Aspects Of Contracts And Negligence For Business





Aspects Of Contracts And Negligence For Business

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Aspects Of Contracts And Negligence For Business

Question 1

LO 1.1

The validity of a contract entails five essential elements. One such element is the intention to establish legal correlations. A business-related agreement should have clear terms that will aid the involved parties to seek legal guidance and assistance in case the other participant does not fulfill the stipulations in the contract. However, such terms as ‘subject to contract’ and ‘without prejudice’ exempt the involved parties from abiding by the legal provisions of a typical agreement. This is because of the differing conditions in the latter two categories.

An offer is also a crucial element in the formation of a valid contract. It refers to the readiness of a person to engage in a certain task, which if followed by the acceptance of the other person results in a formal agreement. For instance, if the sales representative of a certain commercial organization tells a potential client that they will sell them 100 pairs of shoes at $ 200,000, it equates to an offer. If the subsequent contract does not contain a specification of the time limit, the offer becomes valid for a reasonable period before the person responsible for initiating the offer can revoke it (Kelly & Kelly 2011, 29). This explains why most contracts contain specified time limits.

Additionally, the component of acceptance is a major determinant in an agreement. The person presented with the offer has to accept it in order to validate the contract. This may occur orally or in writing. However, the counter-offer does not offer validation to a contract. It is a partial acceptance whereby the party receiving the offer only agrees to certain terms of the treaty. For this reason, it is important for all the involved parties to decide on the most appropriate method of acceptance when formulating a contract. This will avoid conflicts on the validity of the established agreement.

Another chief component of a formal contract entails the benefits offered to the other party. Based on the policies regarding the formulation of a contract, the benefits ought to be measurable through certain economic entities. Some of these measurable considerations include money, goods, and services. However, agreements involving a deed do not operate based on such policies. The law exempts the recipient from giving any form of consideration to the other party in the contract. Similarly, a promise to offer a gift to the other party lacks guidelines in the contract law since it lacks a common exchange of benefits (Kelly & Kelly 2011, 33).

Furthermore, the contract law recognizes that some individuals lack the capacity to formulate valid agreements. Contracts made by people under the age of 18 or those with mental disorders are invalid. Nonetheless, such contracts become valid if the individuals engage in such agreements based on the legal stipulations for necessities. This includes commodities or services that are vital for the existence of the individual under consideration at the time of the contract formulation (Roach 2009, 60). In such cases, the minor or mentally challenged person may have to argue his case before a judge following the legal actions undertaken by the seller of these products.

Based on these elements integrated in a valid contract, Sam should not sell the book to Bob. This is because of the existing contract between him and Carl. The oral agreement comprises of the five major elements of a valid contract. To begin with, the bookseller presented an offer to Carl with the acceptance being evident through the assertions of Sam in his conversation with Bob (Kelly & Kelly 2011, 41). In addition, the agreement did not have a specified time limit. For this reason, it would be illegal for Sam to disregard the terms of this agreement without considering such aspects that make it a valid contract.

LO 1.2

In addition to these provisions, there are different aspects that result in the categorization of contracts. One type of business contracts is the bilateral agreements. This involves two parties under the obligation of doing or not doing a particular activity. In contrast, unilateral agreements only bind one party with such obligations (Roach 2009, 57). One such form of agreement is the reward contract, which requires the individual offering the prize to pay a certain amount of money following the provision of crucial information regarding a person or situation. Another type of agreement is the viodable contract, which is a valid deal that is subject to a dismissal by one of the involved parties. This includes agreements made with persons below the age of 18 or mentally challenged individuals.

LO 1.3

Owing to the numerous conditions associated with these types of contracts, it is important to understand the major terms used in contract laws. One such terminology is consideration, which refers to the exchange made by both parties. For instance, a company may supply certain goods to a client in exchange for a particular amount of money agreed upon in the contract (Roach 2009, 60). Similarly, the express terms are the stipulations in the contract. They may be verbal or in writing since contract laws recognize both elements in the formation of a valid contract. In addition, an offer is one of the core elements of a valid agreement. Making an offer to the other party must have the purpose of creating a legal relationship between the parties. Moreover, it ought to be accepted and complete.

Question 2

LO 2.1

In line with the terms used in contract laws as well as the crucial elements of a valid contract, the local council can rely on the clause neglected by the client in order to avoid any legal consequences due to the incurred damages. This is because an acceptance of an offer in a contract may be in the form of an action that equates to verbal or written approval. In this case, the offer contained detailed information and was subject to acceptance as required by the contract laws. In addition, Barry’s action of renting the chairs was an indication of accepting the presented offer.

LO 2.2

In this case, the formulated contract is valid owing to the express terms of an agreement. The purchasing process between Barry and the local council involved verbal interactions with the leasing of the chairs indicating the acceptance of the available offer. Similarly, in line with the implied terms, any liability on the local council is unfounded. This is because express terms tend to overrule such practices and customs (Roach 2009, 62). Similarly, the exclusion and exemption clauses are statements in a contract that exclude a party from any liability provided such stipulations are evident in the agreement. such terms of contract justify the stand of the local council with reference to the legality of the contract.

LO 2.3

Based on the terms and elements of this contract, the local council did not commit a breach of condition. This is because it upheld their part of the deal by presenting the proposed offer. for this reason, any such claims from Barry are invalid. Similarly, the legality of exemption clauses is beneficial to the local council in this business scenario. This is because this term of contract excludes this party from liability. Accordingly, the contract law does not require the local council to compensate Barry (Roach 2009, 62).

