Professional Documents
Culture Documents
Contents
Introduction.................................................................................................................. 1
Task 1: Elements of a Contract and Its Terms......................................................................2
P1- Importance of All the Elements for a Valid Contract........................................................2
P2- Impact of Different Types of Contract...........................................................................4
P3- Meaning and Effect of Express Terms in Contracts..........................................................5
Task 2: Scenario Analysis................................................................................................. 6
P4- Applying the Elements of Contract in Given Scenario......................................................6
P5- Applying the Law on Terms in Different Contracts..........................................................6
P6- The Effect of Different Terms in Given Contract.............................................................7
Task 3: Literature Review................................................................................................ 9
P7- Contrast Liability in Tort with Contractual Liability........................................................9
P8- Nature of Liability in Negligence..................................................................................9
P9- How a Business Can be Vicariously Liable...................................................................10
Task 4: Fictional Case Analysis - Memo (P10-P11)..............................................................11
Conclusion.................................................................................................................. 13
Bibliography............................................................................................................... 14
Introduction
The success in every business depends on a lot of things. Contract is a major component of a
successful business. A proper contract if not done between two parties, a big business deal may
get ruined and it would bring a big loss. So to protect business owners or consumers from any
kind of unwanted situation business law has its branches to support the victims. And contract is a
basic element that comes first to protect buyer and seller. So contract is very important for
business. And this is not a very small concept rather the depth of contract is vast indeed. And law
makers often give a big priority to the contract of two parties because most of the disputes start
from confusion in contracts.
Offer
Acceptance
Consideration
Intention to create legal relation
Certainty
Capacity
Offer: Offer is the first element of a contract. To make an agreement or contract it is essential
that one party makes an offer to the other party. Suppose two persons are talking about a car.
Person 1 says I want to sell my old car @ $10,000. This not an offer. Because Person 1 did not
ask Person 2 whether or not he wants to buy it. So to become an offer it would be like I want to
sell my old car @ $10,000. Will you buy it? So this is the very concept of offer and in case of
making a valid contract offer comes at the first place. If there is no proper offer then there is no
contract. So offer is very important because if one party do not make an offer then no contract
can be made.
Acceptance: After making an offer by the 1st party the 2nd party replies whether or not s/he
accepts it. In the previous scenario if the Person 2 replies in affirmative that he agrees to buy that
car then it is acceptance. But if he says I want to buy the car but can you please make it $8000?
This is not an acceptance rather the 2nd person is making a counter offer now it is the 1 st person
who will accept or decline the offer. So in the second phase of a valid contract a proper
Written contract is signed by both parties and it is easy to go for a legal action because the proof
of contract is written and signed by the parties. In verbal contract no written document is there.
Both parties agree verbally on any matter. Usually for very general purposes it is used but for
some serious matter written contract is preferred.
When a contract is stamped with seal and the seal represents the legal viability of the contract
then it is a contract under seal. In this kind of contract the seal works as consideration.
Previously it was required to be sealed to take any legal action. So this type of contract has a firm
impact on the parties.
If actions mentioned in the contract is already taken by the parties then it is an executed contract
and on the contrary if the actions will be taken in future then it is termed as an executor contract.
So based on execution contract I also classified.
In express contract all the terms and conditions are discussed or written before the contract is
made. The parties agree on that and make the contract. But in implied contracts everything is not
written rather perceived by the parties. Quasi-contract is the more accurate designation of
contract implied in law. Implied contract is not expressed but the circumstances suggests the
mutual intention of the parties.
A bilateral contract is a two sided contract where both the parties make some promises and work
accordingly. In case of unilateral contract only one party makes promises. Here offeror makes a
promise if offeree performs certain things. Performance and promise work as consideration
alternatively in this case.
Every month Beauty Fashion House has to buy a minimum of 50 lots of dresses to get a
discounted rate.
The payment has to be made at the time of purchase.
If any defect in dresses are found then Mr. X will be responsible to compensate for the
dress.
Any complain regarding the supply must be notified between 3 business days.
Delivery charge will be paid by the buyer.
