An assignment onAspect of contracts and Negligence’s for the business

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Executive Summary

TAM’s college is going to become one of the most effective academic institutes in the UK and

for this purpose they are assigning agents to look over the legitimate issues. TAM’s college has

decided to market their features and services and made an agreement with NAMS marketing firm

for one month. However the management of TAM’s college took proper actions based on the

primary terms of the NAMS. The TAM’s college has also encountered with the trial against them

due to the accident of one of their employees for not wearing the suitable outfit on duty. The

TAM’s college has to undergo the legitimate penalties for the reason of the vicarious

responsibility principle in the business.

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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...........................................................................................................................5

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 Liability.....................................................................................11

3.2 The Nature of Liability in Negligence...............................................................................................................11

3.3 Vicarious Liability in business..........................................................................................................................11

Task 4.............................................................................................................................................13

4.1 Application of the Tort of Negligence and Defences........................................................................................13

4.2 Application of Vicarious Liability......................................................................................................................15

Conclusion.....................................................................................................................................16

References......................................................................................................................................17

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Task 1

1.1 Essential Elements of a Valid Contract

There are some elements that are significant in order to form a formal relation and these elements

are important in the contract. There are eight elements of valid contract. The essential elements

of a valid contract are given below.

1. Offer and Acceptance: In order to form lawful contract a proposal has to be made and it

is the principal step towards an agreement (Hare, J. I. Clark. 2003). Followed by the offer

the concerned party has to agree upon the proposal and thus form an agreement.

2. Free Consent: To form a valid contract the two parties must provide their free consent,

else the contract will be considered as a void contract and it will be avoidable (Hampton,

J. 1976).

3. Lawful Consideration: An agreement lead to a contract when the person accepting the

offer takes choice based on some lawful consideration (Chen L., Law S. and Lee S.

2003).

4. Possibility of Performance: A valid contract should contain the prospect of performance

because if the contract cannot perform the topics then it will not be considered as a

contract (Hare, J. I. Clark. 2003).

5. Formal Relation: Alignment to make an honest confirmation, Official relation has to be

considered. Any act of casual affirmation will not be considered as a formal agreement

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

6. Certainty: Each and every portion of a contract has to be certain so that each parties are

able to understand the issues concerning the contract (Kennedy, R. D. & McMullen, S. Y.

1968).

7. Enforceable by Law: A legal contract is enforceable by law or else it will be considered

as the event of break of contract (Chen L., Law S. and Lee S. 2003).

8. Writing and Registration: An official contract has to be in a written pattern and

registered by the government consultant to make the contract valid (Kennedy, R. D. &

McMullen, S. Y. 1968).

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1.2 The Impact of Different types of Contract

There are many types of contracts that are;

Unconscionable Contact: It is a contract where both parties are concern about the

contract but one party gets the higher benefits than the other (Hare, J. I. Clark. 2003).

This type contracts are unenforceable because there is deficiency of free consent from

one of the party.

Contract under Seal: The traditional manner of building a contract legal is the sealing of

the legal certificate that is enforceable (Chen L., Law S. and Lee S. 2003). It is important

to stamp the deed with several seals and the both parties are responsible to admit the

consequences of the agreement after it is sealed.

Implied Contact: Free consent is important of the both parties to form a legal agreement.

But for implied contract it will be considered as a valid contract if one party does not give

free consent (Hare, J. I. Clark. 2003). This type of contracts happens when a person

pretends to own any assets and sell it. For example; if a servant sells his or her owner’s

stuffs as if s/he is the owner of the assets without the free consent of the owner then it

will be measured as an implied contract.

Express Contract: Express contract is one of the several types of contracts. It may be in

the formation of a printed manuscript or it can even be in the verbal form which is

acknowledged to the senate that focuses on the consent to terms (Chen L., Law S. and

Lee S. 2003).

Executed Contact: It is a type of contract where both parties fulfill the terms and

conditions of the contracts earlier they go in to a contract and there is nothing to be

controlled by each party (Hare, J. I. Clark. 2003).If it is an executed contract, then the

performance of the parties shows that there is no contract.

