Unit 5 Aspects of Contract and Negligence Assignment

INTRODUCTION

In the present report we are going to discuss the law of contracts where the law of contracts deal with agreements between two parties which agree to be legally bound by and its different types and application in the present case scenarios. We will also discuss the law of tort which is also known as civil wrong which only protects one person from the legal injury caused due to negligence on the part of the other person and the law of negligence and the different types of tort and their importance in the present four case studies. We will also try to bring out the differences between the law of contract and the law of tort.

ASSIGNMENT 1

Scenario 1

Importance of the essential elements required for the formation of a valid contract

The law of contracts deal with agreements between two parties which agree to be legally bound by. There are certain elements that need to be present to make a contract a legally valid contract. They are as following:

• Offer: is actually a proposal from one person the offeror who is the one who makes the proposal to the offeree the one to whom the offer is made, to enter into an agreement based on some specific terms.
• Acceptance: happens when the offeree gives his consent to enter into a contract based on the terms of the offeror.
• Consideration: it is something which is given in exchange of the promise; it is some kind of a benefit which has some value in the eyes of the law.
• Meeting of the mind: this means that the party to a contract must agree with the terms of the contract for business in the same sense and they must agree to the same thing.
• Intention to create legal relationship: this means that both the parties to the contract must have the intention that they will be bound by the contract legally and if the terms are breached then the terms would be enforceable on them by law, therefore if the parties to the contract do not have the intention then the parties to the contract will not be bound by it legally, this is the reason that generally the social and domestic contracts are not binding legally (E-LAW RESOURCES, (n.d.)).
• Capacity: this means that there are some group that cannot enter into a contract because they do not have the legal capacity to enter into a contract which means that those people who are below the age of 18 years and those who have unsound mind, are intoxicated or drunk cannot enter into a valid contract (IN-BRIEF, (n.d.)).

Impact of different types of contract

• FACE TO FACE CONTRACT: are those contracts in which the parties agree to the terms of the agreement verbally only. In this contract both the parties to the contract are physically present and they decide all the terms of the contract face to face and orally. Face to face contracts are difficult to prove therefore they have less impact in law.
• WRITTEN CONTRACT: are those contracts in which the terms of the contract are written on a paper especially on standard contract forms and both the parties have knowledge of the terms and when they sign it then it becomes binding on them. Written contracts are easy to prove and their impact is completely valid in the eyes of the law.
• DISTANT SELLING CONTRACT: the contracts that are made between the consumer and the seller when they are present physically in front of each other instead they both are at a distant like in the case of online shopping the seller and the consumer do not come face to face, those contracts are known as distant selling contracts and these are legally valid and protected under the Consumer Protection (Distant selling) Regulations 2000 (PINSENT MASONS, 2010).

Terms in contracts with reference to their meaning and effect

• Condition: is the most important term of the contract and it is actually the core of the contract and it is the basis for the contract so much so that if it is breached then the parties  cannot complete the contract. Therefore when a condition is breached then the other party that suffered loss due to the breach will have the option to terminate the contract and also sue for the damages suffered due to the breach.
• Warranty: it is a small term in the contract which is basically a written guarantee about a product or a service and its breach does not has much effect on the existence of the contract, therefore if it is breached then the party that suffered loss due to the breach can claim for damages.
• Innominate term: there are certain terms that are not defined as a condition or a warranty by the parties to the contract, but are defined by the court depending upon the effect of the breach and this was first established in the landmark case of Hongkong Fir Shipping Co. Ltd. V Kawasaki Kisen Kaisha Ltd(1962) (HEINZE, Rechtsanwalt Yves, 2008).

Is Sam entitled to refuse to sell Bob the book?

In this case Bob goes to Sam’s shop and takes a book and goes to the counter but Sam refuses to sell the book as he had already sold it to Carl. In this scenario Sam can refuse to sell the book to Bob because display in a shop is an invitation to treat which means that it is open for negotiations but it is not an offer therefore the seller is not bound to sell the product to the customer as was given in the leading case of Pharmaceutical Society of Great Britain v Boots (1953), therefore Sam is entitled to refuse to sell Bob the book.

Scenario 2

Are the council entitled to rely on the clause?

For the exclusion clause to be valid it is required that the exclusion clause must be:
“Incorporated in the contract, the exclusion clause must cover the situation that is at present and the exclusion clause must not be fair under the Unfair Contract Terms Act 1977” (INSITE LAW MAGAZINE, 2014)

No the council is not entitled to rely on the exclusion clause as Barry has taken the ticket as a receipt for the chair and that exclusion clause was not even explained to him before he could take the chair, also the exclusion clause was not incorporated in the contract because the ticket was not an offer as was also decided in a case with similar facts, the case of Chappleton v. Barry (1940).

