An assignment on

Aspect of contracts and Negligence’s for the business

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An Assignment On

ASPECT OF CONTRACTS AND NEGLIGENCE’S FOR THE BUSINESS

Submitted By:

Name:

ID:

Submitted To:

Date of Submission:

TABLE OF CONTENTS Executive Summary.........................................................................................................................2

Task 1...............................................................................................................................................3

1.1 Essential Elements of a Valid Contract.................................................................................3

1.2 The Impact of Different types of Contract............................................................................4

1.3 Analysis of Terms in Contracts.............................................................................................5

Task 2...............................................................................................................................................5

2.1 Application of the Elements of Contract...............................................................................5

2.2 Application of the Law..........................................................................................................6

2.3 Evaluation of the Effect of Different Terms..........................................................................8

Task 3...............................................................................................................................................9

3.1 Contrasting Liability in Tort with Contractual Liability.......................................................9

3.2 The Nature of Liability in Negligence...................................................................................9

3.3 Vicarious Liability in business..............................................................................................9

Task 4.............................................................................................................................................10

4.1 Application of the Tort of Negligence and Defences..........................................................10

4.2 Application of Vicarious Liability.......................................................................................12

Conclusion.....................................................................................................................................13

References......................................................................................................................................14

1

Executive Summary

From the case scenario it is very clear that the TAM’s college focus on becoming the leading and

one of the best educational institutions of United Kingdom with highest order of facilities. To

fulfill this mission they have consulted and made an agreement with a consulting firm named

NAMS regarding the issues like promoting their title, attracting more and more students and

helping them with marketing sector on a monthly basis.But due to financial matters, NAMS

could not stick to the agreement which is a straight violation against the contract and TAM’s

have taken legal activities against NAMS. On the last scenario, legitimate action was taken

TAM’s as a result of an unfortunate accident that occurred to one of its non-teaching staffs.

Although TAM’s denied to provide any kind of compensation as the accident was the result of

the staff’s careless attitude of not following the safety protocol of the institute, they faced the

prosecution according to “Vicarious Liability” doctrine.

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Task 1

1.1 ESSENTIAL ELEMENTS OF A VALID CONTRACT

The eight elements those are essential for making a valid contract is stated as below:

1. Lawful Consideration: A mutual agreement leads to an affirmation where the person

accepting the offer takes conclusion based on some lawful consideration (Mountella, H.

C. 1979).

2. Offer and Acceptance:An offer has to be made in order to pattern legitimate agreement

and it is the introduction of an affirmation (Mountella, H. C. 1979). The involved party

has to accept upon the offer and therefore pattern an agreement.

3. Writing and Registration:To make the agreement legitimate, an official contract has to

be in written form and registered by the government administration (Mountella, H. C.

1979).

4. Free Consent:The two parties have togive their free approvalin order to form a

legitimate agreement, or else the contract will be advised as a null and void agreement

(Mountella, H. C. 1979).

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

agreement (Mountella, H. C. 1979). Any act of oral agreement cannot be considered as a

formal contract. For example an individual promised another person that he would give

him a car but he did not mention when. So, it will not be count as an agreement because

there was no formal relation present.

6. Certainty:Each and every element of an agreement has to be certain so that each party is

able to identify the matters considering the contract (Mountella, H. C. 1979).

7. Enforceable by Law: An agreement is valid only when it is enforceable by regulation;

else it will be advised as the event of termination of contract (Mountella, H. C. 1979).

8. Possibility of Performance:A valid agreement should have the prospect of presentation

because if the agreement cannot perform the matters then it will not be considered as a

contract (Mountella, H. C. 1979).

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1.2 THE IMPACT OF DIFFERENT TYPES OF CONTRACT

Different types of contracts and their impacts are described below

Executed Contact:In this type of agreement both parties accomplish the terms and

conditions of the contracts before they go in to an agreement and there is not anything to

be worked out by each party(Mountella, H. C. 1979).

Contract under Seal:The customary method of making an agreement legitimate is the

closing of the lawful article that is enforceable(Mountella, H. C. 1979). It is important to

seal the documents and it is the liability of both the parties to accept the outcomes of the

agreementonce it is sealed.

