Important Aspects of Contracts

Basic Elements of Contract

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Introduction to Aspects of Contracts

A contract is a legally binding agreement between two and more parties. Contract can be applied through written and spoken format.For development of contract consideration of legal and lawful activity is essential as both parties has to agreed on the objectives frame by according to needs and relationship (Grenier and et.al., 2014). The present report will explain the essential elements of valid contract and their importance. It will evaluate the meaning and effect of contract as well as impact of contract according to case of Joe and Dilon. In the next part report will discuses nature of liability of negligence and difference between trot and contractual liability. It will also describe the vicarious liability and role of local council for Holy's slip.

Essential elements of valid contract and their importance

To frame an effective contract which is valid in all manners both parties need to consider the following elements. These elements improve the effectiveness of agreement proposed by both parties. Following are the key elements of legal contract:

Offer and acceptance: It is essential element of valid contract in which there must be lawful offer by one party and lawful acceptance by the other party. In the process the offer should be frame and design according to legal activities. In the offer, party need to consider the fact about the contract which may influence the agreement (Anand, Kirman and Marsili, 2013).For offer and acceptance case of Butler V Ex-Cell-O-Corp [1979]1 WLR 401 can be referred. In this case situation description regarding rules of valid offer and acceptance is provided.

Capacity of parties: In the elements of contract, capabilities of parties have significant impact on development and implementation of contract. This is an important thing that should be consider and analyze by both the parties before making the contract. To frame a valid and long-term contract evaluation of capabilities of parties is important (Lankford and Blaze, 2014).

Lawful consideration: In formation of contract consideration of legal aspects like actual cost of product, words spoken by one party and knowledge about return of something according to contract comes under essential elements of contract. To improve the significance of contract consideration of lawful terms is important which help to claim.

Legal indentation: This term of contract refers to intention of both parties which going to take part in contract (Sinnott-Armstrong and Fogelin, 2014). In that element domestic and charitable agreements are not enforceable due to agreement presumption is made by law in which both parties do not intend to enter into contractual relationship.

Acceptance: In a contract two or more parties take place as one is offering and other one accepts the terms to perform mutual activities that are beneficial for both parties. To develop a legal contract acceptance of all the terms is essential elements of valid contract.

Lawful object: According to framework of contract consideration and use of lawful object is important as it improve the value of contract (Goldman and Sigismond, 2013). It is key element of contract that use for developing the planning and implementation of contract.

Penalty on breach: If one of the party who take part in contract has failed to meet the criteria that define in the contract that other party will be able to claim and force to pay penalty for the breach of contract. This is an important part of contract which help provide the strength to both party as they can claim for unethical and activities that against the law (Thüm and et.al., 2012).

Evaluation of terms for Joe and Dilon

In the given case Dilon was the owner of fitness center and looking to improve the stock for fitness machine. For that Dilon has contacted Joe who was an engineer and built running machines. Dilon has asked Joe to provide machine for its fitness center. In that process Joe has given the details for cost of parts of machine which was around $1000 and sent a text box online which suggest that Joe will not offering any guarantee for price of product that have been quoted. As the prices of parts will increase Joe will also improve the prices of machine. All the essential consideration has been done for buying and purchasing the fitness machine. Meanwhile parts company has increased price of parts $500 which has influenced the overall costing of fitness machine. Joe has informed that to Dilon that if the price of part will increase than he will also improve the prices of whole machine.

In accordance with the case study of Butler V Ex-Cell-O-Corp [1979]1 WLR 401 Final note provided by the Joe will be treated as new offer because in this note terms of contract is modified. It is because, terms of prevailing in clause is sensible because there is situation of uncertainness in the price.

