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- 1. Assignment on Aspect of contracts and Negligences for the
business Submitted By: Date: Submitted To:
- 2. Table of Contents Executive Summary 2 Task 1 3 1.1 Essential
Elements of a Valid Contract 3 1.2The Impact of Different types of
Contract 5 1.3 Analysis of Terms in Contracts 6 2.1 Application of
the Elements of Contract 2.2 Application of the Law 7 8 2.3
Evaluation of the Effect of Different Terms Task 3 8 9 3.1
Contrasting Liability in Tort with Contractual Liability 9 3.2 The
Nature of Liability in Negligence 9 3.3 Vicarious Liability in
business 9 Vicarious Liability in business 9 Task 4 11 4.1
Application of the Tort of Negligence and Defences 4.2 Application
of Vicarious Liability Conclusion 12 13 References 11 14 1
- 3. Executive Summary TAMs college wants to be one of the best
educational institutes in the UK and for this reason they are
hiring agents to take over legal problems. As to make their college
one of the best, TAMs colleges have agreed in a contract with NAMS
marketing firm for one month. During the time period of contract
the marketing firm NAMS broken the contract for some issues and act
contrite to TAMs and asked for extra timefor their marketing
program. But the management of TAMs college took legal actions for
breaching the terms of the contract and asked for returning the
advance payment they had given to NAMS which was an amount of 1500.
On the other hand The TAMs college has also confronted the trial
against them due to the accident of one of their staffs for not
wearing the proper clothing and protective gear on duty. The TAMs
college has to grieve the legal penalties because of the vicarious
liability policy in the business. 2
- 4. Task 1 1.1 Essential Elements of a Valid Contract There are
ten elements in a valid contract. These elements are very much
essential to make a valid contract. The essential elements of a
valid contract are described below- 1. Intention to Create Legal
Relationship:In case, there is no such intent on the part of
parties, there is no contract. Agreements of social or domestic
nature do not reflect lawful dealings. 2. Offer and Acceptance: In
order to make a valid contract, there must be a 'lawful offer' by
one party and 'lawful acceptance' of the same by the other party.
3. Lawful Consideration: Consideration has been demarcated in
various ways. According to Blackstone, "Consideration is recompense
given by the party contracting to another." In other words of
Pollock, "Consideration is the price for which the promise of this
is brought. Consideration is known as quid pro-quo or something in
return. 4. Capacity of parties: The parties to an agreement must be
able to contract. If either of the parties does not have the
capability to contract, the contract is not legal. 5. Free
Consent:'Consent' means the parties must have settled upon the same
thing in the same sense. Consent is said to be free when it is not
caused by(1)Coercion (2) Undue influence, (4) Mis-representation
(3) Fraud (5) Mistake. An agreement should be made by the free
consent of the parties. 3
- 5. 6. Lawful Object: The purpose of an agreement must be valid.
Object has nothing to do with consideration. It means the purpose
or design of the contract. Thus, when one hires a house for use as
a gambling house, the object of the contract is to run a gambling
house. 7. Certainty of Meaning: According to Section 29,"Agreement
the meaning of which is not certain or capable of being made
certain are void." 8. Possibility of Performance: If the act is
impossible in itself, physically or legally, if cannot be imposed
at law. For example, Mr. A agrees with B to discover treasure by
magic. Such Agreements is not enforceable. 9. Not declared to be
void or illegal: The agreement though sufficient all the conditions
for a valid contract must not have been clearlyconfirmed void by
any law in force in the country. 10. Legal Formalities: An oral
Contract is a perfectly valid contract, expect in those cases where
writing, registration etc. is required by some statute. 4
- 6. 1.2 The Impact of Different types of Contract There are many
types of contracts that are; Contracts under Seal: A contract was
an enforceable legal deed only if it was stamped with a seal. The
seal embodied that the parties proposed the agreement to
necessitate legal significances. No legal benefit or harm to any
party was required, as the seal was a symbol of the serious
acceptance of the legal effect and concerns of the agreement.
