Essential Element of Valid Contract in Business

3508 words (14 pages) Essay in Contract Law

02/02/18 Contract Law Reference this

Last modified: 02/02/18 Author: Law student

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According to Sir William Anson in his book Principal Of contract, he defines contract as legal binding agreement between two or more by which rights are acquired by one or more to act or perform any work on behave or part of other or others .It can be also defined as a mutual agreement between any two or more parties considering having legally enforceable effects. Agreement actually in above definitions means meeting of minds or agreeing together about same matter binding them within legal boundary.

An agreement or contract will be valid if below listed elements exists.

Offer and acceptance:

There must be two party, Offer given by one party and acceptance by another party in contract.

Intentions to create legal relations:

Both the parties must be ready to accept each other proposal and go through it legally without violating each other terms.

Legality of objects:

The object or thing which is under the contract or the object which is contracted must be legal or it must not be under disapproval category in terms of law.

Consent must be genuine:

While doing any contract there shouldn’t be any pressure or forcing to enter into contract. Sometimes even physical punishment threat is also given so these things must be avoided.


It is one of the fundamental elements for contract. It must be reasonable and legal. It actually means some kinds of benefit to promisor or detriment to the promise.

Capacity of the parties:

Before entering into any contract both the parties who are planning to do contract must have legal capacity to enter into contract.

Hence if above criteria is fulfilled then it can be termed as a valid contract otherwise it will be Void contract:

It is destitute to a law that means it is not a contract and agreement done between any parties do not confer any legal rights. For example if A agrees to kill C with B, for some money then the contract done is void for it is illegal.

Voidable contract:

It is a type of contract which can be made void if any party wish, for example a contract which is done for fraud or bad intentions can be made avoided by deceiving the contract.

Unenforceable contract:

They are actually a valid contract but cannot be applied or put in force due to lack of evidence forms or norms required by law for example contract which don’t have any writing evidence are unenforceable at law.


Actually offer is made writing or by conduct or by orally for example if a man in soap buy can juice and hand to cashier, who then accepts a customer offer to buy. It is made to a definite person or group of people and acceptance is made according to it. Since holiday booking has been advertise in an internet by le nostre and definitely replay will be there by different modes or way. Some of them are listed below.

Acceptance by post: it can be said that it is complete when acceptance is sent.

Instantaneous mode: it is said to be to be completed when acceptance is received by the offeror and offer is made in the instant where the acceptance is received.

Since purchaser is required to made acceptance by clicking on icons it is done by clicking on icons and acceptance is done by verifying conformations of acceptance sheet or receipt by offeror.

1. C

Contract is actually an agreement done intending to have legal effects. Though agreement is always intended to have positive effect but it is not always applicable. Since many kinds of domestic or social agreements are not contract but some of them create legal obligations. Which is clearer from simpkins v. pays (1955) in which simpkins agreed with pays and her granddaughter to go shares in a weakly fashion competitions and defendant (grand daughter) prediction was right and won £750. Plaintiff sued for her share. Here it shows that they were intentions to create legal relations and evidence to prove that they were ready to share any price won in a competitions.

Commercial and business agreement is done by parties limiting them in a legal parameter and in any case if issue need to be shorted out legally then all the evidence written or oral must be presented in a court to prove its existence. In business and commercial contract law will believe or presume to that both the parties are agreeing to enter into contract that has legal effect. To clear this we can take the case of Rose and Frank v. J.R Crompton and Bros Ltd(1925) where plaintiff were the selling agent of defendant in North America and they had a agreement that ‘this arrangement is not, nor in memorandum written as, a formal or legal agreement and shall not be subjected to legal jurisdiction in the law of court. Though it was not a legally binding contract but it shows the intentions to create legal relations.

Consideration is one of most important element of any kind of contract. It actually can be defined as some benefits and right to a one party and some penalty, forbidden or loss suffered by other. Hence it can be clarify as profit or advantages to promisor and determinant to promisee, which is sufficient in law to promise.

1. D

It is obviously true that staff is recruited by manager rather than any junior level staff or receptionist. Here we are given the case that staff is recruited by receptionist which is against the law. Neither He/she hasn’t got that authority recruit anyone nor right to get involve into such big contract. In this case it is actually a breach of contract and he/ she must suffer for that i.e. he/she must be ready to face any legal actions taken by company.

Task 2: Specific Term in Business Contract


Generally terms are broadly divided into 3 categories

Conditions: it is one of the basic requirements for the contract. Breach of conditions will enable a injured or sufferer party to claim and rebut the case along with necessary benefits or claimed thing from damage. It can be more clear from poussard v spiers (1876) where poussard did a contract with spires to sing in opera for 3 months but at last performances she fell ill and couldn’t perform so she was replaced by another lady to perform for spires and finally due to of breach of contract spires were given right to claim £83 from poussard.

