In Aspect of Valid Contract Assignment specifically mentioned the contract terms and condition and essential elements which are necessary for the formation of valid contract and also explained invitation to treat. Under this there are three task which covers tort of negligence, vicarious liability, difference between tort of negligence and contractual liability. Each case study is explained with the help of examples and other precedent case.
Explain the essential elements required for the formation of a valid contract.
Under this I approached by Citizens Advice bureau for preparing a report which is necessary for the new employee who are not aware about the laws and regulation which is applied in the induction process. In this report first part is elements of contract which are necessary for the formation of valid contract. As contract is the agreement in which goods and services are exchanged with the other party in a contract with consideration price money. For making valid contract it is mandatory and also make ensure by each contracting party that these essential elements are must be present in an agreement.
- Offer: First element which is needed to be followed by one party is offer. It is necessary that party should have to make offer to offeree for making contract. It is necessary that offer must be communicated to offeree otherwise there is no valid contract is made between them. When any party is entered into contract then party must aware about the terms and condition of contract. offer can be withdrawn if offeror is died, rejection of offer, offer will be lapse if time period is over etc. invitation to treat has been given by person in which he made declaration that he is willing to enter into agreement. [J Beatson, A Burrows and J Cartwright, 2010]
- Acceptance: Second element is acceptance of offer, it is necessary that offer must be accepted by offeree. Offeree must have to communicate acceptance of contract to offeree for binding legally to each other. It is necessary that acceptance which is made by person must be free from any undue influence and it must be true in nature. It is the statement which is given by offeree to offeror. Acceptance can be made by offeree through any e-mail, over telephone etc. [J Beatson, A Burrows and J Cartwright, 2010]
- Consideration:Consideration is the price money which support for making a valid contract. Under contract in exchange of something value has been given by offeree. Therefore, one party gives promise to another party in exchange of doing something in return of his promise. It is not necessary that it has some value; it can be any benefit which is given to another party. Usually in contract party is agreed to pay the agreed sum of money for the other promise. [J Beatson, A Burrows and J Cartwright, 2010]
- Intention to create legal relationship: Under this contract requires that each party who want to enter into contract must have intention to legally binding with each other into agreement term and condition. Each party must have under capacity that they can understand the terms and condition of contract which is enforced by law. If any party accept offer then it will be presumed that offeree has intention to create legal relationship between them. [J Beatson, A Burrows and J Cartwright, 2010]
- Privity of contract: Privity of contract means that person who is under contract has right to file claim for any breach is arise. Such right is arise when one party cannot act in accordance with the terms and condition and breach the terms which will caused damages to other party. Under this party who are under contractual relationship can file suit, third party has no right to make claim. [J Beatson, A Burrows and J Cartwright, 2010]
1.1 Explain and discuss the different types of contract.
As in the second part of this report different types of contract are mentioned in which each contracting party has wide choice that they can choose any contract and entered into contract with the contract terms and condition.
- Express contract: Under this contract contracting party has need to express the term and condition of contract expressly in contractual document. It is depend upon party that they can express term and condition in either written form or in oral form. But under this it is required that party must have intention for making this contract and they have to act in accordance with the terms and condition which is specifically mentioned. Under this a definite offer is made by one party and it is supported with particular consideration. All elements which are mentioned above must have been incorporated in contract otherwise there is no valid contract. [Lawmentor.co.uk, (2015)]
- Implied contract: Implied contract is the contract under which terms and condition of contract are not necessary to mentioned in contractual document, these terms are obviousness nature which is no need to mention in contract. Three different sources of implied contract are facts, custom and law. .[Lawmentor.co.uk, (2015)]
- Written contract: Written contract is the contract in which party has need to enter into contract with specific terms and condition which is need to be mentioned in a written document. This document is helpful in using as evidence at the time of breach of contract. After signing this document each party is come under contract and is legally binding with each other. [Lawmentor.co.uk, (2015)]
- Distance selling contract: Distance selling contract is used by the parties which are far away from their distance place or they cannot enter into physical appearance. This contract is made by party through telephone, e-mail and makes online shopping. This contract is regulated through the provisions of Distance selling Regulation. .[Lawmentor.co.uk, (2015)]
- Void and voidable contract: Void contract will be considered void if any act which is performed by any person is impossible or illegal.
Voidable contract will be valid contract but it cannot enforce by law because in this contract one party is not under capacity. [Lawmentor.co.uk, (2015)]
- Unilateral and Bilateral contract: Unilateral contract is that in which one party give promise for doing any act, it is one-sided contract. For instance if any person gives advertisement for finding his dog and person will be rewarded.
Bilateral contract is the contract which is reciprocal in nature, in which each party has to give promise to each other and it is known as bilateral contract. .[Lawmentor.co.uk, (2015)]
1.2 Explain and analyse the different forms of contractual terms.
Third part of report which also used by new employees in induction process is different terms and their impact on contract. As when we enter into contract then different terms and conditions are incorporated in contract. so their impact is also different from one another.
