1. ASPECT OF CONTRACTS AND NEGLIGENCE’S
FOR THE BUSINESS
S UBMITTED BY :
S UBMITTED TO :
DATE OF S UBMISSION
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2. Executive Summary
TAM‟s college has agreed to the proposal of NAMS marketing firm to in order to reach
to other students with a dream of becoming one of the best educational institute in UK.
TAM‟s also hired some legal advisors to reconcile the legal issues and secure the future
risk against the institute. Nonetheless the management of TAM‟s college took legal
activities founded mostly on the prime periods of the NAMS that asserted; if the NAMS
does not consign the proper answer then will refund the advance and furthermore pay
compensation of £1500. The TAM‟s college also was a victim of Vicarious Liability and
had to pay the compensation to the injured employee.
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3. TABLE OF CONTENTS
Executive Summary ...................................................................................................................................... 2
Task 1............................................................................................................................................................ 4
1.1 Essential Elements of a Valid Contract .............................................................................................. 4
1.2 The Impact of Different types of Contract ........................................................................................... 5
1.3 Analysis of Terms in Contracts ........................................................................................................... 6
Task 2............................................................................................................................................................ 7
2.1 Application of the Elements of Contract ............................................................................................. 7
2.2 Application of the Law ......................................................................................................................... 8
2.3 Evaluation of the Effect of Different Terms ......................................................................................... 9
Task 3.......................................................................................................................................................... 11
3.1 Contrasting Liability in Tort with Contractual Liability ....................................................................... 11
3.2 The Nature of Liability in Negligence ................................................................................................ 11
3.3 Vicarious Liability in business ........................................................................................................... 11
Task 4.......................................................................................................................................................... 13
4.1 Application of the Tort of Negligence and Defences ........................................................................ 13
4.2 Application of Vicarious Liability ....................................................................................................... 14
Conclusion................................................................................................................................................... 16
References .................................................................................................................................................. 17
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4. Task 1
1.1 Essential Elements of a Valid Contract
All contracts are divided in portions and to fulfill a contract properly parties need to
perform all the elements of the contract. There are seven elements of a valid contract.
These elements are significant in order to make a valid contract.
The essential elements of a valid contract are given below.
Figure: Essential Elements of Valid Contract
1) Offer and Acceptance: Offer and acceptance in necessary to form a lawful
contract and it offer us the initiation of a contract. After the offer, the parties
engaged in the agreement need to accept upon the offer and thus form an
agreement (Kennedy, R. D. & McMullen, S. Y. 1968).
2) Lawful Consideration: A mutual affirmation lead to a contract where the
individual acknowledging the offer takes presumption founded on some lawful
concern (DiMatteo, L. A. 1998).
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5. 3) Free Consent: To join in to a legitimate affirmation the two parties have to give
their free consent, or the agreement will be directed as a null and void contract
(Marsh, P.D.V. 2001).
4) Writing and Registration: An authorized indenture has to be in a writing pattern
and recorded by the government administration to make the contract legitimate
(Roberts, M. & Zahay, D. 2012).
5) Enforceable by Law: to make an agreement valid the agreement should be
legalized and the agreement should be enforceable by law (DiMatteo, L. A. 1998)
6) Certainty: Every part of an agreement has to be certain so that each party is
capable to identify the affairs considering the agreement (Marsh, P.D.V. 2001).
7) Possibility of Performance: A valid agreement must have the possibility of
performance because if the affirmation cannot perform the activities then it will
not be proposed as a valid agreement (1968Roberts, M. & Zahay, D. 2012).
1.2 The Impact of Different types of Contract
There are many types of contracts that are;
Implied Contact: Implied contract is such a contract where, a person behaves
like he/she is the owner of any assets and tries to sell those assets. To go in to a
valid contract all the parties should give free consent regarding the contract
(Kennedy, R. D. & McMullen, S. Y. 1968). But in case of implied contract it will be
proposed as a legitimate affirmation if one party does not give permission.
Because the person who pretending to own the assets may be an agent of the
real owner and the free consent of the real owner is not necessary.
Contract under Seal: It is significant to assess the articles with closures and the
parties are lawfully responsible to accept the outcomes of the affirmation after it
is sealed (Chen L., Law S. and Lee S. 2003). The customary procedure of
making an affirmation legit is the completing of the lawful item that is enforceable.
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6. Executed Contact: It is a type of contract where the parties undergo and
execute all the terms and conditions mentioned in the contract before forming the
contract and no additional terms need to execute (Marsh, P.D.V. 2001).
Express Contract: It refers to the contract where the agreements are made
either orally or in a written format and the terms are acknowledged by the
authority and focuses on the consent of the parties (Roberts, M. & Zahay, D.
2012).
1.3 Analysis of Terms in Contracts
An agreement consists of many objectives. It is imperative that the parties must realize
the distinct types of agreements, time span, and constituents which not only assists the
parties to obey with the affirmation but furthermore assists to decrease affirmation costs
(Roberts, M. & Zahay, D. 2012).
