Aspects of Contract and Negligence for Business - Essay Example

?Aspects of Contract and Negligence for Business Table of Contents Aspects of Contract and Negligence for Business Table of Contents 2 Task LO1)3 1.1 Explain the Importance of the Essential Elements Required For the Formation of a Valid Contract 3 1.3 Analyse Terms in Contracts With Reference To Their Meaning and Effect 5 Conclusion 6 Task 2 (LO2) 7 2.1 Apply the Elements of Contract in Given Business Scenarios 7 2.2 Apply the Law on Terms in Different Contracts 7 2.3 Evaluate the Effect of Different Terms in Given Contracts 8 Conclusion 9 3.1 Contract Liability in Tort with Contractual Liability 9 3.2 Explain the Nature of Liability in Negligence 10 3.3 Explain How a Business Can Be Vicariously Liable 10 Conclusion 11 Task 4 (LO4) 12 4.1 Apply the Elements of the Tort of Negligence and Defences in Different Business Situations 12 4.2 Apply the Elements of Vicarious Liability In Given Business Situation 13 Conclusion 13 References 14 Bibliography 17 Task 1 (LO1) 1.1 Explain the Importance of the Essential Elements Required For the Formation of a Valid Contract In order to form a valid contract, there are five basic elements that determine high importance. A contract is formed with the intention to form a legal foundation which authorises all the functionalities. In this similar context, a contract is formed with an offer. Offer along with acceptance refers to the modes of evaluating the procedure of negotiation in order to select whether as well as when a particular contract is made. Moreover, the terms of contract are ascertained in this mode. The key features of offer include the aspect of proposal, expression or preparedness to carry out or refrain from executing something along with making of an expression to the other person. Moreover, offer can be implied or expressed. It can be general or specific as well. In this regard, there are two entities that form an offer i.e. offeree and offeror. Offeree defines the person or a unit to whom a particular offer so as to enter within a contract is made by offeror. For Instance, when a company offers to sell certain products at assured discounts rates to the consumers then it can be considered that the company is making an offer. Other elements of a forming a valid contract i.e. acceptance also lays high amount of importance as a contract may not get detailed picture without the fulfilment of this particular element. There are generally three types of acceptance i.e. conditional acceptance, implied acceptance and express acceptance. Correspondingly, the method of acceptance relates to certain steps wherein full performance of required aspects need to be made, subsequently the offeree commences to perform based on different types of contract and promises to perform. Moreover, based general rules and expectations, the acceptance is executed. Another element i.e. consideration also lays high amount of importance as it allows different parties involved in a contract to get certain benefits. Moreover, a contract also binds itself with certain regulations in which minors who are under the age of 18 cannot enter into the terms of a contract. Thus, this aspect can also be considered to be very important as it indicates the sincerity of a contract. In relation to the case of ‘Techno products’, all the elements of a contract especially, offer, acceptance and consideration seem to imply a very clear relation (Community Legal Information Centre, 2012; Gillies, 1988). 1.2 Discuss the Impact of Different Types of Contract Different types of contract formation i.e. bilateral contract, unilateral contract or a business contract among others may render certain impacts that mainly take monetary forms. Considering this aspect, there are other forms of impact that mainly comprise pricing arrangements as well. Correspondingly, making pricing arrangements in different types of contract may give rise to conflicts between the partners which may impact a contract in a negative way. According to the case i.e. Fea v. Dep't of the Army, several conflicting situations in the contract was seen (U.S. Office of Government Ethics, 2013). In addition, different types of contract may also be impacted if the profit sharing ratio in a business contract is not fulfilled in an equalised manner. Therefore, while forming contracts, these aspects are needed to be considered at all levels, otherwise it may lead to drastic amount of impacts in the contracts (McEvoy, 2004). In addition, offers also seem to imply false promises as false advertisements were done in case of Techno products. 1.3 Analyse Terms in Contracts With Reference To Their Meaning and Effect The primary terms in all contracts i.e. offer, acceptance and consideration lay high amount of importance, In relation to this context, an offer is considered to be a proposal for delivering certain assets or proving a chance to enter into a business contract. An offer may also take up a different form in which a company may propose a sale of certain products at valuable discount rates. These types of offers are mainly given to a customer or a set of customers who maintain healthy relationships with the companies. Correspondingly, it is recognised that prior to entering a contract there are certain specific terms that need to be fulfilled. These terms encourage the other party to be a part of the contract. Terms can include warranties or conditions depending upon the scenario. Thus, with due analysis, it can be stated that the term ‘offer’ signifies high amount of effects in the formation of a contract. Acceptance on the other hand is considered to be the other important element in a contract. Acceptance signifies the fulfilment of the initial stages of a contract whereby an offer gets accepted and thus it binds multiple parties into the law of contract. Thus, inclusion of acceptance in a form is considered to create high effects. In terms of a contract, consideration is measured to be another vital element of a contract. It may comprise a promise to complete a required act or even an assurance to avoid an act he/she is