An assignment on

Aspect of Contracts and Negligence’s for the Business

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Executive Summary

In the given scenarios, TAM’s college has appointed agencies that will look after their

legal side of the institution and also an agency to market and promote TAM’s college to

the mass to become one of the best educational institutes in the Great Britain. During

the contract period NAMS marketing firm has broken their initial promise and TAM’s

college authority has taken legal steps against them. Though the management of TAM;s

college has ordered the staffs to wear proper uniform during duty, but the supervisors

were inattentive to the instructions and sent off an guard without proper uniform to the

duty and lead him to an accident. As the guard did not wear proper uniform the

management of TAM’s college denied the claim of the guard showing that he did not

follow the policies of the institute and faced legal actions from the victim’s family.

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Table of Contents

Executive Summary.........................................................................................................2

Task 1.............................................................................................................................. 4

1.1 Essential Elements of a Valid Contract...................................................................4

1.2 The Impact of Different types of Contract...............................................................5

1.3 Analysis of Terms in Contracts...............................................................................6

Task 2.............................................................................................................................. 7

2.1 Application of the Elements of Contract..................................................................7

2.2 Application of the Law............................................................................................8

2.3 Evaluation of the Effect of Different Terms.............................................................9

Task 3............................................................................................................................11

3.1 Contrasting Liability in Tort with Contractual Liability...........................................11

3.2 The Nature of Liability in Negligence....................................................................11

3.3 Vicarious Liability in business...............................................................................11

Task 4............................................................................................................................13

4.1 Application of the Tort of Negligence and Defences.............................................13

4.2 Application of Vicarious Liability...........................................................................14

Conclusion.....................................................................................................................16

References.....................................................................................................................17

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Task 11.1 Essential Elements of a Valid Contract

There are eight elements of valid contract. These elements are important in order to

make a valid contract.

The essential elements of a valid contract are given below.

1. Offer and Acceptance: In order to form valid contract an offer has to be made

and it is the first step towards an agreement (Horton, C., 2012). Followed by the

offer the interested party has to accept upon the offer and thus form an

agreement.

2. Lawful Consideration: An agreement lead to a contract when the person

accepting the offer takes decision based on some lawful consideration (Hampton,

J. 1976)

3. Free Consent: To form a valid contract the two parties must provide their free

consent, otherwise the contract will be considered as a void contract and it will be

avoidable (Hampton, J. 1976).

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1. Offer and Acceptance

2. Lawful Consideration Capabilities of Parties

3. Free Consent

4. Writing and Registration

5. Formal Relation

6. Certainty

7. Possibility of Performance

8. Enforceable by Law

Figure: Essential Elements of Valid Contract

4. Writing and Registration: A formal contract has to be in written and registered

by the government authority to make the contract valid (Myer, J. W. 1978).

5. Formal Relation: Formal relation has to be present in order to make a valid

contract (Hampton, J. 1976). Any act of informal agreement cannot be considered

as a formal contract, for example; a person gave promise to another person that

he would give him some money but he did not mention any time. So, it will not be

count as a contract because there was no formal relation present.

6. Certainty: Each and every element of a contract has to be certain so that each

party is able to realize the issues regarding the contract (Horton, C., 2012).

7. Possibility of Performance: A valid contract should have the possibility of

performance because if the contract cannot perform the issues then it will not be

considered as a contract (Myer, J. W. 1978).

8. Enforceable by Law: A valid contract is enforceable by law otherwise it will be

considered as the event of breach of contract (Horton, C., 2012).

1.2 The Impact of Different Types of Contract

There are many types of contracts that are;

Contract under Seal: The traditional method of making a contract valid is the

sealing of the legal document that is enforceable (Horton, C., 2012). It is

important to stamp the document with various seals and the both parties are

liable to accept the results of the agreement after it is sealed.

Express Contract: Express contract is one of the many types of contracts. It is

either in the formation of a written document or it can even be in the oral form

which is accepted to the governing body that focuses on the consent to terms

(Myer, J. W. 1978).

Implied Contact: To form a valid contract free consent is important of the both

parties. But in case of implied contract it will be considered as a valid contract if

one party does not give free consent (Hampton, J. 1976). This type of contracts

occurs when a person pretends to own any assets and sell it. For example; if a

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servant sells his or her owner’s stuffs as if s/he is the owner of the assets without

the free consent of the owner then it will be considered as an implied contract.

