How to Understand Vicarious Liability in Contracts

In this report, the different aspects of contract and negligence will be studied concerning different case studies. In this report, learning will be shown regarding the essential elements needed for the development of a valid contract (Miles, Fleming and McKinney, 2010). Thereafter, different terms used in the contract will be discussed. Furthermore, the similarities and differences of liability in tort with contractual liability will be discussed. Thereafter, a discussion regarding vicarious liability in a company and its elements will be provided. The nature of liability in negligence will be explained.

Task 1

Case scenario

From the provided case scenario, it has been identified that Peter Abraham is looking to set up as self employed building contract. Due to limited knowledge regarding contractual obligation and development of contract he is threatened regarding legal consequence. In the present section, learning will be shown regarding the elements of contract that must be focussed upon by Peter Abraham.

1.1 Importance of essential elements which has to be present to form a valid contract

The contract can be reasoned as valid only when it includes all the necessary components it (Zoll, 2012). There are broadly 4 necessary elements which Peter Abraham requires to regard while developing a contract. These elements are represented as follows:

• Offer: An Offer can be defined willing but conditional promise made by one party,, that is the offerer,, with the purpose to develop a valid and legally enforceable contract. The offer can be provided through different mediums like face-to-face, through telecommunication, via formal letter, telegram, etc. The component can be effectively elaborated with the lawsuit of Harvey v Facey [1893] UKPC 1. In the presented scenario, Peter Abraham can provide or be provided by the offer from suppliers, buyers and different organisations, etc. (Olander and Norrman, 2012).
• Acceptance: With respect to developing a legally enforceable contract, it is essential for the offeree to provide valid acceptance within the provided time limit. In a presented case, Peter Abraham can develop the contract only when he takes the offer provided by the supplier for furnishing raw material (Andrews, 2015). Moreover, Peter Abraham provides an offer to the buyers that period valid contract can only be developed if the customer accepts within a reasonable time frame. This can be further understood with the lawsuit of Entorres v Miles Far East [1955] 2 QB 327
• Consideration: It is reasoned as something of worth provided by both parties to a contract that provokes them to agree to exchange mutual performance. A contract is founded on the exchange of promises, and all parties to a contract must get a fair advantage out of it and undergo the harm if not fulfilled. In a presented case scenario, the consideration in the contract will be the value charged against the offerings provided to the buyers and the cost paid to the provider during the buying of various components and inputs (Hayre, 2015). The case of Thomas v Thomas (1842) 2 QB 851 can be regarded as support for the understanding of the consideration element.
• Capacity of Party: It is another element for the valid contract, which is important to develop a legally enforceable contract. To develop a binding contract, it is essential to have capable parties (Klass, 2010). It refers to that the parties must be mentally sane, must not be minors a etc. The lunatic, drunkard, etc., are also refrained from developing a valid contract (Four Essential Elements of a Contract, 2015). In the present case, Peter Abraham must check that customers or suppliers who will be participating in the contract must have normal mental capacity, legal age and not intoxicated while entering into the contract (McKendrick, 2015).

Get an Extra 5% OFF On Your Order in Our App

Scan the QR code with your mobile to unlock an exclusive offer!

Download App Now

1.2 Discussing the impact of forming a contract by different means

Peter Abraham can use different mediums to enter into a valid contract with respective parties, like buyers, suppliers, workers, etc. However, it is significant for Peter to have a proper understanding of the consequences of such a violation on development and the violation of contract.(Milman, 2009). The discussion regarding which is provided as follows:

