ASPECTS OF CONTRACT AND NEGLIGENCE FOR BUSINESS

TASK 1:LO1

1. Essential elements required for forming a valid contract (AC 1.1)

As mentioned by Featherstone et al. (2015, p.50), a legal agreement between two parties enforced by law and accepted by two parties is called as contract. Every legal and valid contract includes elements determining the viability and the contract of organisation or two parties. Freddy can use the following below mentioned contract for forming the business along with various terms.

Offer: It is essential to have a contract which needs to be legalised by government and legal authority for the better fulfilment of the offer and the contract. Offers mean an invitation or a proposal by an individual to another to show prime willingness of entering a legally bonded contract (Smits, 2014, p.55). Freddy offered for the sale of the high definition TV for £145 through e commerce.

Acceptance: As inferred by Thomas and Wright (2016, p.67), a contract can be initiated only after the acceptance of the offer properly by one party to another. The acceptance depends upon consideration proposed by one party to another party. Therefore, there is a need for similarity between offer and acceptance without modification. Layla responded to the advertisement and presented to buy the high definition TV for £125

Consideration: As mentioned by Micklitz and Reich (2014, p.800), the consideration in an agreement is one of the most important aspect, as the performance of the parties should be based on the consideration. The consideration term marks the agreement to have something in return for the completion of the agreement. Freddy with no no other cjhoice in the offer, accepted the reply offer of Layla and decided to sell the product at £125.  

Intention: The term intention means that every party needs to have a common intention of fulfilling the agreement and maintaining the consideration of the agreement. Since, the agreement between the charitable factors includes love, bond, and affection, there needs to be an intention between two parties agreeing in one agreement. As per the contract, there were no ill intentions of Freddy and decided as he decided just to sell the product. 

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2. Identification and explanation of Types of contracts that may be entered in the UK by individuals and businesses (AC 1.2)

Written and Oral Contracts: As supported by Dowell et al. (2013, p.445), written contracts are agreements signed by two parties with mutual consent with signed papers for a better chance of providing evidence of the agreement.  The documents provided are duly signed by the parties with the consent of legal authorities. On the other hand, the oral contracts have no such documents in the agreement.  A verbal agreement has no documents to support the agreement in the future.

Business to Business contracts: Agreements between two commercial units or bodies in the society is called as business to business contract. The Business to business contracts are bound by law and generally deal with support of maintain the price and the quality of the product.

Business-to-consumer contracts: These contracts are placed between consumers and the seller of a product, where the seller agrees to sell the object and the consumer agrees will willing to put the proposal; depending on a satisfactory level of consideration.  In the above case scenario, Freddy and Layla were bided in a written contract as Freddy advertised, Layla accepted and the consideration was accepted by both Layla and Freddy via mail, which is in writing and can be used in case of proof.  

3. Different terms that are included in a valid contract (AC 1.3)

Implied terms: As supported by Turner (2014, p.78), the terms of the facts that are taken as default in making any of the contracts are viable. The implied terms refer to the values and the assumptions that are not recorded but are implied by the provider. The Court of Law can define implied terms in the contract between the tenant and the landlord.

Expressed terms:  As mentioned by Warren (2014, p.43), the terms that are included mare utually agreed upon by both parties constituting the agreement into a valid one. The obligation and the implication along with the ground rules are written in the contract with mutual consent. Consentand the conditions written are the primary terms used in the contracts.

Innominate terms: As supported by Norta et al. (2015, p.8), the terms that are not mentioned as warranties or guarantees are called the innominate clause. This cause was first described in the situation of Hong Kong Fir Shipping. The breach in contract with Innocent terms is judged by understanding the situation in which the innocent party is restrained from any grant is done or not.

Exclusion clause: As mentioned by Clarkson et al. (2014, p.56), the legal; terms that reducechance of bearing the risk of liability is called the exclusion clause. The exclusion clause is only applicable if the deed of greement includes the exclusion clause.  In the words of Kiss et al. (2015, p.2660), the exclusion clause needs to be well-informed beforehand for the proper applicability of the clause.

Task 2: LO2

1. Application of elements of contracts in the given business scenarios (AC 2.1, 2.2)

M3

In terms of the case study given, there has not been a proper form of contract because there has been a simple small negligence in the contract. In most general and elementary cases, there has been a seller and consumer contract where Hair 4 U proposed Bella UK in showing intention to buy a a product known as the miracle oil with proper consideration. The support of the contract provided by the organization was most common and had offer, acceptance in the elementary situation (Arrow and Lind, 2014, p.40). The elementary situation was successful as there the offer was offered by Bella UK and Hair 4 U accepted the offer marking the initiation of the offer. The third requirement which is consideration was also settledd as Hair 4 U agreed on the consideration of 10 boxes for 5. However, there was an intention that could be termed as negative as Bella UK said they would not be accountable for any effect on the hair.