Warranty: it is not so important term as it doesn’t go to root of contract. It only allows injured only to claim consequences but cannot repudiate the contract. This can be broaden by Bettine v Gye where Bettine agree to dance for Gye for 3 months but couldn’t attend some of his rehearsal class. So he was replaced by another man. Bettine was in breach of warranty so employer couldn’t end the contract as rehearsal didn’t go deep to contract.

Intermediate terms: terms of contract sometimes become difficult to classify whether as condition or warranty some task may occupy as an intermediate positions where terms can be assessed only in context of consequences of breach considering a effect on a victim or suffer party, if a loss is heavy due to of breach of contract then he/she can repudiate the contract but if injuries is minimum due to of breach then injured party’s will be restricted to damages.

2. B

Actually the general rule is that if a person agrees the contract signing the terms of contract then he/she must be bounded by it. It will be so tough that whether the man who has done sigh reading the content of contract or had done it reading it carefully or couldn’t read properly then also he must bear the effect from that contract or responsible for it. But in some case if a person had done sign in a mistaken belief that it is entirely different document, liability can be avoided in such scenario non estfactum or not my deed can be proceed In our given case also a manager has done the contract with a suppliers without reading it properly which can be more clear from Foster v Mackinnon (1869) where an old man of week eyesight was induced to endorse a bill of exchange for 3000 on the promise that it was grantee. The bill was actually for value to foster who sewed

2. C

Limiting and exclusions clauses are actually the clauses that are inserted or put in contract to limit or exclude the liability of one of the parties for the breaking or breach or negligence of the . But to relay on such clauses incorporations in contract must be there, likely interpretations is also a vital so in totality it has great legal influence on a contract which can be summarise as below.

Incorporations: a people who wish to relay on omitted or exclusion clause must show like that it is also a part of contract which can be incorporated by signing the document or by course of dealing

Signed document: if a plaintiff had done sign during having exclusions clause then it will be part of contract and must be bound by it. So in such case we can say that exclusions clauses have negative effect.

Unsigned document: exclusions may occur in an unsigned document like ticket or notices. In such case the exclusion clause must be presented properly in a document of contract. Along with it must be put in notice as for such clause people hardly bother to read about what had been written so in that case plaintiff may win the case if presented in the court.

Previous dealing: If a party is doing a constant transactions or business for a long time then whether there may be insufficient reason or notice then an exclusions clauses cannot be included so it doesn’t have so much impact

Privity of contract: third party is also affected by the limiting clauses.

When incorporation of limiting clauses occurs then it need to be interpreting which is done by following.

Contra proferentem: if there is suspicious or uncertain exclusion clause in a contract then the court will definitely punish the people who had inserted or used in a contract.

Main purpose rule: working under this rule limiting or exemption clause which is contradictory to the main contract will be strike out.

Doctrine of fundamental breach: actually unfair contract term act, 1997, clears that limiting or exclusions clause can be functionalise even when there is breach of contract that fulfils the criteria of rationality. This can be made clear by Photo Production Company v. Securicor Transport ltd (1980) where plaintiff hired a security company to guard their company. Due to of guard carelessness factory get fire and the case was taken to court and judge found a exclusion clause was clear and instantly recognizable so security company was not panelise.

So, limiting clauses have both positive as well as negative effect on the contract.

Task 3: law of tort in business activities and forms of tortuous liabilities

3. A

Tort is actually derived from a Latin word tortus which mean twisted or crooked. Tortuous liabilities arise due to breaking of law or breach of duty fixed by law that which is towards person generally and its breach is redressible by actions for damage. While Contract actually takes a form of agreement where both parties agree to do promise and accept promise legally.

Some of similarities are.

Both contract and tort create civil obligations.

The culprit who breaks the rule of contract or tort will be penalised by a law. i.e. if anybody enter into contract he/she must limit himself within that parameter otherwise they will be panelise according to the seriousness of case.

Contract and tort claims can be appeal in civil court and court had authority to look after it.

And differences are

Contract liabilities are strict whereas tortuous liabilities are based on fault.

In tort law imposes the obligations but in contract obligations are voluntarily undertaken.

If any person enters into contract then he owes duty towards his partner only. But in tort he/she owe a duty to not harm other, not use violence against them and not to encroach them.

Contractual liabilities are imposed to someone who hasn’t promise what to do, but in tort it is imposed on people who has done something or failed to do something or had committed something wrong.

The main objective of awarding damages in tort is to put the claimant in the positions where he/she would have been if he hadn’t done any fault of tort. While in contract it is to put someone if have been carried out or performed.