- Implied term: This term is not mentioned in contractual document by contracting parties. As this term is obviousness in nature, therefore it does not need to mention in contractual document. Any party who makes breach of this term then he is under liability to pay the damages to injured party. There are three different sources of implied terms which are implied term by custom, fact and law. Implied term by custom is that any term which is prevalent in trade then court will also considered the implied term in the same type of trade. Implied term by fact means that it is totally based upon the party’s intention. Implied term by law means that court will considered the term which is mentioned in contractual document in which court gives protection to weaker party. [Collins, H. (1993)]
- Express term: When any contract is made by party and expressly mentioned each terms and condition according to which each contracting parties has to act is known as express term. If any party breach then injured party make claim. .[Collins, H. (1993)]
- Condition term: Condition terms are important term or say it is the root of contract. When any contractual document is made by party then they have need to mentioned condition term through which each party act in accordance. .[Collins, H. (1993)]
- Warranty: This term is not important part of contractual document. Warranty is the tern which gives warranty about the quality of the product and remedies to buyer of repair and replacement of defaulted good. .[Collins, H. (1993)]
- Exclusion clause: Exclusion clause is the clause under which person takes exclusion that he will be not liable for any damages or loss which is suffers by other contracting party in contract there are two tests which is applicable are common law test, statutory test. .[Collins, H. (1993)]
- Innominate term: Innominate term is the term which is not classified by court that it is condition term or warranty then it will be treated that it is innominate term. .[Collins, H. (1993)]
As this report is concluded then it will be held that essential elements of contract are necessary for formation of valid contract otherwise contract cannot form. Parties who want to bind legally each other have choice that they can enter into contract in which they want their impact is also different from another. Before entering into contract terms and condition are necessary to incorporated into contract.
3.1 Contrast liability in tort with contractual liability.
Tort law is the civil wrong and it is distinguished from criminal wrong. Tort law is applicable on person who is under any duty of care and under an obligation that he has to take care towards neighbor and breach his duty of care. Tort law is not enforced by police but it is civil action which is taken by one person against another. In simple sense it is the body of rights, obligations and remedies which is applied by court when any tort is committed and compensates claimant, plaintiff or injured party who suffered any loss or damages.
- Contractual liability is arise when two or more parties enter into contract and one party breach any term and condition then liability is arise whereas in tort liability party is under legal duty which is imposed by law and it is breach then tort liability is arise.
- Under contractual liability party will be liable for the other contracting party not for third person. Under tort liability person owes the duty towards each person at the time of performing his duty.
- Contractual liability is very strict liability whereas tort liability is depending upon the loss or damages which is suffered by person due to default of individual.
- For making person liable under contractual liability it is necessary that person should be under contractual relationship. Under tort liability there is no need of contractual relationship between the parties.
- Elements which are contributing in contractual liability are offer, acceptance, and consideration, privity of contract, intention, and capacity whereas under tort liability duty of acre, breach and damages due to breach of duty are the essential element of tort liability.
- Contractual liability is regulated through contract law. Tort liability is regulated through tort law.
- Injured party is compensated with liquidated damages when any contractual liability is arising whereas in tort law injured party is compensated with non- liquidated damages.
- Punitive damages are not given by court under contractual liability whereas in tort law punitive damages are compensated to tort law.
- Under contractual liability defendant liability is limited with the liability which is stated in contractual document. Under tort law defendant liability is not limited it is depend upon the damages or loss which is suffered by individual. [McKendrick, E. (2007)]
3.2 Explain the nature of liability in negligence.
Nature of liability of negligence: Negligence is arise when any person who is under legal responsibility that he has to precaution at the time of performing their act, but he did not take such precaution which causes serious injury or damages to party. When any person suffers loss then he has right that he can make claim for the damages which is suffered by him due to negligence of defendant. Under this there is no need of contractual relationship between them for making liable to defendant under this situation. For instance if any person suffers injury due to carelessness of driver then injured person can file suit for damages he suffers due to negligence of driver, therefore there is no contractual relationship between them, but he has right. For making injured party has to prove the following elements which are stated below that:
- Driver is under the duty of care toward each person who is on road. Duty of care is the first essential element under which legal obligation is arise and meet standard reasonable care while performing his duty for reducing any foreseeable harm. There is famous case Donoghue v Stevenson in which duty of care is imposed on manufacturer of ginger beer towards his consumer.
- Second element which gives contribution in tort of negligence is breach of duty of care and in this case manufacturer breach his duty of care while performing his act.
