Aspects of contract and Negligence for business

Introduction to Legal Contract

In order to develop Legal Contract, it is essential for the contractual parties to emphasize on all the elements of the contract which are discussed in the below section (Dobson, 2013). The present study has been discussing different case scenario; thus on such basis, aspects of contract have been stated. In order to form a valid contract, the parties have to emphasize on all the related terms that present under the contractual acts. Thus, for such aspect, types of contract have been stated along with their purposes and their application to different scenario. The subsequent study has been discussing the concept of contrast liability in tort with contractual liability. Moreover, researcher had described the nature of liability in negligence and along with this, certain conditions are also discussed where in business is held vicariously liable for different acts. Lastly, in the research, elements of vicarious liability have been discussed respectively.

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Essential elements for the formation of a valid contract

In order to develop a valid contract, it is essential for the contractual parties to emphasize on these mentioned elements so that validity of the purpose can be fulfilled. The elements are discussed as followed:

Offer: Offer is one of the basic and significant elements under legal contract where in one party has to give offer to other for any specific purpose. Offer should be clearly communicated to the opposite party so that the purpose can be comprehended in adequate manner. Offer must specify all the aspects for which the contract is being formed. Thus, in order to create a valid contract, there must be lawful offer by one party (Four Essential Elements of a Contract, n.d).

Acceptance: Only offer can be accepted and this means that the offer must be accepted exactly as offered without any conditions. If new terms are suggested, then they are considered as counter offer which can be accepted or rejected. There can be many offers and counter offers prior there is an agreement. Acceptance can be given verbally, writing or through inferred action which clearly states that acceptance must confirm with the method prescribed by the offerer.

Intention of legal consequences: Valid contract requires that the entered parties should intend to enter into a legally binding agreement (Wishart, 2012). The intention to create legal relations is presumed; therefore the contract need not to be expressly stated, only legal actions needs to be followed. Thus, while formulating the contract, it is essential for the parties to include legal aspects in to that.

Consideration: Every contract should be formulated on the basis of valuable consideration which specifies mutual agreement from both the parties. Thus, it can be said that one party promises to do something in return for a promise to another party to provide a benefit of value. Legal intention is must to s"Offer is one of the basic and significant elements under legal contract where in one party has to give offer to other for any specific purpose. Offer should be clearly communic"pecify so that the legal purpose of the contract can be stated. Every entity has to perform legal actions so that to manage all the duties in adequate way.

The present case is showcasing the concept of “Invitation to treat” where in James has advertised sale of a high definition camera for £55. Maria responded for the same; however she stated that she will buy the camera for £45. James replied to her that he will would accept it only with the original price which reflects that he made counter offer (Whittaker and Zimmermann, 2000). Hence, after making counter offer, James did not get any reply from Maria and afterwards, he wrote her that he is ready to accept her offer of £45. At this situation, James is not entitled for any offer and contract because once he made counter offer, he cannot make other offer on the same.

Explain main types of contracts entered in the UK by individual and businesses

Different types of contract can be used for different situations; however all the contracts should be integrated with legal aspects. The types are as follows:

Face to face contract: Face to face contract is developed at the time when both the parties are present in front of each other and when both make clear communication by meeting directly. Face to face contract has the evidence of validity and reliability because parties give their actual presence while developing the contract (Babb, 2001).

Written contract: Written contract is developed with formal standards and this is most widely used in business scenario for the purpose of specifying creditable aspects. Written contract are formulated on the basis of conditions of the parties; hence they are most preferred by the business entities. Oral contract is the one where in everything is verbally stated and faith as well as confidence both the aspects matter a lot while framing this contract. Oral contracts are not considered as evident and valid because it lacks credibility.

Business to business contract: These contracts are made among two entities who work with each other. Such contract does not have any involvement of customers and terms and conditions are inserted as per organizational basis. Business entities have to form such contract on written basis especially at the time of formation.

Online contract: Online contracts are created through e-sources and these contracts are chiefly useful for online trading and deals.

