Contract and negligence law is developed for the governance of commercial transactions and to provide guidance for applicability of standard obligations. Contractual law is applied in situation where agreement is created by mutual consent while negligence law is imposed in situation where parties are strangers to one another (Mann, 2002). Present project report is comprises of description of various provisions of contract and negligence. Described provisions will be applied to the case situation in order to provide valid conclusion. In this report previous case precedents will be used for better justification of case analysis.
1. Essential elements required for formation of valid contract
All the agreements formed by the individuals do not have legal enforceability due to absence of required essential elements. In order to create valid contract, parties are required to include following elements-
- Offer and acceptance- An agreement between parties is created by proper offer acceptance. Offer is a proposal given by one party to general public or to a particular person. Invitation to treat cannot be treated as offer because it is only an expression to show intention for creation of contractual relationship. On the other hand acceptance is consent provided by the party to whom offer was made (Elements of Law of Contracts, 2012). Acceptance by the party must not be provided along with a condition or m
- Consideration- Consideration can be termed as mutual benefit for which parties enter into contractual relationship. It must have some value in eyes of law (either monetary or non-monetary) but is not mandatory that it should be at arm length price.
- Intention- Parties entering into contractual relationship must have intention to insert legal obligation for the completion of promise made by them (Watt, 2007). This element is not expressly shown in agreement as intention of parties is assumed clause.
- Capacity- Contract attracts legal duty for the fulfillment of promise thus parties entering into this relationship must be capable to do so. In this context, they must not have any of the disqualification
- Restriction by law
- Doctrine of privity- In accordance with this doctrine third party will not be entitled to sue contracting parties for the non-satisfactory performance provided by them.
As per the described case situation, James had provided advertisement for the sale of camera. By considering the advertisement, Maria approached James for the purchase of camera but in lower price i.e. £45. However, James denied for the sale in reduced price. Further, he did not receive any other offer so he agreed to sell camera to Maria at £45.
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In the described scenario, invitation to treat was given by the James to invite other parties to provide offer for the purchase. Further, offer was given by Maria for purchase camera at £45 but on this counter offer was given for the sale at £55. Due to absence of offer by another party James had provided acceptance to the previous offer of Maria.
Validity of contract
By considering the provisions of English law, previous offer is said to be canceled if counter offer is provided by offerree. As a consequence, offerree is not entitled to provide acceptance on the previous offer. Henceforth, acceptance of James is not valid in this case.
2. Different types of contract and its examples
Contracting parties are entitled to select suitable form of contract in accordance with their convenience and their requirements. Each contract has different impact on the relationship of parties. Description of different types of contract and its examples is enumerated as below-
- Written contract- This is the most formal form of contract and generally selected by business entities. In this type of contract, contractual deed is formed for the description of terms and obligations (Platz, 2007). This deed act as legal evidence in future in order to provide damages to the innocent party. In some agreements written form of contract is mandatory such as sale of immovable property.
- Distance contract- This form of contract is created in situation where offer and acceptance is provided through post because parties are not able to present at same place. In this contract validity is judged by the applicability of postal rule (Distance Selling Contract, 2008). This rule depicts that acceptance is valid if it communicated to the party by whom offer was provided. Example of distance contract is purchase of home appliances from tele-shopping.
- Face to face contract- This type of contract is created for daily requirements such as travel in local bus. In this contract verbal communication is done for offer and acceptance. Further, in this quick acceptance is needed else offer is said to be terminated.
3. Contractual terms that can be included in valid contract
Contractual terms can be defined as provisions inserted to describe obligations of parties which are required to be satisfied by their performance. Following terms can be inserted while formation of valid contract-
- Expressed terms- These terms are specifically mention by the consent of contracting parties. Inclusion of these terms can be either in oral manner or in written manner.
- Implied terms- According to provisions of English law, implied terms refers to the practice of providing effect to the obvious intention of parties (Milner, 2011). These terms are not expressly stated by the parties thus it is assumed to be part of the contract.
- Innominate terms- In accordance with the English contract law, innominate term can be considered as intermediate term which can neither considered as condition nor a warranty. Damages for breach of this term is provided by considering the fact that breach had deprived innocent party from entire benefit or not.
- Conditions- Condition in a contract can be termed as significant stipulation which is required to be fulfilled by the performance of party. In accordance with the case of Poussard v Spiers (1876) 1 QBD 410, if condition of a contract is not satisfied, then innocent party can make claim for the damages for termination of contacts.
- Warranties- These terms are collateral to the main purpose of contract. In situation of breach of warranties, aggrieved party may be entitled for the claim of damages but they cannot repudiate the contract (Heine and Kerber, 2002). For this aspect case of Bettini v Gye 1876 QBD 183 can be considered.
