Contractual Liabilities for Business

Introduction to Contractual Liabilities for Business

The present report is about the Aspect of contract and negligence for the business. In the present era every person has some problems even some people don’t know how to face the certain situation but by the use of laws and rules it is much easier to deal with different types of circumstances. By having at least a basic knowledge and awareness about the business law, no one can play with other people. This research comprises different types of law which are helpful for different type of situation and contract. The study includes different elements of the valid contract, tort law and its liabilities. Along with this investigation discusses distinct case and their situations legal issues on the basis of the tort law and valid contract. Including this various tort liabilities and its principles are also describing in the following paragraph of the report.

Task 1

1.1 Importance of the essential elements for the formation of the valid contract

All that agreements which are enforced by the law is called valid contract. The present case is about the valid contract and its essential elements. Importance of some essential elements for the formulation of the valid contact is given below...

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Offer and Acceptance

It is very crucial and important element for configuration of valid contact without legal offer and acceptance a contract cannot be valid or applicable for law. This constituent shows a legal offer by one party and an official acceptance by another party.

Legal consideration

Legal consideration can define as one party is agreed on the same price which is offered by the other party. Presence of lawful contemplation is very essential for a valid contract.

Lawful object

Object of the valid contact must be lawful and clear for both parties. Without an authorized and apparent object a contract cannot be valid or official.

Legal Relationship

for a valid contract both parties must have a legal and official relationship by following various requirements of valid contract. Societal and familial agreements do no not consider in legal relationship.

Legal Formalities

As per the contract law there are some legal formalities which are essential for a valid contract, such as registration and money transaction with bill receipt, etc.

Free consent

Free consent is very essential for a valid contract and for a free consent it is required that both parties are agreed on the same thing in a same sense. But in some cases such as scam and deception there is no free consent.

Capacity of parties

In a valid contract both parties must be capable for a legal agreement.

Certain and meaningful agreement

A valid contract required a meaningful, clear, certain and significant agreement which is attuned by both parties.

1.2 Impact of different types of the contract

There are different types of contract such as face to face contract, written, distance selling and exchanging by email or fax. All this type of contract affects terms and validity of a valid contract. As per the given case Bob is a person who wants to buy a book which is displayed in the Sam’s book store. He collects that book from exhibit and go to counter for make payment. But Sam says him that this book is already sold to the Carl but forget to remove it from display.

As per the given situation there is no essential element of valid contract between Bob and Sam. There is no offer and acceptance, free consent, legal transaction and lawful consideration. Thus, both parties cannot take any action regarding the agreement.

1.3 Meaning and affects of different terms of the contract

A valid contract includes different terms such as conditions, warranty, expressed and implied terms and exclusion clauses. Expressed terms are those terms on which both parties are agreed at the time of contract formation. In the expressed term there is no obligation on both parties to agree on all conditions. On other hand implied terms are those terms which are included in the agreement as per the rules of contract. In the implied term as per the agreement both parties are obliged to agreed on such terms. Conditions and warranties are included by both parties on some specific situation and it focuses on the restriction of liabilities in any time of damages and injury on these situations. Exclusion clauses help in excluding the liabilities of the parties in some specific situations. Due to the absence of the different essential elements of the valid contract for example, offer and acceptance, transaction of money, legal acceptance and offer, Bob and Sam did not have a valid contract. As per the implied term book seller has right to refuse to sales that book to that person. This case includes the implied terms because all these elements are not included in their agreements so it is not a valid contact and as per the rule of contract Bob can decline to sales the book to Sam.

Task 2

Case scenario states that Barry is a client of that park which is supervised by the local council. In this park he hired a chair with the payment of 50p per hour and after the payment he collected a ticket for the ticket counter. But when he seated on that chair and chair collapsed under him and damaged his cloths. After this accident Barry claims on local council for the compensation of his damaged cloths.

2.1 Application of all essential elements of the contract in the given case scenario

According to the case both parties Barry and Local council have all essential elements of the valid contract in their agreement of chair. Legal issue in this case was that one party has provided all information about the contract to another party after the implementation of the contract. As per the issue Barry has no information that local council will not responsible for any physical injury and damage of customer due to the problem in hired equipments. It comprises a valid offer of chair by Local Council and proper acceptance of offer by Barry; lawful object of this contract is getting compensation for the loss of Berry; legal formalities for this case includes the money transfer for the service of local council, ticket etc; free consent means both parties local council and Berry are agreed on the same thing and in the same sense; official relationship and transaction is also exist in this case because local council and berry had transferred the money and ticket for a particular service. Thus, this case is relevant to the valid contract because existence of all essential elements.