Distance selling: Distance sales contract may not be binding if a copy is not provided to the party within 15 days after the contract is entered into. Distance selling contract is formulated when both the parties are unable to meet each other (NEW REGULATION ON DISTANCE CONTRACTS, 2015). Thus, to facilitate such sort of contract, several modes such as telephones, emails and other concerned methods can be used; however the methods should be reliable in nature so that proper information can be mentioned in the contractual aspects. This type of contract is beneficial for those parties who are unable to meet with each other. One of the major example of distance selling contract is importing several goods and services through online mode. The conditions are similar to every contract; however the entities merely have to conduct all the practices through online. Actual presence of parties does not lies in such contract.

Verbal contract: Verbal contract is the one where in parties develop contract on the basis of mutual trust and faith and the main focus is given to verbal communication. All the parties present in the contract are required to fulfill all the legal considerations; however the contract is informal in nature. In case of any damages, parties can claim as per the situations because there is no written contract specified.

Inferred contract: These are implied contracts which can be formed by conduct. Through, specific actions, offer and acceptance can be shown.

Explain different terms that can be included in a valid contract

Implied terms: In English Law, Implied terms refers to the practice of setting down default rules for contract, at the time when the mentioned terms in the contract are expressed on the basis of mandatory rules and regulations. The chief purpose of implied terms is often to supplement a contractual agreement. Thus, apart from this, implied terms are effective in acquiring fairness in the contractual deed (Weiss, 2003). The specific implied terms may be implied into the contract through statutes or by the courts.

Exclusion clause:This term reduces the liability of the organization even if it has conducted breach in any situation. These terms should not be contradict to legal and public policy and these can be inserted before forming the contract. Both the parties such as Bella UK and Hair 4 U are required to consider formation of such contract. Proper notice should be delivered to the parties and that should be within time frame.

Expressed terms: These are such terms that have been specifically mentioned and agreed by both the contractual parties at the time when the contract is made. They can be in written as well as in oral format. Thus, expressed terms are those which the parties have articulated prior to concluding their contract.

Warranties: Warranties are mentioned in the contract for some specific purpose and it provides the base for which extensive services are delivered to the parties. Time limit is also determined for providing warranties. Hence, warranty is considered the concept of satisfactory performance that parties should be considered (Twigg-Flesner, 2013).

Conditions: Every contract is formulated on the basis of certain conditions and while mentioning conditions in the contract, it is essential for the parties to specify the conditions prior. With the help of these conditions, parties can claim for any damage if occurred.

Innominate terms: The innominate term approach was established with the case of Hong Kong Fir Shipping. The approach has been criticized for sacrificing certainty. The innocent party will be liable for wrongful repudiation if they treat the contract is at an end.

Explain breach of a condition and legality of exemption clause

Breach of a condition: Breach of condition is the case where in the parties are able to claim for the damage upon the other party; however there must be direct relationship exist between both. Thus, in the present case, if the shampoo made by Bella UK affects customers then, Hair 4 U can claim for the damages; but this should be included only in the case when use of shampoo shows the effect (Olmos, 2011). Further, the company has to maintain standard aspects while selling the products so that it may not affect others.

Legality of the exemption clause: Under exemption clause, Bella UK is entitled to sell the product at the market place with limited liabilities; however it can be used unfairly which may disadvantage a party. Therefore, there have been changes to the law to create more fairness and to limit the use of clauses. Hence, in the subsequent case, Bella UK must not sell any product which has harmful ingredients. Hence, while making contracts, these specific things should be clearly communicated or mentioned so as to make contractual deed more specific and reliable (Nystén-Haarala, Lee and Lehto, 2010).

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Explain the differences between contract and tort liability

Contract law is that body of rules that govern contractual agreements between persons and merchants. It is basically an agreement between those parties that outline their duties and responsibilities to one another. According to the concept, contract can be formed for nearly any type of interaction. Thus, contract law addresses various transactions for the sale of goods and services. However besides that, contract law and tort law shares many similarities at the most basic level (Leone, 2011). Under contract law, parties are required to pay equal consideration for the purpose for which contract is made and under this, legal actions can also be taken if any party breaches the contract.

