An assignment on

Aspect of contracts and Negligence’s for the business

Submitted By:

Submitted To:

Date:

Submitted To:

Date of Submission

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EXECUTIVE SUMMARY

TAM’s college is trying to become one of the best educational institute in UK based on

the scenarios. They have appointed marketing firms to promote their facilities. TAM’s

college has also hired an agency to receive legal solutions for future risk regarding the

institute. The management of TAM’s college was in difficulties to manage all the issues

and faced legal actions from one of their staff’s family. The staff was ignorant and went

to duty without proper uniform and induced injury and the management of TAM’s

college denied the claim and fell in the “Vicarious Liability” doctrine.

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Table of Contents

Executive Summary 2

Task 1 4

1.1 Essential Elements of a Valid Contract 4

1.2 The Impact of Different types of Contract 5

1.3 Analysis of Terms in Contracts 6

Task 2 7

2.1 Application of the Elements of Contract 7

2.2 Application of the Law 8

2.3 Evaluation of the Effect of Different Terms 9

Task 3 11

3.1 Contrasting Liability in Tort with Contractual Liability11

3.2 The Nature of Liability in Negligence 11

3.3 Vicarious Liability in business 12

Task 4 13

4.1 Application of the Tort of Negligence and Defences 13

4.2 Application of Vicarious Liability 14

Conclusion 15

References 16

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TASK 1

1.1 ESSENTIAL ELEMENTS OF A VALID CONTRACT

To form a valid contract there are some essential elements that need to be enlisted in

the agreement and they are:

Offer and Acceptance: In order to pattern legitimate agreement an offer has to

be made and it is the initiation of an affirmation (Kennedy, R. D. & McMullen, S.

Y. 1968). Followed by the offer the involved party has to accept upon the offer

and therefore pattern an agreement.

Lawful Consideration: A mutual agreement lead to an affirmation where the

person accepting the offer takes conclusion based on some lawful consideration

(Chen L., Law S. and Lee S. 2003).

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1. Offer and Acceptance

2. Lawful Consideration

3. Free Consent

4. Writing and Registration

5. Formal Relation

6. Certainty

7. Possibility of Performance

8. Enforceable by Law

Figure: Essential Elements of Valid Contract

Free Consent: To form a legitimate agreement the two parties should give their

free consent, or else the contract will be advised as a null and void agreement

(Leibee, B. C. (1976).

Writing and Registration: An official contract has to be in written form and

registered by the government administration to make the agreement legitimate

(Kennedy, R. D. & McMullen, S. Y. 1968).

Formal Relation: Official relation has to be considered in order to make a valid

agreement (Horton, C., 2012). Any act of casual affirmation cannot be

considered as a formal contract, such as; an individual gave promise to another

person that he would give him a car but he did not mention when. So, it will not

be enumerate as an agreement because there was no formal relation present.

Certainty: Each and every component of an agreement has to be certain so that

each party is able to recognize the matters considering the contract (Chen L.,

Law S. and Lee S. 2003).

Possibility of Performance: A valid agreement should have the likelihood of

presentation because if the agreement cannot perform the matters then it will not

be advised as a contract (Kennedy, R. D. & McMullen, S. Y. 1968).

Enforceable by Law: A valid agreement is enforceable by regulation; else it will

be advised as the event of break of contract (Kennedy, R. D. & McMullen, S. Y.

1968).

1.2 THE IMPACT OF DIFFERENT TYPES OF CONTRACT

There are many types of contracts that are;

Implied Contact: To pattern a legitimate agreement free consent is

significant of the both parties. But in case of implied agreement it will be

advised as a legitimate agreement if one party does not give permission

(Chen L., Law S. and Lee S. 2003). This type of contracts occurs when an

individual behave like he/she owns any assets and sell those assets. For

example; if a servant deals his or her proprietor’s stuffs as if s/he is the

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proprietor of the assets without the free permission of the proprietor then it will

be advised as an implied contract.

Express Contract: Express contract is one of the numerous kinds of

contracts where it is either in the formation of a written document or it can

even be in the oral pattern which is accepted to the authority that focuses on

the permission to terms (Kennedy, R. D. & McMullen, S. Y. 1968).

Contract under Seal: The customary method of making an agreement

legitimate is the closing of the lawful article that is enforceable (Horton, C.,

2012). It is important to mark the documents with seals and the both parties

are liable to accept the outcomes of the affirmation after it is sealed.

Executed Contact: It is a type of agreement where both parties execute the

terms and conditions of the contracts before they go in to an agreement and

there is not anything to be worked out by each party (Leibee, B. C. 1976). The

performance of the parties signifies that there is no agreement, and then it is

a performed contract.