- Third element is breach his duty of care when any person is under an obligation a makes breach his duty of care then it is necessary that due to breach of duty he suffers damages or loss and in this case Donoghue friend suffers loss or damages. [Findlaw,.2015]
But sometime defendant liability is reduced due to defenses which can be taken by any person who is liable under tort of negligence which are as follows:
- First defence is Exclusion clause, under which defendant exclude him from liability which I arise due to breach of contract.
- Second is contributory negligence, under which defendant can also claim he is also involve in this tort of negligence. [Hobartlegal.org.au, (2015)]
As it is also decided in very famous case Donoghue v Stevenson in which manufacturer is under duty of care, he is under the duty towards his consumer for the quality of product but due to his carelessness Donoghue friend suffers loss or injury because in ginger beer decomposed snail is found. So manufacturer is liable under tort of negligence.
3.3 Using Film Flops as an example, explain how a business can be vicariously liable.
In simple sense under vicarious liability superior is always held responsible for the act or omission of his subordinate but it is necessary that any act or omission which is committed by subordinate must be authorized by his superior. In business employer will be held liable for the act of his employee under vicarious liability. It is necessary that person who is responsible for the act of third party must have some relationship like employer and employee relationship, principal and agent relationship etc. and along with it is also necessary that employee committed any act or omission must be during the course of employment. If we take example of Films Flops then under this case Paul watching movies in his nearby local cinema at the meantime he purchased some popcorns and coffee. Employee of cinema poured hot coffee on hand of Paul which gives serious injury to him and it is found by his manager that he is in intoxicated situation. So it is the first requirement that any person who will be liable under vicarious liability must have some relationship and under this there is employer and employee relationship, it is also necessary that employee performed his act which is given by his employee, so he is performing his act which is given by employer to him. So under this case employer will be liable for the damages which are suffered by Paul due to his employee.
Employer will be held liable under vicarious liability if following points are fulfilled by party.
- Relationship of employer and employee is existing.
- Performed his act during the course of employment.
- Act which is performed by him must authorized by employer.
Employer can avoid this liability by establishing these under in their organization:
- Proper training should be provided
- Prohibited discrimination
- Department should be established for preventing any wrong.
3.4 Apply the elements of the tort of negligence to the scenario.
For making any person liable under tort of negligence, injured party must have to prove before court these elements which are mentioned below:
- Person should be under the duty of care towards the other person.
- He breaches his duty by performing his act without taking any precaution.
- Injured party suffers loss due to breach of duty.
Under this case study Films Flops employee is under duty towards visitors in which he has to serve the popcorn to all visitors. During serving popcorn to Paul accidentally employee poured hot coffee on Paul hand which causes injury to him and his manager determined that employee is in intoxication situation. so it is clear that employee is liable under tort of negligence in which eh breach the below elements which are stated below:
Under this case all element are present:
- The Films Flops cinema employee is under duty of care towards the consumers who purchased refreshments from them.
- Employee of cinema breaches his duty by not taking any necessary precaution which is necessary for Paul or for other consumers.
- Paul suffers injury due to breach of duty by employee of Film Flops.
So Paul is entitled to file suit against employee of Films Flop under Tort of negligence.
3.5 Apply the law on vicarious liability to the scenario.
Facts of the case are provided that Paul is the injured party and Film Flop cinema is the Defendant. Paul gets injury due to their employee who was performing his duty in intoxication situation. At the time of pouring hot coffee to Paul, employee of cinema poured on his hand which causes serious injury to his hand.[Acas, (2015)]
So it is decided that employee will be held liable under tort of negligence and Manger will be liable under vicarious liability for the injury which is suffered by Paul due to tort of negligence of employee. Employer will be liable under vicarious liability because it fulfills the entire element which are contributing in making vicarious liable. As under this case there is employer and employee relationship is exist between them, second is employee performed act which is authorized by him by his employer, third is he performed this act during the course of his employment. So employer will be liable and pay the damages or loss which is suffered by Paul.[Acas, (2015)]
As we concluded in Aspect of Valid Contract Assignment it covers the entire task which is stated in brief of assignment. Under this report essential element, different types of contract and terms are explained as according to brief description. All case studies are well explained with the help of vicarious liability and tort of negligence. In task 3 differences between contractual liability and tort liability is stated.
Acas, (2015). Understanding what vicarious liability means for employers. [Online] Available at: http://www.acas.org.uk/index.aspx?articleid=3715[Accessed 15 NOV. 2014].
BusinessDictionary.com,. ‘What Is Contract? Definition and Meaning’. N.p., 2015. (Assessed 14 Nov. 2015).
Collins, H. (1993). The law of contract. London: Butterworths
Hobartlegal.org.au, (2015). Defences to the Tort of Negligence | Hobart Community Legal Service. [online] Available at: http://www.hobartlegal.org.au/tasmanian-law-handbook/accidents-and-insurance/negligence/defences-tort-negligence [Accessed 17 Nov.2015].