Implied Contact:Agreement of both parties is significantto pattern a legitimate. But in

case of implied agreement it will be advised as a legitimate agreement if one party does

not give permission(Mountella, H. C. 1979). Implied contract is applicable when a

personacts like he/she owns any assets. An example of this type of contract can be as if a

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

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

Unconscionable Contact:This type of contract is an agreement in which both parties are

alarmed about the agreement but one party gets the higher advantages than the other

(Mountella, H. C. 1979). As there is lack of free permission from one of the party, this

type of agreement is unenforceable.

Express Contract:Express contract is one of the numerous kinds of contracts where it is

either in the formation of a written document or it can even be in the oral pattern which is

accepted to the authority that focuses on the permission to terms (Mountella, H. C. 1979).

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1.3 ANALYSIS OF TERMS IN CONTRACTS

It is significant for the parties to understand the distinct types of agreements, terms, and

componentswhich not only helps the parties to comply with the agreement but furthermore

assists to diminish agreement administration charges (Herrald, C.A. 1983).

Agreements may comprise of various objectives. Major alterations are essential to align the

emplacement affirmation.

It is the mission of TAM’s College to become one of the best educational institutes in the United

Kingdom and they are putting together their best effort to accomplish it. Keeping this mission in

focus, they are hiring agencies and lawful advisors. For their marketing reasons and solving the

legal matters, they are going into agreements with some bureaus. TAM’s college is undertaking

to bring the differences and to pattern a legitimate agreement there should be some

distinctionwithin the exchanging of terms, concerns and bargaining of the parties.

Task 2

2.1 APPLICATION OF THE ELEMENTS OF CONTRACT

The parties must respect the terms and conditions of the agreement and if one of the parties

disagrees from the promise of affirmation then the party respecting the affirmation can go to

court and take lawful actions (Cite man, 2011).To sum up a valid agreement must be enforceable

by law.

The basic elements of the contract with NAMS are:

Offer

Acceptance

Free Consent

Formal Relation

Valid Contract is enforceable

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TAM’s was assisted by NAMS to become one of the best educational institutes in UK and aided

to promote its reputation to as higher as possible. When there is an initiation of agreement

between two parties about business relationship, it forms an official valid agreement.

Both the parties have to accept the terms and conditions of a contract in order to make the

contract legitimate. Otherwise it will be consider as an invalid agreement. Both the parties in the

accepted the terms and conditions of the agreement andthe agreement was in a written form to

make the contract a formal contract. TAM’s college paid the initial fee of £2500 accepting the

NAMS marketing offer.

Another key point is an agreement must be enforceable by regulation in order to become

legitimate. In the case of agreement between TAM’s college and NAMS it was pretty much the

same. So, when NAMS could not supply marketing assistance, TAM’s college took lawful

activities against them.

2.2 APPLICATION OF THE LAW

There are some vital components that need to be advised as soon astwo or more parties make

anagreementin order to make a legitimate contract (Cite man, 2011).Attitude of the parties may

differ from the affirmation which was presumed to be in use as just a pre-declaration of the valid

contract and consequently not part of the agreement (Doughlas, L. A. 1998). Both the parties

always have to follow the terms and conditions of an agreement to make it a successful one.

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The requirements for a valid contract are:

Figure: Requirements of a Valid Contract

Exclusion of responsibility of the terms:

Where other associations are likely to have a term in the contractthat skip one of the party’s

accountability and may proceed wrong in the presentation of the agreement or limits on that

accountability, an agreement can be made (Doughlas, L. A. 1998). It is called a “Prohibiting

Paragraph” or an issue clause. Founded on the scenario, a prohibiting clause from

“Responsibility” for compensating to TAM’s college might be included in the affirmation

between NAMS and TAM’s college.