1.3 Analysis of Terms in Contracts

There are many purposes of a contract. It is essential for the parties to realize the distinct kinds of

agreements, periods, and constituents which not only assists the parties to follow with the

statements but also assists to reduce statement costs (Bucher, C.A. 1983).

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The TAM’s college wants to become one of the best educational institutes of UK. So, they are

making every effort to gain the attention and assigning agencies and lawful consultants to help

them achieving their goals. In the process of becoming the best educational institute in UK, they

are going into contracts with some organizations for their advertising and promotion reasons and

clarifying the lawful matters. To design an appropriate agreement there must be some variation

among the exchanging of terms between the parties and TAM’s college is making every effort to

bring the variations.

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Task 2

2.1 Application of the Elements of Contract

A valid contract is enforceable by law. It is essential for the parties to honor the terms and

conditions of the contract and if one party or the other party fluctuates from the promise of

agreement then the party honoring the agreement can go to court and take lawful actions (Marsh,

P.D.V. 2001).

The basic elements of the contract with NAMS are:

NAMS gave proposals for concentrated marketing for one month to make TAM’s status higher

and help them to turn into one of the best educational institutes in the UK. In an official valid

contract proposal is the initiation of a contract with another party and forms a business

relationship.

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OfferAcceptance

Free conse

nt

Formal

relation

Valid contract is

enforceable

by law

Figure: Basic Elements of Contract

In order to make a valid contract the terms and conditions of the contract has to be accepted by

the parties participating in a contract, otherwise it will be measured as a void contract. TAM’s

college has accepted the NAMS marketing proposal for one month and paid the initial fee of

£2500 and come into a legal contract. Both of the parties in the contract entered into the contract

with free consent and a written certification turned the contract in an official relation.

The management of TAM’s college has the authority and evidence that NAMS has broken the

contract agreement and the preliminary term. NAMS were incapable to provide marketing

support to TAM’s college so that the TAM’s college has taken legitimate actions against NAMS.

2.2 Application of the Law

Between contracts of two parties there are several key elements that are essential to be

considered in order to create a valid contract. The parties involved in contract provide assurance

and inspire the terms and conditions of a contract (Marsh, P.D.V. 2001). Belief of the parties

may vary from the agreement which was imaginary to be in use as just a pre-declaration of the

valid contract and subsequently not part of the contract (Wood, D. and Smith, P. 1989). Parties to

an indenture follow only its terms, not by any minor statements that may not be completed.

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

i. Collateral Contracts

It is one kind of contract in which the terms and conditions are normally written as the

basis of the contract. Where the statement have been created and intended as to make sure

to induce the main contract (DiMatteo, L. A. 1998). Judges have been organized to find a

security convention someplace to make the contract valid and beneficial for the parties

agreed upon the contract.

ii. Contract Includes Conditions and Warranties

The more imperative terms are describing "Circumstances", the smaller amount

significant terms are called "Warranties”. These parts are so important that in absence of

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any one or supplementary of the parties would not go into the indenture (DiMatteo, L. A.

1998). As a result, to construct a circumstance falsely, or to breach a condition, is viewed

so dangerously and considered as a mistreated agreement. The indenture itself provides

motivation to the both parties.

Exclusion of responsibility of the terms:

Contract can be made where supplementary organizations are likely to have a term in the

agreement which eliminates one of the party’s liabilities that may go wrong in the demonstration

of the agreement or limitations on that liability. It is called a “Prohibiting Paragraph” or a

release clause (N. Et Al. Kumar, 2001). Based on the situation, a prohibiting clause

from “responsibility” for spoil complete to the TAM’s marketing campaign by NAMS might be

included in the agreement between NAMS and TAM’s college.

2.3 Evaluation of the Effect of Different Terms

There are many terms involved in the contracts and some of them are for documentations. These

are formation of contract and it is essential to be in written and the hallmark is required to

establish it (Okeke, C.N. 1988). There are several types of law and it needs various types of

formalities.