Executed Contact: It is a type of contract where both parties execute the terms

and conditions of the contracts before they go in to a contract and there is

nothing to be worked out by each party (Myer, J. W. 1978). The performance of

the parties signifies that there is no contract, and then it is an executed contract.

Unconscionable Contact: It is a contract in which both parties are concern

about the contract but one party gets the higher advantages than the other

(Hampton, J. 1976). This type contracts are unenforceable because there is lack of

free consent from one of the party.

1.3 Analysis of Terms in Contracts

There are many objectives of contracts. It is important for the parties to understand the

different types of contracts, terms, elements, and clues which not only helps the parties

to comply with the contract but also helps to diminish contract management costs

(Okeke, C.N. 1988). Major changes are necessary to align the emplacement

agreement.

The TAM’s college is trying to become one of the best educational institutes in UK. So,

they are trying to capture the attention and hiring agents and legal advisors to help them

to the quest. In order to become the best educational institute in UK they are going into

contracts with several agencies for their marketing purposes and solving the legal

issues. To form a valid contract there should be some differences among the

exchanging of terms, considerations and bargaining of the parties and TAM’s is trying to

bring the differences.

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Task 22.1 Application of the Elements of Contract

A valid contract is enforceable by law. The parties must honor the terms and conditions

of the contract and if one party or the other party differs from the promise of agreement

then the party honoring the agreement can go to court and take legal actions (Roberts,

M. & Zahay, D. 2012).

The basic elements of the contract with NAMS are:

NAMS gave offers for intensive marketing for one month to make TAM’s reputation high

and help them to become one of the best educational institutes in the UK. In a formal

valid contract offer is the initiation of a contract with another party and forms a business

relationship.

In order to make a valid contract the terms and conditions of the contract has to be

accepted by the parties participating in a contract, otherwise it will be considered as a

void contract. TAM’s college has accepted the NAMS marketing offer for one month and

paid the initial fee of £2500 and entered in to a valid contract. Both the parties in the

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Offer

Acceptance

Free consent

Formal relation

Valid contract is enforceable by law

contract entered into the contract with free consent and a written documentation turned

the contract in a formal relation.

Valid contract is enforceable by law. The management of TAM’s college has the

authority and proof that NAMS has breached the contract agreement and the initial

term. NAMS were unable to provide marketing assistance to TAM’s college so that the

TAM’s college has taken legal actions against NAMS.

2.2 Application of the Law

When two parties make a contract then there are some essential elements that need to

be considered in order to make a valid contract. The parties involved in contract give

confidence and encourage the terms and conditions of a contract (Roberts, M. & Zahay,

D. 2012). Opinion of the parties may differ from the agreement which was supposed to

be in use as just a pre-declaration of the valid contract and consequently not part of the

contract (DiMatteo, L. A. 1998). Parties to an indenture follow only its terms, not by any

unimportant statements that may not be completed.

To form a valid contract certain requirements are needed. Such as;

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Collateral ContractsIt is one kind of contract in which the terms and conditions are normally written as the basis of the contract. Where the statement have been created and intended as to make sure to induce the main contract. Judges have been organized to find a security convention someplace to make the contract valid and beneficial for the parties agreed upon the contract.

Contract Includes Conditions and WarrantiesThe more imperative terms are describing "Circumstances", the smaller amount significant terms are called "Warranties”. These parts are so important that in absence of any one or supplementary of the parties would not go into the indenture. As a result, to construct a circumstance falsely, or to breach a condition, is viewed so dangerously and considered as a mistreated agreement. The indenture itself provides motivation to the both parties.

Figure: Requirements of a Valid Contract

Exclusion of responsibility of the terms:

Contract can be made where other organizations are probable to have a term in the

agreement which excludes one of the party’s accountability that may go wrong in the

presentation of the agreement or restrictions on that accountability. It is called

a “Prohibiting Paragraph” or a release clause (DiMatteo, L. A. 1998). Based on the

scenario, a prohibiting clause from “responsibility” for spoil done to the TAM’s marketing

campaign by NAMS might be included in the agreement between NAMS and TAM’s

college.

2.3 Evaluation of the Effect of Different Terms

There are many terms included in the contracts and some of them are for formalities.

These are formation of contract and it is necessary to be in a written and the seal is

needed to establish it (Okeke, C.N. 1988). There are many types of law and it needs

various types of formalities.