• Face-to-face Contract: It is a kind of contract where parties are physically present while entering into a contractual arrangement. In the provided case, Peter Abraham can develop a face-to-face contract with customers where their needs and preferences can be known. Thereafter, direct negotiation regarding the terms and conditions of the contract can be done (Aust, 2013). The main requirement of a face-to-face contract is that it demands the physical presence of both parties while developing the contract. However, in case of failure of contract, parties may face issues due to a lack of availability of evidence.
• Written contract: It is kind of contract which is formed after penning the terms and conditions of the contract on the written material and these papers are authenticated by the signature of parties participating in the contract. In the current case, Peter Can enter into written contract (Chen-Wishart, 2012). It is feasible option as in case of breach, the written document can be represented as evidence to the court of law.
• Distance selling: It is a kind of contract which is developed by parties which are separated due to geographical barriers. Therefore, parties to a contract are not physically present during the time of the development of the contract. The terms and conditions can be thus discussed through telecommunication, telegraph, video conferencing, etc (Sidgwick, 2012). Such as in the current case, Peter Abraham can use a distance selling contract to enter into a legal relationship with the customer with the aid of telephone, etc. The limitation of this method is that due to communication failure, the terms and conditions can be misinterpreted, leading to non-fulfilment (Habermas,2015).

1.3 Analysis of terms in the contract concerning their meaning and effect

The contractual term can be defined as any condition forming part of the contract. Every term gives rise to a contractual duty, breach of which can lead to legal proceedings. There are varied terms that are included in agreements developed by parties. Such as:

• Conditions: It can be reasoned as the leading term of the contract, and it is at the heart of a contract by developing a kind of base of the deed. In case the conditions are not fulfilled by the individual, then the innocent party is eligible to breach the contract and can demand damages for the casualty (Strong, 2014). In the provided case, in the course of entry into a contract with the providers of input, the main term can be the supply of 50 tons of raw material, which must be presented within 15 days. In case the provider fails to provide the input, then there is a violation of the conditions. Therefore, Peter Abraham can end the contract and also ask for compensation for the loss which he has suffered.
• Warranties: They are the secondary term of the contract and are not main to the contract. In the case of a violation of warranty, the innocent party is likely to demand damages for the same and cannot reject the entire contract. Such as failure to provide input in the stated quantity and time frame (Wigmore, 2012). For instance, if the provider sends 25 tons of material after 15 days, then it is a breach of warranties, and Peter can demand damages.
• Innominate Terms: They are neither conditions nor warranties. Hence, they perform as in-between terms in the contract. The innominate terms were introduced in the case of Hong Kong Fir Shipping. In the case of violation of the innominate term, it is being identified that the innocent party is disadvantaged of the entire performance or not (Milsom, 2014). The impact of the innominate term depends upon the consequences of its breach on the party.
• Exclusion Clause: it is another term that is used in the contract then it restrict the obligation of a party to prevent the negative outcomes of the failure of the contract (Hillman, 2012). For example, Peter Abraham can use the exclusion clause while getting into a contract with the employees that during a construction mishap may happen, and for the same, Peter will not be liable. Nevertheless, it is the obligation of Peter to render proper training before placing them in employment.

Task 2

2.1 Applying the elements of contract in the provided case scenario

CASE 1

Facts of the case

In the provided scenario, it has been ascertained that Carol student apartment was unfurnished. She contacted Gumtree a online entity with ad stating sale of good leather couch for £600. the advertisement was supported by photo and contact information. Carol through email stated that it want to buy the couch.

Findings and conclusion

From the above case, the online ad by the company can be regarded as an offer, while the email of Carol can be referred to as acceptance of the offer. In addition to this aspect, £600 can be termed as consideration at which both the part agree to buy and sell the couch. The case scenario does not show that the parties to the contract are suffering from mental incapacity or do not have legal age. Thus, it can be stated that they have the legal capacity to enter into a contract. Overall, in the present case, all the essential elements of to contract are present. Hence, it can be said that the contract between Carol and Gumtree can be legally enforced (Dobson, 2015). From the case, it has been identified that the contract was unilateral as well as distance selling. Such as, in the case of Carlill v Carbolic Smoke Ball Company 1893 1 QB 256.

CASE 2

Facts of the case

From the provided scenario, it has been ascertained that Preston's son Devi was looking for a cybersecurity post in the IT company named George Smith and Fogarty Inc. The company decided to give the job to Devi and issued an offer letter on 12 April 2015. Perston was worried about the career of Devi and mailed a letter on 13 April to George containing a promise to pay £150,000 if they appoint on. The company decided to enforce the contract.

