BTEC HND IN BUSINESS (Accounting)

ASSIGNMENT COVER SHEET

NAME OF STUDENT REGISTRATION NO. UNIT TITLE ASSIGNMENT TITLE ASSIGNMENT NO NAME OF ASSESSOR SUBMISSION DEADLINE VN: EN:

Aspects of Contract and Negligence for Business Contracts 1 of 2 (individual report) Mr. John Andre 8 Nov 2013

I, __________________________ hereby confirm that this assignment is my own work and not copied or plagiarized from any source. I have referenced the sources from which information is obtained by me for this assignment.

________________________________ Signature

_________________________ Date

---------------------------------------------------------------------------------------------------------------FOR OFFICIAL USE (Course Administrator) Assignment Received By: Date:

ACNB Assignment 1 Fall 2013-2014

Unit Outcomes
Outcome Evidence for the criteria Feedback Assessors decision
First attempt Rework

Internal Verification

Understand the essential elements of a valid contract in a business context LO1

explain the importance of the essential elements required for the formation of a valid contract

1.1

discuss the impact of different types of contract

1.2

analyse terms in contracts with reference to their meaning and effect

1.3

apply the elements of contract in given business scenarios

2.1

Be able to apply the elements of a contract in business situations LO2

apply the law on terms in different contracts

2.2

evaluate the effect of different terms in given contracts

2.3

Merit grades awarded Distinction grades awarded

M1 D1

M2 D2

M3 D3

ACNB Assignment 1 Fall 2013-2014

Outcome

Evidence for the criteria

Feedback

Assessors decision
First attempt Rework

Internal Verification

Assignment
( ) Well-structured; Reference is done properly / should be done (if any) Overall, youve

Areas for improvement:

ASSESSOR SIGNATURE

DATE

NAME: ..........................................................................................

(Oral feedback was also provided) STUDENT SIGNATURE DATE / /

NAME : ..............................................................................
FOR INTERNAL USE ONLY VERIFIED YES NO DATE : ...........................................................................

VERIFIED BY : ........................................................................... NAME : ...........................................................................

ACNB Assignment 1 Fall 2013-2014

SCENARIO Ken Kummings, owner of a small chain of restaurants called Ken Can Cook (KCC) has hired the business consulting firm (which you now work for) in search for a better understanding on how the law affects his business. He has several situations which you need to comment on. Your goal is to guide him to a better understanding of contract law. His first issue is with a customer named Albert who came into the restaurant and ordered some food for himself. The food was prepared as ordered and after Albert finished the meal he started to leave without paying. When Ken confronted Albert, Albert said there was no contract and Ken should try to sue him but he will lose because there was nothing signed. The cost of the food was 150. There was another, similar, issue with a customer named Bob who filled out a form online to order food for delivery within 30 minutes. The food was properly prepared and when delivered to Bobs address (5 minutes late), Bob said that he was under 18 so he did not have to pay. The food was returned to the restaurant but by that time it could no longer be sold and had to be thrown away. The cost of the food was 200. Charlie is the local health inspector and has hinted that he does not think KCC is clean enough. Charlie told Ken that for 500 he could make sure that all KCC restaurants in the city would be OK for doing business. Ken didnt want to take any chances so he wrote a simple contract as follows:
The undersigned agrees that all Ken Can Cook (KCC) restaurants in the city of Stratford Upon Avon will be given clearance by the health inspector Charlie in consideration for 500. If Charlie does not clear all KCC restaurants, Charlie will return all of the 500 to Ken. Signed by Ken: Date: Signed by Charlie: Date:

Ken believed that with everything in writing, he would be certain to either get what he wanted or get his money back. However, Charlie still failed KCC for being too dirty and KCC had to close for one week, losing 5,000 in expected profit. Charlie refused to give Ken his money back so Ken is planning to sue Charlie. Ken recently purchased 10 new tables and 40 new chairs for one of his KCC restaurants after hearing an advertisement on the radio. The supplier, Delicious Tables, said that all tables bought that month would include an extra guarantee saying that they would replace any table, without charge, if the table was chipped or scratched in the first year of service. Three of the tables were chipped and Ken wanted them replaced as the radio ad said. Delicious Tables said there was nothing in the contract so they did not have to replace anything. Ken feels this is unfair since the ad was what motivated him to buy the tables that month. The cost of the three tables is 150.
ACNB Assignment 1 Fall 2013-2014 4

