Aspects of Contract and Negligence for Business

Contents

Introduction        3

L0-1 Understanding the essential elements of a valid contract in a business context:        4

1.1 Explain the importance of the essential elements required for the formation of a valid contract.        4

1.2 Discuss the impact of different types of contract.        6

1.3 Analyze terms in contracts with reference to their meaning and effect        8

LO-2 Being able to apply the elements of a contract in business situations        9

2.1 Apply the elements of contract in given business scenarios        9

2.2 Apply the law on terms in different contracts.        9

2.3 Evaluate the effect of different terms in given contracts.        11

LO-3 Understanding principles of liability in negligence in business activities:        12

3.1 Contrast liability in tort with contractual liability.        13

3.2 Explain the nature of liability in negligence.        14

3.3 Explain how a business can be vicariously liable.        15

LO-4 Being able to apply principles of liability in negligence in business situations……17

4.1 Apply the elements of the tort of negligence and defenses in different business situations.        17

4.2 Apply the elements of vicarious liability in given business situations.        18

Conclusion        19

Introduction

Contract law plays an important role in our day to day life especially related to business and organizations. Contract law is divided into different categories and effects differently on various contexts.

The aim of the assignment is to discuss the essential elements of contracts and its effect on various cases. It also discusses the classification of the contract, the meaning and effect of the contracts. We also apply the elements of contract on actual business scenario. We also have discussed the principle of liability in negligence in business activities.

L0-1 Understanding the essential elements of a valid contract in a business context

1.1 Explain the importance of the essential elements required for the formation of a valid contract.

Contract law refers to that term where both parties agreed on certain terms and conditions and receive something in return.

The most important factor in contract law is that, both the parties would need to consent on certain rules and regulations. This study will give Mr. Peter Abraham clear concept and knowledge about the importance of the essential elements required for the formation of a valid contract:

Consideration:

Both the parties especially peter would need to clear their intention and ensure that they will get something in return. The main feature of consideration is that, promisor will have to keep his promise under the agreement.

If individual fails to fulfill the term and conditions of the agreement, he will be entitled to give compensation for the damages.

Conditions: These are the major terms in a contract. A condition is the basis of any contract. If one fails or is breached the whole contract is breached. These are in contrast to warranties which are less important and don't usually lead to breach of contract, but rather a price adjustment or damages paid.

Capacity: 

Peter will have to consider the capacity of his own because before determining the terms and condition peter would need to evaluate that in what extent he can complete the task.

Consent: 

Both parties as well as peter would need to agree on the term and conditions to make a valid contract neither there will not be formed any contract.

Certainty:

The term and condition of the contract would need to be precise and clear to the both parties. Peter can check the contract through an attorney or lawyer to make it meaningful.

Offer and Acceptance:

In general, the basic elements of a valid contract are offer and acceptance. One party will offer the other party by presenting certain terms and conditions and if the offeree accepts the offer then the contract will be formed.

Intention to Create Legal Relationship: 

Peter would also need to consider the intention to create legal relationship with the parties. Example: if I promise to my brother verbally that I would give him 200 dollar and if I did not keep my promise then I would not be liable as I did not make any legal paper with my brother.

1.2 Discuss the impact of different types of contract.

For Mr. Peter Abraham, it is necessary to understand the impact of various types of contract.

• Face to Face Contract: 

Face to face are also known as Verbal contracts. Verbal contract can take place by many means, for example; a face-to-face meeting, handshake meetings, virtual or web meeting etc. As there is no written document or evidence regarding the contract, it can create clashes or misunderstanding in future. In some cases, some paper works or paper written contracts are also considered as verbal contract.

Major benefits and impacts of face-to-face contracts are:

• Reduces the complexity of legal formalities
• Helpful in case of sudden contract making
• In case of immediate decision and contract making.

Written Contract: 

Written contract is a well-documented contract where both of the parties entries the certain conditions. Written contract is more efficient and reliable. Any of the party cannot violate the contract without any strong reason. It provides more certainty and plays a role like evidence. Important topics like materials, costs, deadline, interest rate, amount of money, summary of the agreement take place in the contract.

The major benefits and impacts of written contract are:

• Reduce risk
• Reduces uncertainty
• Helps to avoid clashes
• Plays a role of Strong evidence
• Clarifies the individual argument of the related parties

For example Mr. Peter Abraham writes a contract to valid reason and purpose.

• Distance Selling: Distance selling comprises email, internet, telephone and others online business transactions. In today’s fast grooming business world, most of the companies depend on distance business. It facilitates to sell their product in remote countries and in some cases different parts of the world. On that case, communication is very important. It is difficult to operate the business and transactions by going there physically. On that case, businessperson takes help of technology that facilitates distance communication. Telephone, emails, internet, online shopping is some examples.

The major benefits and impacts of distance selling are:

• Reduces physical effort
• Reduces traveling time
• It helps to reach one’s product to nay corner of the world.

For example:

Online

Phone

mail order

TV shopping channel

Interactive TV

1.3 Analyze terms in contracts with reference to their meaning and effect.

Terms of contract set out duties of each party under that agreement. Here we are discussing all of the terms for giving Mr. Peter Abraham a proper knowledge and deep meaning of that.

CONDITIONS:

Peter would also need to take a great care and responsibilities while making contracts. If he thinks that, he cannot fulfill the terms and conditions which has been described in the contracts, he would need to clarify it to the customer in order to save himself from suing breach of law.

WARRANTIES:

In case of distance selling, generally conducted through internet or telephone, peter would need to ensure the quality of the products while delivering the products to the customer. If peter fails to provide the described products to his clients, he will be entitled to breach the contract

INTERMEDIATE TERMS:

Intermediate terms mean the middle situations between the warranties and contrition. In this case, the jury cannot make decision as they are in confusion about the reason of breaching the law, whether the law has been breached on the basis of warranties or condition.