2.2 Application of different terms of Law in distinct contract

As per the given information Barry purchase a ticket for their chair by exchanging some amount of money. Ticket of the chair includes a law term and the statement of term states that “No liability is accepted for any damage or injury caused by the failure of any hired equipment”. This statement is also known as exclusion clauses for a valid contract.

In this valid contract express term is missing because, both parties have no information about the all conditions of the contract at the time of formation of valid contract. As per this term Barry should know about the condition of Local council but council has provided information after the monetary transaction. Thus, it is the against the contract law and terms of the contract.

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Exclusion clause is the most important term of the contract law which help in removing and declining the responsibilities of both parties for various losses and damages. In this case local council has been used this clause for reducing their liabilities towards the physical injury of different customers by different products and services. There are three types of exclusion clauses; Time, true and limitations. True exclusion clauses comprise different liabilities and duties of both parties. Time exclusion clause includes the limitation and validity of contract for use of different clauses and Limitation clauses includes some restrictions towards the legal agreement.

2.3 Meaning and affects of the of different terms in a given contract

As per the above discussion this case is relevant to the legal term which is known as exclusion clause. Avoidance of the express term can dismiss the contract and in this case local council does not provide all information to Barry at the time of contract. so, as per the law of express term local council is liable for the damages of Barry. According to law terms management of the local council has a responsibility towards their products and services so, they are responsible for the Berry. Along with this all they should provide the information about the exclusion clauses before the valid contract but in the case of Barry, information regarding the exclusion clauses is written on the ticket which has been given to him after entering in the valid contract with council. Thus, both parties were not free consent means both did not agree on the same things with the same sense. So, according to the contract law, Management of the local council are accountable for compensating the damage of the Berry’s losses and physical injury.

Task 3

According to the case scenario Brain and Adam both comes in a valid contract when Brain notices that advertisement in the news paper which is published by Adam. It is about the various information of a contest which is organized by Adam. Along with this it comprises a prize of £1000 as a winning amount for paddle across English Channel in a bath from Dover to Calais. After seeing this advertisement Brain decides to take part in this contest. After the completion of this contest Brain claim to Adam for his reward.

3.1 Contrast liability in Tort with contractual liabilities

Case of Adam and Smith are related to the Tort law which focuses on the negligence and vicarious liabilities. There are various difference between contractual and contrast liabilities. Contractual liabilities are applied in the contract by the obligation of the both parties. On other hand contrast liabilities are applied by the contract law which should be followed by both parties during the contract.

Major differences between contractual and torts liabilities include that contractual liabilities are included in the contract as per the mutual understanding of both parties but tort liabilities are included as per the law of contract. In the contractual liabilities both parties must be fulfilled the all standards of valid contract but in the tort liabilities only defended needs to follow all standards of duty of care.

3.2 Nature of Liability of Negligence

Negligence and Vicarious liabilities are major liabilities of the tort law. Duty of care, breach of duty and remoteness of damage are major principles of the Negligence liability of a contract. Negligence liability shows that Adam cannot refuse to give the reward amount to Brain because he did not follow the principles of Negligence. Brain and Adam came into the valid contract before the second advertisement and Brain did not aware about the second advertisement of Adam. Adam has a responsibility towards their participants and has duty of care but he did not follow his duty towards them. So this case is relevant to the breach of duty principle of negligence liability.

3.3 Explanation of how business can be vicarious liable

Vicarious liability

Vicarious liability can be termed as a situation where someone is held responsible for the actions and/or omissions of another person. This liability is transferred because liable person was in position to control the misconduct. Further, if they had acted cautiously then they will be in position to prevent negligent action. However, this liability does not eradicate obligation of original tortfeasor.

Vicarious liability of employer

By considering this aspect, employer is said to be vicariously liable for the misconduct of employee. It is because; they are in position to control their actions. Negligent individual must be have status of employee. Provision of part time or full time employment will not affect the employment status. In this aspect, individuals who are self employed are not covered. It is because, they are not in control of business. Misconduct by employee should be conducted in course of employment in the provided roles and responsibilities by employer. However, vicarious liability will not be applied in situation of criminal actions.

Prevention of vicarious liability

In order to prevent vicarious liability, employer is required to make sure that provisions of Occupier’s Liability Act and Health And Safety Act are properly applied in work environment in order to make reduction in the possibility of injury of individual.