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The Patrol Evidences Rule

It is a role that includes oral evidences. Oral evidence may not be adduced to adjoin to say that the opposite to or shown to be a bogus written article (Okeke, C.N. 1988). The contract always tries to the law of confirmation and applies not only to contracts but also all kinds of credentials.

Establishing Implied Terms

There are some situations in which contracts need to establish the implied terms formally and it is made from one person to another person (Roberts, M. & Zahay, D. 2012).

Various Types of Conditions

Various types of conditions may affect the contract and technical judiciousness of the word is a good amount of central grouping of contractual expression (Okeke, C.N. 1988). The preparation for committing a breach of circumstance at universal law is refutation and indemnity.

Figure: Effects of Different Terms

The Up-To-The-Minute Observation

The violation of a circumstance allows the above misgiving gathering to reckless

spending the indenture as rejected, extravagance in the indenture and the parties are

enable to compel to the activities and performance (Roberts, M. & Zahay, D. 2012).

In the given situation, TAM’s college has agreed to provide the marketing contract to

NAMS based on their oral evidence of intense marketing for one month only for £6000

and established an implied contract between TAM’s college and NAMS.

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Task 33.1 Contrasting Liability in Tort with Contractual Liability

Tort and contact liability:

The law of tort and of contract is categorized as part of the "Law of Obligations", but the

law of tort applies to everyone that it is relevant to, while in the law of contract or in

trusts obligation is "Voluntarily Assumed" (DiMatteo, L. A. 1998). Contract damages are

based on losses that are expected, while tort damages are compensatory.

3.2 The Nature of Liability in Negligence

1. DUTY: The duty is an obligation of one person to another person, it is created

form the social needs, philosophy and various types of religion (DiMatteo, L. A.

1998). The glue of social duty is the threaded that binds humans to one another

in groups where preferences are considered inappropriate if they contravene a

pre-existing impulse and restore carelessly.

2. Breach of Contract: Breach of contract is most important thing in the contract

tort of negligence. It is the behaviour of the people to act as an irresponsible

person or party and not performing the contract terms and conditions (DiMatteo,

L. A. 1998). This element implies the pre-existence of a standard of proper

behaviour to avoid imposing undue risks of harm to people. NAMS has breached

the contract when they have stopped the marketing of TAM’s for one week.

3. Cause in Fact: A small number of trouble are more fascinating, with resolution

more indefinable then causation (DiMatteo, L. A. 1998). Based on the grounds

and performances a person might choose to take steps and avoid doing from

amateur dramatics in convinced.

4. Similar Cause: There are some close causes in different forms, the issue of

factual causation and the elements just examined and factual connection

between protection breach and plaintiff (DiMatteo, L. A. 1998).

3.3 Vicarious Liability in business

It is a doctrine of English tort law that imposes strict liability on employers for the

wrongdoings of their employees. Generally, an employer will be held liable for any tort

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committed while an employee is conducting their duties (Leibee, B. C. 1976). Vicarious

responsibility means that somebody can be detained legally responsible for the

inattentive acts of a different individual even despite the fact that someone overcomes

no mistake in furtherance of the inattentive or tortuous acts (DiMatteo, L. A. 1998).

In the given scenario the management of TAM’s college fell in the doctrine of vicarious

liability because the night guard’s family has taken legal actions against the institution.

Though the management and the supervisors were warned about the accidents and

were also advised to wear protective clothing for the non-teaching staffs to avoid

injuries.

The staff who got hurt did not maintained the organization’s policy so the management

refused to give any compensation to the victim but The TAM’s College are bound to pay

the compensation because of the doctrine of vicarious liability.

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Figure: Vicarious Liability

Task 44.1 Application of the Tort of Negligence and Defences

There are some elements of the tort negligence and defences in various business

situations, they are given below

Tort Negligence Law: It is a form of law in which it is founded and operated in the

realm of intentional tort law and the basic purpose of negligence law, is to control and

protect the employees from injuries related to their line (Leibee, B. C. 1976). TAM’s

college’s non-teaching employees were advised to use protective clothing for their

safety and security.

Duty of care: An individual may owe a duty of care to ensure that they do not suffer

from any unreasonable harm or loss (Leibee, B. C. 1976). If such duty is breached, a

legal liability is imposed. TAM’s college employees were warned about the harm and

losses that the employees might face.