Unconscionable Contact: It is an agreement in which both parties are

alarmed about the agreement but one party gets the higher advantages than

the other (Kennedy, R. D. & McMullen, S. Y. 1968). This type of agreement is

unenforceable because there is lack of free permission from one of the party.

1.3 ANALYSIS OF TERMS IN CONTRACTS

There are numerous objectives of agreements. It is significant for the parties to

understand the distinct types of agreements, terms, and components which not only

helps the parties to comply with the agreement but furthermore assists to diminish

agreement administration charges (Chen L., Law S. and Lee S. 2003). Major alterations

are essential to align the emplacement affirmation.

The TAM’s college is endeavoring to become one of the best educational institutes of

United Kingdom. So, they are trying to capture the attention and hiring agencies and

lawful advisors to help them with the mission. In order to become the best educational

institute in United Kingdom, they are going into agreements with some bureaus for their

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marketing reasons and solving the legal matters. To pattern a legitimate agreement

there should be some dissimilarity amidst the exchanging of terms, concerns and

bargaining of the parties and TAM’s college is endeavoring to bring the differences.

TASK 2

2.1 APPLICATION OF THE ELEMENTS OF CONTRACT

The parties must respect the terms and conditions of the agreement and if one party or

the other party disagrees from the promise of affirmation then the party respecting the

affirmation can go to court and take lawful actions (Kennedy, R. D. & McMullen, S. Y.

1968). A valid agreement is enforceable by law.

The basic elements of the contract with NAMS are:

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Offer

Acceptance

Free consentFormal relation

Valid contract is enforceable

by law

Figure: Basic Elements of Valid Contract

NAMS provided boasts for intensive promotion for one month to make TAM’s reputation

sky-scraping and assist them to become one of the best educational institutes in UK. In

an official valid agreement, offer is the initiation of an agreement with another party and

forms a business relationship.

In alignment to make a legitimate contract the terms and conditions of the contract has

to be accepted by the parties taking part in an agreement, else it will be considered as a

void agreement. TAM’s college has acknowledged the NAMS marketing offer for one

month and paid the initial fee of £2500. Both the parties in the agreement went into the

agreement with free consent and the agreement was in a written form to make the

contract a formal contract.

Legitimate agreement is enforceable by regulation. The administration of TAM’s college

has the authority and confirmation that NAMS has breached the affirmation and the

primary term. NAMS were unable to supply marketing assistance to TAM’s college so

that, the TAM’s college has taken lawful activities against NAMS.

2.2 APPLICATION OF THE LAW

As soon as two or more parties make an agreement then there are some vital

components that need to be advised in order to make a legitimate contract (Leibee, B.

C. 1976). The parties engaged in contract give self-assurance and boost the terms and

conditions of a contract. Attitude of the parties may differ from the affirmation which was

presumed to be in use as just a pre-declaration of the valid contract and consequently

not part of the agreement (Chen L., Law S. and Lee S. 2003). Parties to an indenture

follow only its terms, not by any insignificant declarations that may not be accomplished.

To form a valid contract certain requirements are needed. Such as;

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Exclusion of responsibility of the terms:

Agreement can be made where other associations are likely to have a term in the

contract that skip one of the party’s accountability and may proceed wrong in the

presentation of the agreement or limits on that accountability (DiMatteo, L. A. 1998). It is

called a “Prohibiting Paragraph” or an issue clause. Founded on the scenario, a

prohibiting clause from “Responsibility” for ruin done to the TAM’s marketing crusade by

NAMS might be included in the affirmation between NAMS and TAM’s college.

2.3 EVALUATION OF THE EFFECT OF DIFFERENT TERMS

There are many terms encompassed in the agreements and some of them are for rules

and regulations (Okeke, C.N. 1988). These are formation of agreement and it is

necessary to be in a written form and the seal is needed. There are many kinds of

regulation and it requires diverse types of formalities.

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Collateral ContractsIt is a type of contract in which the terms and conditions are normally in a written form as the basis of the agreement. Where the declaration have been conceived and intended as to make certain to induce the main agreement. Jury has been coordinated to find a security convention someplace to make the contract valid and beneficial for the parties acquiesced upon the agreement (DiMatteo, L. A. 1998).

Contract Includes Conditions and WarrantiesThe more imperative conditions are describing "Circumstances", the lesser significant conditions are called "Warranties”. These parts are so significant that without any one or supplementary conditions, the parties would not proceed into the agreement. As a result, to construct a circumstance incorrectly, or to break a condition, is examined so vigorously and considered as a mistreated confirmation. The agreement itself motivates both the parties (DiMatteo, L. A. 1998).

