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Introduction to ACNB

In order to enter successfully into a valid contract, both the parties must focus on proper legal framework so that they can enable valid agreement (Nielsen, 2010). However, it is essential for the parties to follow proper judicial system so that rights and duties of the parties can be protected who are entering into the contract. Different statute laws as well as regulations framed by the governing authorities must be abide by the parties so that they may not enter into the illegal practices and activities. Therefore, UK government has implemented various laws and legislation that are related with the contract and neglectful activities conducted by the parties so that they may defend the right of innocent parties from the partial practices.

Presently, the study focuses on defining the essential elements for entering or forming a valid contract. However, it will also focus on different types of contracts that parties may form as well as it will also focus on different terms existing in the contract that are required by the business parties to focus on so that they may easily perform the business practices. Furthermore, elements and different forms of contracts are also applied for the given case scenario. In addition to this, report will also discussed the nature of negligence by the parties within the contractual aspect.

The essential elements, contract types and terms of a valid contract

Essential elements

Valid contract within the business context is characterized as a binding statement among two or more parties that may be legally enforced by the judicial system (Lawson, 2011). Valid contract must be in the written form in between two or more parties that mainly specify the terms and actions that have to be performed by both the parties. Despite of this, there are different elements that need to be focused by the parties while entering into an agreement or contract. Different elements of agreement are-

Offer and acceptance: One of the essential elements that proposes agreement is related to valid offer and acceptance. For instance; if an offer is offered by one party to another party and other party accepts that offer, then both the parties are abide in the agreement. An offer is defined as a proposal that has been given by one party to the other party so that they may complete action by performing activity. On the other hand, acceptance is termed as a respond that is provided by other party in to the respect of offer. Therefore, the acceptance of offer must be unconditional (Friedman, 2011).

Intention to create legal relationship: Another essential element within the agreement includes the intention of both the parties who are entering into an agreement. Both the parties must have intention to create legal relationship by enabling fair and ethical practices. For instance; if, intention of both parties are not to create a legal relationship, then there will be no contract among the parties (Beale and et.al., 2010).

Competent parties: However, parties who are engaging in a valid contract must be competent enough so that they may enter into a valid contract. According to the law, any person or individual who is below 18 years, with unsound mind or lunatic may not be valid to enter into a valid contract. Person of sound mind as well as adult of above 18 years is eligible for entering into a contract and form contractual relationship.

Free Consent: Another significant element that is essential for valid contract includes that there must be free consent of each and every party. The consent is defined as a situation where both the parties must agree upon the related things in the identical meaning. Parties cannot entered into a valid contract if, the parties are evoked by fraud, mistake or misrepresentation (McKendrick, 2014).

Different types of contract

There are different forms of contract under which parties may form legal relationship as well as it is also enforceable by the law. For entering into a valid contract, parties may focus on different types of contracts that mainly include-

Written contract: One of the effective type of contracts within the business context is the written form of contract. Under written contract, parties who are entering into an agreement are focused on forming a deed or statement that would clearly state the rights and duties of parties that they would enact (Engler and Heyman, 2011). The advantage of enabling written contract among the parties is that it may act as a proof to the parties that they have entered into a contract and they are liable for performing activities which are mentioned within the contract.

Oral contract: Another type of contract that is commonly used in the business environment is oral contract among the parties (Fried, 2015). This form of contract is highly suitable when parties of the contract are at the distance or are physically present at the same place. On the other hand, oral contract can be made through telephonic conversation. Disadvantage of oral contract is that it lacks the evidence of entering into a valid contract. However, oral form of contract may not be advantageous in the situation where one party does fraud with the other party and the defended party has no right to sue them as due to lack of evidence.

Bilateral contract: Bilateral contract is also considered as an effective type of contract under which parties agreeing into the contract mutually dealing with their promises. Under bilateral contract both the parties specifies their duties as well as role so that they may perform their actions to meet or accomplish the goals of both the parties (Elliot and Quinn, 2009). However, this type of contract is also termed as two sided contract under which both the parties mutually agree to perform their duties and responsibilities.

Unilateral contract: Another sort of contract includes one sided contract that is often termed as unilateral contract. Under unilateral contract, one party gives offer but it is not necessary or required that other party may accept the conditions that are offered by the offeree. Example of unilateral contract includes that an individual advertises in the newspaper and magazine to provide financial reward to the party in the program who would return their missing products. Thus, individual who has provided offer to provide reward is obliged to pay certain amount if it is being returned (Horsey and Rackley, 2009).