3. B

Any service provider will not be always responsible or liable for the tort committed by its costumer. If the client or costumer is working on his own without caring them then they must be responsible for that. In our given case also customer had entered into the hotel and due to of excessive snowfall she slide and fell in the hotel way causing some injury, here 2 cases come into play first of all if company had posted something like notice or warning in that slippery way cautioning them and if they had pass that way neglecting the notice and if he/she would have fell and if they would have gone to court then definitely verdict will be given to hotel (defendant) rather than plaintiff. Second case is that though it is responsibility of every individual to be careful while doing anything but if hotel haven’t put anything about slippery way and if they might have fell then court may find hotel as liable for that case.

3. C

The circumstances in which one people become responsible or liable for the tort of other due to of some kind of contract or relation then it can be called as vicarious liabilities for example if A is the worker of B and A was suggested to committed any kind of tort to C then genuinely B must also be liable to tort like A as he had ordered to do that then B is said to be a vicarious liable.

Vicarious liability is very important from employer points of view it caution the employer to look after their employee everything. As if anything wrong goes with employee during course of duty then he/she must be responsible for that. This can be clearer from century insurance co v. Northern Ireland Road Transport Board (1942) what happen was that the petrol lorry driver deployed to carry a oil in a underground reservoir did a firework to smoke so due to of which it caught fire and get exploded causing huge loss. After that it was cased and his employer was made liable for it as driver was negligent in carrying out unauthorised work.

Some of the employer’s duty that he must perform towards his employee is listed below.

Provisions of safe work place: before employing any employee it become the first duty of employer to cheek and take reasonable steps to find out whether the place is suitable for worker from safety and health point of view to work then only he must enforce his worker over that area. We can be clearer about it by the case of Wilson and Clyde Coal Ltd v. English (1937) where miners suffered a health and safety problem due to of negligence of their employer and it was cased and miners who were plaintiff were given the favour saying that there must be sufficient provisions for equipment and safety in work.

3. D

Safety is the most important thing that must be kept in a priority by any employer to employee and allow the use of those type of machine that really help them not only in terms of physical safety as well as mental safety. In our assessment, the case is that employee of hotel had been injured by some object during course of working and when he had claim for it from hotel management they were just ignoring it saying that all the materials they had brought is of branded quality and shop and accident happen is not due to of their cause, so in that case employee may feel insecure and may even withdraw his claim from hotel but it eye of law it is totally wrong. Actually what must happen is that employee must get the treatment along with necessary facilities which can see transparently from White v. Chief constable of south Yorkshire (1991) what happen was Mr long suffered from a electric shock during rescue work in April 1989 and he suffer from the stress disorder and after his case was filed he got a compensations of £330,000. So from this case also we can easily trace out that the hotel worker must be given compensations and if they don’t do it they must be presented to law and definitely they will be proved liable for that case.

Task 4: Elements of Tort of Negligence

4. A

Negligence is actually the most common and important tort in a law. It may be defined as careless done by anyone despite of warning or cautions. The plaintiff suing negligence must provide below listed three points to have a successful or fruitful claim.

The defendant was under the duty of care to plaintiff:

The responsibility or reasonable care to avoid hampering other enjoying one’s right can be termed as duty of care. It can be also said that the care we should do in our activities not to harm other is also a duty of care. It has been also said that if person had no duty then they would be as negligence as they can. So we must be conscious about duty. Which we can be clearer from Doughen v. Stevenson (1992) where a friend of plaintiff brought a bottle of ginger beer manufacture by defendant and drinking that plaintiff become ill as it was contaminated with remain of snail. So the case was taken to court and plaintiff win the case as defendant was negligence about his products and he was consider liable for that case.

There had been a breach of duty:

To claim for any case by a plaintiff he/she must have a sufficient proof to show that there has been a infringement of duty otherwise she cannot prove that the defendant had done negligence in his deeds and definitely defendant will be rewarded instead of plaintiff.

Breach of duty had cause damage to a plaintiff:

To prove negligence of the defendant in eye of law, plaintiff must have sufficient evidence to prove that he/she had got injured due to of such actions of the defendant then only plaintiff will win the case otherwise it may turn out in others favour.

4. B

Here in our given case study Camelot couple had book a LE Nostre hotel for a weakened stay. And during stay they found a lot of problem especially in proper accommodation, improper heating along with food problem too. So in this scenario we can suggest the following listed thing for those kinds of mishap.

It must first of all apologise for that to a couple.

As there had been negligence in their service so if this will be filed legally by couple then they might be panelise as well. So they must give necessary compensations to a couple if something goes wrong with their health or physical state as it has become legal right to claim for that since 1932 from Donoghue v. Stevenson case

Hotel must also improve the standard of everything.


So from this subject I was able to know must of things related to common law its application and consequences along with necessary things to avoid happening of breaking of law .

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