Figure: Requirements of a Valid Contract

Establishing Implied Terms

There are some situations in which agreements need to institute the inferred

terms formally and it is made from one individual to another individual (Okeke,

C.N. 1988).

The Patrol Evidences Rule

It is a function that encompasses oral evidences. Oral evidence might not be

added or shown to be a false in writing item (Okeke, C.N. 1988). The contract

habitually endeavors to the law of confirmation and applies not only to contracts

but also to all kinds of credentials.

Various Types of Conditions

Various types of situation may affect the agreement and practical judiciousness

of word is good for central grouping of contractual sign (Okeke, C.N. 1988). The

preparation for committing a breach of circumstance at universal regulation is

refutation and indemnity.

The Up-To-The-Minute Observation

The violation of a circumstance permits the overhead misgiving accumulating to

reckless cost to the indenture as rejected, extravagance in the indenture and the

parties are endow to compel to the activities and presentation (Horton, C., 2012).

In the granted position, TAM’s college has agreed to supply the marketing agreement to

NAMS on the basis of their oral evidence of strong marketing and promotion for one

month for £6000 and established an implied contract between TAM’s college and

NAMS.

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TASK 3

3.1 CONTRASTING LIABILITY IN TORT WITH CONTRACTUAL

LIABILITY

Tort and contact liability:

The regulation of tort and of agreement is categorized as part of the "Law of

Obligations", but the law of tort concerns to every person that it is relevant to, while in

the regulation of contract or in trusts obligation is "Voluntarily Assumed" (Chen L., Law

S. and Lee S. 2003). Contract damages are established on losses that are expected,

while tort damages are compensatory.

3.2 THE NATURE OF LIABILITY IN NEGLIGENCE

1. DUTY: The duty is an obligation of one individual to another individual, it is

conceived form the communal desires and beliefs (Myer, J. W. 1978). The glue

of communal obligation is the threaded that binds humans to one another in

assemblies where preferences are advised inappropriately if they contravene a

pre-existing impulse and restore hastily.

2. Cause in Fact: A small number of trouble are more fascinating, with tenacity

more vague then causation. Based on the surrounds and performances an

individual might select to take steps and avoid doing silly dramatics in assured

(DiMatteo, L. A. 1998).

3. Breach of Contract: Breach of agreement is the most significant thing in the

contract tort of negligence. It is the demeanour of the people to proceed as a

reckless individual or party and not performing the agreement terms and

conditions (Chen L., Law S. and Lee S. 2003). This element implies the pre-

existence of a standard of correct demeanour to avoid imposing undue risks of

damage to people. NAMS has breached the agreement when they have halted

the promotion and marketing of TAM’s college for one week.

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3.3 VICARIOUS LIABILITY IN BUSINESS

It is a doctrine of English tort regulation that imposes firm liability on employers for the

wrongdoings of their employees (Leibee, B. C. 1976). Usually, a company will be held

liable for any tort pledged while a worker is conducting their obligations. Vicarious

responsibility means that anybody can be detained legally or to blame for the lacking

concentration actions of a distinct one-by-one even regardless of the fact that someone

overwhelms no mistake in furtherance of the inattentive or tortuous acts (N. Et Al.

Kumar, 2001).

In the granted scenario the administration of TAM’s college fell in the doctrine of

vicarious liability because the guard’s family has taken lawful actions against the

institution. Though the administration and the supervisors were alerted about the

misfortunes and were furthermore suggested to wear proper clothing for the non-

teaching staffs to avoid wounds.

The staff who was injured did not listen to the organization’s policies so, the

administration refused to give any reimbursement to the casualty but The TAM’s college

are compelled to pay the compensation because of the doctrine of vicarious liability.

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TASK 4

4.1 APPLICATION OF THE TORT OF NEGLIGENCE AND

DEFENCES

There are some elements of the tort negligence and defences in various business

situations, they are given below

Duty of Care: the person might owe an obligation of care to ensure that they do not

suffer from any awkward harm or decrease. If such obligation is broken, a legal liability

is imposed (Leibee, B. C. 1976). TAM’s college workers were alerted about the harm

and deficiency that the employees might face.

Tort Negligence Law: It is a pattern of regulation in which it is founded and operated in

the realm of intentional tort regulation and the basic purpose of negligence regulation, is

to command and protect the workers from wounds related to their line. TAM’s college’s

non-teaching employees were suggested to use shielding apparel for their security

(John W. 2009).

