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Business is very competitive than the past that because; as a result effect of globalization. New legislations came into effect on environment of business world. These changes might stimulate more and more business or else drop business than past. Changes happen in business environment that is creating more and more business opportunities. Therefore every businessman, manager and executive must have proper understandings related laws in business environment to uplift businesses without affecting operational failures. Contract law is providing such base to increase the capacity of the business among different business sectors. Specially to get done different works immediately contracts is providing avenue for that. Therefore, contract law is playing significant role in the business context. This assignment is focusing on the following areas and that is providing deeper knowledge and understanding regarding contract law.
Describe of different type of contract and its Key elements which is calculate formation of contract
Offer, acceptance and different mode communication of an offer under.
Define intention to create legal intention and analyze to create valid contract.
Evaluate the contractual capacity in different context.
Define the terms of contracts; intermediate term, condition, and warranty as well as analyze impacts of breach of those four main facts, its legal effect.
Effect of strict liability on employees
Tortious and contractual liabilities of an employer
Evaluating major prerequisites to prove breach of duty of care.
Analysis of case studies of negligence.
Essential Element of a valid contract
1a- Different business contract and key element of contract
According to definition “Contract is an agreement which will be enforced by law”. ODA can two types of contract;
Buying & selling contract – Under this contracts two parties willing to creating
Contract for sale of goods
Contract for an agreement to sell goods
These types of contracts are based on price consideration as well as nature of the goods. Therefore ODA can create contract to buy or sell and hold land under sales of goods act. Because of when lands buy or sell where two parties agree or providing value for those goods, it is controlled by sales of goods contract. As an example, if an ODA want buy land for their development works, they are having various opportunities called “offer” and ODA can accept those offers if it is match with their requirement.
Service contracts – Here both party collectively form a contract rendering services and receiving service. Ex. Employment contract, assign agent to get done some works. Make an arrangements for building works, develop transport system, traffic controlling comes under service contract.
To create valid contract major elements are;
Need two parties and must have an agreement between two parties. Since Nobody can agree with himself to enter into an agreement
On party must make an offer and the other party must accept it.
There must have valuable consideration
Both party must have contractual capacity
Genuine of consent must be given by both parties
Legal object – object of contract must be legal if it illegal, that will be void or voidable contract.
Legal intention – When ODA and other part creating contract both parties need to have legal intention to bind relation to that contract.
Contract must fulfill different legal requirement – specially when creating contract it should not be affect on the general public morale, prevent or clash with government activities.
1b- Rules on offer, acceptance and communication of acceptance
The following major rules on offer ODA need to considered when creating valid contract;
When Offer is made, that must have intention to legally bind from that offer
Offer must clear and specific – Offer must be clear and specific, if offer is vague or else offeree is making cross offer in return, there no valid contract. Gunthing vs. Lynn case is most valid example for this rule
Here one party made an offer to buy a horse for 30 GBP with statement “if the horse lucky to win the race, I will pay extra 30 GBP”.
Party who made an offer neglected the above condition.
Under that case the court was decided there is no valid offer to create valid contract, because of that offer is no clear and specific.
Offer must be communicated to offeree – This most important, if the offeree does not know regarding offer, that offer is considered as an invalid offer.
Acceptance of an offer communicate in writing, by word and by conduct as well as communication of an offer is came to effect, when offer is get know it officially way. If an acceptance is get to know unofficial manner that is consider as invalid acceptance. Therefore ODA need to consider when communication of an acceptance need do official manner (via authorized person).Here there are two rules considered;
If offerer has given authority to act straight way, at that time, if the offeree act on immediately that is considered as an immediate acceptance. Ex Carlill vs. Carbolic smoke ball company.
Acceptance in instantaneous contracts – In the case of instantaneous communication, namely, communication between two parties present, or communication by telephone, telex or facsimile transmission, the contract is complete only when the acceptance is received by the offeror and not merely when transmitted.
Acceptance by post – Where contract are made by letter, telegram or cable they are said to be made by post.In such case depend on the intention of the parties, whether the general rule for the communication has to be statement shall apply (i.e –whether the general rule for the communication has to be communicated to offeror, or whether the mere posting o such an acceptance and not it’s at the address of the offeror, shall be sufficient.The general rule is that acceptance must be commincated to the offeror to be effective.The postal rule is an exception to that. The postal rule is that where the post is reasonably to be expected as the means of communication, then the acceptance takes effect upon posting.This exceptional rule does not; however apply to revocation of an offer. As an Ex. Adams vs Lindsay, House Hold Fire Company vs. Grant provide base of communication of acceptance an offer.
1c.Intention to create legal relations and consideration for validity
Parties (ODA and other party) must have intended to their agreement to have legal consequences. If any party who fails to fulfill a promise undertaken with ODA agreement or contract, take legal action against those parties. This principle creates legal relationship between ODA other party as a result of this principle other party very well know that, ultimate result of breach of duties as well as performance of an agreement. On the other hand to form a valid offer there should be consideration. Consideration is some benefit received by party who gives a promises or perform an act, performance an act, or detriment suffered by a party who receive promise. It may also define as “that which is actually given or accepted in return for promise. This was defined by the court in Currie vs. Misa as “ some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by other” . But to this definition there should be added the the benefit accruing or detriment sustained was in return for a promise given or received. That is clear, when the ODA must provide value consideration to other party as above mentioned for their contract to get done ODA requirement in advance.
