Published on March 9, 2014
Assignment On Aspect of contracts and Negligence’s for the business Submitted By: Submitted To: Date:
Table Of Content Executive Summary Page No. 02 Task-1 1.1 Elements of A Valid Contract 03 1.2 Different types of Contract 04 1.3 Analysis of Terms of Contracts 05 Task-2 2.1 Application of the Elements of Contract 06 2.2 Application of the Law 07 2.3 Evaluation of the Effects of Different Terms 08 Task-3 3.1 Contrasting Liability in Tort with Contractual Liability 10 3.2 Nature of Liability in Negligence 10 3.3 Vicarious Liability in Business 11 Task-4 4.1 Application of the Tort of Negligence and Defences 12 4.2 Application of Vicarious Liability 13 Conclusion 14 Reference 15 1|Page
Executive Summary: In light of the case scenario it can be exponentially explained that it is possible for TAM College to be one of the most desired and successful educational institute in the UK. In the light of the case, TAM College hired a marketing firm NAM to create an advertisement program featuring their methodology and facilities under a contract of one month with the clauses of completing the work within the stipulated time and if unable the return of the advance with compensation of £1500. But in the future NAM dishonoured the contract terms and asked for extension for the contract. This behaviour became unacceptable to the authority of TAM College who in turn filed a legal suite honouring the terms of the initial contract instead they were also charged with the accident of an employee for shortage of protective gear during the duty. On the various factors involved due to having a deep liability TAM College are on route to legal consequences as there is the law involved. 2|Page
Task-1 1.1 Elements of a Valid Contract A valid contract in order to be valid needs eight essential elements for its fulfilment. The essential elements of a valid contract are discussed below: 1. Offer and Acceptance: In order to create a valid contract one party must make a lawful offer to another and the lawful acceptance of the offer is the required contract. 2. Lawful Considerations: The offers made in a contract are lawfully previewed before the starting of the decision making process. 3. Free Consent: Fora valid contract to be rendered both the parties has the right to free consent as nothing can be imposed on the parties taking part in the contract. 4. Formal Relation: For the parties taking part in the contract it is necessary to have a formal relationship because a contract cannot be presented to others in an informal way. 5. Certainty: The terms and clauses of the contract need to be certain so that the facts can be analysed by the accepting party. 6. Lawful Objects: For a contract to be valid there must be a valid object of the contract presented. 7. Possibility of Performance: The terms and conditions of the contract need to be performable by the accepting party in order for the contract to be valid. 3|Page
8. Enforceable by Law: The contract needs to be enforceable to the law if not then the contract becomes void. 1.2 Different types of Contract The different types of contracts are mentioned and discussed below: Implied Contract: The contract which is constructed without the free consent of one party then that contract is an implied contract. Unconscionable Contract: In a contract when one party has a higher advantage than the other party then it lacks free consent from one party so the contract cannot be enforced. Contract under Seal: This type of contract is the traditional contract in which the contract is made valid using various kind seals and stamps making both the parties of the contract equally responsible for the agreement signed. Executed Contract: If in a contract the terms and conditions of it are fulfilled first hand by both the parties of the contract before the finalization of the contract then it implies that there was no contract as it being an executed contract. Express Contract: In this type of contract the terms and conditions needs to be put to paper or it should be accepted orally by the administrative body that focuses on the delivery of the contract. 4|Page
1.3 Analysis of Terms of Contracts There are various factors in a contract that needs to be understood by both the parties. It is necessary for the partiesto understand difference between various types of contract, understand the elements and the terms of the contract which highlights the path to minimizing the investment with look towards maximizing the benefits. In order to do so if changes are made than it must be suited to the opposite party for the agreement to take place. In the race to put themselves in the top of the list of the best educational institutes of UK TAM College has undertaken various strategies to come into the view. In the strategies taken into motion the TAM College are involve in various contacts with several firms who have been hired to look into the marketing purpose and handle the legal issues concerned with the welfare and laws concerning the college. The main objective of TAM is to show something different so the terms of their contract are also different and in accordance if they are accepted shows the validity of their contract. 5|Page
