that is caused by the non performance under the contract. In several contracts a condition may be termed as warranty and warranty may be termed as condition depending upon the effect caused due to non performance under the contract. Remedies therefore may be discussed based on the type of term that is breached (Morgan, 2011).
4. Exemption Clause: exemption clause are the clause that restricts the claims made by the party in case of occurrence of negligence. To enforce the exemption clause in the court of law it is necessary that it should be presented in a proper manner. Various aspects on which exemption clause are based on are strict and narrow interpretations, contra proferentem or fundamental breaches. To include exemptions clause it is necessary that the terms made between the parties should have signature, notice or previous dealings should be there. It is necessary to provide the opportunity to object the clause. Limitations availed in the exemption clause limits the remedies for the breach of contract.

Task 2

2.1: Apply the elements of contract in the given business scenarios below.

Case 1: In this case Carol was interested in buying a couch that was advertised for sale by the seller. Advertisement was posted in a newspaper. Therefore, advertisement provided in the newspaper will be regarded as the invitation to the offer but will not be termed as offer itself. Advertisement of a product in a newspaper means that a seller is willing to attract the offers from potential buyers so that they could purchase the product advertised. Invitation to offers are just intimations that the products are available for sale that will help in inviting the offer available on the basis of the terms mentioned in the advertisement regarding the price of that particular product. Prices provided would be negotiable at the hands of the seller (Giliker, 2010). Offeree present in the market can accept the offer or negotiate on the terms given in the invitation. Hence, mail sent by Carol will be termed as offer made by her. It is necessary that the acceptance should be presented by the seller for the offer made so that contract could be entered. According to the case of Carlill v Carbolic Smoke Ball Co. no contract has be entered into by the parties.

Case 2: This case is about Devi who wants a position in the field of cyber-security with a well known company named George Smith and Fogarty Inc. In this case Devi wants that he should get the position on the basis of his skills and did not want any interference of his dad as his dad was a well known person. Devi had given several rounds of interview and got hired in for the position. Offer for the hire was provided on 12^th of April. Not knowing the fact Devi’s father called Preston and offered a check of 150,000 Pounds so as to hire his son for the position. Therefore, consideration provided by Devi’s dad to George will be termed as contingent consideration for the event that has already taken place. Hence, this consideration will be termed as invalid. According to law offer made for the past consideration is termed as invalid due to which promise could not be enforced by George. Case held under Mills v Wyman (Vettori, 2007).

Read More: Unit 5 Contract Law and Negligence in Business Assignment

2.2: Apply the law on terms in the following contracts

Case 3: Case includes the information regarding a couple who has booked a table with a restaurant. At the time of entry in the restaurant coat was checked and a slip was provided by the restaurant having a clause mentioning restaurant will take responsibility of any valuable present in the coat. After some time man discovered that he had forgot his purse in the coat and went to have a check his coat. After checking the coat he discovered that it was not there in the coat and was stolen from it. Man argued with the restaurant and now he wants the claim from restaurant (Finch, 2007). According to the exclusion clause mentioned in the slip man do not has any right to claim as the clause restricts any such claims. In this case exclusion clause will be termed a valid clause and restaurant can use clause mention on the slip. Man has agreed to the terms at the time he had accepted the slip provided by the restaurant. Accepting the slip means man was aware about the exclusion clause made by restaurant. Any claim made by the man will not be considered as valid as restaurant does not have a core duty of protecting the valuables of the people coming over there and the possible event was not under the control of restaurant. Therefore such kind of duty can be excluded by mentioning them in the clause that makes it valid. Hence, restaurant will not be responsible for the theft occurred case discussed under L’Estrange v Graucob (Richards, 2006).

Case 4: This is a case having a discussion of tenant who had carried out a repair work so as to maintain the warehouse in a usable condition. As tenant had made the repair work therefore, landlord agreed with the tenant that he will not increase the rent of property fir next five years. After one year of the event landlord died and successor of the property increased the rent, after refusal by the tenant successor terminated the tenancy. With the effect of this situation tenant posted a claim for the repair work it had made in past to which new landlord refused to pay. Increase in the rent is charged due to the increase in the value of property due to repair work (Bell, 2013). According to the tenancy agreement it was the responsibility of landlord to carry out the repair work or compensate the tenant for the repair work it had made in past. It was the responsibility of tenant to provide the space to carry out the repair work. In this situation it could be said that the tenant should made the claim for the money spent for the repair work and it would be implied under a standard contract. The claim would be termed as valid as landlord would reap benefits from the repair for its whole life. Case held under Hutton and Warren.