Question 3

LO 3.1

Torts refer to wrongful acts that result in damages on one’s body, possessions, or his or her legal rights. This leads to a breach of duty under statute. in line with terms of a valid contract with reference to liability, the offended party ought to sue the persons responsible for these destructive acts in a civil court for damages or a restriction against repetition. In contrast, a contractual liability occurs when the existing contract voluntarily binds the involved parties. Another major difference between the two concepts involves the governing laws. On one hand, the law of tort is applicable to all the involved parties in the agreement (Gibson & Fraser 2007, 42). In contrast, the law of contract is voluntarily valid. For this reason, unlike the obligations of the tort liabilities that are the outcome of agreements, those of contractual liabilities are in line with the contract laws. This results in expectation losses in contractual liabilities with compensatory damages guiding tort liabilities.

LO 3.2

Based on contract laws, liability requires intent. Nonetheless, negligence attracts liability as a way of holding the responsible person accountable for his or her actions despite the lack of intent to harm another party. The scenario under consideration relates to the nature of tort negligence. this is because Adam’s actions are civil as opposed to criminal. To begin with has a duty to the plaintiff. He is bound by certain customs to fulfill his promise of the monetary prize in accordance with the advertisement. In addition, there is sufficient evidence of Adam’s failure to honor this duty. He refuses to pay Brian the advertised amount of money. Another aspect of tort negligence that justifies the demands of Brian involves the financial and emotional injury incurred due to Adam’s actions (Gibson & Fraser 2007, 49). He incurred numerous expenses in his journey from Dover to Calais. Similarly, failure to attain the promised prize caused him emotional pain and frustration. this shows Adam’s breach of duty.

LO 3.3

Vicarious liability refers to a secondary form of liability, which bases its arguments on the aspect of superiority in a business concept. Based on the tort laws, the actions of the human resources in a commercial organization equate to those of as company through the law of agency. For this reason, vicarious liabilities may occur when the director of an organization engages in fraudulent activities. Any financial, emotional, or physical losses that occur through the actions of such directors result in damages from the company to the affected parties (Gibson & Fraser 2007, 70).

Question 4

Based on the tort of negligence, this statement is correct. as an employer, Ben does not owe Roger non-delegable duty of care in the provision of a safe working environment. This is because his duty with reference to the promotion of a safe environment is complete with the provision of gloves. Nonetheless, Roger disregards them, an aspect that illustrates his negligence to promote safety in his place of work based on the tort law.

Similarly, the tort laws on the negligence with respect to the relationship between an employer and his or her employee in a commercial organization, Roger has no valid claims to fill for vicarious liability against Ben following Collin’s violent actions. This is because these legal stipulations exempt an employer from liability if the actions of the employee under consideration are not part of his or her official duties. These provisions indicate that the employer will not be vicariously liable for any assault committed by the workers of his or her firm provided the purported use of force is not part of their employment tasks (Gibson & Fraser 2007, 90).

Similarly, the tort law comprises of provisions that facilitate the compensation of Mark following the burglary attempt in his hotel room. based on the stipulations in the Occupiers’ Liability Act of 1957, a landlord is vicariously liable for any physical, property, or emotional losses incurred by a non-tenant following actions that depict poor maintenance of the property(Gibson & Fraser 2007, 92). In this case, the gardener obtained a master key to Mark’s hotel room. this is an indication that the property owner did not enact proper safety measures in the hotel premises. For instance, one would argue that the installation of locks that reject any master key would have prevented such an incidence. Based on such assertions, this statement is correct. Mark should claim compensation for the lost valuables based on the vicarious liability governing the noncompliance of the property owner.

In line with the stipulations integrated in the Occupiers’ Liability Act of 1984, Poshplace Hotel is not vicariously liable to mark following the acquired injuries at the swimming pool. To begin with, the tort laws regarding the duty of the property owner indicate that clear indications on such scenarios that may cause losses to non-tenants should be available to the visitors. In this case, the management of this hotel indicated clearly that the pool was a risky area after the operating hours. Accordingly, Mark’s negligence does not warrant any damages (Gibson & Fraser 2007, 110).

In line with the argument highlighted in this discussion regarding Mark’s negligence with reference to the warning notice in close proximity to the swimming pool, Mark is in no capacity to utilize the ordinary negligence principles in his claim against Poshplace Hotel. This is because of the clear warning notice, which prevented all visitors from using the swimming pool during these hours.

Similarly, under the Occupiers’ Liability Act, Mark cannot make any claims regarding the cost of his designer swimming trunks (Gibson & Fraser 2007, 136). This is because the warning notice placed near the swimming pool exempts the property owner and the entire hotel management from vicarious liability. This notification invalidates claims of negligence by Mark against Poshplace Hotel.

However, following the loss of his jewelry after the burglary incidence in his hotel room, Mark can make a claim based on the facet of vicarious liability against Poshplace Hotel. This is because the actions of the hotel gardener were partly because of the negligence by the property owner. His failure to install suitable locks that do not allow access to the hotel room through master keys led to this burglary incidence. For this reason, the management of this hotel ought to compensate Mark of his jewelry.



Gibson, A, & Fraser, D 2007, Business law, Frenchs Forest, N.S.W., Pearson/Prentice Hall.

Kelly, D, & Kelly, D 2011, Business law, Abingdon, Oxon, Routledge.

Roach, L 2009, Card & James’ business law for business, accounting & finance students, Oxford, Oxford University Press.







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