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C o l l a t e ra l

C o n t r a c ts

A t y p e o f c o n t r a c t i n w h i c h t h e t e r m s a n d c o n d i t i o ns a r e n o r m a l l y i n a w r i t t e n f o r m a s t h e b a s i s o f t h e a g r e e m e nt . W h e r e t h e d e c l a r a t i on h a s b e e n i n i t i a t e d to m a k e c e r t a i n t o i n d u c e t h e m a i n a g r e e m e nt . J u r y h a s b e e n c o o r d i n a te d t o f i n d a s e c u r i t y c o n v e n t i on s o m e p l a ce t o m a k e t h e c o n t r a c t v a l i d a n d b e n e f i c i a l f o r t h e p a r t i e s a c q u i e s c ed u p o n t h e a g r e e m e nt ( D i M a t t eo , L . A . 1 9 9 8 ) .

C o n t r a c t I n c l u d e s

C o n d i t i on s a n d

W a r r a n ti e s

T h e m o r e i m p e r a t i v e c o n d i t i o n s a r e d e s c r i b i n g " C i r c u m s t an c e s " , t h e l e s s e r s i g n i f i c a n t c o n d i t i o n s a r e c a l l e d " W a r r a n t i es ” . T h e s e p a r t s a r e s o s i g n i f i c a n t t h a t w i t h o u t a n y o n e o r s u p p l e m e n ta r y c o n d i t i o n s , t h e p a r t i e s w o u l d n o t p r o c e e d i n t o t h e a g r e e m e n t . A s a r e s u l t , t o c o n s t r u c t a c i r c u m s t a nc e i n c o r r e c t l y , o r t o b r e a k a c o n d i t i o n , i s e x a m i n e d s o v i g o r o u s l y a n d c o n s i d e r e d a s a m i s t r e a t e d c o n f i r m a t i on . T h e a g r e e m e n t i t s e l f m o t i v a t e s b o t h t h e p a r t i e s . T h e c o u r t e x a m i n e s a t e a c h c a s e o n i t s o w n d e s e r v e s . I n m a k i n g a c o n c l u s i o n a s t o i f a t e r m i s a c o n d i t i o n o r a w a r r a n t y ; t h e c o u r t w i l l a d d r e s s a l l t h e s u r r o u n d i ng c i r c u m s t a nc e s , e n c o m p a s s in g t h e s e r i o u s n e s s o f t h e c o n s e q u e n ce s i f t h e c o n t r a c t i s h e l d t o b e n o n -b i n d i n g a n d t h e a i m s o f t h e p a r t i e s a t t h e t i m e t h e y m a d e t h e c o n t r a c t ( D i M a t t e o , L . A . 1 9 9 8 ) .

2.3 EVALUATION OF THE EFFECT OF DIFFERENT TERMS

There are many terms encompassed in the agreements and some of them are for rules and

regulations (Merenn, C.N. 1988). These terms form the agreement and that is why they have to

be in a written form and sealed. There are many kinds of regulation and it requires diverse

typesof formalities.

The Up-To-The-Minute Observation

The violation of a circumstance permits the overhead misgiving accumulating to reckless cost to

the indenture as rejected, extravagance in the indenture and the parties are endow to compel to

the activities and presentation (Cite man, 2011).

TAM’s college has agreed to supply the marketing agreement to NAMS of about £6000 for one

month according to their oral commitment for promotion and marketing. In this way they have

established an implied contract between themselves.

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E s ta b l i

s h in g

I mp l i e

d T e r

m s

T h e re a r e s o me s i t u at i o n s i n w h i ch a g r ee m en t s n e e d t o i n s t i tu t e t h e i n f e rr e d t e r ms f o r ma l l y a n d i t i s m a de f r o m o n e i n d iv i d ua l t o a n o th e r i n d iv i d ua l ( O k ek e , C . N . 1 9 8 8) .

T h e P a t

r o l E v i

d e nc e s

R u le

I t i s a f u n ct i o n t h a t e n c om p as s e s o r a l e v i de n c es . O r a l e v i de n c e m i gh t n o t b e a d d ed o r s h ow n t o b e a f a l s e i n w r i t in g i t e m ( O k ek e , C . N . 1 9 8 8) . T h e c o n tr a c t h a b i tu a l l y e n d ea v o rs t o t h e l a w o f c o n fi r m at i o n a n d a p p l ie s n o t o n l y t o c o n tr a c t s b u t a l s o t o a l l k i n ds o f c r e de n t i al s .