Findings and conclusion

Concluding the case, it can be stated that this contract cannot be legally enforced as it is not valid. The contract is formed with illegal intention as the father of Devi is bribing the management to stimulate them to appoint his son. Hence, an offer composed of £150000 is not legal and the sum cannot be regarded as valid consideration (Curtin, 2014). The case of Peterson and George Smith and Fogarty Inc. can be supported by law lawsuit of Re McArdle (1951) Ch 669 ,Court of Appeal.

2.2 Applying the law on terms in the given cases

CASE 3

Facts of the case

According to the provided case, it has been identified that a couple reserved a table in the famous restaurant in London. On entrance man handed over his overcoat with a wallet containing £500. In return porter gave a slip on the back of which exclusion clause stating that all the valuable items must be removed from the jacket pocket as the restaurant is not responsible for their loss. After taking the meal while clearing the payment,  the couple noticed that the wallet was not there. Further, they asked the restaurant owner to bear the loss. In return, the proprietor of the restaurant refused, stating that they are not responsible based on the exclusion clause. It further means a contractual provision disclaiming liability for a specific event.

Findings and conclusion

In the present case, the exclusion clause transcribed on the receipt cannot be regarded as an exclusion clause. According to British law, the exclusion clause can be incorporated into a contract if it is by notice, signature or a previous reason of the transaction. In the current case, the couple was not aware of the exclusion clause on the back of the receipt. It is further supported by the lawsuit of Chapleton v Barry, where the judgment was provided that receipts and tickets are created after the development of the contract (McKendrick,2011). Hence, they are not a component of the contract and the clauses written behind this are invalid. Therefore,  a man can claim damages from the owner of the restaurant.

CASE 4

Facts of the case:

In the provided case, it has been stated that Aaron rented a warehouse from Zehphra. The warehouse was not used for a long time and demanded repair. Aaron modified the warehouse, and returned, Zehphra promised that it would not increase the rent for the next 5 years. The worth of the property increased in value partly due to the modifications made by Aaron. On the death of Zehphra property was inherited by Yeti, and after that, she raised the rent. The tenancy agreement was terminated. Aaron submitted a bill claiming compensation for the expenditure incurred by it. Yeti's new owner denied paying compensation,, saying it was not part of the tenancy agreement.

Findings and conclusion

According to English law, the landlord is not eligible to pay compensation to the party who has rented the property and made modifications to the rented property (Trosborg, 2015). Aaron is not liable for causing damages as it modified the property for its own convenience. Further, this case is based on the case of Hutton v Warren [1836] EWHC Exch J61.

2.3 Evaluate the impact of different terms provided in the case

CASE 5

Facts of the case:

As per the provided case, a holder of a policy applied for motor insurance. The policy asked a question stating does anyone driving the motor vehicle has claimed during the past 5 years. The policyholder stated No. Later, the car was stolen, and the only enquiry it was that a claim was made under a previous motor policy within a 5-year period. Hence, the contract was void and not entered into in good faith. In response to this, it was stated by a policyholder that he did not reveal the previous claim as the insurer concerned has decided not to meet it.

Findings and conclusion

From the aforementioned case, it can be noticed that there is a breach of conditions. The motor insurance company entered into a contract on the belief that there was no previous claim by the holder. Nevertheless, it was ascertained that the previous claim was made based on a lie. Therefore, the insurance company is not liable to provide any help to the holder (Cassells and Ball, 2011). Further, it can repudiate the contract and ask for damages concerning breach of conditions. This can be further supported from the case of Poussard v Spiers (1876) 1 QBD 410.