Task-2 2.1 Application of the Elements of Contract The most prior condition of a contract is that it should be enforceable by law because the terms and conditions of the contract need to be followed in order for the contract to be fulfilled (Gelling 2009). If any one of the parties involved in the contract is unwilling to obey the contract then the opposite party may take legal actions against them for dishonoring the terms of the contract. The basic elements of the contract with NAM are given below: Offer Acceptance Free Consent Formal Relation Enforceable by Law The marketing firm NAM approached TAM College with the offer to design an intensive marketing strategy for one month to make their reputation high and be showcased as one of the leading educational institutes of UK. If a contract is initiated then there takes place a formal business relationship between the two parties. For a contract to be valid the terms and conditions of the contract should be accepted by the two parties present in the contract. According to the terms and conditions of the contract TAM College accepted the NAM’s offer and paid the advance of £2500 thus sealing the contract valid with free consent and documentation. 6|Page
A valid contract is enforceable by law. When NAM breached the initial terms of the contract with TAM College and failed to provide marketing strategy to them they took legal action against them. 2.2 Application of the Law The parties involved in the contract encourages the terms and conditions of the contract and giving courage to make the contract valid. The two parties may have various opinions on the terms of the contract during the pre-declaration of the contract which does not render the contract invalid but with a formal relationship it can be discussed and come to a mutual conclusion about it. Parties need not fulfill any other terms other than that of those mentioned in the contract. The requirements for a valid contract: Collateral Contract: I collateral contract the terms and condition of the contract is the foundation stone of the contract. The main concept here is to induce the business proposal offered for both the parties. The contract is compiled and overseen by judges who take the security of the contract to make it valid. Contract Conditions and Warranties: The major term of the contract is the circumstances and the minor term is the warranty and they are interrelated so in the absence of anyone the contract is considered void. If in a contract falsification takes place causing a breach of the contract it is considered a serious offence in the eyes of the law thus providing the parties with motivation and mutual respect towards the fulfillment of the terms. If a contract is indeed breached then the court will start legal proceedings taking circumstance and situation into consideration to give the rule in favor of the upholders of the contract. 7|Page
Exclusion of responsibility of the terms: The “prohibiting paragraph” sometimes restricts the accountability of one party which can be included by any party during the drawing of the contract. This is also known as the release clause. Taking into account the case that due to NAM’s inability to uphold the contract the reputation of TAM College has suffered and the prohibition clause might just have been included in the contract. 2.3 Evaluation of the Effects of Different Terms In a contract most of the terms and conditions are formalities which are formed and written and the seal is used to make the contract valid. There are many laws that are passed to uphold contracts and a wide range of formalities surrounds it. The Patrol Evidence Rule This role considers oral evidences which can be provided against the opposition to prove the falsification of the presented written document. The contract always abides by the law of confirmation and is applicable to both contract and credentials. Establishing Implied Terms There are certain implications of the contract where the scenario is considered and the implied terms are presented formally face to face. Various Types of Conditions Various types of conditions surround a contract by which it can be affected and has a certain power over the contract. If a contract is breached then under any circumstance then person must remunerate for it. 8|Page
The Up-To-The-Minute Observation The violation of any terms and condition under any circumstance renders the agreement void in a way suspending all the activities related to the agreement. An implied contract was agreed upon by Between NAM and TAM College after TAM decided to award the contract to NAM and paid the £6000 a part of the payment for the one month intense marketing campaign period. 9|Page
Task-3 3.1 Contrasting Liability in Tort with Contractual Liability Tort and contact liability The law of Tort and contract is a sectional part of the “Law of Consideration” where law of Tort is applicable to everyone associated on the other hand law of contract considers willing volunteers. The damages in a contract are pre-determined but damages in Tort are compensatory. 3.2 Nature of Liability in Negligence Breach of contract: In the Tort contract of negligence the breach of contract is considered undue behavior by the person or party violating the terms and condition of the contract formed. For this reason laws are imposed so as to seeing the due behavior is given and no risks are posed to others along the way. The contract between NAM and TAM was breached when NAM halted the advertisement of TAM for a week. Duty: In the light of philosophy and religion, duty can be defined as the humane behavior of one person to another in a society upholding social norms and culture. This is the basic right that we hope and give to each other in the society so that there can be peace and prosperity. Cause in Fact: If the problem we are dealing with is known then it is easier for us to understand it and come forward with the planning to shield us from it. A person should take decision based on fact and after analyzing the situation. 10 | P a g e