Case study

Considering the present case, Adam had provided unilateral offer to the public to provide performance in against of reward through advertisement. By considering this offer, performance was given by Brian. In the mid of the performance Adam had provided another advertisement for cancellation of previous offer. This will be considered as revocation of offer but it was not in reasonable time. Brian had completed his performance and now he is claiming for reward but Adam is not ready to pay due to revocation of offer. In this case situation case study of Carlill V Carbolic smoke ball company can be considered. In this case similar case situation was occurred and company refused to pay reward. Court held that defendant is liable to provide damages. By considering this case, Adam is liable to provide amount of reward as revocation was not in reasonable time period.

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Task 4

4.1 Elements of the tort of negligence and defences in different business situations

The present case states that Neil is a gardener, Roger is a dishwasher and Ben is the owner and Mark is the customer of the Poshplace hotel. Neil has stolen the master key of all hotel rooms and entered into the Mark’s room and threatened to hurt him and taken away all his unique jewellery. Along with this Colin was a head chef and Roger was a dishwasher in the Poshplace hotel. Roger has a problem of skin rash due to the long time washing so he was complaining to the Colin about this. Colin gets fed up on Roger’s complain and strike him by a frying pan with irritation.

Statement A

As per this situation Statement A is explain some responsibilities of Neil towards the Neil and roger. On other hand tort law states that it is not an accurate statement and it is not truthful. As per the non-delegable duty employer of the organization is responsible for any harm of employee. So, Neil is not an employer he is an employee of the Poshplace hotel. Ben is liable to provide a safe working environment for all employees.

Statement B

This statement states that Neil is liable for the Colin’s action on roger. But as per the tort law Colin’s action was very intentional towards the Roger and which does not consider in the tort liabilities. Therefore, this case does not satisfy the all principles and rules of the tort law and liabilities, so, roger cannot bring claim against Neil for Colin’s action. As per the vicarious liabilities both parties required an employee and employer relationship but Neil and roger does not have employer and employee relationship both are employee of the hotel. Thus, Neil is not liable for Colin’s action on Roger; so Roger cannot bring a claim on him.

Statement C

For the Neil action towards the Mark’s does not consider by civil law because it was an intentional and criminal action and tort law does not judge intentional actions. As per the Occupier’s Liability Act 1957 which shows that employer has a responsibility towards the employee for their protection and safety and safe working environment. Considering this Ben is responsible for safety and security of Mark, Roger and Neil. Present statement says that Poshplace hotel is responsible for the jewellery losses of Mark but it is not accurate because Neil’s action was intentional and criminal which could not be forecasted by hotel. So under the Occupiers’ Liability Act 1957, Poshplace hotel is not responsible for the losses of Mark.

4.2 Apply the elements of vicarious liability in given business situations

As well as case also states that Poshplace hotel provides a clear warning about the danger for the all visitors, which states that “pool closes between 7.00 pm to 7:00am. No entry to visitors during these hours; ‘Dangerous when unattended’’. Mark read this warning but ignores this and jumps into the empty swimming pool and suffered from physical injury and losses of his expensive.

Statement D

Statement shows that hotel is not liable for the safety and protection of the Mark’s and its swim suit. It is absolutely true because of the warning session of the contract. According to the Occupiers’ liability act 1984 occupiers has some liabilities for their trespassers but in some situations they can exclude their liabilities by some exclusion clause or warning sections. Therefore hotel has already restricted its accountability by the warning so hotel is not liable for the safety and protection of the Mark.

Statement E

Negligence liabilities of tort law have some principles; these are duty of care, breach of duty and remoteness of damage. As per the above statement a discussion hotel is not liable for the Mark’s losses of his jewellery and expensive swim suit. Thus, remoteness of damage principle is not satisfied, so as per the tort law and negligence liabilities this statement E is not accurate he cannot use ordinary negligence principle in his claim against Poshplace hotel.

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Statement F

As per the exclusion clause and warning session hotel excludes its liability from some situations. On the basis of the above arguments, tort law and Occupier’s liability act Marks is self responsible for the loss of his expensive swim suit. Thus, Section F is not true, Mark will not liable to claim for the charge of his fashionable swimming trunks.

Statement G

Vicarious liabilities do not consider intentional and criminal case and Neil’s action was very intentional and which cannot be estimated by the Poshplace hotel. So hotel is not responsible for Mark’s loss Neil is liable towards this damage. Thus, statement G is not accurate; it has no relevance with vicarious liability. So, Mark cannot bring a claim against the hotel for loss of his jewellery.


The project concludes that all essential elements are very significant for a valid contract because on the basis of these elements both parties can identify their responsibilities towards each other. Along with this research also describes that tort law has various liabilities, such as negligence, contractual, contract and vicarious liabilities. Thus, this investigation includes vicarious liability and negligence principle for examining the accurateness of each given declaration.


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