Introduction to Contract
Contract may be defined as a legal binding or agreement between two or more competent parties who give their consent on terms and conditions of the contract. Competent parties to a contract must fulfill for essential requirement such as offer, acceptance, lawful consideration and intention to create the legal obligation (Appleman, Appleman and Holmes, 2013). These elements are highly required in order to form a valid contract. Contract is usually made in the written formation but they may also be orla or implied form. The present report is based upon the different case scenario which will discuss essential elements which are required to form a legal binding. Besides this, it will also develop understanding about the different types and terms of the contract as well as its effect upon the competent parties. Further, it will also shed light on the doctrine ODF vicarious liability and aspects of negligence.
1. Stating the essential elements required to form the legal binding
There are mainly four essential interments which competent parties must fulfill in order to form a valid contract. Essential elements refer to offer, acceptance, lawful consideration as well as intention to form a legal binding or agreement (Chen-Wishart, 2012). In order to covert agreement into a contract parties to a contract must fulfill the following essentials which are as under:
Offer: It may be defined as proposal in which one party expresses their feelings in relation to purchase or sell of an asset. As per the cited scenario Xs contacted to Country Pine Ltd in relation to the supply of dining tables, chairs and barstools @ £4200. In this case, Xs had made offer to Country Pine in relation to the purchasing of furniture.
Acceptance: When one party give acceptance to another party by taking into consideration all the terms of the contract then it is considered as an acceptance. In the given case Country Pine quoted £45000 for the supplying of furniture. Whereas Xs negotiated the amount and quoted £42000 for such deal. Country Pine had accepted the figure which are quoted by Xs and thereby shows their acceptance.
Lawful or legal consideration: Considerations in form of monetary terms is also one of the essential elements which are required to form a legal binding. For the legal relationship there must be a law consideration between the parties to a contract. In the cited case Country Pine takes £42000 in return of the supply of furniture. Besides this, Xs also receive assets in return of the losing money. Thus, in this each party of the contract give something and receive something in the monetary terms rather than in kind (Lawful consideration, 2011).
Intention to a form a legal binding: Legal intention is also required between the parties to a contract which assures satisfactorily performance from both the sides (Four Essential Elements of a Contract. 2015). In the cited case scenario Country Pine Country Pine had accepted the offer which is made Xs which reflects that both the parties have intention to create the legal obligations.
2. Discussing the different types of contract
As per the given case scenario written contract had made between the parties to a contract. Country Pine quoted the figure of £45000 in relation to making delivery of dining tables, chairs and barstools. In this situation, Xs had quoted £42000 and sended the standard contract form by making their signature. Country had accepted the conditions and sending the further mail to Xs which contains data and delivery time. At the time of delivery Xs had received the invoice of £43100. In this situation, Xs represented his query in relation to the high prices. In addition to this, there are number of dining table whose legs are detached from itself. In this, Country Pine had represented the written evidence or mail which contains that price could be raised by 5% if price of the raw material increased. Besides this, Country had also mentioned the clause that thrty have no liability for any kind of defects. On the basis of the written evidence Country Pine is not liable to compensate Xs for the damaged assets. Thus, written contract provides assistance to the defendant party in against to the claimant on t6he basis of written proof.
Besides the written contract there are also the oral as well as unilateral and bilateral contract which place different impact upon the competent parties are as follows:
Oral contract: In the oral contract competent parties discuss all the terms and conditions in the oral form. Nevertheless, in the case of disputes claimant have no legal proof in against to the defendant party which creates difficulty in front of the legal authorities in relation resolving of disputes
Unilateral and bilateral contract: In unilateral one party who make promise to another without taking consent of another party. In unilateral contract offeror has obligation to perform his promise if offeree also perform as per the terms and conditions of the contract. Offered possesses right to claim for the compensation if offeror make default in his performance (DeMitchell, 2006). In contrary to this, competent parties have agreed to the terms and conditions of contract. Both the parties to a contract has the legal obligation in relation to the performance of promise.
3. Applying the elements of the contract in context to the given scenario
As per the essential element of contract there must be offer, acceptance, legal consideration and intention between the parties to a contract. On the basis of the cited case scenario Xs have made offer to Country Pine that he is ready to give £42000 with the intention to the purchasing of dining table, chairs and barstools. Country Pine had also accepted the offer and agreed to deliver the furniture at the mentioned price. This aspect reflects that all the essential elements are present in agreement so it is considered as a valid contract. Nevertheless, the invoice which Xs received contains £43100 as well as most the dining tables are damaged.
