An assignment on

Aspect of contracts and Negligence’s for the business

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Date of Submission

Table of Contents

Executive Summary02

Task 1 03

1.1 Essential Elements of a Valid Contract03

1.2The Impact of Different types of Contract04

1.3 Analysis of Terms in Contracts05

Task 2 06

2.1 Application of the Elements of Contract06

2.2 Application of the Law07

2.3 Evaluation of the Effect of Different Terms08

Task 3 10

3.1 Contrasting Liability in Tort with Contractual Liability10

3.2 The Nature of Liability in Negligence10

3.3 Vicarious Liability in business11

Task 4

4.1 Application of the Tort of Negligence and Defences12

4.2 Application of Vicarious Liability13

Conclusion15

References ...................................................................................................................16

1

Executive Summary

Under the circumstances mentioned in the case it is obvious that TAM’s college will

be the best among all other educational institute in UK. That’s why they recruiting

agents to look over their legal issues. For the betterment of this progress of TAM’s

college, they are going to promote their features and facilities of vocational

qualifications. They also signed a contract with NAMS marketing firm for a month.

Unfortunately NAMS has failed to fulfill the conditions of the contract within the

month and apologizing to TAM’s college. In the mean time they are seeking for an

extension in their marketing program. But NAM’s college disproved them and took

legal actions against NAMS. The management of TAM’s college stated that, if the

NAMS cannot deliver satisfaction they will return the advance and also pay

compensation of £1500. They also charged NAMS for the accident of one of their

staffs for not wearing the proper clothing and protective gear on duty. The TAM’s

college has to go through the legal penalty because of the explicit liability principle in

the business.

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TASK 1

1.1/ Essential Elements of a Valid Contract

There are eight essential elements of a valid contract. Absence one of them would

make the contract worthless.

Those eight essential elements of a valid contract are mentioned below:

Figure: Essential Elements of Valid Contract

Offer and Acceptance: The first step of a contract is to offer to the interested party.

Then the interested party analyzes the offer and accepts that with an agreement.

Lawful Consideration: During accepting the offer the interested party takes

decisions under lawful consideration and thus an agreement leads to a contract.

Free Consent: Both offering and offered parties should have their free consent

during the formation of a contract.

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1. Offer and Acceptaance

2. Lawful Consideration and

Capabilities of Parties

3. Free Consent

4. Writing and Registration

5. Formal Relation

6. Certainty

7. Possibility of Performance

8. Enforceable by Law

Writing and Registration: To make the agreed contract valid, the contract has to be

written and registered by the government authority.

Formal Relation: To form a valid contract a formal relation must be maintained

within the conditions of the contract. Otherwise the contract would be invalid. For an

example; if a man make a contract to lend some money to another one and in the

contract if the amount of money and the time of lending is not mentioned, then the

contract will not be a valid one.

Certainty: All the elements of a contract have to be certain so that each parties are

able to recognize each and every issue on the subject of the contract.

Possibility of Performance: A valid contract must possess the performance which

is possible to do so. If the contract doesn’t possess the possible acts then that can’t

be considered as a valid contract.

Enforceable by Law: Every valid contract must be enforceable by law otherwise

that can’t be considered as a event of breach of contract.

1.2/ The Impact of Different types of Contract

There are several types of contracts, such as:

Contract under Seal: Sealing of the legal document which is enforceable by

the government authority is the traditional method of forming valid contract.

It’s essential to stamp the document with seals of various trade amount and

after being sealed both parties are bound to accept the results of the

agreement.

Express Contract: It is one of the several types of contracts. This can be

either in the form of written document or in the oral form which is

acknowledged to the governing body that focuses on the approval to terms.

Implied Contract:In case of implied contract free consent of both parties is

not needed. It happens when one party pretend to be the owner of any asset

and make a contract relating that asset. For an example, if a servant sells his

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owner’s staff as he is the real owner of the staff, then that will be an implied

contract.

Executed Contract: This type of contract is formed when both parties

execute their terms and conditions before going to sign the contract. They

don’t work out any contract as there is no contract formed between then. That

is an executed contract.

Unconscionable Contract: In this type of contract both parties hold concern

about the contract but any one party gets more advantage than the other one.

There may be lack of free consent of one party in this type of contract.

1.3/ Analysis of Terms in Contracts:

Contracts possess a lot of objectives. It is significant for both the parties to be aware

ofdiverse types of contracts, conditions, fundamentals, and clues which not only

helps the parties to act in accordance with the contract but also helps to moderate

contract management expenses. Key changes are compulsory to support 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 awareness and recruiting agents and legal advisors

to help them to the pursuit. To be the best educational institute in UK, TAM’’s are

going into contracts with more than a few agencies for their marketing purposes and

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

among the exchanging of conditions, considerations and bargaining of the parties

and TAM’s is trying to fetch the differences.

