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Aspects of Contract and Negligence for Business

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Table of Content
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................3
AC 1.1 Explain to Peter the importance of the essential elements required for the formation of
a valid contract.............................................................................................................................3
AC 1.2 Discuss the impact of different types of contract to Peter...............................................4
AC 1.3 Analyze the terms of a contract with reference to their meaning and effect to Peter......5
Task 2...............................................................................................................................................6
AC 2.1 Apply the elements of contract in given business scenarios............................................6
AC 2.2 Apply the law on terms in different contracts..................................................................6
AC 2.3 Evaluate the effect of different terms in given contracts.................................................7
Task 3...............................................................................................................................................7
AC 3.1 Contrast liability in tort with contractual liability...........................................................7
AC 3.2 Explain the nature of liability in negligence....................................................................8
AC 3.3 Explain how a business can be vicariously liable...........................................................9
Task 4...............................................................................................................................................9
AC 4.1 Apply the elements of the tort of negligence and defenses in different business
situations......................................................................................................................................9
AC 4.2 Apply the element of vicarious liability in the given business situations......................10
Conclusion.....................................................................................................................................11
Bibliography..................................................................................................................................12

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Introduction
A contract refers to an agreement between two or more parties, which has certain terms
and conditions in which, there is a word of honor to do something in exchange of another thing
that is of equal value. Torts refer to wrong doings that result to damage, loss or harm to the body
of another person due to a breach under statue. Liability refers to being liable for the results of
injuring others. Negligence on the other hand is the way to hold individuals responsible when
they failed to make the right decisions even if they did not intend to harm. This paper focuses on
these concepts in explaining different issues in business (Pinsent Masons LLP, 2008).
Task 1
AC 1.1 Explain to Peter the importance of the essential elements required for the formation of
a valid contract
For a contract to be valid, it consists of the following essential elements that are of great
importance:
Offer and Acceptance
An offer is a sign that a party wants to make a contract with the other party on particular
terms. In the case scenario presented, Simone offers Peter a contract of completing electrical
rewiring the five terraced houses. Acceptance is a sign indicating that the other party has taken
the offer. In the case scenario, Peter accepts the offer and decides to rewire the houses. Offer and
Acceptance are important since they ensure that the two parties are in clear agreement of what
they intend to do (Pinsent Masons LLP, 2008).
Lawful consideration
Consideration is the price at which one party has to pay the other for doing something for
them. It could be in form of services rendered, money, sacrifice or the goods exchanged. In the
case scenario above, Simone agrees to pay Peter 5,000 in completion of the work. This is
important since it ensures that both parties benefit from the contract (Small Business
Development Corporation, 2014).
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Intention
The two parties must have a purpose for signing a contract. This means that at the end of
the contact, the two parties anticipate something. In the case scenario, Simone wants the houses
to be rewired so that she can rent them out to the students whereas as Peter expects payment after
doing the work. Intention to create the legal relationship is important as it ensures that the two
parties do their party satisfactorily to be able to achieve their purposes (Turner & Martin, 2011,
pp. 165).
AC 1.2 Discuss the impact of different types of contract to Peter
There are several types of contracts based on different classifications. It is possible to
classify contracts according to their performance, mode of formation, enforceability or validity.
The different types of contract would therefore have different impacts to Peter.
Express contracts are made in written form or verbally. In the case scenario, assuming
that Peter accepted the contract verbally, when Simone refuses to pay him, then it would be
difficult for him to sue her since he does not have any written evidence of the contract to present
to court as evidence. Implied contact is the contract that one deduces from the circumstances of
that particular case of the conduct of a person. The impact of this kind of contract to Peter would
be that if the agreement runs out of time, the parties would continue to perform based on the
terms of the contract an implication comes up that they have both assented to a new agreement
that has similar provisions to the old one (Pinsent Masons LLP, 2008)
An E-Contract is a contract made electronically using the internet. The impacts of this
kind of contract to Peter are that he would not have to meet up with Simone personally to discuss
the contract. It would also be possible for Peter to print out any form of communication about the
contract and present it in court as evidence in case of any problems regarding the contract. A
Partly executed contract is an agreement where one party has not fulfilled its promise whereas
the other party has done so. In the scenario, Peter completes the work on the agreed time but
Simone does not pay him claiming that she is facing financial difficulties. The impact of this type
of contract to peter is that he loses trust in clients and ends up having a loss of doing so much
work and not being paid accordingly (Pinsent Masons LLP, 2008).