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Parts manufacture company PartsCo has quoted $1500 for parts that directly influenced the price of machine. As Joe has informed that before to Dilon that if the price of parts parts will increase that cost of machine also get affected. According to case Dion has accepted the offer of Joe and both have made contract in which all the terms and conditions clearly mentioned and consider by the both. In addition to that, a deal is made between them for $2500 which was the increased and final price for the sale of machine (Gibson V Manchester City Council [1978] 1 WLR 520 (CA) and 1979] 1 WLR 294 (HL). Condition were stated by both the parties for the agreement made between them which are contradictory with each other but finally they get agreed upon a single subject matter. According to case both have agreed on the all terms and conditions that stated before for cost of the machine.

The terms laid down by Joe on note is valid because it is in accordance with the statutory provisions. Terms of prevailing in clause is reasonable because there is situation of uncertainty in the price. In that case, it can be said that there is a valid contract between Dilon and Joe. Further, both the parties are obliged to fulfill their contractual obligations else they will be liable to provide damages for the breach. Joe has made clear contract term for selling the fitness machine according to prices coated by the Partsco. Which is legally right.

This case of fitness machine has the conditions of prevailing clause and proper agreement on the prices that might be increase according to cost of parts. In accordance with the case of Partridge v Critenden (1968) 2 All ER 425 terms and conditions of contract it is consider that Joe has sale machine $2500 was legally right as he has informed Dilon for increasing the price according to cost of parts which id fair. Dilon has also accepted the changes in prices as it was mention in contract.

Basis of contract their meaning and effects

Contract is a legal agreement with lawful object that accept and offer by two or more parties. In that parties make legal framework on the common objectives that consider for consideration of legal activities. Following are the basis elements of contract that has significance impact on lawful activities:

Object: For the development of valid contract, establishment of legal objectives is considering as basis element. The objective of contract determine the involvement of parties and differentiate the offering and accept er for the contract (Dietz, 2012). In addition to that, objectives of contract must be clear as well as legal as both parties need to to agreed on the key terms and conditions sated for the agreement.

Consideration: This has significant impact on the contract as both party who taking part in agreement. Consideration of legal activities, subject and proposal required as contract is a legal terms which shaped by the law and order of national and local government rules (Krauss, 2012). In formation of contract consideration of legal aspects like actual cost of product, words spoken by one party and knowledge about return of something according to contract comes under essential elements of contract.

Use of clause: In contract use as well as presence of clause is important as it improve standard of contract. In that implementation of law such as capabilities of party, determining the liabilities and consideration of law for developing contract which are the basis of agreement (Van Dam, 2013). In that element domestic and charitable agreements are not enforceable due to agreement presumption is made by law in which both parties do not intend to enter into contractual relationship.

Validation: This is most important foundation of contract, in which the terms and conditions use by the parties need to be valid and considerable according to object. It is the responsibility of both parties to check the capabilities and lawful activities that would be performed by undertaking the contract (Deakin and et.al.,2012). Validation of object and conditions is help to improve the trust and quality of agreements.

Mutual undertaking: For the formation of contract mutual undertaking of aims and objective consider by the both parties. Undertaking of terms and conditions is key basis fundamental of contract. In that both parties analyze the situation and benefits that may be gained through undertaking a legal contract will be helpful for them to improve the effectiveness of agreement. It gives the power to both parties to make their way for managing task as well as their benefits. This is an important part of contract which help provide the strength to both party as they can claim for unethical and activities that against the law.

Express and implied terms: According to contract terms, express term refers to specific conditions and note that need to be considered in the initial interview orally or in written format (Bettini v Gye 1876 QBD 183). This has clear impact on the whole agreement develop by the parties as they have to applied the terms in operations. On the other hand implied term refers to legal and ethical regulations that has to be considerable in the development of lawful contract that improve the effectiveness of contract (Shirlaw v Southern Foundries[1939] 2 KB 206).Contract formed PartsCo and Joe.