entitled to perform in a legalised manner. In case of a bilateral contract, both parties of a contract are seen to exchange certain mutual promises in the form of an agreement. Each of their promises is regarded to render sufficient consideration as it can provide certain self-assurance to all the parties involved. In case of a unilateral contract, an agreement in which one party is seen to make a promise by way of examining the performance of the other parties involved. The performance that is delivered can be affirmed to be the key consideration in exchange of the promise. Analysis of these aspects proves that consideration is one of the elements which are imperative (Brunner, 2009; Baker, 2011). In relation to the case of Techno products, the terms i.e. offer, acceptance and consideration seem to imply in a specific manner. It has been apparently identified that the company has offered that the first ten customers who will be entering the shop on 12 September 2013 will be eligible to purchase one of the highest specification computers, which normally retails at ?3000.00 for ?1.00. In response to the offer, Peter decided to grab the deal and talk with the sales assistant of Techno products that he wishes to purchase one of “Techno Products’’ highest specification computers for ?1.00. Considering this aspect, it can be affirmed that one of the most important elements of a contract i.e. acceptance was on the verge of completion. However, the facet of consideration was not fulfilled as he was informed that the advertisement did not have any relevance and if he wished to purchase the computer then he would be required to pay the market rate of ?3000.00. Conclusion From, the overall analysis, it has been learnt that Techno Product followed an irrelevant and misleading strategy in order to attract the customers. In relation to the case, a similar instance in which a jewellery shop was seen to advertise a false price in order to attract the consumers is viewed (Australian Competition and Consumer Commission, 2013). In this case Peter was the sufferer. However, it may not be possible for him to purchase the computer at ?1.00.Correspondigly, he can sue the company for not complying with the law of regulation 4 of the Business Protection from Misleading Marketing Regulations 2008. Task 2 (LO2) 2.1 Apply the Elements of Contract in Given Business Scenarios In the case of Telephone Are Us, the particular elements i.e. offer, agreement and consideration seem to imply to a very less extent. In relation to the contract offer, it has been seen that the company i.e. Telephone Are Us did not provide any initial offers to the customers. However, the customer i.e. Jack who decided to purchase a new telephone from the company failed to read the terms and conditions of a 12 month contract for purchasing the telephone. With regard to this aspect, it can be affirmed that one of the major elements i.e. offer was overlooked from the part of Jack. In relation to another important element of a contract i.e. acceptance was not fulfilled as Jack was perplexed to find the terms of the contract especially Clause xii of the contract that he signed, which stated the company accepts no liability for the replacement or repair of faulty products. 2.2 Apply the Law on Terms in Different Contracts In relation the concerned case, it has been learnt that Jack should have paid attention while signing the agreement. As per the law of the United Kingdom, it is of primary importance to read the terms of agreement before making purchase of any products. This aspect can also be related to all the other forms of business contract as reading of the terms of agreement is very much important. The UK law strongly complies with all the terms and conditions that are needed to be fulfilled at the time of making purchase of products/services and even in other forms of contracts i.e. employment contracts, housing contracts, fixed term contracts and short-term contracts among others (Collins, 2008; McKendrick, 2012). Thus, if Jack would have opted for other contractual terms i.e. the above mentioned contracts then also the same rules would have been applied. 2.3 Evaluate the Effect of Different Terms in Given Contracts Different terms i.e. offer, acceptance along with consideration play a decisive effective role in all the contracts as they are considered to be the foundation of the contracts (Young, 2009; Andrews, 2011). In relation to the concerned case, all of these terms did not seem to take up the most appropriate format. This factor can be provided the maximum amount of weightage as all of the terms were not present in the contract. In the given case, the term offer did not seem to create an effect as there were no offers regarding the telephone sale. It was Jack who visited the store to purchase a telephone. However, the term ‘acceptance’ was seen in the case as Jack accepted the contract of purchasing the telephone and signed it randomly. However, it created an adverse effect because later Jack came to knew about the stringent rules of the contract that he signed. Another term i.e. consideration was not seen in the contract as both the parties i.e. Jack and the company did not make any mutual considerations with each other. Both of the parties felt that they were right in their own ways. Conclusion From the analysis, it has been determined that Jack needed to consider the contract before signing it. He should read all the clauses in the contract thoroughly. In relation to the relevant statutory provisions protecting consumers who purchase goods from businesses, it has also been realised that consumers have the full right to get protection in terms of business but they need to comply with the contract rules of companies as well. Task 3 (LO3) 3.1 Contract Liability in Tort with Contractual Liability Tort liability is applied to someone who causes harm to someone else that may result in serious physical injuries. Moreover, contractual liability refers to the legal liability related to the other party that a particular business organisation consents to undertake via an oral or written contract. With due analysis of the case of Patricia, it has been observed that the train company i.e. Safe and Steady Trains in which she was travelling can be held liable for tort. This factor can be provided with the maximum amount of weightage because the train crash was primarily caused because the driver of Patricia’s train fell asleep. Thus, it calls for contractual liability from the part of the company. According to the case Palsgraf v. Long Island R.R. Co., the aspects of negligence came into play in which an explosion caused harm to the passengers. In a similar respect, this instance also reflected the emergence of tort/negligence (Laws.com, 2013; Ward, 2010). 