Aspect Of Contract And Negligence For Business

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Question :

You are a legal adviser and visiter by clients who require advice on different aspects of Law. They have presented you with a summary of the case. With reference to different aspects of Law prepare a report as stated below. 

The learning outcomes of this assignment are:

You should understand the essential elements of a valid contract in a business context. 

You should be able to apply the elements of a contract in business situations

You should understand the principles of liability negligence in business activities

You should be able to apply principles of liability n negligence in business situations

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Answer :




Executive Summary

The report can be analyzed in terms of the analysis being shown to highlight the different aspects of contracts and negligence for business based norms and policies defined in terms of breach of business contracts and highlighting of several causes of business failures in terms of breached business contracts. The essential elements of the business contract can be analyzed in terms of breach of business in terms of various incidences and findings.

Three case studies are enumerated in the report based on the findings of the business breach and failures in terms of the causes and impacts of business breached proposals. The business based breaching of contracts may be mentioned in terms of the three situations being depicted in the analytical report. The first case study of the report is based on the analysis of the case of a bike rider named Ivan who met with an accident and developed permanent injuries but there was no case mentioned about his treatment to recover himself from his difficulties. 

The second case is a man named John who is cheated while buying the chair to sit in the park as it got damaged and he was hurt in the process but his challenge for justice in the court was not at all greeted with rewards. The third and final case study are that of Roger who after being hurt by his employer severely is planning to sue against the atrocities committed on him in the court in terms of vicarious liability related case scenario. In each case, the negligence in terms of tort and contract is especially and accurately highlighted.

Table of contents:


LO 1:4

 1.1: Importance of essential elements for the formation of a valid contract 4 

 1.2 Impact of different types of contract 5 

 1.3 Analysis in terms of contracts with reference to their meaning and effect 6 

 LO 2:6 

 2.1: Application of elements of contract in context of the scenario 6 

 2.2: Application of law on terms of different contracts 7 

 2.3: Effect of different terms in given contracts 8 

 LO 3:8 

 3.1: Contrast liability in tort with contractual liability 8 

 3.2: Nature of liability in Negligence 9 

 3.3 : Vicarious liability of a business 9 

 LO 4:10 

 4.1: Application of elements of tort negligence and defences 10 

 4.2: Elements of vicarious liability 11 

 Conclusion and recommendations: 11 


Aspects of contract and negligence of business can be analysed in terms of legal patterns. The law procedures and the process of the aspects of contracts and negligence for business is a case of extreme importance or business issue being cropped up in the present world of business contracts and performances. According to McKendrick (2014, p.29), there are different kinds of business and obligations of contracts related to business and the practiced norms and regulations being specific for business are different for different kinds of contracts and the rules and legal laws assigned to them vary in intensity. In spite of it, the overall general rules and regulations assigned for business contracts are similar in nature.

LO 1: 

1.1: Importance of essential elements for the formation of a valid contract  

All agreements are not considered as contracts. The agreements which are enforceable by law are called contracts. There are ten elements of a business contract (Cheung et al. 2014, p.148). 

The essential elements for formation of a valid contract of business are as follows:

Principles Offer and acceptance: In order to consider a contract valid by law, it should have to be accepted by one party as a "lawful offer" and should have to accept by another party as “lawful acceptance" based measures (Andrews, 2015, p.90).

Intention to create the well-defined legal relationship: There is no such contract in the business world which does not entail a legal relationship. Any such agreement which does not entail the relationship on the basis of law is considered as an invalid contact. For instance agreements of social and domestic nature do not necessarily entail legal relationship.

Consideration on basis of law: Consideration on the basis of business patterns are defined in various ways. According to the words of Pollock, “Consideration is the value in terms of price in terms of which the promise of another is bought or purchased.” Consideration is based in terms of quid pro quo process or something in return (Turner, 2013, p.78).

The capacity of parties: The parties of the contract are competent to the contract. In case they are not competent or do not have the capacity to contract they are not valid contractors.

Free consent: Consent of parties mean that the either of the parties has agreed to the same contract in lieu of the same set of reasons. According to Section 14, a contract is said to be liberal or free if not it caused by coercion, misrepresentation, and mistake or by any kind of fraudulent practices.