In the given case Joe also had the contract with PartsCo Which manufacture the parts for fitness machine. In that contract organization has suggested that the price of parts may be changed according to conditions. As organization has provided online information about the initial prices of parts which was $1000 and make the statement that it may change on the last time before the delivery. According to case the final prices that Joe has paid to PartsCo was $1500 which has also increase the demand of Joe from Dilon.

In the given case Joe had the contract with PartsCo as they made contract for delivery of fitness machine to Dilon. In that contract condition and terms are clear as organization can change the quoted price of parts any time and Joe may not argue for the same as management is not able to determining the fix price of parts. Joe also agreed for the same as company has text online. As Joe has purchased the parts company has raised price $500 and make final cost as $1500.

In the given case Dion has accepted the offer of Joe and both have made contract in which all the terms and conditions clearly mentioned and consider by the both. In addition to that, a deal is made between them for $2500 which was the increased and final price for the sale of machine. Condition were stated by both the parties for the agreement made between them which are contradictory with each other but finally they get agreed upon a single subject matter. It is consider that Parts Co have clearly mentioned in an online text box that the prices are flexible and subject to change anytime by the order of Parts Co. They mentioned that company does not guarantee the prices which they have quoted.

Contract and impact of the terms for Fabian and Chloe or Fabian and Jenny

In the given case of Fabian, it was mention that he wants to sell his computer for $100 and for that he has given the advertisement in the newspaper. This advertisment will be considered as invitation to offer.

Offer by Chloe

Chloe come to see computer and agree to make purchase at price of £80. She said to Fabian to provide his decision by Thursday. On this offer, further acceptance of Fabian is required to creation of valid contract. Fabian has several days to provide acceptance on offer made by Joe. Meanwhile Fabian not respond to Chloe and ignored her and offer was considered to be lapsed Offer by Jenny

By considering advertisment, offer is alsoExplanation of nature of liability and difference between tort and contractual liability provided by Jenny. She saw the advertisement on Monday evening and after returning from home, she posted a letter by agreeing on buying the computer. For this situation case of Entorres v Miles Far East 1955] 2 QB 327 and (Morris Associates V Voyce [2003] EWCA Civ 189) can be reffered. Both cases are based on telex communication for the acceptance of contract. Later, she was not interested for the purchase of computer and on Tuesday morning, she telephoned Fabian to ignore the letter that he might receive from her. Letter of offer was arrived on Wednesday morning. In this case situation, offer will be considered canceled. Offer will not be cosnidered contractual relationship between parties (Chandler, 2007).

There are more than two parties that is required for the formation of contract but no consent has been made among any party. And element for consideration and monetary value is also absent. Hence it will not be treated as a valid contract. Fabian has given advertise in news paper for selling the computer but no one has responded to conditions put by him. Jenny has refused to buy the computer and Fabian was not in favor sale computer at $80. according to law there is not proper indication of contract between Fabian and Chloe and same with Jenny. So it is consider that Fabian can not ask for the claimfor not purchasing the computer.

Explanation of nature of liability and difference between tort and contractual liability

Liability refers to obligation that arise during the course of business operations and individual responsibilities towards the role assigned to them. Liability is act of managing and undertaking the activities in proposed manner to get the desired outcome. According to law of UK liability in contract is obligation of conditions that proposed by the parties before making the contract. In that, if one party is failed to meet the contractual liability other party can claim for that to get compensation for loss (The Law Handbook. 2015.). The nature on liability depend on the the type of contract establish by the parties and involvement of risk that can influence the operations determine in contract.

Liability in negligence arises in situation where party is not able to act in accordance with their standard obligations. On the other hand contractual liability arises in situation where contracting party is not able to satisfy terms and condition of the contract. Tort is relationship between parties that are proposed by law while contract is formed by considering mutual consent of parties. In liability of contract damages led to breach of contract, on the other hand tort liability is applied on the basis of losses arise in aggrieved party. Tort is a legal obligation of party to victim as results of wrong decision which required some remedy for managing damage.

