Published on March 9, 2014
Assignment on Aspect of contracts and Negligence’s for the business Submitted By: Date: Submitted To:
Table of Contents Executive Summary 2 Task 1 3 1.1 Essential Elements of a Valid Contract 3 1.2The Impact of Different types of Contract 5 1.3 Analysis of Terms in Contracts 6 2.1 Application of the Elements of Contract 2.2 Application of the Law 7 8 2.3 Evaluation of the Effect of Different Terms Task 3 8 9 3.1 Contrasting Liability in Tort with Contractual Liability 9 3.2 The Nature of Liability in Negligence 9 3.3 Vicarious Liability in business 9 Vicarious Liability in business 9 Task 4 11 4.1 Application of the Tort of Negligence and Defences 4.2 Application of Vicarious Liability Conclusion 12 13 References 11 14 1
Executive Summary TAM’s college wants to be one of the best educational institutes in the UK and for this reason they are hiring agents to take over legal problems. As to make their college one of the best, TAM’s colleges have agreed in a contract with NAMS marketing firm for one month. During the time period of contract the marketing firm NAMS broken the contract for some issues and act contrite to TAM’s and asked for extra timefor their marketing program. But the management of TAM’s college took legal actions for breaching the terms of the contract and asked for returning the advance payment they had given to NAMS which was an amount of £1500. On the other hand The TAM’s college has also confronted the trial against them due to the accident of one of their staffs for not wearing the proper clothing and protective gear on duty. The TAM’s college has to grieve the legal penalties because of the vicarious liability policy in the business. 2
Task 1 1.1 Essential Elements of a Valid Contract There are ten elements in a valid contract. These elements are very much essential to make a valid contract. The essential elements of a valid contract are described below- 1. Intention to Create Legal Relationship:In case, there is no such intent on the part of parties, there is no contract. Agreements of social or domestic nature do not reflect lawful dealings. 2. Offer and Acceptance: In order to make a valid contract, there must be a 'lawful offer' by one party and 'lawful acceptance' of the same by the other party. 3. Lawful Consideration: Consideration has been demarcated in various ways. According to Blackstone, "Consideration is recompense given by the party contracting to another." In other words of Pollock, "Consideration is the price for which the promise of this is brought. “Consideration is known as quid pro-quo or something in return. 4. Capacity of parties: The parties to an agreement must be able to contract. If either of the parties does not have the capability to contract, the contract is not legal. 5. Free Consent:'Consent' means the parties must have settled upon the same thing in the same sense. Consent is said to be free when it is not caused by(1)Coercion (2) Undue influence, (4) Mis-representation (3) Fraud (5) Mistake. An agreement should be made by the free consent of the parties. 3
6. Lawful Object: The purpose of an agreement must be valid. Object has nothing to do with consideration. It means the purpose or design of the contract. Thus, when one hires a house for use as a gambling house, the object of the contract is to run a gambling house. 7. Certainty of Meaning: According to Section 29,"Agreement the meaning of which is not certain or capable of being made certain are void." 8. Possibility of Performance: If the act is impossible in itself, physically or legally, if cannot be imposed at law. For example, Mr. A agrees with B to discover treasure by magic. Such Agreements is not enforceable. 9. Not declared to be void or illegal: The agreement though sufficient all the conditions for a valid contract must not have been clearlyconfirmed void by any law in force in the country. 10. Legal Formalities: An oral Contract is a perfectly valid contract, expect in those cases where writing, registration etc. is required by some statute. 4
1.2 The Impact of Different types of Contract There are many types of contracts that are; Contracts under Seal: A contract was an enforceable legal deed only if it was stamped with a seal. The seal embodied that the parties proposed the agreement to necessitate legal significances. No legal benefit or harm to any party was required, as the seal was a symbol of the serious acceptance of the legal effect and concerns of the agreement. Previously, all contracts were prerequisite to be under seal in order to be valid, but the seal has lost some or all of its effect by edict in many dominions (Holbeche 2013). Acknowledgment by the courts of informal contracts, such as implied contracts, has also reduced the importance and employment of formal contracts under seal. Express Contracts: In an express contract, the parties state the terms, either orally or in writing, at the time of its formation. There is a definite written or oral offer that is accepted by the offeree (i.e., the person to whom the offer is made) in a manner that explicitly demonstrates consent to its terms. Implied Contracts: Although contracts that are obscure in fact and contracts inferredinlaw are both called implied contracts, a true implied contract consists of requirementsascending from a mutual agreement and committed to promise, which have not been uttered in words. It is ambiguous to label as an implied contract one that is implied in law because a contract implied in law lacks the requisites of a true contract. The term quasi-contract is a more accurate designation of contracts implied in law. Implied contracts are as binding as express contracts. Executed and Executory Contracts: An executed contract is one in which nothing relics to be done by either party. In a certain extent it isanincongruity because the conclusion of performances by the parties indicates that a contract no longer exists. An executor contract is one in which some future act or commitment remains to be performed according to its terms. Bilateral and Unilateral Contracts: The exchange of mutual, give-and-takeassurances between individuals that needs the performance of an act, or restraint from the performance of an act, with respect to each party, is a Bilateral Contract. 5
