Aspects Of Contract And Negligence In Busines

Aspects Of Contract And Negligence In Business


Pearson BTEC Level 4/5 HNC/D Diploma Business – Unit 5 : Aspects of Contract and Negligence in Business

Aspects Of Contract And Negligence In Business


Unit Description

Aspects Of Contract And Negligence In Business

Introduction
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Aspects Of Contract And Negligence In Business

This Mont Rose College aspects of contract and negligence assignment report deals with the concept of law of contracts, the law of negligence and the law of tort. In this report we will discuss the different implications of law of contract which deals with the agreement between two parties who have the intention to make it legally binding in different cases and scenario, we will discuss the types of contract and essential elements of a contract. We will also see the effect of the breach of the terms of the contracts like condition and warranty. Next we will see the importance of law of tort which deals with civil wrongs and will discuss the law of negligence which puts legal duty of care and vicarious liability which makes the employer liable for wrongs of the employee. We will bring out the similarities mad difference between the law of contract and the law of tort.

Aspects Of Contract And Negligence In Business

TASK 1

1. Discuss the impact of different types of contracts (e.g. face to face, written, distance selling)

FACE-TO-FACE CONTRACT: are also known as verbal contracts where two parties agree to enter in a contract verbally, in this contract no paper is signed by the parties, which makes it difficult to be proved but it still can be proved if it was done in the presence of any third party(NOLO, 2014).

Case on this contract

(JOACHIM v. WELDON, 1962)-In this case the oral contract between the parties was held to be legally enforceable because the contract was cogent,clear and forcible as there was no doubt left on the terms of the contract.

WRITTEN CONTRACT: Those contract in which all the terms and conditions of a contract are mentioned in the contract in a written form and it has been signed by both the parties to a contract, the contract becomes binding after it has been signed (THE LAW HANDBOOK, 2013). Written contracts are like any sale of deed, or loan agreements, rent agreements are examples of written contracts.

DISTANCE SELLING CONTRACT: are those contracts which are concerned with goods and services between a supplier and a customer under distance sales provisions scheme which makes exclusive use of distance communication up to and includes the moment at which the contract is made (THE OFFICE OF FAIR TRADING, 2006). Examples of distance selling contract include online shopping site, ordering material from different state or country.

2. Explain the importance of the essential elements required for the formation of a valid contract.

ESSENTIAL ELEMENTS OF A VALID CONTRACT ARE:

OFFER: where one person puts forward a proposal to enter into a contract.

ACCEPTANCE: when the person to whom the offer was made, gives his consent to the offer and accept the terms of the contract.

CONSIDERATION: it is the bargain which one party gives to another in lieu of a promise.

INTENTION:It means that the party to a contract should have the intention that the agreement in which they are entering will be legally binding in nature.

CAPACITY:it means legal capacity a person who is an adult and who possess a sound mind can enter into a contract.

MINI CASE-A,in this casethe postal rule applies which was given in the case of Adams v Lindsell (1818) where it was decided that there was a valid contract between the parties as soon as the letter of acceptance was placed in the post box, so in the present case also there was a valid contract between Fiona and Arnold.

MINI CASE-B, this case deals with the concept of unilateral contracts where the offer or asks for an act from the offeree to show his acceptance of the offer, in a unilateral contract the contract is complete as soon as the offeree accepts the offer and gives his acceptance in the form of an act this was decided in the case of Carlill v. carbolic smoke balls(1893) and likewise in the present case the contract was an unilateral contract and as David has performed the act after seeing the advertisement Mrs. Smith cannot refuse to pay.

MINI CASE-C, this case deals with the concept of past consideration where a consideration is promised after the task has been completed, past consideration is not considered valid and enforceable as given in the case of Re McArdle(1951) where it was decided that past consideration is not a valid consideration, similary in the present case the promise of consideration was made after the task has been completed therefore it is not a valid consideration and Ted cannot claim for the payment of £50.

MINI CASE-D, this case deals with the topic of intention and both the parties did not had the intention to enter into a legally binding contract, as is given in the clause of contract which says that it is not a legal agreement but it is a honourable pledge, so in the present case the agreement is not enforceable but it is a legally valid contract where the order of the cars was given and it was accepted, so that part is enforceable but the whole contract is not, as was decided in a case with similar facts(Rose v Crompton Bros , 1925).