In alignment to become the best educational institute in UK, they are going into
affirmations with some agencies for their marketing and advancement causes and
interpreting the lawful matters. The TAM‟s college is endeavoring to become one of the
best informative institutes of UK. To pattern a legitimate affirmation there should be
some dissimilarity amidst the swapping of terms between the parties and TAM‟s college
is endeavoring to convey the dissimilarities.
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7. Task 2
2.1 Application of the Elements of Contract
The parties participating in a contract must respect the time span and the terms of the
contract and if any of the party tries to breach the terms of affirmation then the party
respecting the agreement can proceed to court and take lawful activities (Marsh, P.D.V.
2001).
The basic elements of the contract with NAMS are:
Figure: Basic Elements of Valid Contract
NAMS took the contract of TAM‟s college to market their reputation so that they could
become one of the best educational institutes and capture the student‟s attention. In an
authorized legitimate agreement, offer is the initiation of a contract with another party
and builds a formal relationship.
To make a contract valid the terms and conditions provided by one party has to be
accepted by the other parties taking part in a formal contract, or it will be advised as a
void agreement. TAM‟s college agreed to the NAMS offer and decided to go in to a
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8. formal contract with NAMS for one month and also paid the advance of £2500. Both
TAM‟s college and NAMS formed a formal relationship and the contract was in a written
form so that the contract may be enforceable by law.
TAM‟s college has taken legal steps against the NAMS marketing firm because they
were unable to deliver the promise and breached the terms of the contract. And as the
contract was a formal one that is why TAM‟s college went to court for the legal
assistance and the contract was enforceable by law.
2.2 Application of the Law
The parties pledged in an affirmation give self-assurance and increase the terms and
conditions of an affirmation (Marsh, P.D.V. 2001). Approach of the parties may disagree
from the contract which was presumed to be in use as just a pre-declaration of a valid
agreement and consequently not part of the contract. As two or more parties go into
agreement then some crucial constituents arise that need to be suggested in order to
make a legitimate agreement. Parties to an indenture chase only its terms, not by any
secondary affirmations that may not be accomplished.
To form a valid contract certain requirements are needed. Such as;
Contract Includes Conditions and Warranties: The more imperative situation
are describing "Circumstances", the lesser important situation are called
"Warranties”. These constituents are so significant that without any one or
supplementary position, the parties would not advance into the affirmation
(Collins, Hugh. 1999). The affirmation itself motivates both the parties. The court
examines at each case on its own merits. The court will address all the
surrounding attenuating factors, encompassing the gravity of the penalties if the
contract is held to be non-binding.
Collateral Contracts: Collateral contract is a type of contract in which the terms
and situation are routinely in a composing pattern as the base of the agreement.
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9. Committees have been coordinated to find a security conference someplace to
make the affirmation legitimate (DiMatteo, L. A. 1998). Where the affirmation
have been conceived and suggested as to make certain to induce the main
affirmation.
2.3 Evaluation of the Effect of Different Terms
There are numerous terms adopted in the contracts and some of them are only for
formalities and guidelines (Collins, Hugh. 1999). These are formation of affirmation and
it is necessary to be in a writing pattern and the sealed. There are many types of
guideline and it needs various types of formalities.
Figure: Effects of Different Terms
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10. The Up-To-The-Minute Observation
In the scenario TAM‟s college has agreed to go into a contract with NAMS on the basis
of their oral evidence that NAMS can help the TAM‟s college to promote their facilities
within one month only for £6000. The TAM‟s college has established a formal contract
between TAM‟s college and NAMS marketing agency.
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11. Task 3
3.1 Contrasting Liability in Tort with Contractual
Liability
Tort and contact liability:
Contract damages are established on deficiencies that are foreseen, while tort damages
are compensatory. The regulation of tort and of contract is categorized as part of the
"Law of Obligations", but the regulation of tort concerns to every detail that it is
applicable to, while in the guideline of affirmation or in trusts obligation is "Voluntarily
Assumed" (DiMatteo, L. A. 1998).
3.2 The Nature of Liability in Negligence
1. DUTY: The duty is an obligation of one individual to another individual; it is
conceived pattern the communal yearns and convictions (DiMatteo, L. A. 1998).
The glue of communal obligation is the threaded that binds humans to one
another in congregations where preferences are proposed inappropriately if they
contravene a pre-existing impulse and refurbish hurriedly.
2. Breach of Contract: It is the demeanour of the individuals to accelerate as a
reckless one-by-one or party and not performing the affirmation periods and
situation. This constituent suggests the pre-existence of a standard of correct
demeanour to bypass enforcing undue dangers of impairment to persons
(Roberts, M. & Zahay, D. 2012). Breach of agreement is the most important thing
in the contract tort of negligence. NAMS has breached the affirmation when they
have halted the advancement and trading of TAM‟s college for one week.
3.3 Vicarious Liability in business
Vicarious blame means that any individual can be detained lawfully or can be accused
for the undertakings of a distinct party or individual regardless of the aspect that
somebody swamps no error in furtherance of the inattentive or tortuous acts (Leibee, B.
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12. C. 1976). It is a doctrine of English tort guideline that imposes firm liability on employers
for the wrongdoings of their workers. Usually, an enterprise will be held liable for any
tort promised while a employee is carrying out their obligations (DiMatteo, L. A. 1998).