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Task 2

2.1/ Application of the Elements of Contract:

All the valid contracts are enforceable by law of the government. Both offering and

offered parties must obey the terms and conditions of the contract. If any party differs

from the conditions of agreement then the other party obeying the conditions of the

agreement can go to court and take authorized trial.

The basic elements of the contract with NAMS are:

NAMS offered TAM’s to help them to be one of the best educational institutes in UK

and to make their reputation higher by intensive marketing for one month. In case of

a valid contract offer is the initial stage of a contract between two parties and the

formation of formal relationship. 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 TAM’s college and NAMS entered into the contract with free consent

and a written documentation turned the contract in a formal relation.

As every valid contract is enforceable by law.The management of TAM’s college has

the right and proof that NAMS has violated the contract. As NAMS has failed to

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O ff e r

provide the committed result within the time, so TAM’s college has taken

authorizedtrial against NAMS.

2.2/ Application of the Law:

In order to make a valid contract both parties need to consider some essential

elements and they need to have confidence on it and mutually encourage some

terms and conditions for the contract. Those opinions of any party which are differing

from the actual agreement are used as a pre-declaration of the actual contract but

finally they don’t get any part in the valid contract. Those who must obey the rules of

the contract follow only the terms mentioned in the contract, no need to bother about

the unimportant statements.

Requirements needed to form a valid contract are:

Figure: Requirements of a Valid Contract

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Collateral Cotracts

In this type of contract, terms and conditions are mentioned as the basis of the contract. Here the conditions are stated to encourage the main contract. Judgements are maintained for the beneficial of both parties and to make the contract secure and valid.

Contract Includes Conditions and Warranties

The more terms and conditions are mentioned relating to the term circumstances the smaller need to bother for the terms of warrantis. Both the the terms are much important for a valid contract are works supplimentary to each other. It helps to make the contract firm and confident. Because of these it is not easy to construct a false circumstance and get rid of the accusation of breaching the conditions. Here in this case the indenture works as a motivation to both parties. The court will go through all the surrounding circumstances to make a decision that wheter the breach were a condition or a warranty.

Exclusion of Responsibility of the Terms:

When other organizations are willing to have a term along with an agreement which

excludes any party’s accountability then a valid contracts are made. That agreement

may go wrong in the presentation of the terms of the agreement or restriction on the

accountability. It is called a “Prohibiting Paragraph” or a release clause. According to

the circumstances, a prohibiting clause from “responsibility” for spoil done to the

TAM’s marketing campaign by NAMS might be incorporated in the agreement

between NAMS and TAM’s college.

2.3/ Evaluation of the Effect of Different Terms:

There are lot of terms are mentioned in a contract and many of them are used to

maintain formalities. Those are essential for a valid contract which are ascertained

by the seal.

There are many types of law and it needs various types of formalities.

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The Patrol Evidences RuleIt represents a role that includes oral evidences. This oral evidence is not used to show that the written document is bogus or to say any opposite of that rather it is used to make the contract lawfully confirmed in course of all credential.

Establishing Implied Terms

There are some circumstances in which contracts need to ascertain the implied terms officially and it is ended from one person to another person..

Various Types of Conditions

Various types of circumstances may influence the contract and methodological caution of the word is a good amount of central alignment of contractual appearance. The groundwork for committing a breach of circumstance at universal law is repudiation and compensation

The Up-To-The-Minute Observation

The breach of a condition allows the mentioned misgiving meeting to thoughtless

expenses the indenture as rejected, over-spending in the agreement and the parties

are enable to induce to the actions and performances (Count 1976).

In the above situation, TAM’s college has approved to make available the marketing

contract to NAMS founded on their oral evidence of powerful marketing for one

month only for £6000 and established an implied contract between TAM’s college

and NAMS.

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Task 3

3.1/ Contrasting Liability in Tort with Contractual Liability:

Tort and Contract liability:

Both law of tort and the law of contract is obligatory part of a valid contract. But they

possess their individuality with characteristics. Tort is applied to parties which is

relevant on the other hand law of contract complies with the trust or voluntarily

assumed. Contract damages occur for the losses and it is normal to except, while

tort damages are compensatory.

3.2/ The Nature of Liability in Negligence:

Duty: The term duty is the obligation of a man towards another man. It is

derived from religion, philosophy and social needs. It is social duty or

responsibility that binds all human in groups in the society. Here preferences

are considered unsuitable if they breach a pre-existing desire and renovate

imprecisely.

Breach of Contract: The most essential part of a contract tort of negligence

is the breach of contract. It represents the irresponsible behavior of a person

for which he is not fulfilling the contract according to the terms and conditions.

