Aspect of contracts and negligence
- Pages: 7
- Word count: 1669
- Category: Contract
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This assignment will explain the conditions of existing for a valid contract, elements and terms of contract, types of contracts and the terms of liability and negligence. A contract si an agreement between two or more parties, especially one that is written and enforceable by law (www.thefreedictionary.com) For a contract to exist, usually one party must have made an offer and the other must have accepted it. Once acceptance take effect, a contract will usually be binding on both parties and the rules of offer and acceptance are typically used to pinpoint when a series of negotiations has passed that point, in order to decide whether the parties are obliged to fulfill their promises (Business Study Guide)
The essential elements required for a valid contract are as follow: 1. Offer – is a communication that gives listener the power to conclude a contract. It is an expression of willigness to contract on a specific set of terms, made with the intention that, if the offer is accepted, he or she will be bound by a contract (www.tutor2u.net) 2. Acceptance – is an expression of absolute and unconditional agreement to all the terms set out in the offer. The acceptance must exacey mirror the original offer made (www.tutor2u.net) 3. Consideration – each party to the contract must receive something of value. 4. Intention – to create legal relations, to be legally binding. 5. Capacity – all parties must have the capacity required by law to be party of a contract. 6. Privity of contract – a contract confere rights and impose obligations just for the parties of the contract. Privity of contract is the relationship between two or more parties to an agreement.
Impact of different types of a contract
In business, law can be identified the follow types of contract:
– contracts under seal
– express contracts
– implied contracts
– executed/executory contracts
– bilateral/unilateral contracts
– unconscionable contracts
– adversion contracts
– aleatory contracts
– void and voidable contracts
– face-to-face contracts
– written contracts
– distance selling contracts
Contracts under seal are the contracts that are signed and has the seal of the signer applied. This type of contract is a special one. Express contract – is that contract in which all elements and terms are specifically stated. Implied contract – is an non-verbal agreement between two or more parties, which is not written or spoken. Executed contracts – is the contract is which all parties completed their obligations in all terms. Executory contract – is the contraqct which is not all parties performed their duty as stipulated in that contract. Bilateral contract – is that contract which impose obligations and terms for all parties. Unilateral contract – is the contract in which just one party assume an obligation under the terms of contract. Void contract – it is not actually a contract.
This agreement can not be enforced by law. Voidable contract – it is a valid contract because at most one party to the contract is bound. Written contract – it is the contract whose terms have been reduced to writing and have been signed by all parties. Face-to-face contract is the contract in which the offer and acceptance are made directly, by talking, in presence of both parties. Unconscionable contract is that contract in which one person or party who is mentally competent would enter into and that no fair and honest person would accept. Adhesion contract – is the contract in which one party should accept all conditions and terms. Aleatory contract – is the contract in which the parties involved do not have to perform a particular action – will a specific event occurs.
Terms of contract
Terms can be deffined as ‘an expression of a willigness of the parties to agree abide by that obligation and breach of it will enable the parties to sue for breach of contract’ (Law of contract, Paul Richards)
Contracts will always contain different types of terms, some more important than others. The more important terms are called ‘conditions’. The less important terms are called ‘warranties’. Conditions are very important that without them one or other parties would not enter into the contract. Where the term is a waranty the wronged party will only be able to seek monetary damages for any loss suffered. Innominate terms are the terms which can be a condition or a warranty in existing circumstance.
Terms of a contract can be:
– expressed – whose are agree between the parties themselves – implied – which are put into the contract by the court or by statute.
L.O.2.1., 2.2., 2.3.
In the scenario Bob vs Sam, the type of contract is bilateral, face-to-face. Price-marked goods on display on the shelves or in the windows of shops are generally regarded as invitation to treat, rather than offers to sell goods at that prices. In shopping contract, the customer makes an offer to buy when presenting the goods at the cash desk, and the shopkeeper may accept or reject that offer. In given contract, Sam like shopkeeper is entiled top refuse to sell Bob the book, so he rejected Bob`s offer without any acceptance. In this circumstances, between Bob and Sam is not a binding contract and Bob can not sue Sam for any breach. Barry vs local council: local council made a public offer to anyone who want to hire a chair for 50p/hour. Barry Barry had accepted that offer and hired a chair. In this circumstance between Barry and local council, exists a contract. Just regards hiring a chair. But in the contract is not any obligations or warranty from local council to pay any damages to Burry for damaging clothes.
Barry can sue local council but the court, because the clouse on the ticket which state ‘not liability is accepted for any damage or injury caused by the failure of any hired equipment’, will drop of the case. Adam vs Brian is a contract unilateral in which the obligation of the contract is in Adam`s side. He made a public offer of a reward and Brian accepted that offer. Brian starts to execute that contract before Adam withdrown the offer. In this circumstance, Brian is entitled tu sue Adam. The contract between Adam and Brian become executory when Brian accepted Adam`s offer and was executed when Brian arrives in Calais with his boat. Adam breaches the contract and is entitled to pay Brian the reward offer by advertising.
Liability in tort is a legal obligation of one party to a victim as a result of a civil wrong or injury (Business Study Guide) Contractual liability is obligation assumed by any contracting party under the terms of a contract (www.businessdictionary.com) Liability in tort does not required that the victim should be a contracting party. A tort liability arises because of a combination of directly violating a person`s rights causing damage or a private wrongdoing. Contractual liability exists just when entering into a contract in which either party to the contract fails to perform in accordance with terms, otherwise known as a brech of contract. For liability in tort evidences must be evaluated in a court hearing. In other hand, contractual liability is show in that contract, by the terms of the contract.
Liability in negligence
‘Negligence is the omission to do something, which a resonable man, guided upon those considerations, which ordinarily regulate the conduct of human affairs, would do, or do something, which a prudent and resonable man would not do’ (Baron Alderson in Blyth vs Birmingham Waterworks co) In law, negligence is defined as a legal term classifying a nature of behavioral accountability with regard to any or all injury, damage or harm sustined by an individual as a result of the action of another individual. The laws of negligence help to decide when compensation should and should not be allowed. Negligent claims may result from road accident, injury at work, careless medical treatment, badly done work by an accountant.
To prove liability must prove three things:
– a duty of care owend by the attendant to the claiman
– a breach of duty of care
– that the breach caused damage.
The courts are trying to identify when a defendant should be seen as having an obligation to avoid causing damage to the claimant. This is a matter of law rather than a matter of fact. Negligence was first recognized in the 1932 case of Donoghue vs Stevenson and concerns breach of legal duty to take care, with the result that damage is caused to the claimant.
Vicariously liable in a business
Business liability is the liability for breach of obligation or duties arising from things done or to be done by a person in the course of a business whether is own business or another. Vicariously liability is a situation in which one party is held partly responsible for the unlawfull actions of a third party. The third party also carries his or her own share of the liability. Vicariously liability can arise in situations where one party is supposed to be responsible for a third party and is negligent in carrying out that responsibility and exercising that control (www.investopedia.com) In certain situation an owner of a business can be held legally responsible for the actions of another. Generally, an employer can be held liable for the actions of his employees under a theory called respondent superior. This means that the employer is vicariously liable for compensatory damages resulting from negligente acts of employees comitted within the scope of their employment. This is based that the employer has the authority to supervise and therby control his employees and also on the fact that he has the ultimate right to hire or fire the employee.
In conclusion, a contract exists if it has all the esential elements – offer, acceptance, consideration, intention, capacity, privity of contracts – and legal terms.
Business Study Guide
Law of contract, Paul Richards
Blyth vs Birmingham Waterworks co, Baron Alderson