1. Applicability of provisions of contractual law
According the described situation, Bella UK is engaged in production of various beauty products and recently they had launched their new product i.e. “Miracle Oil” for good hair growth. For the promotion of this oil they had sent out the flyers with an advertising statement that buy ten boxes at 5 and provided offer will be valid for limited period. This advert was supported by additional fact that company does not owe any responsibility for adverse consequences and success probability of product is 20%. By considering the flyer, offer was given by Hair 4 U for the purchase of 10 boxes of oil. Draft of their contract is as follows:
Draft of contract
10 boxes of oil is required by the purchasing party (Hair 4 U) from Bell UK. Contract of parties is supported by following terms-
- Expressed terms- 10 boxes will be provided at the price of 5 by seller. This special offer is available up to limited period.
- Implied terms- Implied terms described by Sales of Goods Act will be applicable in this agreement. In accordance with these terms, seller is required to provide qualitative product to satisfy the objective of purchasing party.
- Exclusion clause- Statement that “Seller does not owe any responsibility for adverse consequences” will be considered as exclusion clause.
In situation where above described terms, then party in fault will be liable to provide damages for the injury occurred to the innocent party.
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2. Report on impact of terms to the owner of Hair UK
Breach of condition
Breach of condition will be treated as breach of contract. In situation where conditions of contract is not satisfied by the Bella UK, then owner of Hair 4 U will be in position to claim for the termination of contract.
Legality of exemption clause
In accordance with the provisions of Unfair Contract Terms Act 1977, exclusion clauses are considered for relief only if it is appropriately inserted and supported by legislatory aspects. In this case, exclusion clause is in contradiction with implied terms of Sales of Goods Act. It is because, seller has obligation to provide qualitative products to customers to reduce risk of injury (Emanuel and Emanuel, 2008). As a consequence, Hair 4 U will be entitled to claim damages for side effects occurred due to poor quality of oil. However, they cannot demand damages in situation where usage of oil does not result in hair growth.
1. Differences between contractual and tort liability
Contractual and tort obligation are form of civil responsibility. Objective of both the provisions is to repair the prejudice action caused by misconduct committed by party in fault. It provides remedy either in monetary or non monetary terms. Despite of these similarities, there are certain differences between these obligations which is as follows-
Basis of difference
Issue of consent
In tort, interaction between parties is never supported by their consent. Thus, in tort relationship is imposed by law.
In contract, it is essential for parties to create agreement willingly and in absence of coercion.
Occurrence of obligation
In tort obligation arises in situation where party fails to fulfill their standard duties.
On the other hand in contract, faulty party is liable to pay obligation if they are not able to satisfy terms and conditions of contract (Elliot and Quinn, 2009).
Reason of damages
Damages in tort are provided to bring innocent party in situation where negligent action had not taken place (Dabydeen, 2004).
In contract, damages are provided to bring party in position where satisfactory performance is provided by the faulty party.
Determination of damages
Damages is determined by considering the situation and standard duty.
Remedy is provided to the aggrieved party by considering deed of contract.
Wilson and Clyde Coal Co. V English (1938)
Steinberg v Scala (Leeds) Ltd (1923)
2. Concept of duty of care and neighbor principle
Negligence law is important part of English common law. In accordance with the provisions of this law, negligence can be defined as an act which injured an innocent party for which they are entitled to sue the wrongdoer. In order to make successful claim for negligence party is required to satisfy that defendant owes obligation of standard duty of care and they had breached that duty (Bowyer, 2000). In addition to this, damages should be occurred to the claimant from the negligent action of defendant. Along with this, damages should be forseeable in nature.
Principles of negligence is directly associated with the provision of duty of care. In accordance with the tort law, duty of care can be termed as situation and relationship which impose obligation of duty of care to the parties. This duty is imposed for the prevention of both property damage and personal injury (Bledose, 2010). For the determination of existence of duty of care, neighbor test has been developed by Lord Atkin in case of Donoghue V Stevenson.
In this case defendant went to cafe with her friend. She ordered ice cream with ginger beer. Drink was provided in opaque bottle due to which ingredients in it were not visible and while consumption a decomposed insect occurred. In this aspect, Lord Atkin had stated that individual must not injure your neighbor (parties which are likely to get affected by your actions). In this aspect, individuals are required to avoid actions or omissions which can cause injury to the neighbor. By considering this aspect, it was stated that Stevenson has duty of care for consumers. He should take care of manufacturing process to prevent possibility of injury. However, occurrence of snail shows breach of duty and he was held liable to provide damages.
3. Description and applicability of provisions of vicarious liability
Provision of vicarious liability has been developed by considered doctrine by agency. In accordance with this legislatory provision, liability for negligent party is imposed on party other than the tortfeasor (Bar, 2009). Obligation is transferred because obliged party was in position to control the actions of tortfeasor and if they have behaved cautiously then can prevent the possibility of damages.
On the basis of this aspect, employee is also held liable for the negligent action committed by employees in coursework of employment. However, this provision will not be applicable in situation where misconduct is covered under provisions of criminal law or negligent action is committed by self employed. Due to this aspect, employers are required to monitor and guide employees in a proper manner (Employer Vicarious Liability, 2013). In addition to this, they are required to following norms of Occupier’s Liability Act and Health and Safety Act. By considering provisions of this Act, employers will be able to reduce possibility of negligent action in workplace.