2.3: Evaluate the effect of different terms in the given scenario.

Case 5: This case is regarding a policy holder who was asked to answer the question on the form by the policy company regarding the claim it has made for the theft of motor vehicle. Question was whether there were any claims made by the owner of motor vehicle in previous five years and answer provided by the policy holder was in No. after investigation of the matter policy company found that the policy holder had filed the claim for the theft of car in previous five years. These types of questions on the policy forms will be considered as condition. All the terms in the insurance policy were subjective to the motor vehicle therefore; these terms will be categorized as the important terms without which the purpose of contract will be lost. Hence, according to the case under Poussards v Spiers insurance company could void the contract (Adams, 2008).

Case 6: In this case policy holder denied for any modifications made in the motor vehicle and also denied for any claims made in previous five years. With the investigation it was found that there are several alternative parts that were fitted in the car and there were two claims made under the name of the car. It was found that the policy holder was are for one claim and was not having any idea for the second claim made regarding his car. In this case terms in the question may be regarded as that of replacements of the parts of the car would e breached but could not be used as sufficiently enough because replacements in the car can be made by the policy holder on its will. Therefore, in this case no breach could take place. But for the second term in which wife was aware of the claim which was applied but was rejected was not mentioned in the form could be termed as a case for misrepresentation. In such case policyholder may be said to have committed misrepresentation and may be said that he could claim the damages. According to the case held under Bissat v Wilkinson breaches made by the policy holder are not sufficient enough to void the contract (Vettori, 2007).

Task 3

3.1: Explain the similarities and differences of liability in tort with contractual liability using an example.

Law of tort and law of contract are the laws which are strict in nature. Under these liabilities arises with the acceptance of the responsibilities for the consideration. In both the aspects of law liabilities that will arise will have to be paid on the breach of the essential elements. Both the liabilities are different because the elements that are breached in both the liabilities are different. In both the situations the liability could arise by proving the breach occurred by the affected party. Some of the differences are as follows:

Basis	Contractual Liability	Tortuous Liability
Remedies	Remedies in contractual liability are rescission, restitution and restoration	Remedies in tortuous liability are claiming compensation.
Area	Area of liability in contractual liability is limited	Area of liability in tortuous liability is vast
Right	Right in personam is  a concerning right in contractual liability	Right in rem is a concerning right in tortuous liability
Motive	It is necessary to provide motive of breach in this	it is necessary to provide the motive of breach
Causation	Causes provided are termed as irrelevant	Causes provided are elemental
Damages	Against the consideration damages are quantifiable	It depends upon the situation and damages are decided by the court

3.2: Explain using suitable example how liability for negligence can arise and the conditions needed to be met for ac claimant to successfully prove negligence.

Obligation to pay introduced for the damage occurred under a situation is known as liability. If a person is indulge in the act of negligence in which duty of care is avoided then liability of negligence arises. Such type of duties is necessary to be undertaken so as to protect the general public from any vulnerabilities. For occurrence of the liability it is necessary that the duty of care existing with the person shall be breached and that breach shall harm the person and that harm could be classified as in terms of economic damage, physical damage or psychological damage (Morgan, 2011). If a person is doing a rash driving on the road then it is a breach of the duty of care but the liability would only arise if any person will get harmed due to the breach of duty.

There could be a direct or indirect liability towards the party which is affected as discussed under the case of Donoghue v Stevenson. It was discussed that the party claiming would only e entitled for the damage if either his rights has been breached directly or indirectly. According to the case instructions were provided to the manufacturers that they should ensure that the all the safety and security measures should be undertaken and people attached with the process should not get affected (TAN, 2008). There is threefold test provided that could help in classifying the tort of negligence in the case of Caparo Industries Plc. v Dickman UKHL 2:

• Proximity and forseeability: In case if wrongful act and the affect of that act would be found within the approachable areas then it will be termed as proximity.
• Cau?sation: It is necessary that the cause and its affect should have a direct relation with each other.
• Remoteness of damage: occurred damage should be sufficient enough so as to influence the damage so caused.

3.3: Explain what the vicarious liability means and how a business such as your organization can become vicariously liable giving example.