Scenario based: Is the sign in supermarket and excuse by Tim for rejecting liability valid?

Case: In the supermarket Holly met with an accident. She got slipped as floor of the supermarket was wet and got injured. In this she approaches to the manager of supermarket for the injuries that incurred to her and states that it has become the contractual liability to the injuries incurred to her. In this respect Tim refuse to take any kind of liability against it and stated that proper sign board was placed at the entrance of the market. This clearly indicates that management of the supermarket will not be liable for any act of negligence or injury that happens to the customers within the premises.

Condition: In the present case claimant is Holly and she is a victim and claims liability from the manager of the supermarket. Supermarket manager is trying to defend against the claim that is filed by Holly against the supermarket which has arisen all because of negligence of Holly. It has been seen that signboard was present as an evidence that is in the favor of manager. It is because sign board clearly indicates that supermarket will not be held liable in case of any injury.

Held: In the current case scenario, supermarket manager will be liable against the claim filed by Holly as per Occupiers Liability Act. This act states that by giving general notice or by keeping a sign board organization cannot get rid of the safety that they need to initiate against their customers (Proving Fault: What is Negligence?. 2015). In accordance with the provisions of Unfair terms of contract, this term is not valid because reduces obligation to personal injury of the defendant.It is their duty and even the responsibility to provide proper safety to the customers who approaches to the market. Hence, as per the case Tim will be liable against the claim that is imposed by Holly.

Scenario based: Could Dex claim for negligence and supermarket have a defense?

Case: Holly husband Dex came to know about such a situation that happened with her wife. After listening to the occurrence his husband went to the supermarket in a drunkard condition. Holly husband looks after the patch of water on the floor and for carrying out the fun he skids on the floor (Krauss, 2012). When he skid on the floor he fall on a shelf that was displaying pots of cream. This action of Dex lead to collapse of shelf causing injury to him. In this respect he headed towards manger of the supermarket. But the manger got annoyed by this situation and punched Dex and thrown him out of the market.

Condition: Present case shows that here claimant is Dex who is claiming for the negligence showed within supermarket. Tim the manager of the supermarket is defendant here as he gets blamed against punching Dex and is help liable for his action. In this scenario claimant is in a situation of drunkard and it is a situation of sub conscious state (Thüm and et.al. 2012). Seeing this aspect it can be said that Dex was not at the stage of viable decision. But his decision of jumping into a water was intentional that has made him got injured.

Held: As per the case Dex will not be able to claim against the injury that is caused to him against the negligence. In this case situation, Dex is not entitled to claim for damages because defence will be applicable of volenti non fit injuria. In the present case study, claimant was aware of patch of the water. He deliberately entered into a situation which there was possibility of injury. By considering this aspect, he is not entitled to make claim for damages. He had contributed in the act of negligence. As per the negligence act it can be said that if a person is getting injured all because of his carelessness, but here the intention was unusual to get into an activtity that can cause harm (Goldman andSigismond, 2013). Case clearly indicates that Dex in that particular situation was intoxication. As claimant is in the stage of drinking, so its liability will be with Dex itself. Here, claimant will not be able to make claim against the negligence caused by supermarket. However, manager of the business can ask claim against the broken shelf all due to negligence that is caused by Dex in the supermarket. Manger has got a very strong defense against the compensation and can claim against the damage. Here, in this scenario also reason for the cause remain the same as Dex was in the stage of intoxication and carried out the activity that was totally against the law.

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Scenario based: Explanation to how supermarket can be vicarious liable

Vicarious liability is defined as strict form of secondary liability. It is carried out under common law of doctrine of agency (The Law Handbook. 2015). This act shows that if any liability is incurred all because of negligence of subordinates then their superior will be liable for such an act. Further, it can be termed as liability that is imposed by third party and possess right, ability and duty for managing the actions that is carried out by the violator. In accordance with this provision, employer is liable for the negligent actions occurred in due course of employment. Employer will be held liable for both part-time and full-time employers but not for individuals who are working as self employed. To prevent situation of vicarious liability, employer is required to act in accordance with the Occupier's Liability Act. They should take care of their actions and provide proper guidelines.