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AC 1.3 Analyze the terms of a contract with reference to their meaning and effect to Peter
Several terms of a contract, that would have an effect to Peter. It is important to analyze
contracts to ensure that one is able to identify the similarities and differences between different
agreements according to their clause elements and language. The terms of a valid contract
include:
Definitions and Interpretations
It is important to explain the terms that are not clear or may cause misinterpretations. In
the case scenario, it is important for Simone to ensure that she explains well the different terms
to Peter and ensure that he understands them so that he can complete the task well. Failure to
understand the terms well and misinterpretations would result to Peter completing the work in a
wrong way. The term such as rewiring should be clear to peter (Pinsent Masons LLP, 2008).
Parties
It is important to ensure that both parties have the right information about each other.
They should know each others names, addresses and contact information. In any case, Peter
does not have the right information about Simone; he may end up communicating to the wrong
person about the contract.
Timescale
It is important for the parties to show the exact time that the contract should take. In the
case scenario, Simone gives Peter up to 15 September for a good pay. This affects Peter in that he
ensures that he has completed the task by the time Simone had given him.
Payment provision
It is important for the parties to state clearly the payments of the services involved in the
contract. The parties should as well specify the dates the payments are to be met and the
consequences in case of any failure. In the scenario, Simone agrees to pay Peter an extra 1,000
if he attains the work by 15 September. Peter completes the work by 15 September but Simone
does not pay him as agreed. This then affects Peter since they had not set any consequences in
case one party fails to attend to the other (Pinsent Masons LLP, 2008)
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Task 2
AC 2.1 Apply the elements of contract in given business scenarios
In the given business scenario, the offer was made by Norman to buy Jackies car for
4500. Jackie did the acceptance. Jackie however attached a condition to the acceptance stating
that Norman needed to add an extra 500. The consideration in this scenario is in form of money
in exchange for the car. The intention of Norman is to pay 4500 for the car in May and pay the
remaining 500 in September. The intention of Jackie on the other hand is to sell the car for
5000. The legal formality in this contract is that it is in written form in that Jackie accepts the
contract by writing a letter to Norman and Normal also replied in form of a letter. In any case any
of the parties does not comply with the terms and conditions of the contract, then the other party
has a right to file a complaint (Pinsent Masons LLP, 2008).
AC 2.2 Apply the law on terms in different contracts
Under the express contract, one party accepts the offer made by the other in written form.
In the scenario, Jackie accepted the offer by writing a letter to Norman. If any problems come up
in the breaching of the contract, it is important for an agent to see into it. It is significant as well
to have evidence in written form. In the scenario, the evidence of the contract is the letter that
Jackie and Norman were writing to each other regarding the contract. If any of the parties is not
able to abide by the terms and conditions of the contract, in this case either Jackie or Norman,
then they should follow a legal procedure in destroying the contract (Miller & Jentz, 2010, pp.
65-78).
Under the implied contracts, it is the duty of the agents to work according to the terms
and conditions of the contract. The clients have a right of taking a legal action against them if
they try to go against the rules of the contract. In the scenario, Jackie accepted the condition that
Norman would pay for the car in two installments, the first one in May and the other one in
September. She should therefore stick to the condition and do as agreed. Norman has a right to
take a legal action if Jackie does not comply with the terms. Jackie on the other hand does not
have the right to take a legal action if Norman does not follow the terms. This is because, as
much as she accepted, she did not give Norman a feedback. Norman did not therefore have a
clear answer as to whether Jackie had accepted the term or not (Miller & Jentz, 2013, pp.78-85).
