Aspects of Contract

Task 1

1.1 Importance of essential elements of the contract

The contract is an enforceable agreement in which two parties are legally obliged to fulfil the promises made by them. A contract is said to be valid if it is supported by the following elements...

Offer

An offer is a proposal given by one party to a specific person or to the general public to enter into legal relationship. The offer given by the party should be specific and legally valid. An invitation to treat will not be considered an offer because it is merely an invitation given by a party to show their interest in the formation of a legal relationship. In addition to this response to an invitation is an offer in which the primary party is free to accept or reject it. In the given case situation Bill had given an invitation to treat to the general public for the sell of printing press.

Offer is important because it describes the initial terms of the contract. Due to this aspect, the offer is required to be specific and certain. In addition to this, it must not include terms for the completion of impossible or unethical tasks.

Acceptance

It can be termed as consent given by the offeree on the offer made by the offeror. It should not be supported by any modification else it will have legal status as a counteroffer. Only offeree is entitled to provide acceptance. Acceptance is important for contractual relationships because it creates agreement between parties. Further, without acceptance of party agreement cannot be formed.

Consideration

Agreement should be formed against some beneficial value. This value is not required to be at arm's length price but it must be supported by mutual consent. Consideration is vital in a contractual relationship as it creates mutual benefit for both parties. Furthermore, a promise without consideration is null and void.

Intention

Contracting parties should intend to create a legal agreement in order to fulfil their promise. The presence of intention in the contract is significant because all agreements are not considered binding contracts and the same is not enforceable by a court of law.

1.2 Main types of contracts along with their impact

Parties can enter into contractual relationships with different types of contracts. Description of different types of contact along with their impact is as follows...

Oral contract

Oral contracts are created on the basis of verbal communication by parties. These agreements are supported by trust and faith.

Impact

This agreement is informal and uncertain in nature because there is an absence of evidence of contractual terms. In the situation of dispute, interpretation is made by the court in accordance with the situation which may be unfair in some situations.

Written contract

Written contracts are supported by contract deeds. It is a formal and specific agreement as parties had described terms and conditions in appropriate manner.

Impact

In the situation of contradiction, this deed is considered to provide relief. In some business agreements, it is essential to select a written contract. An example of this agreement is the purchase of a tangible asset.

Distance contract

A distance contract is made in situations where parties are not present at a similar place for the determination of contractual terms.

Impact

In this agreement, the postal rule is applicable to determine its validity. As per this rule, a contractual relationship exists only if acceptance is communicated to the party by whom the offer was provided.

Task 2

2.1 Applicability of essential elements of contract in given case scenario

Bill and Cathy

In this case situation there is no contract between parties because with the providing of a counter offer previous offer between parties is canceled. In this case, a counteroffer was given by Bill by which the offer of Cathy was cancelled due to which he is not entitled to provide an offer on the same.

Bill and Liza

In the given case situation, the postal rule will be applicable as there is a distance contract between parties. In accordance with this rule, a contract between parties is said to be valid if the letter of acceptance of Liza is delivered to Bill in a reasonable time. By considering the case scenario, it can be said that Liza had posted the letter in a reasonable time period thus agreement between parties is enforceable by law.

Promissory Estoppel

It is a doctrine according to which in specific circumstances a person is prevented from going back on their promise because it is not supported by appropriate consideration. This doctrine was developed in the case of Central London Property Trust Ltd v High Trees Ltd [1947] KB 130. In this case, the defendant was prevented to going back on their previous promise in order to accept the lower rent contempt to the fact that the promise was not supported by consideration.

2.2 Analysis of contractual terms along with their applicability in given case situations

Terms of the contract are clauses inserted to describe the obligations of parties in order to enforce them to fulfil their promise in an appropriate manner. These terms can be either expressed or implied in nature. The description of these terms is enumerated below...

Expressed terms

These contractual terms are inserted by the mutual consent of contracting parties. There are three types of expressed terms i.e. conditions, warranties and innominate terms. The description of these terms is enumerated below...

Condition

These are the primary terms which are centred on the objectives of the contract. In the situation of non-satisfaction with the condition, the innocent party is entitled to breach the entire contract.

Warranties

On the other hand, warranties are ancillary terms inserted to specify the obligations of parties. In the situation of breach of warranties, the claimant is liable to make a claim of damages only.

Innominate terms

In a situation where terms cannot be bifurcated into conditions and warranties then it is considered as innominate terms where damages are provided by considering the impact of a breach.

Implied terms

These terms are inserted by legislation and custom in order to protect the interests of weaker parties and promote fairness in commercial contracts. These terms are assumed to be part of the contract as it is expressly described. In a situation where these terms are not satisfied then the party is required to provide reasonable damages.

Case study

In the initial case claim of Joyce DiDonato will be unsuccessful because the condition was breached by her and Royal Albert Hall Company is entitled to breach of contract. However, in this situation she had breached only warranties thus another company is not in a position to repudiate the entire contract.

2.3 Evaluation of the impact of expressed and implied terms using the above case

In the situation of contradiction of expressed and implied terms in a contractual scenario then implied terms will prevail. This is because parties are required to insert contractual terms in accordance with the legislation. Further, if there is a contradiction in terms then expressed terms will not be considered as part of the contract.