Vicarious liability is a responsibility of another party under a given situation. In vicarious liability, responsibilities arise from the delegation of authorities from the primary party to the secondary party. This kind of delegation should provide benefit to the primary party for the duty performed by secondary party. Vicarious liability occurs mostly in the case of employer and employee relation. In this term the performing party must get paid for the duty provided to him. It is necessary to ensure that the liability will arise in the case of the wrongful act has taken place while performing the duties assigned by the employer to employee. The liability will not arise in case the action performed out by the employees on his free will (Collins, 2008).

It is necessary that an employer should undertake all the steps which should protect its workers and the health standards of the organization. Employer should manage the safety and security and health measures according to the health and Safety at Work Act of 1974. En employer should ensure that the water and equipments used at the workplace should be availed according to the standard. A test for the responsibility for the liability was formulated under the case of Ready to Mix Concrete (South East) V MPNI (1968). Information was provided that if the employee works under more than one employer then the employer directly responsible for the work performed at that time will be said to be liable for the damaged caused during the performance of duties by employee (Richards, 2006).

Task 4

4.1: Apply the elements of the tort of negligence and defenses in the given business scenarios below:

Case 7: In the case it was discussed that the Doctor had prescribed over the counter medicines to the patient admitted due to chest pain and breathing problem. The patient was found dead due to pneumonia from the toxic mould. In this case a tort of negligence was found as the doctor of Goodmayes Hospital had not personally examined the patient which was his duty (Meyer, 2010). It is necessary for a doctor to examine the chest and breathing problem as these are the aspects which could cause heart attack. Therefore, in this case it could be said that doctor has neglected his professional duty and has committed professional negligence.

In this case But-for test was applied which is a case which is applied under medical profession negligence. With the test it was found that the doctor had committed the professional negligence but he was not entirely liable for the damage caused to the patient. It is because the there was no direct link between the cause and the effect on damage. In the case the patient was found dead due to pneumonia and not because of heart attack. As in this case doctor had not prescribed the medicines for pneumonia. Therefore, no liability would arise and hospital would only be responsible for the doctor for not checking the patient personally. Case held under Froom v Butcher (Finch, 2007).

4.2: Apply the elements of vicarious liability in given business situations below:

Case 8: In this case the driver was assigned a duty to pick up the client from the airport. After reaching the airport driver found that the flight has delayed from its time and will arrive after some time. Therefore, driver decided to have some drink.  After arrival of the client he drive back him, while driving back driver was completely drunk and has lost his conscious due to which they met with an accident in which car and client got damaged. In the investigation of the case it was found that the driver was drunk over the limits. Therefore driver was found responsible for neglecting the rules of driving as drunk and drive is against the rule of driving on the other hand company would be liable for the damages caused (Richards, 2006). Reason behind this is that driver was performing the duty which was provided to him by his employer and at the time performance of duty damages were occurred. Although company will not be responsible for the case of drink and drive as company has not allowed the driver to drink and drive the car. In this case breach of duty of care occurred for which company would be termed as liable for the actions of the driver. Case held under Lister v Hesley Hall Ltd.

Case 9: This case includes the discussion regarding the vicarious liability in which accident had occurred in the super market while loading the pallets into the truck. In this case safety and security measures were neglected by the employer. Although the health and safety requirements were outsourced to another company but as determined in previous question the employer which is directly related with the breach is responsible for any breach happens. Therefore supermarket will be liable for the accident held as it occurred in the premises of it. As damages were occurred during the performance of the official duty within the premises of business environment supermarket then the vicarious liability would be applicable to the supermarket. Case discussed under Ready Mix Concrete (South East) V MPNI (1968) (Meyer, 2010).

Conclusion

With the verification of various aspects and understanding developed with the help of the cases it could be concluded that non performance of the duties would lead to breach of contract. Breaches occurred could be compensated that is to be paid by the party causing breach. An understanding could be made that the law of tort and law of contracts are different and compensations are to be paid according to the nature of breach occurred. It can also be concluded that vicarious liability is the liability for which employer is termed to be responsible for every activity related with the safety and security of the workplace no matter with whose negligence the damage has occurred. If the damage occurs while performing the duty by the employee then employer will be liable for the damages occurred to the party.

References

Cases:

Carlill v Carbolic Smoke Ball Co.
Mills v Wyman
L’Estrange v Graucob
Hutton v Warren
Poussards v Spiers
Bisset v Wilkinson

Books:

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.

Journals:

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.

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