Aspects of Contract

Task 1

1.1 Importance of essential elements of the contract

Contract is an enforceable agreement in which two parties are legal obliged to fulfill the promises made by them. A contract is said to be valid if it is supported by following elements...

Offer

An offer is a proposal given by one party to specific person or to general public to enter into legal relationship. Offer given by party should be specific and legally valid. Invitation to treat will not be considered as offer because it is merely an invite given by party to show their interest in formation of legal relationship. In addition to this response of invitation is an offer in which primary party is free to accept or reject it. In the given case situation Bill had given invitation to treat to the general public for the sell of printing press.

Offer is important because it describes initial terms of the contract. Due to this aspect, offer is required to be specific and certain. In addition to this, it must not include terms for completion of impossible or unethical task.

Acceptance

It can be termed as consent given by the offeree on the offer made by offeror. It should not be supported by any modification else it will have legal status as counter offer. Only offeree is entitled to provide acceptance. Acceptance is important for contractual relationship because it creates agreement between parties. Further, without acceptance of party agreement cannot be formed.

Consideration

Agreement should be formed in against of some beneficial value. This value is not required to be at arm length price but it must be supported by mutual consent. Consideration is vital in contractual relationship as it creates mutual benefit for both the parties. Furthermore, promise without consideration is null and void.

Intention

Contracting parties should intend to create legal agreement in order to fulfill their promise. Presence of intention in contract is significant because all agreements are not considered for binding contract and same is not enforceable by court of law.

1.2 Main types of contract along with their impact

Parties can enter into contractual relationship with different types of contract. Description of different types of contact along with their impact is as follows...

Oral contract

Oral contracts are created on the basis of verbal communication by parties. These agreements are supported by trust and faith.

Impact

This agreement is informal and uncertain in nature because there is absence of evidence of contractual terms. In situation of dispute interpretation is made by court in accordance with the situation which may be unfair in some situations.

Written contract

Written contracts are supported by contract deed. It is formal and specific agreement as parties had described terms and conditions in appropriate manner.

Impact

In situation of contradiction this deed is considered to provide relief. In some business agreements it is essential to select written contract. Example of this agreement is purchase of tangible asset.

Distance contract

Distance contract is made in situation where parties are not present at similar place for determination of contractual terms.

Impact

In this agreement postal rule is applicable to determine its validity. As per this rule, contractual relationship exists only if acceptance is communicated to the party by whom offer was provided.

Task 2

2.1 Applicability of essential elements of contract in given case scenario

Bill and Cathy

In this case situation there is no contract between parties because with the providing of counter offer previous offer between parties is canceled. In this case counter offer was given by Bill by which offer of Cathy is canceled due to which he is not entitled to provide offer on same.

Bill and Liza

In the given case situation, postal rule will be applicable as there is distance contract between parties. In accordance with this rule, contract between parties is said to be valid if letter of acceptance of Liza is delivered to Bill in reasonable time. By considering the case scenario, it can be said that Liza had posted the letter in reasonable time period thus agreement between parties is enforceable by law.

Promissory Estoppel

It is a doctrine according to which in specific circumstances a person is prevented to going back on their promise because it is not supported by appropriate consideration. This doctrine was developed with the case of Central London Property Trust Ltd v High Trees Ltd [1947] KB 130. In this case, defendant was prevented to going back on their previous promise in order to accept the lower rent contempt to the fact that promise was not supported by consideration.

2.2 Analysis of contractual terms along with its applicability in given case situations

Terms of the contract are clauses inserted to describe obligations of parties in order to enforce them to fulfill their promise in an appropriate manner. These terms can be either expressed or implied in nature. Description of these terms is enumerated below...

Expressed terms

These contractual terms are inserted by the mutual consent of contracting parties. There are three types of expressed terms i.e. conditions, warranties and innominate terms. Description of these terms is enumerated below...

Condition

These are the primary terms which is center to the objectives of contract. In situation of non-satisfaction of condition, innocent party is entitled to breach entire contract.

Warranties

On the other hand, warranties are ancillary terms inserted to specify obligations of parties. In the situation of breach of warranties claimant is liable to make claim of damages only.

Innominate terms

In situation where terms cannot be bifurcated into conditions and warranties then it is considered as innominate terms where damages are provided by considering impact of breach.

Implied terms

These terms are inserted by legislation and custom in order to protect interest of weaker party and promote fairness in commercial contract. These terms are assumed to part of the contract as it is expressly described. In situation where these terms are not satisfied then party is required to provide reasonable damages.

Case study

In the initial case claim of Joyce DiDonato will be unsuccessful because condition was breach by her and Royal Albert Hall Company is entitled for breach of contract. However, in situation she had breach only warranties thus another company is not in position to repudiate the entire contract.

2.3 Evaluation of impact of expressed and implied terms using the above case

In situation of contradiction of expressed and implied terms in contractual scenario then implied terms will prevail. It is because, parties are required to insert contractual terms in accordance with the legislation. Further, if there is contradiction in terms then expressed terms will not be considered as part of the contract.

