Aspects Of Contract And Negligence

Presently, the study focuses on defining the essential elements for entering or forming a valid contract. However, it will also focus on different types of contracts that parties may form as well as it will also focus on different terms existing in the contract that are required by the business parties to focus on so that they may easily perform the business practices. Furthermore, elements and different forms of contracts are also applied to the given case scenario. In addition to this, the report will also discuss the nature of negligence by the parties within the contractual aspect.

The essential elements, contract types and terms of a valid contract

Essential elements

A valid contract within the business context is characterized as a binding statement among two or more parties that may be legally enforced by the judicial system (Lawson, 2011). A valid contract must be in written form between two or more parties that mainly specify the terms and actions that have to be performed by both parties. Despite this, there are different elements that need to be focused on by the parties while entering into an agreement or contract. Different elements of the agreement are-

Offer and acceptance: One of the essential elements that propose an agreement is related to a valid offer and acceptance. For instance; if an offer is offered by one party to another party and the other party accepts that offer, then both parties abide by the agreement. An offer is defined as a proposal that has been given by one party to the other party so that they may complete action by performing the activity. On the other hand, acceptance is termed as a response that is provided by the other party in respect of an offer. Therefore, the acceptance of an offer must be unconditional (Friedman, 2011).

Intention to create a legal relationship: Another essential element within the agreement includes the intention of both the parties who are entering into an agreement. Both parties must have the intention to create a legal relationship by enabling fair and ethical practices. For instance; if the intention of both parties is not to create a legal relationship, then there will be no contract among the parties (Beale and et.al., 2010).

Competent parties: However, parties who are engaging in a valid contract must be competent enough so that they may enter into a valid contract. According to the law, any person or individual who is below 18 years old, with unsound mind or lunatic may not be valid to enter into a valid contract. A person of sound mind as well as an adult of above 18 years is eligible for entering into a contract and forming a contractual relationship.

Free Consent: Another significant element that is essential for a valid contract includes that there must be free consent of each and every party. Consent is defined as a situation where both parties must agree upon the related things in the identical meaning. Parties cannot enter into a valid contract if, the parties are evoked by fraud, mistake or misrepresentation (McKendrick, 2014).

Different types of contract

There are different forms of contract under which parties may form legal relationships as well as it is also enforceable by the law. For entering into a valid contract, parties may focus on different types of contracts that mainly include-

Written contract: One of the effective types of contracts within the business context is the written form of contract. Under a written contract, parties who are entering into an agreement are focused on forming a deed or statement that would clearly state the rights and duties of the parties that they would enact (Engler and Heyman, 2011). The advantage of enabling a written contract among the parties is that it may act as proof to the parties that they have entered into a contract and they are liable for performing activities which are mentioned within the contract.

Oral contract: Another type of contract that is commonly used in the business environment is an oral contract among the parties (Fried, 2015). This form of contract is highly suitable when parties of the contract are at a distance or are physically present at the same place. On the other hand, oral contracts can be made through telephonic conversation. The disadvantage of an oral contract is that it lacks the evidence of entering into a valid contract. However, an oral form of contract may not be advantageous in a situation where one party does fraud with the other party and the defended party has no right to sue them due to lack of evidence.

Bilateral contract: A bilateral contract is also considered an effective type of contract under which parties agree to the contract mutually dealing with their promises. Under a bilateral contract, both parties specify their duties as well as role so that they may perform their actions to meet or accomplish the goals of both parties (Elliot and Quinn, 2009). However, this type of contract is also termed as two-sided contract under which both parties mutually agree to perform their duties and responsibilities.

Unilateral contract: Another sort of contract includes a one-sided contract that is often termed as a unilateral contract. Under a unilateral contract, one party gives an offer but it is not necessary or required that the other party may accept the conditions that are offered by the offeree. An example of a unilateral contract includes that an individual advertises in the newspaper and magazine to provide financial reward to the party in the program who would return their missing products. Thus, an individual who has provided an offer to provide a reward is obliged to pay a certain amount if it is being returned (Horsey and Rackley, 2009).

Terms in a valid contract

A valid contract requires different terms and conditions in their written agreement so that parties may perform their duties according to terms and conditions. If the parties are failed to satisfy the terms and conditions of the contract then the aggrieved party is liable to claim for the damages and injuries. The different kinds of contractual terms are classified as follows-

Expressed terms are considered significant terms that are entered into a contract by the parties. These are the terms that are clearly directed and communicated mutually by the parties of the contract in oral as well as written form (McKendrick, 2008).