3. Analyse terms in contracts with reference to their meaning and effect in the mini-cases above.

MINI CASE E–This case deals with concept of trader puff, representation, conditions and warranty. To apply these terms we need to understand specific terms.

TRADER PUFF: It means an overstated praise of a product through advertisement, which is not considered as a true fact (COLLINS, 2014).

REPRESENTATION: It is a statement which is made by any one party of the two contracting parties at the time of making a contract or before the formation of the contract about some fact which is influential in bringing about the agreement (BLACK’S LAW DICTIONARY, (n.d.)).

CONDITIONS: It is the most important term in a contract and if it is breached the contract loses its value, therefore if it is breached then the other party which suffered loss because of the breach can terminate the contract and claim for damages(DRUKKER SOLICITORS, 2013).

WARRANTY: It is one of the less significant terms where it holds less importance in the contract and its breach will result in claim for damages that are mainly monetary in nature(THE LAW HANDBOOK, 2013).

Now in the MINI CASE-E

Trader puff would be the claim about lowest price ever in Britain where cars may be available with even lower prices but this ad encourages the customers to buy the cars, considering them as the cheapest, if this is breached then there is no breach and damages cannot be claimed.

Representation is when the salesman tell him that the car had only done 30,000 miles and it had only one owner, if this fact is not true than Paul can claim for breach of contract as was decided in the case of Dick Bentley Productions Ltd v Harold Smith Motors Ltd (1965) that the dealer was in a position to know the true facts and the statement amounted to a contractual term.

Condition in this case would be that the car is of the year 1994 and it is a Mondeo, if these facts are false then Paul can terminate the contract.

Warranty in this case warranty will include road fund tax, radio, stereo and a full tank of petrol and if any of these are not provided then Paul can claim for damages.

MINI CASE F

EXCLUSION CLAUSE: it a clause that restricts the right of remedy from the party that suffers a damage or injury due to the breach of contract by the other party(INSITE LAW MAGAZINE, 2014).

In nominate term: are those terms that are neither a warranty nor a condition, it is something in between both these terms and it is considered as a warranty or a condition according to the effect its breach causes (LAWMENTOR, 2014).

In the present case there is reference to two exclusion clauses, one in which the Fun park’s car parking has a notice that the “cars parked entirely at owner’s risk” which was obscured by overgrown shrubs, and secondly whem jim buys a ticket for family admission and it contains a clause at the back of the ticket that states that “the company will not be held liable for death or injury to visitors, howsoever caused.”

The first clause will not be valid as it was not incorporated in the contract as Jim was not able to see the exclusion clause due to overgrown shrubs and no notice about the clause was given to Jim when he entered the Fun park, as there was no contract between the company and Jim, the exclusion clause does not comes into effect, as to rely on exclusion clause one needs to prove that the party have entered into a contract and the exclusion term was accepted whether expressely or impliedly, this priciple was also given the leading case of (Olley v Marlborough , 1949).

The second clause is not a valid exclusion clause because to rely on the exclusion clause the party relying on it should make reasonabel efforts to bring into notice the exclusion clause especially if it excluded the party from all liability like death and injury, this was decided in the leading case of Thornton v Shoe Lane Parking Ltd (1971), where it was held that reasonable steps should have been taken by the parties to bring into notice an exclusion clause of such nature which excludes all the liabilities and also Unfair Terms in Consumer ContractsRegulations 1999 Sch 2, also prohibits exclusion clause which excluded death and injury caused by negligence.
TASK 2

1. CONTRAST LIABILITY IN TORT WITH CONTRACTUAL LIABILITY

The law of tort and the law of contract are two different fields of the private law where the law of tort is also known as the civil wrong.

Law of tort are for wrongs against individuals like defamation, assault and battery.

Tort provides the victim with compensation. Torts are mostly the creations of courts like the law of negligence, trespassing and nuisance.

In tort the relationship is formed by law and not by the parties themselves (MICHAEL, 2014).

The law of contract deals with agreements between two parties where the parties do an act or refrain from doing an act in exchange of a consideration which holds some value in the eyes of the law.

Breach of contract, this happens when there is violation of contractual obligation by one party and by failing to perform one’s own promise.

In law of contract both the parties themselves enter into an agreement which is legally binding on them.