A unilateral contract includes a promise that is prepared by only one party. The offerer promises to do a certain thing if the offeree performs a requested act that he or she knows is the basis of a legally enforceable contract. Adhesion Contracts: Adhesion contracts are those that are enlisted by the party who has the greater negotiating advantage, providing the weaker party with only the opportunity to stick tothe contract or to reject it. They are commonly employed because most businesses could not execute business if it were necessary to negotiate all of the terms of every contract. Not all adhesion contracts are inconceivable, as the terms of such contracts do not necessarily exploit the party who assents to the contract. Aleatory Contracts: An aleatory contract is a mutual agreement the effects of which are generated by the incidence of atentativeoccurrence. In this type of contract, one or both parties assume risk. A fire insurance policy is a form of aleatory contract, as an insured will not receive the proceeds of the policy unless a fire occurs, an event that is uncertain to occur. Void and Voidable Contracts: Contracts can be either void or Voidable. A void contract imposes no legal rights or obligations upon the parties and is not enforceable by a court. It is, in effect, no contract at all. A voidable contract is a legally enforceable agreement, but it may be treated as never having been binding on a party who was suffering from some legal disability or who was a victim of fraud at the time of its execution (Leibee 1976). 1.3 Analysis of Terms in Contracts The terms of a contract is always set for the benefit of the two parties. So, it is important for both the parties to clearly understand the meanings, reasons and outcome of the terms. Because if a contract does not reflect the interest of the both parties , it can be misused and a long term legal procedure may occur from tha, which may harm both the parties financially and morally. 6
The TAM’s college is demanding to become one of the best educational institutes in UK. So, they are trying to seizure the attention and hiring agents and legal advisors to help them to the quest.That why they are contracting with marketing agencies to enhance their reputation. But in order to make so, they should analyze the terms of the contracts with the marketing agencies because if any lacking remain behind it may harm them as well as the agencies in near future. Task 2 2.1 Application of the Elements of Contract A contract is valid when the two parties are agreed with that. And when the parties are agreed with the terms and conditions of the contracts they also should honor and obey those. Otherwise, another party can take legal actions against the terms breaking party. TAM’s colleges was agreed with the terms and conditions of the contract with the marketing agency NAMS. The basic elements of that contract are: Offer. Acceptance. Intention of legal consequences. Consideration. NAMS made the offer to the colleges of TAM’s, because they are trying to build their reputation in a highest level. NAMS gave the offer as they would work for one month to build the reputation of the colleges. TAM’s colleges accepted the agreement and paid initial fee of £2500 to NAMS. By this they were bound in legal relations and their intentions of legal consequences were clear. Their consideration was pay the contracted fee and the other party would make the job done as they promised in the contract. 7
2.2 Application of the Law Certain requirements are needed to form a legal contract. They should discuss about the terms and conditions of the contracts. Each party should clear the reason s and the benefits of their conditions to the other party so that no confusion remains in the agreements. No party can asked for anything out of the contract after signing the contract. The should read the agreement carefully before signing it. A valid contract must have certain requirements, like- Specifics Consideration Capacity Legal Proper Form 2.3 Evaluation of the Effect of Different Terms The terms of a contract are made for the benefit of the both parties. So, to evaluate the effect of the terms the benefits of the terms should be determined (Emenike 1989). There are many types of law and it needs various types offormalities. The Patrol Evidences Rule: This rule contains with oral evidences. Oral evidence may not be offered to affix to say that the opposite to or shown to be a bogus written article. Establishing Implied Terms: There are some circumstances in which contracts need to establish the implied terms officially and it is made from one person to another person (Hendry 2012). Various Types of Conditions: Various types of conditions may affect the contract and procedural prudence of the word is a good amount of central grouping of contractual appearance. Figure: Requirements of a Valid Contract 8