One party under the contract has the duty to perform specific action for another party and if either party fails to perform their duties, contract laws will prescribe a suitable remedy for the breach. Nonetheless, most tort violations also involve some sort of breach of duty. The interaction in a tort is never based on consent and it generally involve an intrusion by one party into the safety, health and privacy of the victim (Klass, 2010). Hence, tortious liability arises from the breach of a duty primarily fixed by laws; however such duty is towards the persons who is redressible by an action for unliquidated damages.

Both the aspects are different from each other on the basis of existing relationship as in contractual aspects, relationship is developed on the basis of mutual trust and understanding between the parties where in all the people know each other already. On the contrary, in tort liability, parties do not know each other and relationship exist between them through lawful aspects. They can not show direct relationship with each other if anyone has conducted negligent action.

Discuss the development of the concept of “duty of care” with reference to the case of Donoghue v Stevenson

Under tort liability, a duty of care is a legal obligation which is imposed on an individual in the case when he fails to fulfill the purpose of the contract towards another party. There should be direct relationship among both the parties so that they can claim against duty of care. As per the English law, an individual may owe a duty of care to another person so as to reduce the opportunities of a harm and uncertainties. In the case, if breach of duty takes place, then the party is entitled to impose legal action against tortfeasor (Jones, 2002). Apparently, duty of care is an element of the tort of negligence; thus as per the laws, it is vital for the tortfeasor to pay for the damage caused to plaintiff. There should be direct relationship such as employer and employee where in employer is held liable for all the actions of employees under duty of care. Donoghue v Stevenson created the modern concept of negligence by setting out general principles where in one person would owe a duty of care to another person. Thus, as per the concept, the contractual party can claim upon another if damage caused from any domain.

Meaning of negligence

Negligence is a action or can be called a situation in which one person acts negligently without paying concern for the same aspect. The act of negligence may provide harm or damage to any concerned party.

Liability in negligence

Duty of care – Here it is essential for the plaintiff to prove that defendant is in default and he is entirely responsible for the damage caused. Harm should be reasonably foreseeable.

Breach of duty – It arises at the time when any one party fails to meet the standard of contract.

Remote damages – Damages must be reasonable according to the negligence of the claimant.

Causation – Primary reason of every damage and injury should be negligent act of plaintiff as through that only, claim can be successfully managed.

Foreseeability - Damages to the claimant must have to be foreseeable from the act of negligence; because without it claimant is not entitled to claim for the damages.

Explain how business is vicariously liable in different situations

In the given case, Alan owes a duty of care towards Mathew because he was working for Alan (Haarala and, 2010). Though, Alan is not supposed to employ Mathew because he is minor; and after giving employment, he is liable to protect Mathew from harm and uncertainty. While driving, Alan's action accidentally injured Mathew; therefore the milkman is vicariously liable to pay for the injuries caused.

Breach of duty – If the legal and requisite duties are not fulfilled, then the aggrieved party can claim for breach of duty. The party conducting the act of negligence has to pay for the damages.

Damage to the property – If property of any one business gets damaged due to the action of any other concerned party, then the plaintiff has the right to claim for the damages against recovery.

Contributory negligence – In this situation, negligent will not be liable to pay for the damages and this will work as a defence for the company who conducts the act of negligence.

Can Mathew sue Alan

Mathew can sue Alan because the milkman owes a duty of care to him. Mathew can claim for the damages against duty of care and Alan has to pay for the damages (Hodgson and Lewthwaite, 2001). Further Alan, was not entitled to employ minor person in the farm and as he did it; therefore he shall be liable for the action. Mathew is injured in the course of employment; therefore he can claim for the damages caused. As per duty of care, Alan was responsible to take care of his actions.

Can Norfolk Farm be held vicariously liable in this situation

Norfolk Farm cannot be held vicariously liable in this situation because the accident took place by mistake of Alan. It is required for the owner of the farm to observe who are employed for the job and the farm can also suspend Alan for employing minor for delivery purpose. Thus, it can be said that Norfolk farm is not entitled to pay for any damage because it has already specified situations for employment (Vicarious Liability, 2013). Thus, in the particular situation, Alan is only entitled to pay for all the damage to Mathew. Another action can also be placed on Alan because without intimation, he employed minor for the delivery of milk. Thus, Alan is alone liable for the damage caused to Mathew. The farm is held liable in this situation because the owner did not have the idea regarding employment of a minor; therefore the farm has t get information about all those people who are working with the entity. The employees have to consider all the guidelines given by the terms of employment. The farm failed to do that; hence the amount of damages should be paid by the Norfolk farms.