Previously, all contracts were prerequisite to be under seal in
order to be valid, but the seal has lost some or all of its effect
by edict in many dominions (Holbeche 2013). Acknowledgment by the
courts of informal contracts, such as implied contracts, has also
reduced the importance and employment of formal contracts under
seal. Express Contracts: In an express contract, the parties state
the terms, either orally or in writing, at the time of its
formation. There is a definite written or oral offer that is
accepted by the offeree (i.e., the person to whom the offer is
made) in a manner that explicitly demonstrates consent to its
terms. Implied Contracts: Although contracts that are obscure in
fact and contracts inferredinlaw are both called implied contracts,
a true implied contract consists of requirementsascending from a
mutual agreement and committed to promise, which have not been
uttered in words. It is ambiguous to label as an implied contract
one that is implied in law because a contract implied in law lacks
the requisites of a true contract. The term quasi-contract is a
more accurate designation of contracts implied in law. Implied
contracts are as binding as express contracts. Executed and
Executory Contracts: An executed contract is one in which nothing
relics to be done by either party. In a certain extent it
isanincongruity because the conclusion of performances by the
parties indicates that a contract no longer exists. An executor
contract is one in which some future act or commitment remains to
be performed according to its terms. Bilateral and Unilateral
Contracts: The exchange of mutual, give-and-takeassurances between
individuals that needs the performance of an act, or restraint from
the performance of an act, with respect to each party, is a
Bilateral Contract. 5
- 7. A unilateral contract includes a promise that is prepared by
only one party. The offerer promises to do a certain thing if the
offeree performs a requested act that he or she knows is the basis
of a legally enforceable contract. Adhesion Contracts: Adhesion
contracts are those that are enlisted by the party who has the
greater negotiating advantage, providing the weaker party with only
the opportunity to stick tothe contract or to reject it. They are
commonly employed because most businesses could not execute
business if it were necessary to negotiate all of the terms of
every contract. Not all adhesion contracts are inconceivable, as
the terms of such contracts do not necessarily exploit the party
who assents to the contract. Aleatory Contracts: An aleatory
contract is a mutual agreement the effects of which are generated
by the incidence of atentativeoccurrence. In this type of contract,
one or both parties assume risk. A fire insurance policy is a form
of aleatory contract, as an insured will not receive the proceeds
of the policy unless a fire occurs, an event that is uncertain to
occur. Void and Voidable Contracts: Contracts can be either void or
Voidable. A void contract imposes no legal rights or obligations
upon the parties and is not enforceable by a court. It is, in
effect, no contract at all. A voidable contract is a legally
enforceable agreement, but it may be treated as never having been
binding on a party who was suffering from some legal disability or
who was a victim of fraud at the time of its execution (Leibee
1976). 1.3 Analysis of Terms in Contracts The terms of a contract
is always set for the benefit of the two parties. So, it is
important for both the parties to clearly understand the meanings,
reasons and outcome of the terms. Because if a contract does not
reflect the interest of the both parties , it can be misused and a
long term legal procedure may occur from tha, which may harm both
the parties financially and morally. 6
- 8. The TAMs college is demanding to become one of the best
educational institutes in UK. So, they are trying to seizure the
attention and hiring agents and legal advisors to help them to the
quest.That why they are contracting with marketing agencies to
enhance their reputation. But in order to make so, they should
analyze the terms of the contracts with the marketing agencies
because if any lacking remain behind it may harm them as well as
the agencies in near future. Task 2 2.1 Application of the Elements
of Contract A contract is valid when the two parties are agreed
with that. And when the parties are agreed with the terms and
conditions of the contracts they also should honor and obey those.
Otherwise, another party can take legal actions against the terms
breaking party. TAMs colleges was agreed with the terms and
conditions of the contract with the marketing agency NAMS. The
basic elements of that contract are: Offer. Acceptance. Intention
of legal consequences. Consideration. NAMS made the offer to the
colleges of TAMs, because they are trying to build their reputation
in a highest level. NAMS gave the offer as they would work for one
month to build the reputation of the colleges. TAMs colleges
accepted the agreement and paid initial fee of 2500 to NAMS. By
this they were bound in legal relations and their intentions of
legal consequences were clear. Their consideration was pay the
contracted fee and the other party would make the job done as they
promised in the contract. 7
- 9. 2.2 Application of the Law Certain requirements are needed
to form a legal contract. They should discuss about the terms and
conditions of the contracts. Each party should clear the reason s
and the benefits of their conditions to the other party so that no
confusion remains in the agreements. No party can asked for
anything out of the contract after signing the contract. The should
read the agreement carefully before signing it. A valid contract
must have certain requirements, like- Specifics Consideration
Capacity Legal Proper Form 2.3 Evaluation of the Effect of
Different Terms The terms of a contract are made for the benefit of
the both parties. So, to evaluate the effect of the terms the
benefits of the terms should be determined (Emenike 1989). There
are many types of law and it needs various types offormalities. The
Patrol Evidences Rule: This rule contains with oral evidences. Oral