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AC 2.3 Evaluate the effect of different terms in given contracts
Different terms of contracts have different effects to the agent as well as the client of the
contract. If the parties have not given their correct names and addresses then there would be a
problem of communication in sealing the contract. In the scenario for instance, if Jackie did not
have the right name and address of Norman then she would end up sending the letter to the
wrong person and Norman would not be able to know if his offer was accepted. Payment
provisions affect the parties of the contract when the payment id not conducted as agreed and in
the right time. In the scenario, Jackie agrees that Norman pays 5000 for the car in two
installments 4500 in May and 500 In September (Martin, 2012). In any case, Norman does not
complete the payments as agreed, and then Jackie has a right of taking a legal action. The
timescale of the contract affect it in that the parties have to work with the given time. In the
scenario, Norman has up to September to complete the payment of the car whereas Jackie has up
to September to hand over the car in any case Norman will have completed paying for it.
Termination provisions are the situations under which the parties could do away with the
contract. This ensures that the parties are able to control the problem before it is too late. In the
scenario, it would be important to come up with a provision such as if Normal will not have paid
the full amount of the first installment by May, then the contract be terminated (Martin, 2012).
Task 3
AC 3.1 Contrast liability in tort with contractual liability
One can consider a tort as a civil wrong and the individual wronged has the ability to sue
in civil court for a restriction against repetition or compensation. In the scenario, a tort has been
done to the appellant, a blind man, resulting to an injury and he therefore has a right to sue for
compensation or to prevent the same from happening to another person. A contractual liability
presents itself with the presence of a contract, which voluntarily connects people together.
Liability in tort is the consequence of the law and the damages can be compensated whereas
contractual liability is the consequence of agreements and are based on expected losses ( Elliott&
Quinn, 2011, pp. 56-67)
In torts law, if there is no mistake, then no damage done by the defender is able to make
him liable. In the scenario, if the servants of London Electricity Board are not on the wrong, then
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they are not in any way liable to the injuries on the appellant. Torts law identifies two types of
damages; punitive and compensatory. The amount for the damage given is according to the
principle of compensating the claimant for his loss and not for punishing the wrong of the
defendant. If this were to be applied in the case study then the appellant would be compensated
to treat his injury and not to punish the servants of London Electricity Board. In tort, the claimant
may not have any relationship with the defendant, in the scenario, the appellant and the servants
of London Electricity Board may not have any relationship. In contractual liability, the claimant
and the defendant have to be parties of a contract (Harpwood, 2008, pp 89-96).
AC 3.2 Explain the nature of liability in negligence
For an individual to be considered answerable to legal negligence, in the scenario, the
servants of London Electricity Board, four factors have to be present. The defendants have to
owe some kind of duty to the public or plaintiff. The defendants have to have failed to honor the
duty. Then the plaintiff has incurred injury and finally a reasonable individual could have
foreseen the failure of the defendant to meet his duty could have led to the injury of the plaintiff.
In the scenario, the board did not intend to harm the appellant. The law identifies a number of
defenses that are against civil negligence. The doctrine of contributory negligence asserts that an
individual cannot sue another person if his own actions were as well negligent. In the scenario,
the appellant cannot sue the board if he was negligent in any possible way. An individual cannot
also take liability if the injured individual consented earlier to the circumstances wherein the
person injured ought to have known that injury was possible. This does not apply to the appellant
in the scenario since in attempt to detect the objects in front of him he missed the hammer. This
happened because he is blind and one cannot therefore say that he anticipated the injury (Miller
& Jentz, 2010, pp.110-115).