In this situation Xs made complaint to Country pine then CP drew the attention of the claimant upon clauses which are mentioned in contract. Country pine had mentioned in contract that price could be raised by 5% if the price of raw material increased. In addition to this, they have also mentioned that company has no liability for defects after delivery. On the basis of this aspect Xs has the legal obligation in relation to the performance of their duties and responsibilities. Thus, Xs has to prevail the contract until and unless mutual consent in occurred between the parties in relation to the revocation or reformation of the contract.
4. Stating the type of terms as per the given scenario
There are mainly three types of terms such as express, implied and innominate parties which place different impact upon the parties to a contract. On the basis of cited case scenario express terms are involved in the contract. Express terms may define as those in which both the parties give their mutual consent upon the terms and conditions which are inserted in contract (Sutton, 2010). It provides right of sue to the innocent party if defendant party make default in their performance. In the given case Xs and Country Pine gave their mutual consent upon the 5% rising in prices as well as no liability for defects clause. It is recognized as an express terms of the contract. As per this aspect, if Xs does not perform in accordance with the terms of contract then Country have the right to make sue upon him for the loss which is suffered by claimant. Thus, if Xs make default in his performance then Country Pine has the right to claim for the compensation ion against to defendant party.
5. Applying the terms of law in different contracts
Different terms of the contract place different effect upon the parties to contract which are enumerated below:
Express terms: It refers to the terms and conditions are inserted by the parties to a contract with their mutual consent. In accordance with such terms competent parties are obliged to perform their duties and responsibilities as per the contract (Platz, 2007). If defendant party make default in their performance then innocent party have the right to make sue upon them for the compensation.
Implied terms: Implied terms refer to rules which are included by laws and legislation in contract (Treitel, 2002). These terms are also known as default rule which provides safety to innocent party in against to the defendant party.
Innominate terms: Innominate term may be defined as contractual terms which may either be condition or warranty. These aspects are highly dependent upon the type or nature of contract which are made by parties to a contract. Condition and warranty place different effect upon the competent parties. In case of breach of condition claimant possesses the right to repudiate the contract or claim for damages which are suffered by innocent party. Further, in warranty right of innocent party is limited to claim for the compensation. In this, claimant does not have the right to repudiate the contract.
As per the cited case scenario there is express terms are mentioned in the contract. In contract exclusion clause are mentioned by Country Pine. It is the mistake of Xs that he did not read the clauses which are included by Country Pine. Thus, Xs is not entitled to claim for damages in against to Country Pine.
1. Stating the differences between obligation in contract and in negligence
There is significant difference between the obligation in contract and in negligence. In case of contractual liability rights, duties and responsibilities are determined by parties to a contract with their mutual consent. On other hand in negligence, rights and duties are determined by legal authority (Overgoor and et.al, 2015). Along with it, contractual liability occurs when parties to a contract fails to perform their duties and responsibilities according to the terms and conditions of contract. In contrary to this, liability in tort occurs when competent parties do not perform their roles and responsibilities as per the standards. In addition to this, under the contractual liability competent parties build legal binding or relationship with their mutual consent (Granger, 2015). On other hand in tort liability, legal relationship is formed between the parties to a contract by legal authority. On the basis of such aspects it can be stated contractual liability highly differs from tort liability.
2. Stating the nature of liability in case of negligence
Negligence consists of the situation in loss or injury is suffered by the employee or guest due to the failure of employer in making proper health and safety arrangements. As per the case scenario Country Pine manufactures the furniture and employed forty employees within an organization. There are several key elements which provide support to innocent party in against to defendant which are enumerated below:
Duty of care: On the basis of this aspect employer has the liability to make proper health and safety arrangement for their employees. If employer fails to perform the duty of care which caused damages to innocent party. In this case, employee possesses the right to make sue upon employer for compensation (Handford and McGivern, 2015). Besides this, employer is also entitles to compensate the claimant to the extent to which loss is suffered by him.
Breach of duty: It refers to the failure of employer in relation to the performance of duty. If employer or company breaches their duty then employee has the right to make sue for damages.
Forseeability: This element emphasizes that if loss is easily foreseeable by employer then if he fails to make the proper safety arrangements for the same (Haripriya and Haripriya, 2014). Then, employee has the right to make sue upon employer for the damages.