Advise to Brad whether he can recover his loss from Charles

In the present case, Brad gave a flat on rent to Albert by relying on Charles's statement. Charles was unaware about the financial condition of Albert and due to confusion, he gave recommendation to Brad to give him the flat. Brad faced loss because Albert ran away without paying the amount of debt; hence in the particular situation Brad can recover the loss from Charles because he has given statement of his financial condition (Giliker, 2010). This states that Charles has given negligence misstatement; therefore he has to pay for the damages.

The present situation has been showing the provision of negligent misstatement. Thus, for the same facet, generalized case of Ross V Caunters 1980 can be referred. According to the case approach, claimant was expected to derive benefit from a will but to inadequate advice from the lawyer she was unable to derive such advantages. Therefore, she can claim on the solicitors for the damages. The claim is made beneficiary for the case because she relied on the statements of her lawyer.

In further case, Brad can sue Charles as Charles has given negligence misstatement; therefore he has to pay for the damages. The entire loss can be recovered from Charles because he worked as a nominee for Albert while Brad was giving flat on rent to him. Here, also the case of Ross V Caunters can be applied because of negligence misstatement. The action for negligence will be held successful because there was a relationship between the nominee and injured party.

Apart from this, if Charles would have given right statement to Brad, then he might have protected himself from the liability of damage. The mistake happened because of negligent act by Charles as he would have to look upon the correct statements. This clearly shows the concept of breach of duty and because of this, economic loss occurred; thus Charles is liable to provide damages.

Apply the elements of vicarious liability

Graham has ejected the customer out of the club as he was highly drunk and he was damaging the property of club; therefore it is clear that Graham was doing his duty as he had to protect the property of the club. Thus, he cannot be held liable for the manhandling troublesome due to ex turpi causa because Graham was on duty and he had not done any mistake. Hence, he should not be prohibited from the employment course because he did his work and the accident happened while he was protecting club's property (Furmston and, 2007). The club is not liable for the actions because Graham was considering his roles towards the club.

The case does not show any kind of negligence; therefore employer is not held liable vicarious liability and he is also not liable to pay for the damages. On the basis of next condition, defense can not be applied because manhandling troublesome is not expected to impose on the customers. Thus, employer of Graham is entitled to pay for the damages and the employers has to make clear guidelines regarding the job roles of all the employees.

Carla is liable for the damage because she was using the car for her personal purpose. She has to pay for the damage caused to George's car; however Links Ltd is not entitled for any damage. That was not a working day and nobody has told her to deliver the parcels on non working day. Since, she has crashed the car; so she is entitled for the negligence. In this case, the concept of vicariously liability can be applied; because it was a non working day and she is not supposed to make delivery of parcels on subsequent day (Dobson, 2013). Thus, in terms of payment of damage, it can be said that Carla has to pay for the amount due to act of negligence.

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Articulating the entire case, it can be said that business is held responsible for the wrong commitment by their employees under vicariously liability. The present study has clarified the use of different contracts in diverse situations. Further, parties are also liable for negligence acts under breach of duty and according to English Law, specified amount should be paid by the tortfeasor. As a conclusion, it is clear that the amount of negligence needs to be reimbursed under vicariously liability.


  • Hodgson, J. and Lewthwaite, J., 2001. Law of Torts. Blackstone.
  • Jones, M., 2002. Textbook on Torts. Oxford University.
  • Klass, G., 2010. Contract Law in the USA. Kluwer Law International.
  • Sumner, G. and Williams, A., 2010. The economic impact of a shift from hard to fuzzy contracts. Journal of Financial Economic Policy.
  • Tomasic, R., 2011. Company Law Modernisation and Corporate Governance in the UK-Some Recent Issues and Debates. DICTUM-Victoria L. Sch.
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