Case: Present case dictates about Holly who went into the supermarket gets slipped due to patch of water at the floor of the market. Listening to this situation Holly's husband got angry and went back to the supermarket and viewed the patch of water at the floor. He seeing this in a drunkard condition tried to slide on the floor and get injured and broke the shelf of the market. On this he went to manger of the supermarket Tim (Lankford and Blaze, 2014). Seeing the scenario Tim got annoyed and punched Dex. Even Dex was thrown out the supermarket by the manager.

Held: In this case scenario vicarious liability will be applied on supermarket for the payment of damages. According to the case of Maltis Vs Pallack, if worngful act is being done by the employees to their customers during employment then employer will be liable for the damages. Here in this case supermarket will be liable against the vicarious liability for the act that is performed by Tim. Under such a situation Dex will be compensated by the supermarket against the act performed by Tim (Sinnott-Armstrong and Fogelin, 2014). This is because employee of an organization has not got any right to punch their customers for the undue act that is performed by them. Hence, in this case vicarious liability emerges which dictates that supermarket have to compensate actions which is performed by the manager of the market. Here, liability will be raised against the super market for the payment to be made to the Dex for the injury that is caused to him all because of punch which is initiated by Tim against him.

Scenario based: Claim for negligence against the local council

Case: After getting punched by the manager Dex return back to the home. Holly his wife sees the injury that is caused to him and went to the chemist shop to get some ointment for the injury. When earning back home from the chemist shop she got tripped over a paving stone. Here, it has been seen that there was no consideration laid down by the local council considering the standard duty of care to be maintained by them (Grenier and et.al., 2014). If council is carrying out any construction then in that case proper sign board must be placed for creating awareness among the pedestrians, so that accident can be avoided.

Held: From the case it can be said that it was he responsibility of local council to provide proper sign boards. However they have caused complete negligence from their part in undergoing such an activity. There negligence has caused injury to the Holy and she tripped in paving stone. In this scenario local council cannot defense themselves as it was their responsibility to look after the paving stone. However, if they provide reasonable approach in their action then they can prevent such a situation claimed by Holly.

Scenario based: Vicarious liability of the local council for Holly's slip

In this scenario local council will be vicarious liable for the injury that is caused to the Holly. Vicarious liability is defined as strict form of secondary liability. It is carried out under common law of doctrine of agency. This act shows that if any liability is incurred all because of negligence of subordinates then their superior will be liable for such an act. Further, it can be termed as liability that is imposed by third party and possess right, ability and duty for managing the actions that is carried out by the violator (Van Dam, 2013). Here, construction was performed under the supervision of a manger and that is not going to raise the liability of employee. Further, it can be detailed that if local council wanted then they could have control the paving stone by laying down proper duty of care. However, they have undergone the act of negligence that has increased their liability towards Holy. In the present scenario proper duty of care was not initiated leading Holly to get tripped in the paving stone. Here, local council made the assumption that pedestrian is aware considering this route. Even this was under the total control over the officer that was considered liable for the act performed by their employee. But for preventing the accident it was the responsibility of manager to take necessary against for initiating proper care. However they have not initiated any activity in this respect leading them to get liable for the claim imposed by Holly. Under such a situation officer will be liable to compensate Holy for injuries caused to her.

Conclusion

From the above report it is consider that contract is made by including and considering the elements like offer, acceptance, lawful object and legal activities, report has explained the key elements of contract and fundamental of agreement with their meaning and effect . In the report two case has been discussed and evaluated with the respect of contract and law of UK. In the next part report has discussed nature of liability and difference between trot and contractual liabilities that influence the conditions of contract. In the end report has explained vicariously liability and case of Dex.

Reference

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