Terms in a valid contract

The valid contract require different terms and conditions in their written agreement so that parties may perform their duties according to terms and conditions. If the parties are failed to satisfy the terms and condition of the contract then the aggrieved party is liable to claim for the damages and injuries. The different kind of contractual terms are classified as follows-

Expressed terms are considered as significance terms that are entered into a contract by the parties. These are the terms that is clearly directed and communicated mutually by the parties of contract in oral as well as written form (McKendrick, 2008).

Conditions: Conditions are considered as expressed terms within the contract that are mutually agreed by the parties that need to be followed by them within the contract. Parties in the contract are required to fulfill the conditions and if in case parties are unable to meet the conditions and terms entered into the contract then aggrieved party is liable to pay for the damages and compensate for the injuries (Peel and Treitel, 2007).

Warranties: another form of expressed terms include warranties these are considered as ancillary terms that are offered by the one party to the other party in the contract. In the case if party is unable to provide warranties then offered party is in the position to provide compensation and remedies.

Implied terms are also considered as significant terms in the valid contract as these terms are enforced by the law and governmental authorities that is mandatory for all the parties who have been in the contract. The main purpose for which government official enforce or impose the implied terms in the contract is to protect or defend the rights of parties from the unethical practices and behavior (Nielsen, 2010).

Negligence for Business

Negligence can be defined as a failure of taking reasonable care by a person. That person is obliged to take reasonable care on account of other people in such situations where it is foreseeable that other people could be harmed by their actions or omissions. Further it can also be defined as the situation where a particular person fails to obey a duty of care (Volokh, 2010). Moreover, the individual alone is not responsible for the injury caused but the failure of acting as a reasonable person gives rise to the damages. In a general format, when an individual acts in a careless manner and due to which injury has been caused by another person than under legal principle of negligence the careless person would be legally liable for any harm which have resulted due to carelessness (Spindler, 2011). There are 4 key principles for negligence which are described as follows:

1.Duty of Care: This can be defined as the circumstances and relationships which have been recognized by the law. This give rise to a legal duty to take reasonable care. If the person who is responsible for this duty fails to perform than he is liable for the resultant harm caused to another person (Booth, 2007). For this purpose, liable person has to pay damages to other party who got injured or suffered losses. In certain cases, there are exceptions to the duty of care such as when a person donates the food in good faith for charity purpose than that person is protected from legal liability. If any one is caused harm while consuming that food than that person is not liable. Moreover, volunteers who are doing community work cannot be held responsible if they cause any damages to the others. In that case, community organization will be held liable.

2.Breach of Duty: When any person fails to take extra care they are require to take than this situation is considered to be breach of duty of care. It happens when the individual does not meet the expectations and fails to perform what a reasonable person would require to do. Moreover, this can be explained in a simpler term that breach of duty in negligence liability can be found when the defendant fails to meet the standard of care which is required by the law (Abn, 2009). When once it is established that defendant which is at fault owed the duty of care than the claimant must also prove that defendant was in breach of duty.

3.Causation: In order to prove a causation in tort law it is required by the claimant to describe the loss they have suffered which has been caused by the defendant. Defendant is liable to pay the damages which have been caused by them in regards to the failure of duty of care.

4.Proximate: This principle is closely related to all the three principles. The damage must be of a foreseeable type and it is required in order to relate the proximity. While doing the claim of negligence, claimant has to establish that the defendant owes them a duty of care and he has got injured or suffered damages because there was a breach of duty (Giliker, 2010). The claimant must also prove that damages were not too remote.


After preparing this report of aspects of contract and negligence it can be concluded that it is very essential to include all the elements of a contract. If any of the element is missing than the contract may become void. Certain cases have clearly explained the importance of all the essential elements. Under breach of contract law the innocent party can claim damages. Further, tort liability is also included which describes that a person owes a reasonable duty of care against another party and if there is negligence than damages have to be paid to the claimant party. Moreover, the vicarious liability is also explained so that employer's responsibility can be known.


  • Fletcher, G.P., 2008. Tort liability for human rights abuses. Bloomsbury Publishing.
  • Fried, C., 2015. Contract as promise: A theory of contractual obligation. Oxford University Press.
  • Friedman, L. M., 2011. Contract law in America: a social and economic case study. Quid Pro Books.
  • Giliker, P., 2010. Vicarious liability in tort: a comparative perspective. Cambridge University Press.
  • Lawson, R. G., 2011. Exclusion clauses and unfair contract terms. Sweet & Maxwell.
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