This part of the contract fixes the standard of the behavior of the indenture

and resists the risk of loss. NAMS has breached the contract when they have

stopped the marketing of TAM’s for one week

Cause in Fact:A minute trouble is more enthralling, with declaration more

imperceptible then causation. Based on the justification and acts a person

might choose to take steps and steer clear of doing from

recreationalemotional behaviour in swayed.

Similar Cause: There are different forms of causes which are very close to

each other. Issues of main causation and the elements are examined and

factual connection to protection breach is made.

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3.3/ Vicarious Liability in Business:

The doctrine of English states that employers are directly liable for the misdeeds of

their employees. Vicarious responsibility implies that someone can be incarcerated

legally for the wrongdoings of entirely different individual (Rerrwood 1998).

Under the above circumstances, management of TAM’s college are accused by the

night guard’s family and detained under the Doctrine of vicarious liability. Though the

management and the supervisors warned the staffs about the accidents and asked

them to wear protective clothing to avoid injuries.

As the victim of the accident disobeyed the order of authority, so management

refused to give them compensation. But according to the Doctrine vicarious liability

rule TAM’s management are bound to give the compensation to the staff who got

hurt.

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Principal Agent Third Party

Direct LiabilityTort

Vicarious Liability

Figure: Vicarious Liability

Task 4

4.1/ Application of the Tort of Negligence and Defences:

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

situations, they are mentioned below:

Tort negligence law:This law is founded and operated in the monarchy of

intentional tort and negligence law. It is formed to control and prevent employee

injuries related to their line of work. As TAM’s college’s employee were ordered to

use protective clothing for their own safety.

Duty of care: It is a responsibility of any individual who will act duty of care to make

sure that no one is facing any unintentional sufferings. If this type of duty is breached

then necessary legal action can be taken against. Staffs of TAM’s college were

warned about the harm they might face.

Sources of negligence: Negligence can be termed as the failure to ensure proper

care and precaution. Though it is an unintentional deed, but it causes damage and

accept that negligence no breach would have occurred.

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Potential sources of negligence are:

Poor activity selection:The selection of activities that are impossible or

beyond capabilities of any individual is poor selection of activities.

Using faulty equipment: Using defective of expired equipment may cause

harm.

Inadequate Protection: It refers to negligent behaviour holder who express

unwillingness to wear protective clothing.

Hazardous condition: Hazardous conditions are unforeseen and

unavoidable.

Defence against negligence:

Risk assumption: Risk happens to be occur when an individual engage in

activity.

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Potential sources of negligence

Poor activity selectionUsing faulty equipmentInadequate protectionHazardous condition

Defence against negligence

Risk assumptionSudden emergencyAn act of God

Sudden emergency: Any act of immediate action to protect or help any

individual in danger. For an example: Attempt to rescue a drowning person.

An act of God:The situation or result that is out of bound of human capability.

This term can only be used when necessary actions were previously taken to

avoid injuries.

4.2/ Application of Vicarious Liability:

The management of TAM’s college has advised to illiterate staffs such as guard,

labours etc to wear protective clothing (Emenike1989). On the other hand, senior

supervisors overlooked the staff that they weren’t wearing proper clothing and sent

them to work. That is against the company policy.

Senior supervisor have complete authority over the employees and they were asked

to maintain the proper clothing among the staffs. But supervisors didn’t performed

his duty properly and sent employees without checking their clothing.

Though, here senior supervisor is totally responsible for the accident as he let the

staff work without protective clothing. But the management of TAM’s college will be

detained for it’s responsibility according to Doctrine vicarious liability rule.

The management of TAM’s college denied the compensation to the staff as; he was

not abiding by 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

In 1, 2, and 3 number scenarios we found that management of TAM’s college are

recruiting legal consultants to deal with some of their legal issues which has shown

some threat to them recently. They also possess ambition to be one of the best

educational institutes in UK (Maerean 2012). For this purpose they are hiring

agencies to promote their college so that students, who want quality education with

best facility, become attracted to their college. NAMS marketing consulting firm gave

the best offer that they can use extensive marketing tool and promote the college

name for one month only for £6000. NAMS had to stall the marketing program due to

financial issues and TAM’s college were unhappy about it and they have taken legal

actions against NAMS marketing firm based on the initial terms of NAMS. From third

scenario we get a new topic as TAM’s college management were accused for one of

their staff’s accident for negligent act and asked to pay compensation for that. But

TAM’s college denied to pay compensation as the staff got himself in accident by not

following company policy. As a result, TAM’s college faced law suits and detained

under Doctrine vicarious liability rule. That’s why now the management of TAM’s

college is bound to pay compensation to the staff who got hurt.

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References

Count, 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.

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.

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

availableat :

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

pdf>(Accessed on November 29, 2013)

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

Michigan State Univ. Press.

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