Similar Cause: In the day to day life we are faced with different sort obstacles but there are some similarities between all of them so it is easy for us to come up with a solution. 3.3Vicarious Liability in Business The English Tort law states that it is the liability of an employer if the employee under him is responsible for any breach in the code of conduct while working for the organization and if inattentiveness is shown by anyone towards that act then they can be legally taken under jurisdiction. If a wrong is done it is our duty to correct it and see through to it (Reeve 2009). In the given case scenario it is shown that a night guard was injured and the family of the night guard has taken legal actions against the TAM College which has become a vicarious liability to them. The management and the supervisors were warned that the non-teaching staff should wear protective gear to avoid injuries. The management of TAM College refused to pay compensation to the guard because he disobeyed the regulations set by the institute but on vicarious liability they are bound to pay the compensation. Figure: Vicarious Liability 11 | P a g e
Task-4 4.1Application of the Tort of Negligence and Defenses Tort negligence law This law is the composed from intentional tort law and basic purpose of negligence law, which has a purpose to protect the employees of TAM. The non teaching staff had been advised to wear protective gear for their own safety. Duty of care An individual has the right to know the risks against them so that they are not harmed in any way this is the duty of care. TAM had already been warned about the risks involved and the threats against their employees (Knight 2006). Source of Negligence The lack of will to take proper initiatives can be defined as negligence. The damage caused was totally unaccounted and unintentional but it does not count as a breach of legal duty. Potential Sources of Negligence o Lack of protective gear: The negligence of an individual to use protective gear for safety. o Selection of activities: The activities that are incapable of completion or the individuals lack knowledge about it is called poor selection of activities o Hazardous Condition:The conditions that are unforeseen and unavoidable are hazardous condition o Use of faulty equipment: The use of faulty equipment is a source of negligence 12 | P a g e
Defense against Negligence o Emergency: Any humane act that is decided on the spot is an act of emergency. o Act of God: There are some incidents that are unavoidable but only measures can be taken against them to avoid casualty. o Assumption of risk:A person is bound to take risk when they are engaged in any sort of activity involving risk. 4.2Application of Vicarious Liability The use of protective gear by the non-teaching staff of the college had been told of the mandatory use of protective gear. But this order was ignored by the senior supervisors when they sent a night guard on duty going against the policy of the company (Henry 2012). It was the duty of the supervisors to ensure the safety of the non-teaching staff and to maintain the order provided to them but due to their negligence a guard met with an accident due to absence of protective gear. According to the vicarious liability doctrine it can be said that the act of any employee is the responsibility of the employer and they can be detained for the mistake committed by the employee. So TAM College has to face prosecution for the act of their supervisors under the vicarious act of liability. The compensation of the night guard for the accident was denied by TAM because he did not follow the instructions but according to the vicarious liability doctrine they are legally responsible for the acts committed by their staff. 13 | P a g e
Conclusion: From the scenarios presented in the case we can see that TAM College was ambitious and they want to be one of the best educational institutions of UK for this they became involved in various contracts (Moriar 2006). They covered the legal and marketing side to boost their performance. Theywent into a contract with the marketing agency NAM to advertise their facilities because the best offer was provided by them. The terms of the contract were to give marketing consultancy for one month at the cost of £6000. But due to some financial reasons NAM had to halt the campaign of TAM but due to violation of the contract TAM took legal action against NAM. During the same time a night guard under the jurisdiction of TAM was injured in an accident and TAM refused to pay the compensation to the guard due to violation of protocol set by the organization. But the family of the guard filed a law suit and under the English doctrine of Vicarious Liability TAM is responsible for the accident and must take responsibility for the action. 14 | P a g e
References: Gelling, L, & Cray, D 2009, 'Career Paths for Managers in the Arts', Australian Journal Of Career Development, 21, 3, pp. 23-32, ERIC, EBSCOhost, viewed 20 March 2013. Henry, G, Shepherd, C, Lambert, B, Ridnour, R, &Weilbaker, D 2012, 'The training of sales managers: current practices', Journal Of Business & Industrial Marketing, 27, 8, pp. 659-672, Business Source Complete, EBSCOhost, viewed 20 March 2013. Knight, C 2006, Building Resilience In Learning Managers [Electronic Resource] / Cecily Knight, n.p.: FrenchsForest, NSW : Pearson Education Australia, 2007., CQUniversity Library Catalogue, EBSCOhost, viewed 20 March 2013. Moriar, D, & Smith, R 2006, Preparation Of A Learning Manager In The BLM Program [Electronic Resource] / David Lynch And Richard Smith, n.p.: FrenchsForest, N.S.W. : Pearson Education Australia, c2006., CQUniversity Library Catalogue, EBSCOhost, viewed 20 March 2013. Reeve, P, & Reeve, J 2009, 'Training Corporate Managers to Adopt a More AutonomySupportive Motivating Style toward Employees: An Intervention Study', International Journal Of Training And Development, 13, 3, pp. 165-184, ERIC, EBSCOhost, viewed 20 March 2013. 15 | P a g e
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