In the assigned scenario the management of TAM‟s college was the victim of the
doctrine of vicarious liability because the guard‟s family went to court and has taken
lawful actions against the TAM‟s college. Though the administration and the supervisors
were notified about the misfortunes and were furthermore suggested to wear correct
apparel for the non-teaching employees to keep away from wounds.
The TAM‟s college are compelled to pay the compensation because of the doctrine of
vicarious liability and they denied paying the compensation to the staff because he was
not paying any heed to the instructions.
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13. Task 4
4.1 Application of the Tort of Negligence and
Defences
There are some elements of the tort negligence and defences in various business
situations, they are given below
Duty of Care: TAM‟s college employees were notified about the impairment and
deficiency that the employees might face. The individual might owe an obligation of care
to double-check that they do not suffer from any inapt damage. If such obligation is
broken, a lawful liability is enforced (Leibee, B. C. 1976).
TAM‟s college staffs were advised about the harm and deficiency that the workers might
face. If such duty is broken, a lawful liability is enforced. An individual may owe a duty of
care to ensure that they do not bear from any unreasonable damage.
Potential
sources of
negligence
Defence
against
Negligence
• Inadequate
protection
• Use of faulty
equipment
• Poor selection
of activities
• Assumption of
risk
• Sudden
emergency
• An act of God
Figure: Sources of Negligence
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14. Potential sources of negligence are:
Inadequate protection: Inadequate protection refers to negligent behaviour on
part of the person who is unwilling to wear protective gears (Myer, J. W. 1978).
Use of faulty equipment: Another potential source of negligence is the use of
faulty equipment which can cause harm (John W. 2009)).
Poor selection of activities: The undertakings that are beyond the capabilities
of individuals or inadequate information of undertakings are poor assortment of
activities (Emenike, E.U.I. 1989).
Defence against Negligence:
Assumption of risk: It is assumed that a person takes measure of the risks
when engaging in activity (Emenike, E.U.I. 1989).
Sudden emergency: Any act of immediate action to help the person in danger.
Such as, attempt to rescue a person drowning in the water is an act of sudden
emergency (John W. 2009).
Tort Negligence Law: Tort of negligence law is a type of guideline in which it is
founded and functioned in the realm of intentional tort guideline and the basic cause of
negligence guideline, it is to command and fight back the workers from cuts related to
their line (Myer, J. W. 1978). TAM‟s college‟s non-teaching employees were suggested
to use defending apparel for their security.
4.2 Application of Vicarious Liability
In this scenario the supervisors did not chase the directions and lead one of their staffs
to blame without correct apparel. Supervisors have the inherent power to command
over the employees and the supervisors were demanded to maintain the right apparel
and correct keeping safe gears of the non-teaching staffs and they were supposed to
instruct other staffs to do so (Kennedy, R. D. & McMullen, S. Y. 1968).
The TAM‟s college regulated the wearing for college‟s non-teaching staffs in alignment
to stay away from future misfortunes. Whereas the older supervisors have unseen the
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15. principles and he has dispatched off an evening guard on obligation without the correct
apparel. It is against the institute‟s benchmark.
On the other hand, vicarious accusation means that any individual can be detained
lawfully to accuse for the inattentive undertakings of a distinct individual. In this scenario
the supervisors were negligent and have overlooked the instructions for the staffs. But
the management of the TAM‟s college will be exposed to blame because of vicarious
liability doctrine.
The administration turned down the compensation payment to the worker because he
was not following the principles of the TAM‟s college. But under the vicarious liability
doctrine an employee may be defective but TAM‟s management will be lawfully to
accuse for the staff‟s incorrect doing.
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16. Conclusion
TAM‟s college have dreaming of becoming the best educational institute within the UK
and for this objective they were signing up marketing agencies and law firms to make
the institute an all in all educational institute in UK. According to the scenarios NAMS
marketing firm were unable to respect the terms and conditions of the contract with
TAM‟s college and faced Legal actions. TAM‟s college also had to face lawsuits
because the management has denied the compensation to the employee who got
injured.
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17. References
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practice‟– an empirical study, Business contract, Vol. 24 Issue 3, pp.299-318
Collins, Hugh. 1999. Regulating Contracts. New York: Oxford Univ. Press.
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.
John W. (2009) „Business contract and negligence in practice‟ Journal, Vol. 7, No. 3, pp.
5-18
Kennedy, R. D. & McMullen, S. Y. 1968. “Contract Negotiation and Contract Theory”,
Home Wood, Illinois: Richard D. Inrurin.
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.
Marsh, P.D.V. 2001. Contract Negotiation Handbook: Burlington, Vt: Gower
Myer, J. W. 1978. “Negligence in Contract and practice”, Delhi: Prentice Hall of India,
3rd edition.
Okeke, C.N. (1988). Some Legal aspects of Organizations. A paper presented at a two
day conference organized by the National Sports Commission, Enugu, vol. 13,
no. 5, pp. 707-719.
Roberts, M. & Zahay, D. 2012, Laws and Regulation in practice in Business, 6th Edition,
Wadsworth Publishing Co, Belmont, USA.
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