evidence may not be offered to affix to say that the opposite to or
shown to be a bogus written article. Establishing Implied Terms:
There are some circumstances in which contracts need to establish
the implied terms officially and it is made from one person to
another person (Hendry 2012). Various Types of Conditions: Various
types of conditions may affect the contract and procedural prudence
of the word is a good amount of central grouping of contractual
appearance. Figure: Requirements of a Valid Contract 8
- 10. Task 3 3.1 Contrasting Liability in Tort with Contractual
Liability Tort and contact liability: Tort laws govern situations
where one person has harmed or injured another person. Tort laws
cover violations where the party intentionally harmed the other
person, such as in a battery claim. Tort laws also address
incidents where the party may be held liable even if they did not
act intentionally, such as in negligence claims or strict liability
claims. Tort laws usually result in the liable party paying the
victim monetary damages to compensate for their losses. Contract
law is that body of rules that govern contractual agreements
between persons or merchants. A contract is basically an agreement
between parties outlining their duties and responsibilities to one
another. 3.2 The Nature of Liability in Negligence There are two
senses in which the law of torts deals with negligence. In its
'ordinary' meaning, negligence simply refers to a careless conduct
of the defendant as opposed to a willful conduct. However in tort
law, the term negligence is used more commonly in its technical
sense to mean the breach of a duty by the defendant consisting of
his or her failure to take reasonable care to avoid a reasonably
foreseeable harm to another person. A significant section of the
law of torts is based on this notion of negligence. Causes of
action before a person can sue another in tort, he or she usually
has to fit the facts of the case into the framework of a recognized
cause of action. 3.3 Vicarious Liability in business Vicarious
Liability in businessa situation in which one party is held partly
responsible for the unlawful actions of a third party(DiMatteo
1998). The third party also carries his or her own share of the
liability. Vicarious liability can arise in situations where one
party is supposed to be responsible for (and have control over) a
third party, and is negligent in carrying out that responsibility
and exercising that control. 9
- 11. In the given situation the management of TAMs college fell
in the principle of vicarious liability because the night guards
family has taken legal actions against the institution. Though the
management and the supervisors were presaged about the accidents
and were also warned to wear protective clothing for the
non-teaching staffs to avoid injuries. 10
- 12. Task 4 4.1 Application of the Tort of Negligence and
Defences In general terms, negligence is "the failure to use
ordinary care" through either an act or omission. That is,
negligence occurs when: somebody does not exercise the amount of
care that a reasonably careful person would use under the
circumstances; or Somebody does something that a reasonably careful
person would not do under the circumstances. In the case, it was
said that TAMs colleges non-teaching employees were counselled to
use protective clothing for their safety and security. Some sources
of negligence are: Poor selection of activities. Use of faulty
equipment. Inadequate protection. Hazardousconditions. Defence
against Negligence: Assumption of risk. Sudden emergency. An act of
God. 11
- 13. 4.2 Application of Vicarious Liability The TAMs college has
enforced the wearing for schools non-teaching staffs for example
guards and labors in order to avoid future accidents (Hofstra
2012). However the senior supervisors have overlooked the warning
and he has sent off a night guard on duty without the proper
clothing. It is against the company policy. However, vicarious
responsibility sometimes called "imputed liability," attachment of
responsibility to a person for harm or damages caused by another
person in either a negligence lawsuit or criminal prosecution. But
the authority of the TAMs college will be found responsible because
of vicarious liability principle. The authority repudiated the
compensation to the staff because he was not following the rules of
the TAMs college. But under the vicarious liability doctrine no
matter how faulty the staffs are the TAMs authority will be legally
responsible for the staffs wrong doing. 12
- 14. Conclusion We know that TAMs college has hired legal
consultants so that they can deal with the legal issues. They have
hired NAMS marketing consulting firm who gave them the offer of
extensive marketing of the colleges and promote the college name
for one month only for 6000. But NAMS had faced some problems and
did not meet the timeline of agreement. TAMs colleges have taken
legal engagements against NAMS marketing firm based on the initial
terms of the contract (Greer 2012). On the other hand, TAMs college
was responsible to pay a reimbursement for an incident but they
have denied it because according to them the staff acts in
negligent which was against the policies of the college. 13
- 15. References DiMatteo, L. A. 1998. Contract Theory: The
Evolution of Contractual Intent. East Lansing: Michigan State Univ.
Press. Emenike, E.U.I. 1989. Safety Measures associated with
Physical and Health Education Journals. Vol. 3, No. 1, vol. 48, no.
1, pp. 54-82. Greer, C.R. 2012 Strategy and Human Resources.
Englewood Cliffs, NJ: Prentice-Hall. Hendry, C. & Pettigrew,
A.M. 2012, Patterns of Strategic Change in the Development of Human
Resource Management. British Journal of Management, 3: 137156.
Hofstra, 2012. Business law and commercial law and practical use of
these (Online) availableat :(Accessed on November 29, 2013)
Holbeche, L. 2013, Aligning Human Resources and Business Strategy.
Oxford: ButterworthHeinemann. Leibee, B. C. 1976, Tort Liability
for Injuries to employees. Organisation and Administration.
Philadelphia W.B. Saunders Company Journal Of Tort Law ,vol. 18,
no. 1, p. 1. 14