An individual may owe a duty of care to ensure that they do not suffer from any

unreasonable harm. If such duty is breached, a legal liability is imposed. TAM’s college

employees were warned about the harm and losses that the employees might face

(John W. 2009).

POTENTIAL SOURCES OF NEGLIGENCE

DEFENCE AGAINST NEGLIGENCE

INADEQUATE PROTECTION AN ACT OF GOD

POOR SELECTION OF ACTIVITIES SUDDEN EMERGENCY

HAZARDOUS CONDITIONS ASSUMPTION OF RISK

USE OF FAULTY EQUIPMENT

13Table: Sources of Negligence

Potential sources of negligence are:

Inadequate protection: Inadequate protection refers to negligent behaviour on

part of the person who is unwilling to wear protective gears (John W. 2009).

Poor selection of activities: The undertakings that are beyond the capabilities

of individuals or inadequate information of undertakings are poor assortment of

activities (John W. 2009).

Hazardous conditions: Hazardous conditions are unforeseen and unavoidable

(John W. 2009).

Use of faulty equipment: Another potential source of negligence is the use of

faulty equipment which can cause harm (John W. 2009).

Defence against Negligence:

An act of God: The conditions or situations that is uncontrollable by human

beings. This assumption is only applicable when adequate safety measures are

taken to avoid injuries (John W. 2009).

Sudden emergency: Any act of immediate action to help the person in danger.

Such as, attempt to rescue a person drowning in the water is an act of sudden

emergency (John W. 2009).

Assumption of risk: It is assumed that a person takes measure of the risks

when engaging in activity (John W. 2009).

4.2 APPLICATION OF VICARIOUS LIABILITY

The TAM’s college has enforced the wearing for college’s non-teaching staffs in

alignment to stay away from future accidents. Although the senior supervisors have

overlooked the alert and he has dispatched off a night guard on obligation without the

correct apparel. It is against the institute’s principle.

Supervisors have the inherent power to control over the workers and the supervisors

were requested to maintain the right apparel and proper defending gears of the non-

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teaching staffs. But in this scenario the supervisors did not follow the instructions and

lead one of their staffs to duty without correct apparel (Roberts, M. & Zahay, D. 2012).

On the other hand, vicarious blame means that any person can be detained legally to

blame for the inattentive actions of a different person. In this case the supervisors were

inattentive to the directions and that lead one of the staffs to get hurt. But the

administration of the TAM’s college will be found to blame because of vicarious liability

doctrine.

The administration denied the reimbursement to the employee because he was not

following the directions of the TAM’s college. But under the vicarious liability doctrine a

employee may be faulty but TAM’s administration will be lawfully to blame for the staff’s

wrong doing.

CONCLUSION

In one situation TAM’s college went in an agreement with the NAMS marketing firm to

market the possibilities of the college but the firm were incapable of providing the

service and TAM’s college took legal actions against them. In another scenario TAM’s

college authority have to face legal actions from one of their non-teaching staff because

the management of TAM’s college have denied the compensation for the injured

employee because the staff was not following the management’s orders and ignored the

institutes polices.

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REFERENCES

Chen L., Law S. and Lee S. (2003) ‘business contract- the laws and regulation in

practice’– an empirical study, Business contract, Vol. 24 Issue 3, pp.299-318

DiMatteo, L. A. 1998. Contract Theory: The Evolution of Contractual Intent. East

Lansing: Michigan State Univ. Press.

Hampton, J. 1976. “Legal Responsibilities in Business”, Reston: Prentice Hall.

Horton, C., 2012. Legal aspects in Business and Contractual Intent, Journals. Vol. 2, pp.

54-82.

John W. (2009) ‘Business contract and negligence in practice’ Journal, Vol. 7, No. 3, pp.

5-18

Kennedy, R. D. & McMullen, S. Y. 1968. “Contract Negotiation and Contract Theory”,

Home Wood, Illinois: Richard D. Inrurin.

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.

Myer, J. W. 1978. “Negligence in Contract and practice”, Delhi: Prentice Hall of India,

3rd edition.

N. Et Al. Kumar, 2001. “Negligence in business” 4th edition, Anmol Publications Mumbai

Okeke, C.N. (1988). Some Legal aspects of Organizations. A paper presented at a two

day conference organized by the National Sports Commission, Enugu, vol. 13,

no. 5, pp. 707-719.

Roberts, M. & Zahay, D. 2012, Laws and Regulation in practice in Business, 6th Edition,

Wadsworth Publishing Co, Belmont, USA.

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