Case study 1

In accordance with the given case scenario, the party will not be entitled to the remedy for the non-satisfaction of contractual terms. It is because the terms of the contract do not imply a certain meaning.

Case study 2

In the given case study, a claim made by the claimant regarding the bill of work and cost of seed spent on the field as was customary in farming tenancies is valid. It is because completion of the tenancy agreement was not pre-determined and he had provided his efforts on the land. Due to this aspect, he is entitled to make a claim for compensation for his work. In this case, the inserted exclusion clause by City Cars Rentals is valid because they had laminated the document of limitation of liability in order to attract the attention of customers. Thus, by considering the assumption of absence of negligence clause is inserted in a proper manner.

The described statement is not completely justified because the exclusion clause is considered for relief only if it is inserted in a proper manner. It is not essential to be described at the time of formation of contract but it must be inserted prior to its applicability. In accordance with the case scenario, Thompson v LMS Railway [1930] 1 KB 41 exclusion clause will be valid if reasonable notice for the insertion of the exclusion clause is provided even after the formation of the contract. Spurling v Bradshaw [1956] 1 WLR 461 states that an exclusion clause can also be incorporated on the basis of previous dealings.

Task 3

3.1 Advise Brad on the applicability of negligence law along with available defences

In the given case situation, Brad is entitled to claim damages from the accountant. It is because due to this negligent misstatement he had agreed on a tenancy agreement with Albert and faced economic losses. It was his duty to provide relevant information of the client but he failed to do so thus he is liable to provide damages for the same.
In negligence, individual is entitled to defence in the following situations to relinquish the obligation for damages

• Volenti non-fit injuria- Claimants put themselves voluntarily in situations where there is a risk of injury.
• Ex turpi causa- The Act of the defendant is justified in the eyes of the law.
• Contributory negligence- The claimant is also responsible for the act of negligence.

3.2 Contrast of nature of liability in contract with tort

Liability in contract and tort are both part of civil law. The objective of both obligations is to provide compensation to the injured party for the default act.

3.3 Importance of the case of Donoghue V Stevenson in the development of the concept of duty of care

Duty of care can be defined as the standard responsibility of individuals that should be taken by them in order to prevent the risk of injury. In the case of Donoghue V Stevenson, an ideal example of duty of care was established. In accordance with this case, the manufacturer is required to take care of operational activities in order to prevent injury to consumers. He was held liable because a decomposed snail emerged from the drink of the defendant. By considering this case, the neighbour principle was developed in this case by Lord Atkin. In accordance with this case, an individual should love their neighbours (related parties) and should take care they are not adversely affected by their actions.

In accordance with the approach of strict liability, the obligation is imposed without finding their fault. For this liability, the claimant is just required to prove that the tort occurred and the defendant is responsible for the same. In the case of Rylands v Fletcher [1868] UKHL 1, the defendant was the owner of the mill. He had constructed a reservoir over a disused mine. Due to this act claimant had suffered from extensive damages. Further, the court held that the defendant is strictly liable to provide damages as they had made non-natural use of land.

Task 4

4.1 Applicability of principles of negligence

In the given case situation Bill has a duty to drive in a proper manner in order to prevent the risk of injury to his companion. Due to his negligence injury occurred to the boy. This act shows a breach of duty by which injury is occurred to the related party. By considering this aspect, Bill will be liable to provide damages for his negligent action.

XYZ Diaries has an obligation to ensure that suitable candidates have been selected for the work practices. They were aware of the fact of the engagement of minors for employment act still they had nothing done about it. Thus, they will be vicariously to provide damages for the same.

4.2 Vicarious liability of business

In accordance with the approach of vicarious liabilities, an individual will be held responsible for the tortuous acts of the parties which are controlled by them. On the basis of this provision, business is responsible for the negligent actions of employees. Such obligation will be transferred in a situation where the following two conditions are satisfied...

• The default party has the status of an employee while negligent action occurred.
• Negligent action occurred in the course of employment.

However, employers will not be held liable in situations where employees have occurred negligence after working hours or they are involved in criminal actions. In the given case situation negligence occurred by a friend not by an employee thus the owner of Vintage Vehicles Museum will not be responsible for the same.

In accordance with the Occupier's Liability Act, an occupier is responsible for taking care of visitors in order to prevent the situation of their damages. By taking appropriate actions such as the insertion of an exclusion clause or warning notice they can prevent their obligation.

Conclusion

In accordance with the present report, it can be concluded that parties are required to take care of their actions in order to relinquish the risk of injury. Further, they should fulfil their obligations in an appropriate manner to discharge contractual liability through performance. In a situation where they failed to do so, they will be liable to provide damages for the same in order to compensate for the injury of the innocent party.

References

• Adams, A., 2010. Law For Business Students. 6th ed. Pearson Education Ltd.
• Edwards, S. J., Edwards, L. L. and Wells, K. P., 2008. Tort Law for Legal Assistants. Cengage Learning publication.
• Elliot, C. and Quinn, F., 2009. Tort Law. Longman.
• Gillies, P., 2004. Business Law. Federation Press.
• Jennings, M., 2010. Business: it's Legal. Cengage
• Kelly, D. and et.al., 2013. Business Law. Taylor & Francis.

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