In the present case the offer by the council was the notice which had stated that “chairs are for hire for 50p per hour”
Barry accepted the offer and the money which was paid by him that is 50p was the consideration for the chairs and the contract was complete there after that the exclusion clause was written on the ticket which was not incorporated in the contract as the contract was complete before the exclusion clause was inserted in the ticket as the ticket was just a receipt.

Elements of contract in given business scenarios

Condition: is the most important term in a contract and if it is breached then the party can terminate the contract

Warranty: it is a small term in the contract which if breached will only result in claim for damages.

Innominate term: it is a term which is not predefined as a warranty or a term but which is decided as a warranty or a condition depending on the effect of the breach and the parties can terminate the contract or claim for damages depending upon the effect of the breach.

Law on terms in different contracts

• Express terms: those terms that are clearly incorporated in a contract, like express terms in a rent agreement.
• Implied terms: those terms that are assumed to be a part of a contract even when they are not clearly mentioned in a contract.
• Exclusion terms: are those terms that included in a contract to exclude or restrict the liability of a party rising due to breach of the contract.

Effect of different terms in given contracts

In the given contract, the exclusion clause was incorporated in the contract as the ticket was not an offer, therefore the council cannot rely on the exclusion term and they are bound to be liable for the damage caused to Barry this was also held in a similar case of Chappleton v. Barry (1940).

Scenario 3

Contrast between liabilities in tort and contractual liability

The law of tort: Is a law which is also known as civil wrong which only protects one person from the legal injury caused due to negligence on the part of the other person. In tort one person is supposed to show duty of care towards another person especially if that person is indulging in some work of dangerous nature.

• In law of tort the damages are unliquidated whereas in law of contract in business the damages are liquidated.
• In tort the parties generally do not have any previous relationship and the relationship is created by the courts.
• In tort the liability arises when there is a severe damage caused by the acts of the defendant to the plaintiff and this liability is fixed by the courts.
• The law of contract: It a law that protects the rights of people who enter into a legal agreement in lieu of a valid consideration.
• In contract the parties have a previous relationship as they enter the contract therefore they are in contractual relationship.
• In contract the liability arises when there is a breach of the terms of the contract which were expressed or implied on the parties to the contract.
• In law of tort relationship is established by the court by the breach of duty of care on the other hand in the law of contract the relationship is decided by the agreement entered by the parties (STANDLER, Ronald B., 2002).

Nature of liability in negligence

In negligence law it is required that the people should act in a careful manner so that there is no injury to the other person and when the negligent act has caused an injury to the other person then the law requires that the person who has suffered injury must be compensated. There are some elements that must be present to fix the liability under negligence and they are as following:

• “A duty of care which was owed by the defendant to the plaintiff,
• A breach of the specified duty of care, 
• An actual relation relationship between the conduct of the defendant and the harm that resulted,
• Proximate cause which means that the harm must be reasonably foreseeable and avoidable by the defendant,
• The injury or damage of legal nature that resulted from the conduct of the defendant” (THOMSON REUTERS, 2014)
• When all the above elements are present in a scenario only then a person will be held negligently liable.

How can a business be vicariously liable?

When an employee injures another person when they are in their course of their employment then the employer could be liable under vicarious liability which means that the employer will have to pay for the damage caused instead of the employee and this liability is call vicarious liability (THOMSON REUTERS, 2014).

There are some defences to vicarious liability and they are as following:

• The person that caused the harm or injury was not an employee at the time when the harm was caused or when the person was an independent contractor,
• The person was the employee when the harm was caused but the harm did not occur during the course of the employment (THOMSON REUTERS, 2014)

To prove the vicarious liability the following factors are required to be seen:

• “Firstly it is required to be seen that the person who caused the injury must be an employee as the employer is not liable vicariously for the injury caused by an independent contractor,
• Secondly the harm that was caused must have occurred during the course of the employment which means that the employee must have an implied or expressed authority of the employer when the harm was caused” (THOMSON REUTERS, 2014)  

Is Brian entitled to claim the reward?

In the present case the advertisement by Adam was an offer made to the world but when the person has made an offer he has the option to withdraw the offer before accepted and in case the acceptance is by conduct then the offer can be withdrawn before the act or conduct is completed and in the present case the offer was withdrawn before Brain had completed the act therefore Brain cannot claim the reward from Adam as this was a unilateral contract as offer made to the world are known as unilateral contract which was held in the case “(Carlill v Carbolic Smoke Ball Co., (1893)”.  

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