Sources of negligence: Negligence can be defined as failure to take proper care of

precaution. It is the unintentional breach of a legal duty causing damage reasonably

foreseeable without which the breach would have not occurred.

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Potential sources of negligence

Poor selection of activities

Use of faulty equipment

Inadequate protection

Hazardous conditions

Defence against Negligence

Assumption of risk

Sudden emergency

An act of God

Figure: Sources of Negligence

Potential sources of negligence are:

Poor selection of activities: The activities that are beyond the capabilities of

individuals or inadequate knowledge of activities are poor selection of activities

(Emenike, E.U.I. 1989).

Use of faulty equipment: Another potential source of negligence is the use of

faulty equipment which can cause harm (Emenike, E.U.I. 1989).

Inadequate protection: Inadequate protection refers to negligent behaviour on

part of the person who is unwilling to wear protective gears (Emenike, E.U.I.

1989).

Hazardous conditions: Hazardous conditions are unforeseen and unavoidable

(Emenike, E.U.I. 1989).

Defence against Negligence:

Assumption of risk: It is assumed that a person takes measure of the risks

when engaging in activity (Emenike, E.U.I. 1989).

Sudden emergency: Any act of immediate action to help the person in danger.

Such as, attempt to rescue a person drowning in the water is an act of sudden

emergency (Emenike, E.U.I. 1989).

An act of God: The conditions or situations that is uncontrollable by human

beings. This assumption is only applicable when adequate safety measures are

taken to avoid injuries (Emenike, E.U.I. 1989).

4.2 Application of Vicarious Liability

The TAM’s college has enforced the wearing for school’s non-teaching staffs for

example guards and labors in order to avoid future accidents. However the senior

supervisors have overlooked the warning and he has sent off a night guard on duty

without the proper clothing. It is against the company policy.

Supervisors has the inherent authority to control over the employees and the

supervisors were asked to maintain the right clothing and proper protecting gears of the

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non-teaching staffs (Roberts, M. & Zahay, D. 2012). But in this scenario the supervisors

did not follow the instructions and lead one of their staffs to duty without proper clothing.

However, vicarious responsibility means that somebody can be detained legally

responsible for the inattentive acts of a different individual. In this case the supervisors

were inattentive to the instructions and that lead one of the staffs to get hurt. But the

authority of the TAM’s college will be found responsible because of vicarious liability

doctrine.

The authority denied the compensation to the staff because he was not following the

rules of the TAM’s college. But under the vicarious liability doctrine no matter how faulty

the staffs are the TAM’s authority will be legally responsible for the staff’s wrong doing.

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Conclusion

After analysing the scenarios it can be deduced that TAM’s college wanted to become

one of the leading institute in the UK and for this reason hired law agencies and

marketing firm but the management of TAM’s college faced many difficulties. They have

sued against their marketing agency for breaching the contract agreement. An accident

with their night guard has made TAM’s college authority liable to pay the compensation

to the victim because of the English doctrine “Vicarious Liability”. The victim’s family

also sued the TAM’s college because the management have denied the compensation

as the guard was not attentive to the institute’s policies.

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References

DiMatteo, L. A. 1998. Contract Theory: The Evolution of Contractual Intent. East

Lansing: Michigan State Univ. Press.

Emenike, E.U.I. (1989). Safety Measures associated with Physical and Health

Education Journals. Vol. 3, No. 1, vol. 48, no. 1, pp. 54-82.

Hampton, J. 1976. “Legal Responsibilities in Business”, Reston: Prentice Hall.

Horton, C., 2012. Legal aspects in Business and Contractual Intent, Journals. Vol. 2, pp.

54-82.

Leibee, B. C. (1976). Tort Liability for Injuries to employees. Organisation and

Administration. Philadelphia W.B. Saunders Company Journal Of Tort Law ,vol.

18, no. 1, p. 1.

Myer, J. W. 1978. “Negligence in Contract and practice”, Delhi: Prentice Hall of India,

3rd edition.

Okeke, C.N. (1988). Some Legal aspects of Organizations. A paper presented at a two

day conference organized by the National Sports Commission, Enugu, vol. 13,

no. 5, pp. 707-719.

Roberts, M. & Zahay, D. 2012, Laws and Regulation in practice in Business, 6 th Edition,

Wadsworth Publishing Co, Belmont, USA.

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