Aspects of Contract and Negligence for Business - Assignment Example

Business November 22, Aspects of Contract and Negligence in Business Under the law As use of contracts is becoming a normal form of relationship, it is important that we understand the elements that makes it valid, enforceable and binding 1. Presentation at Clegdon College.. What is a contract? A contract is an agreement entered into by two or more persons and could be done orally, written, or a combination of both. Essential elements of a contract. A contract, to be valid, must have the required elements prescribed by law. These elements are: First, it should have an offer which is accepted and a consideration is given. Second, It has an intention to create legal relationship and Third, there must be certainty of term. Contracts are normally used in transactions for sale of goods, employment and sale of lands. Special rules are applied to these forms of contract. Note that offer or contract can be revoked prior to acceptance. In the sale of goods, the merchandise is offered in exchange for money. Understanding the presence of all these elements is important to contracting parties as absence of makes the contract unenforceable (Booker, Rene) What are the Types of contract and their Impact? Contracts have different types and classifications. Common types of contract used worldwide are bilateral, unilateral, implied, voidable, executory, oral contracts (Booker, Rene) and quasi-contracts that is applied by law. (Stevens, John,2014) Bilateral contracts are those entered by two parties who are obligated to do something; Sale of good is an example . When A promises to sell a mobile phone to B for $100 and B promises to buy it from A, the plain giving of a return- promise is already an acceptance. A Bilateral contract differs from the unilateral contract wherein the former is formed upon completed performance Related to bilateral contract is Quasi contract that is not actually a contract, but is applied by courts to unfinished business of bilateral contracts. It is an unbiased system used by the court to: “avoid unfairness by allowing the plaintiff A to sue to recover the value of the benefit he gave to the other party B.. To compensate for such unfairness, the law implies a promise by B to pay the reasonable value of the benefit which has been conferred on him by the A.”(Stevens, John, 2014) In order to take advantage of the quasi-contract system, plaintiff must show evidence that A actually rendered or expended property that benefitted the B and to allow B to retain the benefits without paying A is unfair. Unilateral contract is not commonly used. In this kind of contract, only one person is obligated to do something. A reward contract is a case in point wherein a person offers a reward to pay a sum of money in exchange for information for the return of something. In this case, the person who received the reward is not obligated to do something. Applying the quasi-contract theory on unilateral contracts, let us look at this situation wherein a doctor rendered medical help to an injured person in an emergency case. Under the quasi-contract theory, the court will imply a promise that the injured person will pay for the value of the medical treatment received.. Implied contracts. There are situations that the terms in the contract are implied and are done as a sign of goodwill. For instance, warranty on the workability, adaptability of the product are illustrations of implied contracts. Void and voidable contracts are two different things. A void contract is from the beginning, not a valid one like it was established for an illegal purpose. A voidable contract is actually a valid contract that may be voided by one of the contracting parties for some undue reasons. Example, a contract entered by a mentally ill person and a minor person are voidable because of lack of capacity. The remaining two, are the executory and oral contracts. Executory are contracts whose performance are yet to be done. Example are installment purchases on cars and real estate. As the name implies, oral contracts are unwritten ones which will be difficult to prove particularly when the parties disagree on its terms. Because of incidences of frauds, written contracts are more reliable. w.c. 659 II. Protection rights of consumer The transactions done by Carl are both a remote or internet agreement that needs change of disposition either to decline or pursue. Mitigating circumstances here are the errors of the Direct Company, the Classic Training.com and the right of a consumer. Under the circumstances above, Carl Smith, the Training officer Consumers have the right of protection under the Consumer Protection Act For Direct Company internet transactions that calls for renogiation of price, the Consumer Protection Act 2002, Chap. 30, sec. 16, says “  It is an unfair practice for a person to use his, her or its custody or control of a consumer’s goods to pressure the consumer into renegotiating the terms of a transaction”. Doing so, the practice, under the Consumer Protection Act is considered unfair.. Since Carl does not want to rescind the contract with the company, neither does he want a renogiation, he could push on his consumer rights and demand for the delivery of the items on the before stated price of the contract. For the Classic Training contract, Carl has the right to cancel the contract because under the provisions of the Consumer Contract Regulations that gives consumer protection to remote transactions, among others. Chap. 3, sec. 29 (1) of this CCR states “the consumer has the right to cancel a distance contract any time in the cancellation period without giving any other reason, and without incurring liability but should be within the prescribed cancellation period.” A normal cancellation period is within 14 days , As a result of cancellation, company must reimburse Carl all the payments charged to his credit card. Reimbursement must be done without undue delay, or in any case at the end of cancellation period of 14 days. It should be done in the same manner they used in the initial transaction. Since goods are not yet received, Carl has no more obligations except sending a formal notice of cancellation of order that should be duly confirmed and noted by Classic Training. In the event of cancellation, it is the responsibility of Classic Training to collect the goods, or in this case, hold delivery as per information, it is still in process. In case the goods were delivered to his house, it is the responsibility of Carl to return the materials in good condition to Classic Training and without delay. Consumer Contract Regulations (sec. 5)says, consumer must bear the direct costs of returning