V a ri o u s T y p

e s o f

C on d i ti o n s

V a r io u s t y p es o f s i t u at i o n m a y a f f e ct t h e a g r ee m en t a n d p r a c ti c a l j u d i ci o u sn e s s o f w o rd i s g o o d f o r c e n t ra l g r o up i n g o f c o n tr a c t ua l s i g n ( O k ek e , C . N . 1 9 8 8) . T h e p r e pa r a t io n f o r c o mm i t t in g a b r e ac h o f c i r c um s t an c e a t u n i ve r s a l r e g ul a t i on i s r e f u ta t i o n a n d i n d em n i ty .

Task 3

3.1 CONTRASTING LIABILITY IN TORT WITH CONTRACTUAL LIABILITY

Tort and contract liability:

The regulation of tort and of agreement is categorized as part of the "Law of Obligations", but

the law of tort concerns to every person that it is relevant to, while in the regulation of contract or

in trusts obligation is "Voluntarily Assumed" (Doughlas, L. A. 1998). Tort damages are for

compensation while contract damages are calculated for expected losses over a period of time.

3.2 THE NATURE OF LIABILITY IN NEGLIGENCE

Breach of Contract:Breach of agreement is the most significant thing in the contract tort

of negligence. It is the demeanour of the people to proceed as a reckless individual or

party and not performing the agreement terms and conditions(Doughlas, L. A. 1998).

This element implies the pre-existence of a standard of correct behaviour to avoid

imposing undue risks of damage to people. NAMS has broken the agreement when they

could not continue the promotion and marketing of TAM’s college for one week.

DUTY:The duty is an obligation of one individual to another individual, it is conceived

form the communal desires and beliefs(Doughlas, L. A. 1998). The glue of communal

obligation is the threaded that binds humans to one another in assemblies where

preferences are advised inappropriately if they contravene a pre-existing impulse and

restore hastily.

Cause in Fact:A small number of trouble are more fascinating, with tenacity more vague

then causation. Based on the surrounds and performances an individual might select to

take steps and avoid doing silly dramatics in assured(Doughlas, L. A. 1998).

3.3 VICARIOUS LIABILITY IN BUSINESS

It is a policy of English tort regulation that imposes firm liability on employers for the

wrongdoings of their employees (Leibee, B. C. 1976). While a worker is conducting his/her

obligations, thecompany will be held liable for any tort promised. Vicarious liabilities mean that

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anybody can be imprisonedlegitimately or to blame for the lacking concentration actions of a

discrete one-by-one even regardless of the fact that someone overwhelms no mistake in

furtherance of the inattentive or tortuous acts(Doughlas, L. A. 1998).

As the guard’s family has taken lawful actions against TAM’s college,the administration of the

institute fell in the policy of vicarious liability. Though the administration and the supervisors

were alerted about the accident and were clearlywarned to wear safety clothingto avoid any kind

of accident or hazard at workplace.

The staffwhowasinjured did not listen to the instructions and thus did not follow organization’s

policies. So, the administration refused to give any compensation to the casualty but The TAM’s

college are compelled to pay the compensation because of the policy of vicarious liability.

Task 4

4.1 APPLICATION OF THE TORT OF NEGLIGENCE AND DEFENCES

The elements of the tort negligence and defences in various business situations are given as

below:

Duty of care:The person might owe an obligation of care to ensure that they do not suffer from

any awkward harm or decrease. If such obligation is broken, a legal liability is imposed (Leibee,

B. C. 1976). All the staffs and workers of TAM’s college was previously alerted and briefed to

strictly follow the safety measures to avoid accident.

Tort negligence law:It is a pattern of regulation in which it is founded and operated in the realm

of intentional tort regulation and the basic purpose of negligence regulation, is to command and

protect the workers from wounds related to their line (Leibee, B. C. 1976). Non-teaching

employees of TAM’s college were suggested to use protectiveclothingto ensure security.