Task 3 3.1 Contrasting Liability in Tort with Contractual Liability Tort and contact liability: Tort laws govern situations where one person has harmed or injured another person. Tort laws cover violations where the party intentionally harmed the other person, such as in a battery claim. Tort laws also address incidents where the party may be held liable even if they did not act intentionally, such as in negligence claims or strict liability claims. Tort laws usually result in the liable party paying the victim monetary damages to compensate for their losses. Contract law is that body of rules that govern contractual agreements between persons or merchants. A contract is basically an agreement between parties outlining their duties and responsibilities to one another. 3.2 The Nature of Liability in Negligence There are two senses in which the law of torts deals with negligence. In its 'ordinary' meaning, negligence simply refers to a careless conduct of the defendant as opposed to a willful conduct. However in tort law, the term negligence is used more commonly in its technical sense to mean the breach of a duty by the defendant consisting of his or her failure to take reasonable care to avoid a reasonably foreseeable harm to another person. A significant section of the law of torts is based on this notion of negligence. Causes of action before a person can sue another in tort, he or she usually has to fit the facts of the case into the framework of a recognized cause of action. 3.3 Vicarious Liability in business Vicarious Liability in businessa situation in which one party is held partly responsible for the unlawful actions of a third party(DiMatteo 1998). The third party also carries his or her own share of the liability. Vicarious liability can arise in situations where one party is supposed to be responsible for (and have control over) a third party, and is negligent in carrying out that responsibility and exercising that control. 9
In the given situation the management of TAM’s college fell in the principle of vicarious liability because the night guard’s family has taken legal actions against the institution. Though the management and the supervisors were presaged about the accidents and were also warned to wear protective clothing for the non-teaching staffs to avoid injuries. 10
Task 4 4.1 Application of the Tort of Negligence and Defences In general terms, negligence is "the failure to use ordinary care" through either an act or omission. That is, negligence occurs when: somebody does not exercise the amount of care that a reasonably careful person would use under the circumstances; or Somebody does something that a reasonably careful person would not do under the circumstances. In the case, it was said that TAM’s college’s non-teaching employees were counselled to use protective clothing for their safety and security. Some sources of negligence are: Poor selection of activities. Use of faulty equipment. Inadequate protection. Hazardousconditions. Defence against Negligence: Assumption of risk. Sudden emergency. An act of God. 11
4.2 Application of Vicarious Liability The TAM’s college has enforced the wearing for school’s non-teaching staffs for example guards and labors in order to avoid future accidents (Hofstra 2012). However the senior supervisors have overlooked the warning and he has sent off a night guard on duty without the proper clothing. It is against the company policy. However, vicarious responsibility sometimes called "imputed liability," attachment of responsibility to a person for harm or damages caused by another person in either a negligence lawsuit or criminal prosecution. But the authority of the TAM’s college will be found responsible because of vicarious liability principle. The authority repudiated the compensation to the staff because he was not following the rules of the TAM’s college. But under the vicarious liability doctrine no matter how faulty the staffs are the TAM’s authority will be legally responsible for the staff’s wrong doing. 12
Conclusion We know that TAM’s college has hired legal consultants so that they can deal with the legal issues. They have hired NAMS marketing consulting firm who gave them the offer of extensive marketing of the colleges and promote the college name for one month only for £6000. But NAMS had faced some problems and did not meet the timeline of agreement. TAM’s colleges have taken legal engagements against NAMS marketing firm based on the initial terms of the contract (Greer 2012). On the other hand, TAM’s college was responsible to pay a reimbursement for an incident but they have denied it because according to them the staff acts in negligent which was against the policies of the college. 13
References DiMatteo, L. A. 1998. Contract Theory: The Evolution of Contractual Intent. East Lansing: Michigan State Univ. Press. Emenike, E.U.I. 1989. Safety Measures associated with Physical and Health Education Journals. Vol. 3, No. 1, vol. 48, no. 1, pp. 54-82. Greer, C.R. 2012 Strategy and Human Resources. Englewood Cliffs, NJ: Prentice-Hall. Hendry, C. & Pettigrew, A.M. 2012, Patterns of Strategic Change in the Development of Human Resource Management. British Journal of Management, 3: 137–156. Hofstra, 2012. “Business law and commercial law and practical use of these” (Online) availableat :<http://law.hofstra.edu/pdf/Academics/Journals/LawReview/lrv_issues_v35n04_i01.pdf >(Accessed on November 29, 2013) Holbeche, L. 2013, Aligning Human Resources and Business Strategy. Oxford: ButterworthHeinemann. Leibee, B. C. 1976, Tort Liability for Injuries to employees. Organisation and Administration. Philadelphia W.B. Saunders Company Journal Of Tort Law ,vol. 18, no. 1, p. 1. 14
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