AC 3.3 Explain how a business can be vicariously liable
Vicarious liability is the situation whereby one party id considered responsible for the
wrong acts of a third party. It comes up when a party should have control over another party but
is negligent in exercising that control. In business, it is possible to hold the employer viable for
the wrong actions of a worker such as discrimination in the workplace. Despite the fact that the
employer has not conducted the unlawful action, the employer is considered responsible because
they are in charge of their workers when they are working and they should therefore prevent any
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unlawful acts (Harpwood, 2008, pp. 200-209). In the scenario, London Electricity Board is the
employers are the servants are the workers. London Electricity is held responsible for the
mistakes of the workers since the board is in charge of them and it should have considered the
blind when giving instructions to the servants. In business, it is important to train the workers on
the lawful and unlawful acts in a workplace. This would prevent the unlawful acts from coming
up in the workplace. In the scenario, the board was being negligent considering the fact that it
already knew that there are blind people in Woolwich yet it did not take sufficient warning in
ensuring that it takes into account the needs of the blind people in the area (Miller & Jentz, 2013,
pp. 98-117).
Task 4
AC 4.1 Apply the elements of the tort of negligence and defenses in different business
situations
There are four main elements of the tort of negligence in different business situations. A
duty of care is the first element. A duty that the law identifies needs to compliance with a certain
standard of conduct to be able to protect other people against any reasonable risks. In business,
the owners should ensure that they consider risks that may befall on people around the business.
They should put measures to ensure that individuals around are protected against the risks that
the business may cause. In the scenario, Tony should have found out if Jane was in a position to
drive before giving her that responsibility. In the other scenario, James should have been careful
all through in making the deliveries to avoid the crash (Miller & Jentz, 2010, pp.125-152). A
breach of the duty of care is the second element. This is whereby the business does not conform
to the needed standards of care. It therefore ends up operating without considering the safety of
the people within it. In the first scenario, Jane drives the forklift truck and loses control. In the
second scenario, James negligently crashes the van. The third element is damage. This is the
resulting injury to a person due to inconsideration of the business. The damage in the first
scenario is Simon being injured by the boxes whereas the damage in the second scenario is
Richard being severely injures by the crashing van. The last element is the close relationship
between the conduct of the offender and the injury. In the first scenario, it was clearly that Jane
trying to do something she did not have skills in could lead to injury. In the second scenario, as
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much as Richard was not wearing his seatbelt, James crashing the van would all the same cause
injuries to him (Girod, 2013, pp. 135-142).
To be able to defend against negligence successfully, the defendant will attempt to negate
one of the elements of negligence. The defenses can be either contributory negligence or
voluntary assumption of risks. Contributory negligence happens when a plaintiff is unable to
attain the standards of care needed of them for their individual protection. It is failure of the
appellant to avoid the injury due to the conduct of the defendant. In the second scenario, it is
failure of Richard to maintain his own safety by not wearing his seatbelt. In this case, both
parties will cater for the responsibility of the injury based on the degree of responsibility. Under
the voluntary assumption of risks, the plaintiff willingly assumes the risk of the injury and may
not recover anything. The defendant in this case is not liable in any way. In the second scenario,
Richard may take all the responsibility by claiming he was not being careful by not wearing a
seatbelt (Martin, 2012).
AC 4.2 Apply the element of vicarious liability in the given business situations
Vicarious liability is the circumstance whereby a person is held responsible for the
actions of another person. There are two main elements significant for the establishment of a
vicarious liability. The first one is the existence of a relationship between the employer and the
employee. In the first scenario, the employer is not present. Jane and Tony are both employees
working in different departments. In the second scenario, James is as well an employee and the
employer is absent in the situation. In both cases, the workers are liable to the injuries. The
second element is whether the workers were working within the course of employment when the
injuries happened. In the first scenario, Jane is a cleaner, driving the forklift truck is therefore not
within her employment her employment description. She is then liable to the injury. In the
second scenario, James uses the companys van to attend to his own personal concerns. He will
therefore be liable o some degree to the injuries (Miller & Jentz, 2010. 196-205).
Conclusion
According to the paper, it is evident that there are there are many concerns that a business
should put into consideration in its operation. It is important to understand the importance of the
different elements that are needed for the formation of a contract. The types of contracts are
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relevant as well as the terms that apply to the different types of contracts. The businesses need to
consider liability in tort and contractual liability. The nature of liability in negligence is as well
important and how the businesses can be vicariously liable.

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