goods, unless trader has agreed to do so. If contract specifies, consumer is not under any obligation to pay return cost. Going still further in the scenario that the good was actually delivered, and the value of goods has diminished (because of reckless handling) and could no longer be restored, the right of Classic Training is to recover that amount from Alfred up to the contract price. w.c. 474 III. Briefing note to Ian Page Asad’s agreement with Abdul Bashir. This agreement calls for a three year apprenticeship of Asad, a minor, with Abdul’s Fighting Academy, “Fight Right”. Note that that the agreementt’s clause states that it can be terminated without notice. On the first question whether the agreement is binding, the answer is no. An agreement is not a contract since it lacks the elements of for its validity. The apprenticeship has no incentive or consideration given as in contract of employment. This agreement is voidable because of one of the contracting parties is not legally competent. Web definition of an agreement is a “negotiated and legally enforceable transaction between two or more legally competent persons.” Under this premise, Asad can void his agreement with Abdul on the claim of the lack of capacity to contract on account of his being a minor . Accordingly, the law protects the minors from being pressed on to go through with a deal that takes advantage due his or her lack of capacity. Under the CPA law, minors (under the age of 18) lack the capacity to enter into an agreement.. Asad was only fifteen years old when he signed the agreement with Abdul, so he has the right to void or terminate the agreement under the claim of incapacity due to minor age. Note that he can claim this right only while he is still of minor age which Asad can still do as he only sixteen years old. Agreement v. Contract. For a clearer understanding of the legality of the terms, an agreement is an informal arrangement entered into by one or two parties, and its validity is based on mutual acceptance, so it is not legally enforceable. A contract is a formal arrangement between two or more parties, has the required elements of the law, valid and enforceable by law. Contracts must have a specific offer and acceptance; a mutual consent, meaning, parties are not forced and they both agree to the terms; a consideration that both parties exchanged. Considerations may be goods, services, or money wherein both parties have to provide. It is important that both provide considerations, otherwise, as Diffen.com, a legal counsel, interprets it, it is a gift, and not a contract. Competence referred to here is the capacity to understand the situation in the contract, so minors, mentally deficient, or drugs-alcohol addicts are not qualified, and last, contract must specify a legal purpose. Any one of the required elements found lacking, will constitute the invalidity of the contract. IV. Hotsafe Case. Liability and defence. .Let us first discuss the liability of Hotsafe Hotsafe is on a business of cleaning services of ovens for the catering trade. Garside sues Hotsafe for damages caused by explosion of the ovens that resulted to personal property and economic loss to business. Is the supplier liable here? The Ohio revised Code, Sec. 2307.78 states that the supplier is subject to liability for compensatory damages only if the claimant establishes by preponderance of evidence that the supplier was negligent and that the negligence is the proximate cause of harm for which the claimant wish to recover compensatory damages.” (LAWriter n.d.) Negligence is the failure to use ordinary care through either an act or omission. Negligence takes place when one does not use enough care that a reasonably careful person would use under the circumstance. Lawsuits arising from injury is based from the theory that defendant was negligent. In order to establish a case for prima facie evidence for negligence, these facts must be present: first, there is an existence of a legal duty to to provide reasonable care; second, cause of physical harm by the negligent conduct, third, physical harm in the form of actual damages, and fourth, the proximate cause that the harm is within the scope of liability. Hotsafe’s Defense We have two suppliers that Garside could pursue a lawsuit with: Hotsafe and the oven manufacturer. As a manufacturer, it has the responsibility for any injuries caused by its products. Under the Consumer Protection Act, the manufacturer maybe held liable for damage if any part of the product is defective, regardless of any contractual limitations of liability. Product defect may cause harm death, personal injury and damage to property, but the law says that neither of these acts may be used to pay for economic losses or consequential losses. Consumers Protection Act is strict on defective products and it imposes severe liability on manufacturers because of harm caused by the product. This means that people injured by the defective product can sue for for compensation and proof that manufacturer was negligent is not necessary. However, there is a necessity to prove that the product was defective, and that damage or injury was caused by the product. (Out-Law.com. 2011) In order for Hotsafe to be liable, Garside (plaintiff) must establish both negligence and proximate cause exist. Proximate cause exists when the plaintiff is injured as a result of negligence conduct and Garside’s injury must have been the probable result of the negligent behaviour. (Larson, Aaron, 2003) Hotsafe can also claim for comparative negligence. When this is applied, damages claimed from Hotsafe will be reduced as the manufacturer of the ovens share with the claim. Doing so, Hotsafe can stay with the amount stipulated in its guaranty of £500 which was agreed in the terms of contract.. If Garside is asking for £5000, and the court determines oven manufacturer is also 90% liable, then penalty is reduced to the terms of service that says it is only liable and willing to pay up to £500.(Aaron, Larson, 2003. w.c. 538 References Booker, Renee, 2014, “What are the different types of contract.” Wise Geek. Web. 21 Nov. 2013 Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched. Awww.e laws.gov.on.ca/html/statutes/english/elaws_statutes_02c30_e.htm Diffen. 2014. Agreement v. Contract http://www.diffen.com/difference/Agreement_vs_Contract Larson, Aaron. “Negligence and Tort Laws.” Expert Law.com. 2003. Web. 21 Nov. 2014 . LAWriter. “ Liability of supplier. Ohio Laws and Rules 2013. http://codes.ohio.gov/orc/2307.78 web 21 November 2014. Out-Law.com. Product Liability under Consumer Act” . Aug. 2011 web. 21 November, 2012 Stevens, John, Examples of legal Contract” 2014..@ e-how.com web. 21 N ov. 2012. Read More