Elements of contract in this given scenario:

Bella UK produces new products and to promote that specific product they have to follow specific elemenof contractacthattt deal with government policies rules regulations, agreements, proper understanding of market demand,cre creating relations, and many more. The inside element of contracts consists the factors like consideration, offer, competency and capacity, mutuality of obligation, and moreElementsts of contracts majorly consist of agreements between two entities and then further processing. According to a given scenario, it is clear that for launching a new product Bella UK must follow the process of dealing with the market trend and demand of customers as well.

Implied Terms:  There has been an implied term between Bella UK and Hair 4 U as they both agreed to ba etter understanding between them in buying one product and understanding the entire situation proposed by Bella UK. The Bella UK and Hair 4 U need to follow all consequences in the organization and contracts.

Expressed term: In terms of the expressed terms, the Bella UK and Hair 4 U have agreed on the quantity and the rate of shampoo.

Exclusion Clause:

Definition: The exclusion of clause helps in lowering the chance of acquiring risk and loss.

Timing: The exclusion clause needs to be included in forming the agreement between the two parties. The option if interested from beforehand the objective of the organization is set as a valid contract if any issue is raised against the viability of the contract.

Criteria of validity: The objective will be considered in proper relief; the issue is properly included at the beginning of the contract. However, as argued by Glover and Kusterer (2016, p.46), the exclusion clause is applicable only in terms of item and not in any contradiction to the law.

Legality in terms of the law: Exclusion as inserted by Bella UK needs to be in terms of the public policy. It must not be in disadvantage of hair 4 U. It is to be evidently supported that exclusion clause should be entered in the agreement with the prior notice.

The Bella UK will not be liable to any consequences and effect the shampoo and will also not be liable to pay any amount if the product delivered is not as per described.

3. Evaluation of the effect of different terms in given contracts (AC 2.3)

M2

Breach of condition: Breach of condition is regarded as the condition in the contract that has not been satisfied through which the defendant was obliged to make payment for the damages as well as the claimant was entitled towards repudiating the contract. As mentioned by Ayres and Schwartz (2014, p.545), a condition describing the situation of nonsatisfaction by Bella UK  then hHair4 U can claim the damages for the same amount and hw quality.  If the warranty of the perfect is not properly satisfied by Bella UK then the innocent party can claim for the product which is not received in time.   

Exclusion clause legality: In terms of the exclusion clause, Bella UK is not liable for paying any amount for not delivering the product according to the description. The exclusion clause as per the case study has the proper consent of both the parties, here Bella UK and Hair 4 U. Since, the clause was placed in the beginning and both the parties had mutual consent over the clause, there have been no confessional norms. Thus, Bella UK has effective relief. In case of breach of contract Hair,4 U can return the goods without making payment for the damages of the contract breach.   

Remedy outline: Remedy online means the mitigation form which can be accessed to make the issue situation all right (Drechsler et al. 2017, p.75). The actual situation may not be clarified but the innocent party can ask for the mitigation methods. Hair 4 U is eligible to repudiate the contract if the contract is not in terms of deeds implemented at the beginning of the contract. In addition to this, they can demand a special performance as well.

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Task 3: LO3

1. Contrasting liability in tort with contractual liability (AC 3.1)

Contractual liability:  This type of liability occurs in a situation where one of the parties does not fulfill the views and promises made to another.  As per the notions of Twigg-Flesner (2013, p.76), breaching and none performing situation can be termed as the failure of the party to meet contractual obligations as per the deed or contract signed.

Tort liability: This particular liability arises from a breach of duty which is fixed by law and negligent or tortuous act refer to the situation where any individual typically fail to undertake optimum duty of care during the performance of  contract.

Contrasting both tort liability and contractual liability, it could be stated that both come under the perspectives of civil law. According to the views of Gilson et al. (2013, p.170), damages that are incurred under both liabilities are supposed to be recovered on behalf of the party for whom the innocent party has suffered. The origin of the tortuous liability has been observed to form the act of negligence whereas the contractual liability has risen from non-fulfillment othe f the obligation of the signed contract.

Under the liability of tort, a relationship among parties is said to be imposed by any effective law without any ultimate consent of parties whereas referring to the contractual liability, parties entered into their mutual relationship on their willingness. As per the statements of Bakos et al. (2014, p.34), objective of the tortuous liability is to bring the claimant into the position when the act of tort was eventually not committed by the defendant or the innocent party. Under the notions of contractual liability, if the obligations are fulfilled by the specific party supporting acts of tort, the objective of this specific kind of liability lies in bringing the claimant into the position due to the cause of damages to the party. Referring to tort liability, un-liquidated damages have the probability to take place whereas, under contractual liability, liquidated damages occur very frequently.