Lawful object: The object of an agreement must be valid .It has nothing to do with the considerations dealing with the contract and it is mainly constituting the objectives and designs or purpose of the contract (Lauridsen, 2015. p.44).

Certainty of meaning:

According to section 29, the agreements which are not capable of being certain are void.

The possibility of sound performance: A contract should be sound in terms of performance based criteria.

Not declared to be illegal or void in nature: A contact which is not legal is considered to be empty.

Formalities on the basis of law: A contract should be guidelines it terms of legal formalities.

Hence, the case of Balfour v Balfour (1919) can be highlighted here which duly represent the features and contracts of breaching of business based contracts. 

1.2 Impact of different types of contract

In terms of the contract of unilateral and bilateral origin, the impacts of contracts can be judged in terms of the relevance of contracts of business origin in terms of the promises made on the basis .of terms and conditions of the business (Salehi and Mangion 2014, p.115). 

When the partiers of a business contract are cleanly or conspicuously depicting all the terms and conditions of the contract then it is called the express based contract. Most of the contracts based on business are express contracts. Then there are another category of contracts called the implied contracts which are those contracts whose purpose is to indicate that the attitudes, behaviour

and performance based exercises of the parties of the contract (O'Sullivan et al.2016, p.57).

Then the impact of other varieties of contracts is analyzed in terms of executor and executed contracts. When the parties of the contract are not performing or are still left to perform the obligation being put forth for them in the contract, then such type of contract is called executor contract. Otherwise, if they perform or have already performed the obligation of the contract then the contract then it is called the executed based contract.

Additionally, the impact of different varieties of contracts can also be achieved in terms of the enforceable agreement or unenforceable agreement. An agreement is enforceable or unenforceable based on the consent or decisions made by the judicial authorities. A contract in long term can be null or void in terms of the consent based on the decisions of judicial bodies dealing with the conduction of various kinds of business contracts (Robertson, 2012, p.34).

 1.3 Analysis in terms of contracts with reference to their meaning and effect

The terms and conditions in business contracts with respect to their size and effect can be analyzed in terms of their legal considerations based on various angles or facets of business contracts (Post, 2013, p.7). 

For instance, in terms of the content of agreement, he or she should have the clear conspicuous idea of the content on which he is coming to be in agreement on the business processes and procedures.  The content of agreement based contract may vary from person to person but it may happen that some content of contracts is familiar in terms of their basic or general properties of applicability (McKendrick, 2014, p.89). 

Similarly, the terms and conditions of various contacts of business can be based on fees, charges, remunerations and expenses based budgetary expenses choices, and billing procedures and policies.

The terms and conditions of express based norms can be mentioned in terms of either oral or written based communications (Gutierrez et al. 2013, p.78). 

There are some forms of implied contracts whose terms and conditions may not be expressed directly by the parties but their nature and role can be expressed by judicial bodies in form of statutes.

There are many forms of contractual contracts whose terms and conditions should be maintained with stringency and should be mandatory be followed by the signing parties for the proper implementation of the contractually based contracts of business and finance.

LO 2: 

2.1: Application of elements of contract in context of the scenario

As per the case depicted in the case study or example as the person named Ivan after having a visit to Tudor's bookshop preferred to buy a book but was denied by the owner from buying the same because of the reason that the piece of book allotted there was the last copy of the book and it was hence not possible for reselling. Hence the business elements suitable for the scenario can be explained as follows (Bunni, 2013, p.34).

In terms of lawful offer or legal relationship or norms of business the selling of the last copy of the preferred book of Ivan by Todor’s bookshop can be considered illegal since each and every bookshop is given the prescription or legal entitlement of maintenance of last copy of the book in its own domain i.e.,  it cannot be offered to any of the preferred buyers of books preferring it. If the owner or bookkeeper does not maintain this policy of keeping the last copy of books sold of different origin and varieties, then it will be impossible for book sellers and publishers of decent standards to minimize or redeem the risks involved in making losses to the business (Amin, 2013, p.11). 