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T h e P a tr o l E v id e n c e s R u le

I t is a ro le th a t in c lu d e s o ra l e v id e n c e s . O ra l e v id e n c e m a y n o t b e a d d u c e d to a d jo in to s a y th a t th e o p p o s ite to o r s h o w n to b e a b o g u s w r it te n a r tic le (O k e k e , C .N . 1 9 8 8 ) . T h e c o n tra c t a lw a y s tr ie s to th e la w o f c o n f irm a tio n a n d a p p l ie s n o t o n ly to c o n tra c ts b u t a ls o a l l k in d s o f c re d e n tia ls .

E s ta b lis h in g I m p lie d T e r m s

T h e re a re so m e s i tu a tio n s in w h ic h c o n tra c ts n e e d to e s ta b lis h th e im p lie d te rm s fo rm a lly a n d i t is m a d e f ro m o n e p e rs o n to a n o th e r p e rs o n (O k e k e , C .N . 1 9 8 8 ) .

V a r io u s T y p e s o f C o n d it io n s

V a r io u s ty p e s o f c o n d it io n s m a y a f fe c t th e c o n tra c t a n d te c h n ic a l ju d ic io u s n e s s o f th e w o rd is a g o o d a m o u n t o f c e n tra l g ro u p in g o f c o n tra c tu a l e x p re s s io n (O k e k e , C .N . 1 9 8 8 ) . T h e p re p a ra tio n fo r c o m m itt in g a b re a c h o f c irc u m s ta n c e a t u n iv e rs a l la w is re fu ta tio n a n d in d e m n ity .Figure: Effect of Different Terns

The Up-To-The-Minute Observation

The violation of a situation allows the above misgiving assemblies to careless expenditure the

indenture as prohibited, extravagance in the indenture and the parties are enable to force the

actions and performance (Collins, Hugh. 1999).

In the given circumstances, TAM’s college has decided to provide the marketing contract to

NAMS based on their oral evidence of intense marketing for one month only 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 law of tort and of contract is classified as part of the "Law of Obligations", but the law of

tort applies to everyone that it is relevant to, while in the law of contract or in beliefs obligation

is "Voluntarily Assumed" (DiMatteo, L. A. 1998). Contract damages are based on losses that are

expected, while tort damages are compensatory.

3.2 The Nature of Liability in Negligence

1. Breach of Contract: In the contract tort of negligence Breach of Contract is most

important thing. It is the behaviour of the people to act as a careless person or party and

not acting the contract terms and conditions (Okeke, C.N. 1988). This portion indicates

the pre-existence of a standard of appropriate behaviour to avoid imposing undue threats

of harm to people. NAMS has broken the contract when they have stopped the marketing

of TAM’s for one week.

2. DUTY: The duty is a responsibility of one person to another person; it is created form of

the common needs, philosophy and various sorts of religion (DiMatteo, L. A. 1998). The

glue of social burden is the threaded that binds humans to one another in groups where

preferences are considered unsuitable if they breach a pre-existing desire and restore

casually.

3. Cause in Fact: A small amount of trouble are more charming, with resolution more

indefinable then causation (DiMatteo, L. A. 1998). Based on the surroundings and

performances a person might choose to take steps and avoid doing from sloppy dramatics

in convinced.

3.3 Vicarious Liability in business

It is a policy of English tort law that imposes strict responsibility on managers for the

misconducts of their staffs. Usually, an employer will be held responsible for any tort committed

while an employee is carrying out their duties (John W. 2009). Vicarious responsibility means

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that somebody can be detained legitimately responsible for the reckless acts of a different

individual even despite the point that somebody overcomes no error in maintenance of the

unfocussed or indirect acts (DiMatteo, L. A. 1998).

In the given situation the management of TAM’s college fell in the doctrine of vicarious liability

because the night guard’s family has taken lawful actions counter to the institution. However the

management and the administrators were informed about the accidents and were also instructed

to dress protective outfit for the non-teaching employees to avoid injuries.