2. Explaining the nature of liability in negligence (AC 3.2)

D1

Liability from a legal perspective meaning

In the views of Morgan (2015, p.120), liability could be defined as the obligation that might arise through an unjustified and unreasonable acts byae particular party accidentally or deliberately. It is regarded as the comprehensive legal term which describes a specific situation by being actually or potentially subject to the lawful compulsion.

Negligence meaning

On the other hand, negligence could be considered to be the situation of not achieving success in taking care of something. It is referred to as an act which does not go according to behavioral standards which are established by the law for protecting the public against unreasonable or unjustifiable rrisksconcerned with harm or damage.

Liability in negligence

As per the suggestions of VerSteeg (2015, p.73), claiming liability under the negligence that follows principles is supposed to be satisfied. This could be illustrated through the case of Donoghue v Stevenson n [1932] AC 562. The element of ‘duty of care could be understood through the demonstration of the case while elaborating element of negligence.

Duty of care: it could be stated that the plaintiff is supposed to prove that the defendant possesses a duty to justifiable and reasonable care of actions. Relating to the case of Donoghue v Stevenson, when the plaintiff, Donoghue visited the cafe, she ordered cream along with ginger beer. The beer turned out to be harmful since a decomposed snail emerged from the beer and she claimed the Stevenson to be completely liable for such a discrepancy in his action. Hence, to avoid the negligence factor, duty of care must be present to the tortuous action.

• Breach of duty: The defendant needs to breach the duty through failure to confirm the standard needed for conduct. In the present case decomposed snail within the drink of the plaintiff demonstrates a breach of duty.
• Remote damages: Damages has to be reasonable in accordance with the negligence of claimant. Because of act of Stevenson, Donoghue might has expressed mental trauma. Therefore injury was  reasonable towards claiming for damages.
• Causation: The primary reason related with the injury needs to be negligent act of plaintiff. In the present case the major reason relates with negligence of defendant therefore claim was successful and therefore damages needs to be paid by Stevenson.  
• Foreseeability: The damages towards the claimant need to be foreseeable from the act that is the negligence of the defendant. Otherwise, the claimant would not be entitled to claim damages in case of injury.

Nature of liability in negligence mainly includes that way of outcomes and that results in violation of the law or injury to others as well. Negligence mainly considerss several factors like Tort negligence, criminal negligenceand , defense against negligence. This factor directly affect the nature of liability like when a person is charged with a crime, so in that case criminal negligence is quite difficult to prove the specific crime as well.

3. Explaining how a business can be vicariously liable (AC 3.3)

The origin of vicarious liability is from the fact that any innocent party is held liable for any kind of tortuous act. As per the observations of Aguir et al. (2014, p.585), those obligations are imposed by law as a result of the influential relationship as the liable party is in the position of controlling the act of the party which had committed a mistake. Thus, it could be stated that as a result of the negligence, the liable party is charged with committing the tort and that particular individual is held vicariously liable for such a sincere mistake. Any negligence caused on behalf of a party amongst the two in any contract are deed which would be held responsible for causing any act of tort which makes the party vicariously liable who performs the tortuous act.

As per the opinions of Ding (2014, p.90), the party committing the actions of torts would be obliged to undertake complete liability for causing any harm or damage to the other party. If being vicariously liable, any party rejects undertaking the liability of causing the damage or harm, and then sincere actions are supposed to be taken against the offending party. Referring to the case study, Bob is vicariously liable to undertake complete liability of 13-year 13-year-old boy, named Matt due to the injury that had been caused to him. Hence, justifying the above case, it could be stated that Norfolk Farms could be held vicariously liable since, due to Bob's negligence, Matt has been injured which was completely unfair and an act of tort as well.

Task 4: LO4

1. Application of the elements of the tort of negligence and defenses in different business situations (AC 4.1)

Referring to the case scenario, it could be evidently observed that a tort of negligence had occurred with Brad through Charles as he informed wrong about the client Albert who had turned out to be a fraud. The elements of tort of negligence involve breach of duty, property damage and contributory negligence.

M1

Breach of duty: Breach of duty could be stated as any mis-happening that is not supposed to occuduringgle the duration of a contract. As suggested by Morgan (2015, p.121), violating any rules and regulations and breaking up a contract without meeting the contractual terms would be even considered a breach of duty. In the mentioned case study, it could be stated that Charles is obliged to pay compensation to Brad for this loss since his negligence has resulted in the action of a tort committed by Albert.  Since Brad has faced serious issues and a breach of duty due to the negligence shown by Charles; hence it could be referred to as a breach of duty.