In terms of the capacity of business parties or consideration, it can be mentioned here that the resources availability is a big question or issue in terms of judging the capacity of parties being involved in business. The reason is that it may be a case that the selling party decides to even the last copy of the book demanded by Ivan for short-term profits gain as Todor chiefly believes that he has plenty of resources to gather again the copies of the sold books from outside sources. It may be also a case that Todor tries to make advance payments for buying even the last copy of the book which he deeply prefers.

2.2: Application of law on terms of different contracts

The law of terms can be applied in different contracts as shown below:

For example the agreement made between Jagg company and the Lycos company where the latter company of Lycos which is a internet or web based service company which is designed to manufacture various type of official product based videos for the company of Jagg and hence functions in the business alliance with Jagg as per certain terms of business contracts. The terms may be the manufacture of the special set of videos for the company of Jagg by the Lycos which will be suitable in terms of as per the formal profile based business needs of the Jagg Company. Other terms are proper time punctuality in terms of completion of the business in time, licenses based norms, exclusiveness, representation based norms, and formalities based terms and conditions (Amin, 2013, p.10). Some other terms are press release based terms and conditions, and confidentialities based terms and conditions,  termination based terms , choices of rules, choices of laws and limitations of liabilities based constraints and notices.

The consequences for classifying terms as condition , warranty and innominate terms  in terms of the above explanation are that the Los company will manufacture requisite conditions  of videos for Jagg company with minimum possible manufacturing warranty and with some intermediate terms based on licensing ,exclusiveness and representation and noticed based norms, choices of rules and limitations (Rao,2015, p.89). 

2.3: Effect of different terms in given contracts

The condition or scenario mentioned here can be explained in terms of visit of John to a park where he hires a chair but breaks it after use in the process in which he injures himself and the damage was done cannot be compensated as per the courts of law though he tries to appeal to the judicial authorities for compensation (Restubog et al. 2013, p.674). So, different terms of law on different terms and exemption clauses in contracts can be explained in the following manner. Firstly the laws of contracts as per the legal formalities can be argued to be brought to issue in this case the contracting parties here namely the hirer of chair namely John and its seller have argued to sell the chair among them and due to some reason the hirer was cheated because of the false quality of the chair which was actually damaged but the seller did not mention it to the hirer and so the terms of contract of hired chair is violated in the case and the judiciary body also did not support the demands of compensation for the physical harm caused to Mr. John. So the legal or law based terms are seen to against the true favours or true claims of compensation made by John .So this is a negative externality of the legal formalities on valid demands of John.

LO 3: 

3.1: Contrast liability in tort with contractual liability

Liability in tort with contractual liability can be explained on the basis of Common law module. Liability in tort is defined as a liability in terms of an act which hurts the ethics of or injures a person and in terms of which the person injured may sue the wrongdoer for adverse impacts or damages conferred upon him. But in terms of contractual liability, intentional damages for injuries do not necessarily happen or do not arise from a statute. In terms of tort-based liability the persons can sue the wrong doers for injuries or harms caused to them in a general manner but in contractual pattern of liability people injured or damaged can move to court to take actions against the wrong doers fort specific and unique reasons rather than reasons of general variety or type (Restubog et al. 2013, p.674). 

Tort being a privately committed  wrong generally helps the injured person to take actions against the wrongdoer at any stage of harm but he or her in tort also have the options of withdrawing back the case by entering into agreements or negotiating with the wrong doer. But this is not the case with contracts based liabilities.

Another important differentiation between tort-based liability and contract based liability is that in contracts there is always a mandatory facility of compensations based grants to the wrongdoers. But in torts there may a vice-versa case may arise due to the fact that chances of damage may instead be conferred upon the person claiming justice instead rather than on the complained wrongdoer in case if the claim made by the injured person is false. 

3.2: Nature of liability in Negligence

Basic nature of liability in business can be analyzed in terms of justification of both historical and specific grounds from the following conditions:

Duty of care - In kinds of any kind of negligence, the actually harmed injured or damaged person because of wrongdoers who has harmed them, the judicial body is sure to take compensatory actions in favour of the person actually harmed by the wrong doer provided that he or she can validate his damage or injury. He or she also has to mention the quantity and quality of harm inflicted upon him.