Another Sample- Analysing Different Aspects Of Contract And Negligence In Business

CASE 6

Facts of the case:

With respect to the provided case, it has been ascertained that the policyholder applied for the insurance. In the proposal form, it was asked about the alteration or modification in the maker specification. Also, a question regarding any claim made in the previous 5 years due to an accident or loss was asked. The policyholder refused and responded no to both questions. On the enquiry, it was identified that modifications to the car were made as it was fitted with oversized alloy wheels, etc. In addition to this claim was made on the previous policy. Therefore, the insurer refused to meet the claim and cancelled the contract from the beginning (Bowal and Bontorin, 2014). In response to this, the policyholder stated that she thought all the car modifications were the owner's real specifications. Further, she said it was not in her husband's claim was refused as it was third-party cover during the period.

Findings and conclusion

In the provided case, the insurance company is eligible to repudiate the policy from the start. However, as per the obtained evidence, the insurance company recognised that the policyholder genuinely thought that the car was not changed while purchasing it. Withal, she asked to disclose the claims made before by her husband. Therefore, a client of a motor insurance company is required to demonstrate the past incidents and claims (Caulfield, 2016). Since she failed to provide true information and give an actual response doing so, she misguided the insurance company into accepting risks she would have consented to cover against the higher premium. Hence, there is a breach of warranties by the client of the insurance company and this firm can demand the damages. The findings can be backed up with the case of Bettini v Gye 1876 QBD 18.

Task 3

3.1 Explaining the similarities and differences of liability in tort with contractual liability

As per the English Law, liability provisions have been characterised to ensure that parties can execute their obligations in an adequate way. The liabilities for tort and contract are contrasting, and they have been detailed as follows:

Hence, it can be stated that within tort law, the duty is imposed by law. While in breach of contract, the duties are imposed by the parties to the contract. Thereafter, in tort law, there is a breach of right in rem, while in contract there is a violation of right in personam. Thereafter, in tort law, the damages are unliquidated. On the other hand, damages within the contract act are liquidated. Further, the objective in tort contract the objective is material, while in contract act the objective is immaterial. It is important in contractual liability that the defendant and claimant must be parties to the contract, while, in tort law,, it is not important that the defendant have a prior relationship with the claimant (Law of Contract and Tort of Negligence, 2016).

The similarity between the tort and contract is that they are both civil wrongs. In addition to this, in tort and contractual liability, the wrongdoers can be sued in court for compensation.

3.2 Explaining the liability for negligence and the conditions that need to be met claimant to successfully prove negligence

According to the provision of law, negligence is characterised as the incompetence of a party to execute the duty of care which a sensible individual must perform in a given state. The injured party can demand compensation from the defendant as a result of negligence caused by them.

Elements of Negligence

To show the tort of negligence, the affected party must conform to the next described elements of negligence:

• Duty of Care: According to the Court of English law it has been stated that various relationships and condition that give emergence to the standard duty of care which a reasonable person and enterprise must perform out while executing their work(Miles, Fleming and McKinney, 2010).
• Breach of Duty: The breach of duty occurs when a organization and an individual fails to carry out the legal duty of care in satisfactory way(Trosborg, 2015).
• Damages Caused: For establishing the breach of duty in carelessness, the guiltless party is needed to demonstrate the damages or loss caused to them by the defendant.
• Remoteness: According to the remoteness component it can be stated that the damages must be of predictable kind which have been reason by plaintiff (Wigmore, 2012).

Hence, the case of negligent act can be supported with the actual case of Donoghue v Stevenson, 1932.

Defences

To minimise the obligation of the plaintiff, the English Law has characterised three kinds of defences. First and foremost is the Volenti non fit injuriain which applicant has kept themselves in a state of affairs where damage subsists and they are cognizant of the same. Hence, plaintiff is eased from their portion of susceptibility. Other than this, there is a Contributory Negligence where the suspect and applicant both have shared equally and responsible for the occurrence of negligent action. Hence, the plaintiff is not only liable but the applicant is also equally responsible for the same. Other than this, Ex Turpi Causa is one of the philosophies according to which a defendant may not render legal remedy if it arises due to the prohibited act of the affected party (Chen-Wishart, 2012).