Conditions: Conditions are considered as expressed terms within the contract that are mutually agreed by the parties and need to be followed by them within the contract. Parties in the contract are required to fulfil the conditions and if in case parties are unable to meet the conditions and terms entered into the contract then the aggrieved party is liable to pay for the damages and compensate for the injuries (Peel and Treitel, 2007).

Warranties: another form of expressed terms includes warranties which are considered as ancillary terms that are offered by the one party to the other party in the contract. In the case, if a party is unable to provide warranties then the offered party is in the position to provide compensation and remedies.

Implied terms are also considered significant terms in the valid contract as these terms are enforced by the law and governmental authorities which is mandatory for all the parties who have been in the contract. The main purpose for which government officials enforce or impose the implied terms in the contract is to protect or defend the rights of parties from unethical practices and behaviour (Nielsen, 2010).

Negligence for Business

Negligence can be defined as a failure to take reasonable care by a person. That person is obliged to take reasonable care on account of other people in such situations where it is foreseeable that other people could be harmed by their actions or omissions. Further, it can also be defined as a situation where a particular person fails to obey a duty of care (Volokh, 2010). Moreover, the individual alone is not responsible for the injury caused but the failure of acting as a reasonable person gives rise to the damages. In a general format, when an individual acts in a careless manner and due to which injury has been caused by another person then under the legal principle of negligence the careless person would be legally liable for any harm which has resulted due to carelessness (Spindler, 2011). There are 4 key principles for negligence which are described as follows:

1. Duty of Care: This can be defined as the circumstances and relationships which have been recognized by the law. This gives rise to a legal duty to take reasonable care. If the person who is responsible for this duty fails to perform then he is liable for the resultant harm caused to another person (Booth, 2007). For this purpose, a liable person has to pay damages to the other party who got injured or suffered losses. In certain cases, there are exceptions to the duty of care such as when a person donates the food in good faith for charity purposes then that person is protected from legal liability. If anyone is caused harm while consuming that food then that person is not liable. Moreover, volunteers who are doing community work cannot be held responsible if they cause any damage to others. In that case, the community organization will be held liable.

2. Breach of Duty: When any person fails to take extra care they are required to take then this situation is considered to be a breach of duty of care. It happens when the individual does not meet the expectations and fails to perform what a reasonable person would be required to do. Moreover, this can be explained in a simpler term that breach of duty in negligence liability can be found when the defendant fails to meet the standard of care which is required by the law (Abn, 2009). When once it is established that the defendant who is at fault owed the duty of care then the claimant must also prove that the defendant was in breach of duty.

3. Causation: In order to prove causation in tort law it is required by the claimant to describe the loss they have suffered which has been caused by the defendant. Defendant is liable to pay the damages which have been caused by them in regards to the failure of duty of care.

4. Proximate: This principle is closely related to all three principles. The damage must be of a foreseeable type and it is required in order to relate the proximity. While making the claim of negligence, the claimant has to establish that the defendant owes them a duty of care and he has been injured or suffered damages because there was a breach of duty (Giliker, 2010). The claimant must also prove that the damages were not too remote.

Conclusion

After preparing this report of aspects of contract and negligence it can be concluded that it is very essential to include all the elements of a contract. If any of the elements is missing then the contract may become void. Certain cases have clearly explained the importance of all the essential elements. Under breach of contract law, the innocent party can claim damages. Further, tort liability is also included which describes that a person owes a reasonable duty of care against another party and if there is negligence then damages have to be paid to the claimant party. Moreover, the vicarious liability is also explained so that the employer's responsibility can be known.

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References

• Fletcher, G.P., 2008. Tort liability for human rights abuses. Bloomsbury Publishing.
• Fried, C., 2015. Contract as promise: A theory of contractual obligation. Oxford University Press.
• Friedman, L. M., 2011. Contract law in America: a social and economic case study. Quid Pro Books.
• Giliker, P., 2010. Vicarious liability in tort: a comparative perspective. Cambridge University Press.
• Lawson, R. G., 2011. Exclusion clauses and unfair contract terms. Sweet & Maxwell.

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