If the contract is breached then the parties can terminate the whole contract and sue for damages and if it a breach of a small terms of a contract then the parties can only sue for damages (MICHAEL, 2014). (See more : BITE College Marketing Principles)

2. Explain the nature of liability in negligence and apply the elements of the tort of negligence and defences available.

THE NATURE OF LIABILITY IN LAW OF NEGLIGENCE

Negligence in law means breach of the legal duty of care which is the duty to protect the plaintiff against the risk of unreasonable harm.The duty of care is determined by the following:

The extent to which the conduct of the defendant was to affect plaintiff
Forseeability of harm to the plaintiff
The degree of surety that the plaintiff will suffer injury
The closeness or proximity of the correlation between the Defendant’s conduct and injuries suffered(MICHAEL, 2014).
CASE 1

The principle of negligence was first decided in the case of Donoghue v Stevenson (1932), where it was held that the manufactures of the ginger beer had a duty of care. This case also established the neighbour test which say that in law a person is required to take care of his neighbour and neighbour would imply the person who is in the close proximity of a person who would be affected by the act of defendant.

CASE 2

In the case of Mersey Docks and Harbour Board v Coggins & Griffiths (Liverpool) Ltd(1946) the control test wasused to see that who had the control over an employee, only then the responsibility of vicarious liability can be decided, and in this case the permanent employer was held liable as the temporary employer did not had control over the employee.

REMEDIES TO THE LIABILITY IN NEGLIGENCE

Contributory negligence– In this negligence the plaintiff is himself also responsible for the injury suffered as there was negligence on his part also, so this reduces the amount of the claim of damage.

Proximate cause- There should be Forseeability of the effect of the injury caused, which means that if the injury was caused due to a remote reason then the defendant will not be held liable.

Volenti non fit injuria-this maxim means that the person who himself has given consent to a danger cannot demand damages if he gets an injury after giving the consent like for example in football or cricket match the spectators are at a risk of getting injury but they cannot claim a relief if they get injured during the game.

3. Explain how a business can be vicariously liable and apply the elements of vicarious liability using relevant principles and case 2 above.

VICARIOUS LIABILITY: Is a tortuous liability in which the person holding the superior or higher position is held liable for the wrong done by the person who holds a lower position, the reason for this liability is that the superior is in control of the actions of the lower position person and the relationships of master-servant, principle-agent and employer-employee come under this liability.

CASES on vicarious liability

(Limpus v. London Genera Omnibus Co, 1862)- in this case the employer was held vicariously liable when the Bus drivers were racing even though it was prohibited and he caused a collision.
(century Insurance Co. v. Northern Ireland Road Transport, 1942)- In this case the delivery driver caused an explosion by lighting a cigarette while refuelling a petrol tanker and his employer was held liable
CASE 2

In the case of Mersey Docks and Harbour Board v Coggins & Griffiths (Liverpool) Ltd(1946) the control test wasused to see that who had the control over an employee, only then the responsibility of vicarious liability can be decided, and in this case the permanent employer was held liable as the temporary employer did not had control over the employee’s actions. (See all Mont Rose College Assignment)

 

REMEDIES TO THE VICARIOUS LIABILITY

Not in due course of employment: If the employee commits a wrong which is not in his due course of employment but something beyond the employment then the employer will not be held vicariously liable, as was given in the case of(Deatons v Flew , 1949).

Not in case of contractors:vicarious liability is only in the case of relationship of an employer and employee and the employer is not held liable for wrongs done by independent contractors as was decided in the case of (Sweeny v Boylan Nominees , 2006).

Frolic of his own:generally an employer is not held vicariously liable if the employee commits the tort in frolic of his own(Battistoni v. Thomas, 1932).

CONCLUSION

So we have seen that although the law of tort and the law of contract are very unique laws that are different in most aspects and similar in some aspects but they both have their own importance the law of tort and the law of contract are two different fields of the private law where the law of tort is also known as the civil wrong. The law of contract deals with agreements between two parties where the parties do an act or refrain from doing an act in exchange of a consideration which holds some value in the eyes of the law. The law of contract helps in establishing business relationships and the law of tort makes people aware about their legal duty of care towards the people in their close proximity. We have discussed different types of contracts and torts and also their applicability in different scenarios and cases.
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