Damage to the Property: Property damages could be regarded as the specific injury caused to the real and personal property of the opposite party through wilful destruction. Due to the damage caused to Brad as a result of the wrong information provided by Charles, he would be completely obliged to pay off the compensation charges by paying off the flat's net worth since Brad had been suffering through it due to such an act of negligence. Contributory negligence: As per the norms of tort of negligence, the defendant would not be liable to pay for the compensation since; the party had been digressed by the offendant party. If in any case, the defendant would pay for the compensation, it would not be liable to claim for the compensation charges. 

2. Applying elements of vicarious liability in a given business situation (AC 4.2)

D3

• a) Yes, Macho Men plc is liable for such offenses made by Graham but if on the grounds of such an act, Graham is prohibited from working in the pub as a doorman then the company might not be vicariously liable for paying for the damage made to the customer. Despite Graham's intentions of Graham being pure and vital, the company is obliged to pay for the charges due to Graham's negligent act. As per vicarious liability, the acts of the employee are liable to the employer in the course of employment. Thus Macho men plc would be liable for the acts committed by Graham.
• b) Carla is completely liable for damages made to the car due to her negligence based on which, she could be charged to pay off the compensation. Links Ltd. could not be held responsible since Carla used the car at the time of her week off. Hence, the company would not be responsible for compensation. Carla would be completely responsible for it.

In this given case scenario, it is clear that Carla is responsible for all damage to George's car. Hence, in the case of vicarious liability, it refers to the employer's liability and it is directly related to the higher management of the company so that according to their rules and policy they take required action against the employee. This vicarious liability also provides training managers about legal lawful acts in the workplace as well. In addition to this, there is an effective approach available to solve that specific problem like Macho Men plc and Carla's carcass. Moreover, convergent, lateral, and creative thinking helps to improve the thought process in the right direction and manage the process of generating new ideas and creative approaches as well. Creative thinking, in this case,statess that Macho men think creatively and find ssolutionsby inspecting all matters and thentakinge the right actions. Lateral thinking is also similar to creative thinking and has a direct impact on the ability to make decisions.

CONCLUSION

Through the study, it could be concluded that a valid contract contains a few essential elements such as offer, acceptance, mutual consent, consideration, and intention. Referring to the study, it could be evaluated that the elements of a valid contract justify the validity and reliability of the contract. It could be eventually deduced that a significant distinction exists between the tort liability and the contractual liability. There are a few particular elements of the tort of negligence that are applicable in various situations of business and a business could be stated as vicariously liable under certain terms and conditions. The terms of a contract must be read through before signing up or accepting any contract which might be implied terms, express terms, innominate term terms, or clauses. 

References

• Aguirre, I., Burns, N., Mansi, S.A. and Wald, J.K., (2014). Liability protection, director compensation, and incentives. Journal of Financial Intermediation, 23(4), pp.570-589.
• Arrow, K.J. and Lind, R.C., (2014). Uncertainty and the evaluation of public investment decisions. Journal of Natural Resources Policy Research, 6(1), pp.29-44.
• Ayres, I. and Schwartz, A., (2014). The no-reading problem in consumer contract law. Stan. L. Rev., 66, p.545.
• Bakos, Y., Marotta-Wurgler, F. and Trossen, D.R., (2014). Does anyone read the fine print? Consumer attention to standard-form contracts. The Journal of Legal Studies, 43(1), pp.1-35.
• Clarkson, K., Miller, R. and Cross, F., (2014). Business Law: Texts and Cases. Nelson Education.
• Ding, C., (2014). Development of Employer's Vicarious Liability: A Chinese Perspective. Journal of European Tort Law, 5(1), pp.67-97.
• Dowell, D., Heffernan, T. and Morrison, M., (2013). Trust formation at the growth stage of a business-to-business relationship: A qualitative investigation. Qualitative Market Research: An International Journal, 16(4), pp.436-451.
• Drechsler, M., Johst, K. and Wätzold, F., (2017). The cost-effective length of contracts for payments to compensate land owners for biodiversity conservation measures. Biological Conservation, 207, pp.72-79.
• Featherstone, R.M., Dryden, D.M., Foisy, M., Guise, J.M., Mitchell, M.D., Paynter, R.A., Robinson, K.A., Umscheid, C.A. and Hartling, L., (2015). Advancing knowledge of rapid reviews: an analysis of results, conclusions, and recommendations from published review articles examining rapid reviews. Systematic reviews, 4(1), p.50.

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