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It is the duty of an individual to ensure that they do not face any kind of accident. If such duty is

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

losses that the employees might face.

Potential sources of negligence:

Hazardous conditions: Hazardous conditions are unforeseen and unavoidable (Ralph,

E.U.I. 1989).

Use of faulty equipment:A likely source of negligence is the use of faulty equipment

which can cause injury (Ralph, E.U.I. 1989).

Inadequate protection:Insufficient protection states the negligent behaviour on part of

the person who is reluctant to wear shielding gears (Ralph, E.U.I. 1989).

Poor selection of activities:The activities that are beyond the abilities of individuals or

insufficient information of undertakings are poor collection of activities (Ralph, E.U.I.

1989).

Defence against Negligence:

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Potential sources of negligence

Use of faulty equipmentHazardous conditionsInadequate protectionPoor selection of activities

Defence against Negligence

Sudden emergencyAn act of GodAssumption of risk

Sudden emergency: Any act of instantaneous action to help the person in

endangerment. Such as, attempt to rescue a drowning person is an act of sudden

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

An act of God: The situations or circumstances that human beings cannot control. This

hypothesis is only applicable when adequate safety measures are taken to avoid injuries

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

Assumption of risk:A common assumption is that a person takes measure of the risks

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

4.2 APPLICATION OF VICARIOUS LIABILITY

To ensure the safety of the teaching staff’s from any future accident, TAM’s college has

imposed safety clothing. It was a fault of the senior supervisor that he did not notice the alert and

posted a night guard on duty without proper safety protocol which is a violation ofinstitute’s

principle.

Supervisors possess the intrinsicpowerof controlling the workers and the supervisors were

requested to ensure the right clothing and proper defensive gears of the non-teaching staffs. But

in this case the supervisors did not follow the instructions and lead one of their staffs to duty

without correct apparel (Hofstra, 2012.).

However, vicarious blame implies that any person can be punished legally to blame for the

careless actions of a different person. In this case the supervisors were careless to the directions

and that lead one of the staffs to get injured. But according to vicarious liability doctrine the

administration of the TAM’s college will be found to blame.

The administration denied providing any compensation to the employee because it was his fault

that he was not following the directions of the TAM’s college. But under the vicarious liability

doctrine an employee may be faulty but TAM’s administration will be legitimate to blame for the

staff’s careless attitude.

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Conclusion

From the case study it is clear that TAM’s college which aims to be one of the best institutions in

UK, hired bureaus to promote their institution and to attract students providing them with

enriched facilities. They also consulted with legal advisors to deal with the potential threats.

TAM’s college received a lucrative offer of £6000 on monthly basis from NAMS marketing

consultant firm for the promotion of their title and marketing purpose.Due to financial matters,

NAMS could not stick to the agreement which is a straight violation against the contract and

TAM’s have taken legal activities against NAMS. Finally we can see that TAM”s college had to

compensate for the accident that occurred with one of their staff in spite of the accident occurred

due to the staff’s negligence to the institute’s safety protocol.Although TAM’s denied that they

are responsible for the accident, they had to face legal actions according to a doctrine named

“Vicarious Liability”.

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References

Cite man, 2011. “The Evolution of Contractual impact” (Online) available

at :<http://www.citeman.com/4121-essential-elements-of-a-valid-contract.html(Accessed

on December 13, 2013)

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

Michigan State Univ. Press.

Herrald, C.A. (1983). Administration of Legal Responsibilities. The C.V. Mosby Company, St.

Louis., vol. 32, no. 8, pp. 849-875.

Hofstra, 2012. “Business law and commercial law and practical use of these” (Online)

availableat :

<http://law.hofstra.edu/pdf/Academics/Journals/LawReview/lrv_issues_v35n04_i01.pdf>

(Accessed on November 29, 2013)

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.

Merenn, 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.

Mountella, H. C. (1979). Mountella Law Dictionary, St. Paul West Publishing Company vol. 57,

no. 2, pp. 217-268.

Ralph, E.U.I. (1989). Safety Measures associated with Physical and Health Education Journals.

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

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