Remoteness of damages: If claimant has evidence which prove that physical injury is suffered by claimant due to the negligence of employer (Nijem and Galpin, 2014). In the cited case scenario Fiona slipped due to the negligence aspect of Country Pine. On the basis of this aspect Fiona possesses the right to make sue upon CP for physical injury.
The above mentioned aspects provide support to claimant in against to defendant if they succeed in satisfying all the above mentioned aspects.
3 and 4. Applying the elements of the tort of negligence and defenses in the different business situations
As per the cited case scenario in February Fiona had visited the CP showroom with the intention to purchase some beds for her bed and breakfast business. During this, Fiona slipped due to some water spill. Unfortunately, Fiona had fallen down and her leg was also breaking down. In this situation, Country Pine is entitled to compensate Fiona for the physical injury suffered by her. As per the case of negligence Fiona has evidence of physical injury in terms of broken leg. It is the responsibility of employer to make proper safety arrangements for their guest. Due to the failure of Country Pine loss is suffered by Fiona. On the basis of this aspect Fiona has the right to claim for damages in against to Country Pine. Thus, Fiona needs to make sue upon defendant party. Besides this, CP is also entitled to compensate the innocent party to the extent to which loss is suffered by her.
In addition to this, employee who operates machine has the work to cut and assemble the furniture. Sanding machine is installed by Country Pine within an organization which helps in finishing the woods before its assembling. In order to maintain the health and safety standards Country Pine had repeatedly informed their employees in relation to the removal of safety guards. Company had informed that employee should not remove the safety guard when wood jam occurs. On the basis of case scenario, Bob was operating the sanding machine with the intention to meet the customer demands on the occasion of Christmas. During his working the wood become jammed.
In order to remove such blockage Bob had separated safety guard from sanding machine. Due to the removal of safety guard Bob is got heavily injured. His hand and arms had adversely affected due to such injury. As per the aspects of negligence Country Pine had repeatedly inform their employees in relation to causes of removal of safety guard. By this, they had performed their duty of care to the large extent. Loss is suffered by Bob due to his own negligence in relation to the health and safety aspects. Bod had totally ignored the information provided by Country pine in relation to the ways of operating machine. Thus, Country Pine is not accountable to Bob and his damages. In accordance with the principles of negligent Country Pine is not liable for the loss which is suffered by Bob.
5. Stating the doctrine of vicarious liability
Vicarious liability consists of situation in which employer is held accountable for the irresponsible or undesirable act of their employees or another person. Under vicarious liability, employer has responsibility to exert control over their employees (Tadros, 2014.). Moreover, employer has responsibility to frame strict policies and rule in order to restrict undesirable action of employees. By introducing the penalties and other types of punishment company can easily control the undesirable activities of their employees within an organization. Employer and employees have contractual relationship with each other (Orne, 2015). Thus, he is obliged to give compensation to another party for the illegal act of their employees. On the basis of principles of vicarious liability employer is not liable to compensate the third party in the following situations:
- Employer is not held accountable for the loss suffered by third party if employees perform illegal activities in order to restrict the undesirable act of third party (Raine, 2014). In this case, third party does not have right to make sue upon the employer.
- Claimant party is able to claim for the compensation if they fail to proof the activities of the employee as illegal or immoral.
Thus, Country Pine is held accountable for the compensation only when claimant get succeed in proving the undesirable act of employees.
6. Ways through which business can be vicariously liable
On the basis of cited case scenario employees having responsibility in relation to the supply of furniture driving rashly due to pressure of meeting deadline. On the occasion of Christmas Jason was delivering the large consignment of furniture to the number of retail outlets. With the aim to meet up the deadline Jason was driving over the speed limit. In order to avoid the accident of child Jason’s crashed into a shop. It may cause of damages to the owner of shop.
On the basis of the case scenario Jason is not in control of his employer. Thus, Country Pine is not held accountable for the illegal activity of Jason. Owner of shop can claim in against to Country Pine when contractual relationship exists between the employer and employee. Therefore, owner of the shop are not in position to claim in against to Country Pine as per the vicarious liability act.
From this project report it has been concluded that competent parties needs to undertake all the essentials in order to form a valid contract. Besides this, it can be inferred that Xs has no right to revoke the contract as per the express terms of the contract. It can be seen in the report that different type of contract having different impact upon the competent parties. In addition to this, it can be concluded that Fiona can claim for compensation in against to Country Pine. Further, it can be concluded that Country Pine is not entitled to compensate Bob for the damages which is suffered by them. In can be concluded that Country Pine is not held accountable for the undesirable act of Jason.
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