The employee who got hurt did not keep up the organization’s policy so the management

declined to give any advantage to the victim but The TAM’s College are certain to pay the

compensation because of the policy of vicarious liability.

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Task 4

4.1 Application of the Tort of Negligence and Defences

There are some basics of the tort negligence and defences in various business situations, they are

given below

Tort Negligence Law: It is a procedure of law in which it is initiated and operated in the realm

of intentional tort law and the elementary motive of negligence law, is to control and protect the

workers from injuries connected to their line (Leibee, B. C. 1976). TAM’s college’s non-

teaching workers were guided to use defensive clothing for their protection and security.

Duty of Care: An individual may owe a responsibility of care to ensure that they do not injured

from any irrational harm or loss (Okeke, C.N. 1988). If such obligation is breached, a legitimate

liability is forced. TAM’s college workers were cautioned about the damage and losses that the

workers might face.

Sources of Negligence: Negligence can be defined as failure to take accurate caution of

protection. It is the accidental breach of a legitimate duty causing damage reasonably foreseeable

without which the breach would have not occurred (John W. 2009).

Potential sources of negligence are:

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

or insufficient knowledge of activities are poor selection of activities (John W. 2009).

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

equipment which can cause harm (N. Et Al. Kumar, 2001).

Inadequate protection: Inadequate protection denotes to careless actions on portion of

the individual who is unwilling to wear protective gears (John W. 2009).

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Defence against Negligence:

Assumption of risk: It is assumed that a person takes portion of the risks when engaging

in activity (John W. 2009).

Sudden emergency: Any act of instant action to help the individual in danger. Such as,

attempt to rescue a person drowning in the water is an act of sudden emergency

(Emenike, E.U.I. 1989).

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Potential sources of negligence

Poor selection of activities

Use of faulty equipment

Inadequate protection

Defence against Negligence:

Assumption of risk

Sudden emergency

Figure: Sources of Negligence

Figure: Sources of Negligence

4.2 Application of Vicarious Liability

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

guards and labors in order to avoid upcoming accidents. However the senior superintendents

have ignored the caution and he has sent off a night guard on duty without the suitable clothing.

It is against the company policy.

Supervisors has the in-built authority to control over the employees and the supervisors were

asked to maintain the right clothing and proper protecting gears of the non-teaching staffs

(Okeke, C.N. 1988). But in this situation the supervisors did not follow the directions and lead

one of their employees to duty deprived of proper clothing.

However, indirect responsibility means that somebody can be detained lawfully responsible for

the reckless acts of a different individual. In this situation the supervisors were careless to the

guidelines and that lead one of the staffs to get hurt. But the authority of the TAM’s college will

be found blameable because of vicarious liability doctrine.

The authority denied the compensation to the staff because he was not following the guidelines

of the TAM’s college. But under the vicarious liability policy no matter how faulty the

employees are the TAM’s authority will be legally responsible for the staff’s wrong doing.

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Conclusion

In the scenario 1, 2 and 3 we can see that TAM’s college has appointed legal advisors in order to

deal with the lawful issues that are probable threat for them. They also have an ambition of being

the best educational institute in the UK and for this reason they were hiring agencies to promote

their college and trying to capture the attention of the students who wants superiority education

with the uppermost facility. On the last scenario, TAM’s college was accountable to pay a

compensation for an occurrence with one of their staff that they have denied because of the staffs

careless act against the policies of the college. As a consequence TAM’s had to face lawsuits and

fell in to an English doctrine called “Vicarious Liability”, which indicates that TAM’s were

bound to pay the compensation to the staff because of the vicarious liability.

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References

Bucher, C.A. (1983). Administration of Legal Responsibilities. The C.V. Mosby Company, St.

Louis., vol. 32, no. 8, pp. 849-875.

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.

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.

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

Hare, J. I. Clark. 2003. The Law of Contracts. Clark, N.J.: Law book Exchange.

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.

Marsh, P.D.V. 2001. Contract Negotiation Handbook: Burlington, Vt: Gower

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.

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