3.3 Explaining the vicarious liability of a business with an example

Vicarious liability can be defined as liability for the wrong done by others. Such as In case of the wrong done by employees, the owner is responsible. According to the provisions of vicarious liability,, the company is criminally liable for the actions of an agent or employee in the course of employment (Vicarious Liability, 2015). Such as different prohibited actions performed by the employee which involve physical and mental molestation of colleagues, fraudulent activities towards the suppliers or customers, furious acts at the workplace, etc. In this case, the employer will be equally responsible for the acts of the employee. In vicarious liability, the obligations are imposed by the government due to the relationship shared by the parties (Hayre, 2015). Similarly, in the case of a father and son/ daughter, the parents are vicariously liable for the actions of their children. For instance, if the father, the owner of the bike, permits his son to drive and later the accident is caused, then in that case, the father is partially liable for the actions of his child. However, there are certain conditions, if they are met, only than will the employer be held liable for the acts of employees. The description of which is provided as follows:

• The illegal act must be performed by the organisational member within working hours.
• The prohibited act should be executed under the employment period(McKendrick, 2015).
• The wrongdoers must be a worker or part of the firm.
• The act must be a tort that comprises all the components of negligence

Task 4

4.1 Discussing the elements and defence in negligence

CASE 7

According to the case study, Mr Brown fell unwell, so he went to Good Mayes Hospital under where they have a breathing problem and chest pain. In this way, Mr Brown was seen by the nurse and she called the doctor on duty. Nurse provides the medicine to the patient without checking with the doctor under whom they asked the nurse to prescribe. Furthermore, negligence can be stated as the term wherein an individual fails to take action for some reason. Person not able to take action against the party, and they know the unfair activities occurred at the workplace. In this way, the negligence results in all types of incidents due to physical and personnel injuries, etc. It also includes the company's mistakes and miscalculations under which individuals make the claim for the damages based on the allegation of the other's negligence (Wigmore, 2012). As per this, the plaintiff sues the other party due to negligence, wherein the owner of the firm knows the unfair practices occurred at the workplace. In this situation, the injured party claims against the other party and they are responsible for all the unfair situations.

Facts of the case

A)

The doctor and hospital are reliable due to the negligence under which they have reached the hospital and take the responsibility for examining Mr Brown. Accordingly, they provide some painkillers like medicine to patients due to suffering some personal injuries. The doctor takes the responsibility for checking the patients, but they are not able to perform the duty of care in a proper manner. As per this negligence, the hospital is liable for taking action against the doctor who avoids all situations and is not able to carry out the activities of care. The doctor suggests the medicine to the nurse through the telephone without examining the patients (Hillman, 2012). As per this situation, the hospital is liable for taking the action because he is a worker of the Good Mayes Hospital.

B)

As per this case study, Mr Brown died due to pneumonia under which the hospital and doctor are not responsible for the reason behind the patients died. In this way, Mr Brown died because they have pneumonia caused by toxic mould in the home. In this situation, the doctor and hospital are not responsible for the negligent act. Henceforth, Mr Brown is not able to sue the hospital and doctor because they died for personal reasons as well.

4.2 Application of elements of Vicarious Liability

CASE 8

According to the case study, the owner of the Chauffeur organisation sends a driver to pick up the clients at the airport. In this way, the driver takes a few glasses of alcohol while during the wasted time. As per this situation, the driver was on the way from the airport to the client's hotel when he crashed into the lamp post because they intake the alcohol. In this situation, the client is liable to sue the company, and the organisation will be responsible vicariously because they were injured due to the negligence of the driver (Bowal and Bontorin, 2014). They pay the amount of all damages that occur in the workplace. Furthermore, the main element of the vicarious liability under which customers are satisfied as the river was on the duty. The negligence carried out by the employee during working hours.