Breach of duty- In the case of breach of duty, the duty needs to settle regardless of the case that it is truly breached or not one it is proved that the particular defendant owed his services to the claimant. Here the test can be subjective or objective or of both origins (Gergen, 2013, p.953).

 Direct causation - Causation in direct terms or factual causation is going to happen anyway even if the accused or alleged party does not necessarily cause any harm to the injured party.

Legal Causation- In legally based terms, the focus or concentration is given to the injured in the hands of wrongdoers so that the minimisation of loss is undertaken in support of the injured persons who may have the desire of expositions of the wrongs committed upon him or her. 

3.3 : Vicarious liability of a business

A business can be vicariously liable based on some conditions of maintenance and obligation of business related norms and rules. A situation based on contracts can be explained in terms of the definition that a situation is something where one party is responsible for the actions or omissions of the other party (Razman et al. 2013, p.134). According to the rules and regulations of business norms, a business can be vicariously liable in terms of its actions, activities based on welfare generated activities or ill -motivated activities or on the omission activities on workers being deployed there or at times of their first employment. A business firm can also be held vicariously liable in terms of the commitment of wrongdoings or illegal activities being conferred on other parties being actively participating in the business activities of the concerned business firms. So the fate of recruited employees can be judged in terms of the vicarious liability of the firms on the basis of the activities of the recruited employees and their actions at each level of work hierarchy in the business activities of the concerned firm. In a holistic manner, the fate of operations and performance of the business firm is based on the vicarious liabilities incurred by the firm. It can be judged in terms of the activities of either positive or negative origin of both the firm and its employees for which the entire firm is held responsible (Henry, 2016. p.510). .


LO 4:

4.1: Application of elements of tort negligence and defences

As per the given scenario, the elements of tort of negligence and defenses in the given scenario of business can be attributed in terms of the probable case of negligence of justice by the court in the mentioned case (Linzer, 2015, p.56).

Here the Young man David facing permanent  injuries  or challenges in a bike accident  in   his  pursuit of saving a nine -year old boy  from being hurt by himself dragging him against the government-owned telephone pole and picking up permanent injuries. The tort of negligence can be easily observed in terms of the possible neglect of duties shown by the judicial authorities who may possibly step aside or step down from giving justice to David because of the fear of being facing allegations of improper duty or lack compensatory action being shown to David when he is under threat of life for being not receiving any proper treatment for permanent disability caused due to the road accident. This kind of negligence in form of negligence in terms of tort can be analysed in terms of the loopholes or the irresponsible attitude shown to David at times of his extreme distress. The distress is increased due to increasing intensity of medical negligence which may be shown to the young David as the higher authority do not need to face any chances (Gergen, 2013, p.953).  

 4.2: Elements of vicarious liability

The given case of injury or harm being shown to Roger by the owner of the restaurant named Collin is a case of vicarious liability (in terms of the damage of one on his  employees)of the Regent Hotel. The injured personality Roger can move against the Collin and his hotel and sue them in Court because of the harm caused to him unnecessarily. So this is a case of vicarious liability of the hotel for their cause of maltreatment and injustice being committed on Roger in the hands of Collin. This is an extreme case of vicarious liability being committed on the dishwasher Roger and he can surely challenge against his crime in the court for demand or expectation of getting fair justice (Hargreaves and Price, 2015, p.90).

Conclusion and recommendations:

The last part of the report should always be interpreted in terms of various conditions and schemes and provisions of business contracts each one important or significant in its own place in terms of the role played by each of them in particular cases of business or particular facets of business .breach of business contracts and its due negligence is also being reported in some parts of the analysis in terms of the provisions of tort analysis and also in terms of the negligence of other varieties in business based schemes based on business agreements.

Proper policies should also be designed for correcting the loopholes or risks related to violation of business based norms and policies so that the persons who are in distress due to the harm caused to them by breach of business contracts. Proper safety measures should be defined for minimizing the casualties associated with the breach of business contracts.