Mr. X will not take return any lot if it is unsold.
The terms discussed here are express terms and both party agrees to it. But still there are some
implied terms such as
If Beauty Fashion House misses one month to buy 50 lots then from next month the
If any damage done due to buyers carelessness then Mr. X wont be responsible to
price.
If Beauty Fashion House takes delivery by their own transportation then any damage
during transportation will not be compensated by Mr. X.
So these are some express and implied terms in the scenario discussed above. Now in November
due to less number of sales in October Beauty Fashion House buys 35 lots of dresses. But in
December due to Christmas Season the shop buys 75 lots of dresses. And In December Beauty
Fashion House asks for a discount due to buying more than the promised number dresses. Mr. X
declines to give the discount. And for this when they went to the court Mr. X wins the case.
Because in November there was a breach of contract. So the contract is void. So to get a discount
Beauty Fashion House needs a new contract with Mr. X.
him. Retailer is at his liberty to set the retail price. Due to transportation if any loss occurs then it
will be depending on the parties. If Mr. X shipped with his transport system then it is his liability
but if the buyer uses his own transport then it is up to the buyer. And obviously due to implied
terms the contract gets void if agreed amount of dresses is not bought in one month by the buyer.
10
11
MEMO
To: Director, Reading Plc
From: Director, Famer Dale Farm
CC: Bob the builders contractor Ltd
Date: May 21, 2014
Re:
Take greetings from Famer Dale Farm. I am very much sorry for your recent loss due to harvest
work in my farm. Basically I second that tort is created between us. Your clinic was heavily
disturbed by the noise and a devastating fire destroyed your property. This is a clear sign of
negligence and we admit that. But understand that we Famer Dale Farm is also affected during
the work was going in. Our swimming pool got severely damaged. Besides, there was no
complain from you. As a result it was thought that you had no problem regarding the work. But
however the damage is done and I tell you Famer Dale Farm is not responsible for this. All the
work was subcontracted to Bob the builders contractor Ltd. Famer Dale was their client. During
their service they not only damaged your property but also damaged our property. And the
immense noise created is not a matter of concern of Famer Dale Farm because the whole work
was done by Bob the builders contractor Ltd. So it was their duty to keep the environment calm
and dust free. Even if it was impossible to make a soundless move, they could restrict it in a
tolerable level. It was their fault that they harmed the neighborhood people. And the dust created
in the work also damaged the swimming pool water of us. There might be a possibility of
comparative or contributory negligence but we the victims were not expecting this much
damage. And it was so kind of you that you didnt disrupt ongoing construction. But still the
liability goes to Bob the builders contractor Ltd because of their being exclusively accountable
on the project.
12
There is another vicarious liability fact. Joe an employee of Bob the builders contractor Ltd was
responsible for the fire accident in your property. But as the accident happened during
performing his job the employer of him cannot help but being somewhat accountable on
catastrophe. At the end I again apologize for your loss and I consent my loss as well. And a tort
case can be filed together against Bob the builders contractor Ltd. Waiting for your reply.
13
Conclusion
Contract is a very important element of business law. No business dealing can be productively
executed without a proper contract. Express and implicit contract serve consequently to protect
the right of both parties. And following the proper steps of contract is essential to make it valid.
On the other hand Breach of contract and tort are very close to each other. Tort may arise in
different contexts and point of time but no written contract is there to handle tort. So tort law is
very important for everyone to get compensated for any tort case. And there is a strong
correlation between tort and contract. Understanding these fundamentals of business law is
crucial for any business practitioner or any person related to business. And knowledge focusing
in realistic scenarios unquestionably assist individuals to comprehend these correctly.
14
Bibliography
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Deakin, S., Jhonston, A. & Markesinis, B., 2003. Tort Law. 5th ed. London: Oxford University
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Ferrari, F., 2010. Donoghue v. Stevenson's 60th Anniversary. Annual Survey of International &
Comparative Law, 1(1).
Harpwood, V., 2009. Modern Tort Law. 7th ed. New York: Routledge-Cavendish.
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What Difference Does It Make?. s.l., s.n.