Ken decided to buy a used dish washing machine from Edie. The written agreement said that Ken would give to Edie a cash register in good working order and Edie would give to Ken a dish washing machine in good working order. On Monday, Edie and Ken exchanged items. Two days later, on Wednesday, before Ken ever used the dish washing machine, Ken sold it to Gary for 300. On Friday, Edie tried to use the cash register only to learn that it never worked. When she went to Ken, Edie was told that all sales are final and Edie cannot get her dish washing machine back because Ken has already sold it. Ken admitted that the cash register never worked but says Edie should have checked before taking it. Edie now wants to get the dish washer back from Gary but Gary, who is a friend of Kens, says he made a good faith trade with Ken and he will not give the machine back. Gary says that Edie must deal with Ken. Another issue that Ken has is with Fast Money Bank. Ken needed a working capital loan so he went to Fast Money, met with a loan officer, and agreed by talking (with nothing in writing) with the following terms: Fast Money would lend KCC 10,000 at 10% interest per year for two years. KCC would make equal monthly instalments of 461.45 for 24 months for a total of 11,074.78. If KCC failed to make any payment on time, Fast Money would have the right to take and sell any asset from KCC in order to get the money owed by KCC to Fast Money. The loan officer gave Ken the 10,000 and the two shook hands. Ken has already made two payments but feels he cannot make any more payments without running out of money (which means he would have to close his restaurant). He wants to know what his options are. One more case involved Henry and Ivan who entered KCC on a Monday for lunch. The ordered their lunch and on the back of the receipt was printed KCC accepts no responsibility for any losses, including personal injury, occurring while on KCC property. A customer had spilled a drink but the employees were too busy to notice it. Henry and Ivan both slipped in the liquid, hitting their heads, and losing consciousness. While they were out, someone stole smartphones from both Henry and Ivan. Each phone costs 500 to replace and the hospital bills after the accident totalled 1,000 for both of them. Henry and Ivan expect KCC to pay for all 2,000 but Ken showed them the disclaimer on the back of their receipt. Henry and Ivan are planning to sue KCC but Ken thinks they will lose because he has protected himself. Another item Ken would like advice on is about a new stove he leased. This stove allowed KCC to increase their productivity because they could cook more meals at the same time, reducing customer wait time. The terms of the lease were that KCC would pay Jelly Bean Rentals 200 per month for 18 months and Jelly Bean Rentals would ensure that the stove worked correctly during the length of the lease. After six months, the timer on the stove, which helped the cooks make sure they did not overcook any meals, broke. Ken called Jelly Bean Rentals and told them to come and fix it. Jelly Bean Rentals offered excuse after excuse and, in the end, it took them 3 months before they came to fix the timer. By this time Ken was angry and
ACNB Assignment 1 Fall 2013-2014 5

wanted to break the contract. He insisted to the manager, who came with the repairman to fix the broken timer, that KCC would not make any more payments on the stove and that Jelly Bean Rentals should disconnect the stove and take it back according to the terms of the agreement. The manager refused saying they contract would stay in force. Ken has not made any further payments and 4 more months have passed. The contract stated that if Ken failed to make 2 or more payments on time then the monthly payment for all future payments would double to 400 per month. Ken believes he does not owe any payments (and he didnt make any late payments before he cancelled the contract) to Jelly Bean Rental since he told the manager to his face that he wanted to cancel the contract. KCC also has an issue with a customer who ordered 1,000 hotdogs last month for a party. KCC delivered the hotdogs but did not deliver any condiments (mustard, ketchup, etc.). The customer was expecting there to be condiments and when there werent any, the customer had to send someone out to buy ketchup and mustard. The customer now wants the money back for the condiments but Ken says that condiments were not included in the contract although he does offer then for free in his restaurant. The cost of the condiments was 100. Your tasks: A) Using one or more contracts from the scenario, explain the importance of the essential elements required for the formation of a valid contract (outcomes 1.1 & 2.1) Using one or more of the contracts from the scenario, discuss the impact of different types of contract (outcome 1.2) Explain several different terms in contracts referencing their meaning and effect (outcome 1.3) Using two or more of the contracts from the scenario, apply the law on two or more terms (outcomes 2.2) Using one or more of the contracts from the scenario, evaluate the effect of two or more terms in the contracts (outcome 2.3)

B) C) D) E)

GRADING Pass is achieved by meeting all the requirements defined in the assessment criteria. Identify and apply strategies to find appropriate solutions (M1)

Merit

Characteristics / Possible Evidence Effective judgments have been made with respect to scenario contracts. Select and apply appropriate methods/techniques
ACNB Assignment 1 Fall 2013-2014

(M2)
6

Characteristics / Possible Evidence Appropriate methods have been applied in analyzing legal impact and selection of cases to include has been justified. Present and communicate appropriate findings (M3)

Characteristics / Possible Evidence You have used coherent, logical development of principles/concepts for the intended audience.

Distinction Use critical reflection to evaluate own work and justify valid conclusions (D1) Characteristics / Possible Evidence self-criticism has been shown regarding analysis and recommendations. Demonstrate convergent/lateral/creative thinking (D3)

Characteristics / Possible Evidence Innovative and creative thought have been applied.

PRESENTATION 1. The assignment should have a cover page that includes the assignment title, assignment number, course title, module title, Lecturer/tutor name and students name. 2. Ensure that authenticity declaration has been signed. 3. This is an individual assignment. 4. Table of contents with a list of all headings and page numbers. 5. A fully typed up professionally presented report document. Use 12 point Arial, 12 point Times New Roman, or 11 or 12 point Calibri script. 6. Your assignment should be word-processed and should be less than 3,000 words in length. 7. Appendices/administrative aspects are outside this word count limit. 8. You must acknowledge the sources of information and evidence using the Harvard referencing system. 9. Submit both a hard (printed) and soft (electronic in DOCX format) copy by the deadline listed above.

ACNB Assignment 1 Fall 2013-2014

NOTES TO STUDENTS FOR SUMMISSION Check carefully the submission date and the instructions given with the assignment. Late assignments may not be accepted. Ensure that you give yourself enough time to complete the assignment by the due date. Do not leave things such as printing to the last minute excuses of this nature will not be accepted for failure to hand-in the work on time. You must take responsibility for managing your own time effectively. If you are unable to hand in your assignment on time and have valid reasons such as illness, you may apply (in writing) for an extension. Failure to achieve a PASS grade will results in a REFERRAL grade being given. Take great care that if you use other peoples work or ideas in your assignment, you properly reference them in your text and any bibliography. Failure to follow any of these instructions may cause you to fail for submitting improperly. NOTE: If you are caught plagiarizing, the University policies and procedures will apply.

ACNB Assignment 1 Fall 2013-2014