CASE 9

As per the case study, Mr Jones works in the supermarket and they role play as a delivery driver under which they loading the pallets into his truck and there after he supplied on the tail gate and fall over the another place, during the working period under which he got the injured and they way very serious so that it requires to surgery and moths of the rehabilitation with a physiotherapist. In this situation, the colleague is liable to sue the supermarket due to damages for personal injuries(Chen-Wishart, 2012). However, the company argued during the period of the accident that which take the responsibility for health and safety had been provided by the other organisation. As per the vicarious liability act, the company is responsible for taking action regarding the employees' care during some injuries. Moreover, If any case, the organisation is not able to accomplish the duty under which they take the responsibility for paying all amounts of the damages. According to the case study, the plaintiff sued the party and compensation as Mr Jones suffered the injuries (Lockwood, 2011). Furthermore, the supermarket is not responsible and liable for compensating the damages because Mr Jones was working for another company while sustaining the injuries, so they did out ensure the health and safety. The Occupiers' Liability Act 1984 is formulated by the UK government, which the physical damages will be compensated for the liable for the injury.

Conclusion

From the above report, it can be concluded that any agreement which is willful, intended and lawfully made between two or more capable parties is known as a contract. Contracts are normally written but can also be verbalised or implied. To make a valid contract, there are certain elements which are needed: offer and acceptance, intention to develop a lawful relationship, contractual capacity, consideration, etc. There are various kinds of contracts that can be entered by part, including written, face-to-face and distance selling, etc. Further, it has been identified that there is a significant difference between tort and contractual liability. In tort, the legal duty of the aggrieved party to the innocent is due to civil wrong. While, in contrast, the legal obligation between the parties arises due to failure to perform and meet the terms and conditions of the contract. It has been identified from the report that vicarious liability in which one party is held liable for the unlawful actions of a third party. For example, the employer of any organisation is obligated for the outlaw acts of their employees. For students needing help understanding such legal concepts, do my assignment for me services can be a valuable resource.

References

• Andrews, N., 2015. Contract Law. Cambridge University Press.
• Aust, A., 2013. Modern treaty law and practice. Cambridge University Press.
• Bowal, P. and Bontorin, L., 2014. Vicarious Liability: The Legal Responsibility of Employers.
• Cassells, N. C. L. and Ball, D. R., 2014. Difficult airway management and the risk of vicarious liability. Anaesthesia. 69(10). pp.1178-1179.
• Caulfield, M. T., 2016. Relational Fault and the Intermediate Nature of Employer Vicarious Liability.
• Chen-Wishart, M., 2012. Contract law. Oxford University Press.
• Curtin, G., 2014. Professional negligence: The most frequent error in professional negligence cases. LSJ: Law Society of NSW Journal. 1(7). p.82.
• Dobson, E., 2015. Negligence. Legaldate. 27(1). p.4.
• Habermas, J., 2015. Between facts and norms: Contributions to a discourse theory of law and democracy. John Wiley & Sons.
• Hayre, A., 2015. Aspects of Contract and Tort Law: The Scenario of Budgburys Ltd. GRIN Verlag.
• Hillman, R.A., 2012. The richness of contract law: An analysis and critique of contemporary theories of contract law (Vol. 28). Springer Science & Business Media.
• Klass, G.., 2010. Contract Law in the USA. Kluwer Law International.
• Lockwood, G., 2011. The widening of vicarious liability: implications for employers. International Journal of Law and Management. 53(2). pp. 149-164.
• McKendrick, E, 2015. Contract Law. Palgrave Macmillan.
• McKendrick, E., 2014. Contract law: text, cases, and materials. Oxford University Press (UK).
• Miles, A., Fleming, M. and McKinney, P. A., 2010. Retaliation: legal ramifications and practical implications of discriminatory acts in the workplace. Equality, Diversity and Inclusion: An International Journal. 29(7). pp. 694-710.
• Milman, D., 2009. National Corporate Law in a Globalised Market: The UK Experience in Perspective. Edward Elgar Publishing.

Analysing Different Aspects Of Contract And Negligence In Business

UPTO55%

Avail The Benefit Today!

To View this & another 50000+ free

Enter Email

Submit