In accordance with the described situation, a minor (Mathew) was appointed by the employer (Alan) of Norkfolk farms. Alan was aware of the fact that minor cannot be appointed as an employee but still he acted contrary to express prohibition stated by Norkfolk farms. He said to Alan that they will not disclose this fact to third party. After some days, Mathew was helping Alan in delivering milk. During this work, Alan had reversed the van and accidentally Mathew was injured.
- A: Alan has duty to drive in proper manner to reduce risk of injury. Incident of reversing van shows breach of duty by Alan. Due to the negligent action of Alan, injury was occurred to the Mathew. In addition to this, occurred damages were forseeable in nature. In this case, all the principles of negligence are satisfied that Mathew is entitled to sue Alan in order to demand compensation for the injury.
- B: In this case situation, Norkfolk farms cannot be held vicariously liable for the negligent action of Alan. It is because, they had provided the strict prohibition regarding employment of minor. Alan was aware of the fact that minor cannot be appointed as an employee but still he acted contrary to express prohibition stated by Norkfolk farms. As a consequence, employer will be held vicariously liable to provide damages.
1. Applicability of principles in negligence
In the described case scenario, Albert was wishing to rent a flat from Brad. In order to assure Albert's financial position, Brad had made application to accountant (Charles D Lois) to avail account details. Charles had provided wrong information that Albert is an excellent client in confusion and he did bother to open the books. In actual, Brad was indebted as he had continuous overdraft. By considering his statement, Brad agreed to enter into tenancy agreement with Brad. After some time, Albert disappeared by making arrears of rent of several months.
Present case situation is based on the provision of negligent misstatement. In this case, due to misstatement made by Charles, Brad entered into tenancy agreement with Albert and consequently he had to suffered from the damages. In this situation, Charles has duty to provide fair and true information regarding financial position of Albert. However, because of his carelessness he had provided wrong information.
Applicability of liability
In this situation, Charles will be liable to provide damages to Brad as because of negligent misstatement made by him injury was occurred to the innocent party.
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2. Applicability of defences in negligence and provisions of vicarious liability
In the given situation, Graham is working as a doorman at Macho Men plc. This company is running a chain of night club throughout the UK. While working at one night, he noticed that, one of the drunken customer is involved in argument with barman. Along with this, he is throwing items due to which damages were occurred to the property of club. In order to stop him, Graham had ejected his actions but meanwhile he had broken the arm of customer.
In this case situation Macho Men plc will be entitled for the action of Graham. However, Graham is entitled to avail the defense of Ex turpi causa (Lane v Holloway  3 WLR 1003). In accordance with this defense, none of the action of the defendant is immoral or unjust in eyes of law.
Applicability of liability
In the described case, Graham had acted to prevent damages on the property of club. In addition to this, customer was misbehaving with the barman. As a consequence, he cannot be held liable for the act of negligence.
However, in situation where expressed prohibition had provided by the company from manhandling troublesome customers then company will not be held liable for the actions of Graham. It is because, Graham had acted beyond the provided roles and responsibilities.
In this case situation, Carla has used van of her company on the holiday in order to drop her friend at railway station. On the way back, she decided to deliver some parcels. Afterwards, she negligently crashes the car driven by George.
Legal provisions and Applicability of liability
In this case Carla had duty to drive appropriately to prevent situation of accident. However, due to her negligent driving she had cause damage to the car of George. As a consequence, she is entitled to provide damages to the George for the same (Adams, 2010). In this case, vicarious liability cannot be imposed on Links Ltd as negligent action was occurred after the course of employment.
In accordance with the present study, it can be concluded that contractual and tort law provide description about the standard obligations which are required to be fulfilled by party. In situation where contradictory performance is provided by the party, then individuals will be held responsible for the injury of the innocent party. Consequently, they will be liable to provide damages for the compensation of injury. However, in certain situations, they are entitled to avail the benefit of defences provided by English law in order to relinquish the obligation of misconduct.
Books and journals
- Adams, A., 2010. Law For Business Students. 6th ed. Pearson Education Ltd.
- Bar C. V., 2009. Non Contractual Liability Arising out of Damage Caused to Another. Walter de Gruytre.
- Bledose, A., 2010. Business law for Business Men. BiblioBazaar.
- Bowyer, M. L., 2000. Insurance contract law and regulation and competition in the UK insurance industry: The missing link. Journal of Financial Regulation and Compliance.
- Dabydeen, S., 2004. Legal and regulatory framework. IUniverse.
- Elliot, C. and Quinn, F., 2009. Tort Law. Longman.
- Distance Selling Contract. 2008. [Online]. Available through: < www.out-law.com›TMT & Sourcing>.
- Elements of Law of Contracts. 2012. [pdf]. Available Through: <http://www.londoninternational.ac.uk/sites/default/files/programme_resources/laws/ug_subject_guides/elements_law_contract-subjectguide4chapters.pdf>.
- Employer Vicarious Liability. 2013. [Online]. Available Through: <http://www.oxbridgenotes.co.uk/notes/oxbridge/2013/tort-law-notes/samples/employer-vicarious-liability>.