Case study 1

In accordance with the given case scenario, party will not be entitled for the remedy for the non-satisfaction of contractual terms. It is because, terms of the contract does not imply certain meaning.

Case study 2

In the given case study, claim made by claimant regarding bill of work and cost of seed spent on the field as was customary in farming tenancies is valid. It is because, completion of tenancy agreement was not pre-determined and he had provided his efforts on the land. Due to this aspect, he is entitled to make claim for the compensation for his work. In this case, inserted exclusion clause by City Cars Rentals is valid because they had laminated the document of limitation of liability in order to attract attention of customers. Thus, by considering assumption of absence of negligence clause is inserted in proper manner.

Described statement is not completely justified because exclusion clause is considered for relief only if it is inserted in a proper manner. It is not essential to be described at the time of formation of contract but it must be inserted prior to its applicability. In accordance with the case scenario, Thompson v LMS Railway [1930] 1 KB 41 exclusion clause will be valid if reasonable notice for the insertion of exclusion clause is provided even after formation of contract. Spurling v Bradshaw [1956] 1 WLR 461 states that exclusion clause can also be incorporated on the basis of previous dealings.

Task 3

3.1 Advise to Brad for applicability of negligence law along with available defenses

In the given case situation, Brad is entitled to claim for damages on accountant. It is because due to this negligent misstatement he had agreed on tenancy agreement with Albert and faced economic losses. It was his duty to provide relevant information of the client but he failed to do so thus he is liable to provide damages for the same.
In negligence individual is entitled for defense in following situations to relinquish obligation for damages

• Volenti non fit injuria- Claimant put themselves voluntarily in situation where there is risk of injury.
• Ex turpi causa- Act of defendant is justified in eyes of law.
• Contributory negligence- Claimant is also responsible for the act of negligence.

3.2 Contrast of nature of liability in contract with tort

Liability in contract and tort are both part of civil law. Objectives of both the obligations is to provide compensation to the injured party for the default act.

3.3 Importance of case of Donoghue V Stevenson in development of concept of duty of care

Duty of care can be defined as standard responsibility of individual that should be taken by them in order to prevent risk of injury. In the case of Donoghue V Stevenson, ideal example of duty of care was established. In accordance with this case, manufacturer is required to take care of operational activities in order to prevent injury of consumers. He was held liable because decomposed snail emerged from the drink of defendant. By considering this case, neighbor principle was developed in this case by Lord Atkin. In accordance with this case, individual should love their neighbors (related parties) and should take care they are not adversly affected with their actions.

In accordance with the approach of strict liability, obligation is imposed without finding their fault. For this liability, claimant is just required to prove that tort was occurred and defendant is responsible for the same. In the case of Rylands v Fletcher [1868] UKHL 1,defendant was owner of mill. He had constructed reservoir over a disused mine. Due to this act claimant had suffered from extensive damages. Further, court held that defendant is strictly liable to provide damages as they had made non-natural use of land.

Task 4

4.1 Applicability of principles of negligence

In the given case situation Bill has duty to drive in proper manner in order to prevent risk of injury of his companion. Due to his negligence injury was occurred to the boy. This act shows breach of duty by which injury is occurred to the related party. By considering this aspect, Bill will be liable to provide damages for his negligent action.

XYZ diaries has obligation to ensure that suitable candidates has been selected for the work practices. They were aware of the fact of engagement of minor for employment act still they had nothing done about it. Thus, they will be vicariously to provide damages for the same.

4.2 Vicarious liability of business

In accordance with the approach of vicarious liabilities, an individual will be held responsible for the tortuous act of the parties which are controlled by them. On the basis of this provision business is responsible for the negligent action of employees. Such obligation will be transferred in situation where following two conditions are satisfied...

• Defaulty party has status of employee while negligent action was occurred.
• Negligent action was occurred in course of employment.

However, employer will not be held liable in situation where employee had occurred negligence after working hours or they are involved in criminal actions. In the given case situation negligence was occurred by friend not by employee thus owner of Vintage Vehicles Museum will not be responsible for the same.

In accordance with the Occupier’s liability Act, an occupier is responsible to take care of visitors in order to prevent situation of their damages. By taking appropriate actions such as insertion of exclusion clause or warning notice they can prevent their obligation.

Conclusion

In accordance with the present report, it can be concluded that parties are required to take care of their actions in order to relinquish risk of injury. Further, they should fulfill their obligations in an appropriate manner to discharge contractual liability through performance. In situation where they failed to do so, they will be liable to provide damages for the same in order to compensate the injury of innocent party.

References

• Adams, A., 2010. Law For Business Students. 6th ed. Pearson Education Ltd.
• Edwards, S. J., Edwards, L. L. and Wells, K. P., 2008. Tort Law for Legal Assistants. Cengage Learning publication.
• Elliot, C. and Quinn, F., 2009. Tort Law. Longman.
• Gillies, P., 2004. Business Law. Federation Press.
• Jennings, M., 2010. Business: it’s Legal. Cengage
• Kelly, D. and et.al., 2013. Business Law. Taylor & Francis.

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