3.2 Explain the Nature of Liability in Negligence In terms of tort law, negligence is considered to be a factor which encompasses situations in which people get seriously hurt due to negligence or carelessness from the part of service providers (Stathopoulos, 2009; Stone, 2013). In the concerned case, Patricia became the victim of negligence to a very large extent. It was so severe that Patricia ended up breaking her leg. This incident was primarily caused because of the train driver who fell asleep while driving the train. 3.3 Explain How a Business Can Be Vicariously Liable In relation to negligence and tort, a business can be vicariously liable. Vicarious liability takes place in the scenario when an individual is accountable for the neglectful actions of the other person despite the fact that the individual is not straightway accountable for the harm caused. It depends upon the severity of the negligence reflecting from the part of a business. However, based on the nature of negligence and its severity, the terms of punishment may have certain amount of variances (Stark, 2003). In the concerned case, the train company can be held vicariously liable because of the fact that the driver put the lives of the all the passengers in jeopardy as he fell asleep while driving the train. As a result, the train met with a horrible accident as it collided with another train. Patricia who was one of the passengers lost one of her legs in the dreadful accident. Based on the severity of the accident, it is felt that Patricia can approach the government to bring a claim of negligence against the train driver. This would prove to provide her with justice and most importantly it will definitely lead to lowering of such instances in the future. Conclusion Analyses of the case provided great aid in learning the severity that can be caused due to negligence. The analysis proved to be very fruitful as it also facilitated in realising that people reflecting negligent behaviours can lead to disastrous accidents. Task 4 (LO4) 4.1 Apply the Elements of the Tort of Negligence and Defences in Different Business Situations Different businesses/companies may reflect elements of the tort of negligence and defences in dissimilar business situations (Cornell University Law School, 2013; The CECP, 2001). This aspect may lead to disaster which may end up harming the employees or employers or even outsiders who visit companies. The aforesaid aspect can very well be related with the case of Paula in which she was invited to a job interview with Pushing and Pulling Ltd. The primary factor that proves that the company was liable for the tort of negligence is that there was an exposed cable which was lying across the reception area at floor level in which Paula stepped. Additionally, there were no warning notices advising about the exposed cable in the building. However, the building was partly occupied by the company and in such a case Paula cannot make a claim to the company in the fields of occupier’ liability legislation. Another factor that puts the company in ‘no harms’ mode because it has been recognised that Paula was taking medication for a virus and the medication process suggested that the medicines should only be taken with food. She took the medicine without food before the interview. This factor can very well contribute to create a certain amount of dizziness in Paula resulting in her falling over the cable. However, it can also be said that the company acted in a negligent manner as it was its duty to keep the premises safe having partially owned the building. Despite this fact such incident cannot put the company in a negligent motion. It is however felt that the company should provide her with free treatment on the grounds of humanity. 4.2 Apply the Elements of Vicarious Liability In Given Business Situation There are situations in which companies /businesses are held responsible for vicarious liability (Stark, 2003). In the given case, there were instances in which the company has been found to reflect elements of negligence to a certain extent. However, it does not put the company in position of having vicarious liability. Conclusion From the above analysis, certain negligent actions that can be brought under legislation relating to occupiers liability have been ascertained. These types of liabilities are applied when companies are found to reflect highest rates of negligence. However, in the concerned case, it has been felt that legislation relating to occupiers liability cannot be applied to Pushing and Pulling Ltd as they did not fully own the building. Considering this aspect, it can be stated that damages awarded to Paula may get reduced to some extent as there were certain contributory negligence on her part as well. It is felt that Paula would definitely receive certain award for the damage because the law generally supports the victims in such cases. According to a case of Tri Hoang v Swedish Medical Center, an award of $5 million was delivered for negligence case, which proves the validity of such a verdict (Black, 2007). References Australian Competition and Consumer Commission, 2013. False or Misleading Claims. Home. [Online] Available at: http://www.accc.gov.au/consumers/misleading-claims-advertising/false-or-misleading-claims [Accessed November 29, 2013]. Andrews, N., 2011. Contract Law. Cambridge University Press. Brunner, C., 2009. 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