1d. Legal position in relation to capacity of ODA
According to ODA case they ODA contractual capacity created by specific act. When any act passed in the parliament, where it is comes with documented manner, so that act is define the following area;
Name of that authority which is going to create
Opening spate account
Objectives of that authority
Power of that authority
Management of that authority, timer duration of post holding, resignation, disqualification of holding such post.
Common seal and its usage
Accounting records and receipt of grnats
Creating contract with other parties
So the act itself is define ODA as an legal entity (consider as person in front of law) and capacity enter into contract. That act has provided ODA to create contract any type of contract between other parties.If ODA made contract with a person whom in the the following category, considered as disqualified person to make contract;
Minors (Age less than 18)
2a. Legal implication of breach of specific termTerms in contracts
The undertaking and promises contained in the contract are known as the term of the contract.ODA could state in their terms in the contract when they creating contract. Specially there are two type of terms could be recognized in formation of contract. Terms are material and those can in the form of express term and implied term. If any party is deviate or break any of term in contract, the below mentioned remedies could apply by ODA.
Terminate contract – ODA can cease the contract with that party.
Reject fulfill contract further – Other remedy is that ODA can reject to fulfill remaining duties and obligation towards other party.
Asking compensation – ODA could demand the compensation breach of terms
Ask to fixed order from court to complete contract – This preventing other party neglect their obligations and responsibilities by ODA when breach terms of contract
2b. Application of conditions, warranties and intermediate term
A condition is a major term that is vital to the main purpose of the contract. As an example ODA could apply condition when they issue of ticket for audience, building works, development road transport, etc. A breach of condition will entitle the injured party to repudiate the contract and claim damages. The injured party may also choose to go on with the contract, despite the breach, and recover damages instead. This was highlighted in the case Poussard v Spiers (1876).Based on that if ODA suffers any damage as result of work that they handed over to the other can legal action to get done work completely.
A warranty is a less important term: it does not go to the root of the contract. Warranty can apply when the ODA getting service of other agencies. Breach of warranty will only give the injured party the right to claim damages.This was prove in case of Bettini v Gye (1876).
It may be impossible to classify a term neatly in advance as either a condition or a warranty. Some undertakings may occupy an intermediate position, in that the term can be assessed only in the light of the consequences of a breach. If a breach of the term results in severe loss and damage, the injured party will be entitled to repudiate the contract; where the breach involves minor loss, the injured party’s remedies will be restricted to damages. Therefore ODA could apply to free from the contractual work which are having lesser importance. Effect of Intermediary term was proven in the following case laws.
Hong Kong Fir Shipping Co v Kawasaki Kisen Kaisha  1 All ER 474
The Mihalis Angelos  1 QB 164
The Hansa Nord  QB 44
Reardon Smith Line v Hansen-Tangen  3 All ER 570
Bunge Corporation v Tradax Export  2 All ER 513
2c. Legal effect of exclusion clause and limiting clause
An exemption clause of a contract is containing in contract to reduce the liability of one the party to the contract fully or partly, suppose if the ODA is breach the contract, ODA is having an opportunity to free from contractual obligation. But, if any case is arise in relation exclusion clause and limiting clause following things are considered by court;
The court looks upon such clauses with considerable disfavor, especially where the parties to the contract are not of equal bargaining power.
Especially when the ODA is add exemption clauses must consider the requirement of reasonableness. There are some cases where exemption clause or limitation of liability clause will not effective because of those case have to fulfill requirement of reasonableness. Those situations are;
one clause seeks to exclude or limited liability for certain statutory implied terms (as to description, quality and sample)
Situation where the clause seeks to exclude or limit liability for loss or damage (other than the death or personal injury) caused by negligence.
Where the one party deals as a consumer or on the other party’s written standard term of business.
Where the consumer is not dealing as consumer.
Where the clause seeks to exclude or limit liability for misrepresentation.
The following cases can be shown relating to exemption clause and limiting clauses
Exclusion clause is contained in a signed contractual document, the signatory is bound by the clause unless show it as fraud or misrepresentation in regard to the clause. Ex Curtius vs. Chemical cleaning & Dyening company.
When notice of the exclusion clause is not given until after contract been completed the clause will be ineffective. Ex. Olley vs. Marlborough Court Ltd.
If the party subject to the clause has had previous dealing with the party relying on it, the court may readily infer knowledge of exemption clause
Any exclusion clause incorporated in receipt, ticket or a voucher is invalid, if prior notice is not given. Ex Parker vs. South eastern Railway Co.
Law of tort in business activities and form of tortuous liability
3a. Comparison and contrasting tortuous and contract liability
Tortious liability and contractual liability are creating under civil law obligations.
Breach of duties may cause to claim for damages.
Civil courts have jurisdiction to hear contract and tort claims.
Contractual obligations undertaken voluntarily but tort liabilities do not have free choice, law impose the obligation. According to contractual obligations are owe only for other party, but in tort owes obligation to all the parties. Example of Tortious liabilities of ODA are; Protect the employees health, security and safety and Protect the public safety and security within ODA developed premises
This means not to use violence against to them as well as any property which is belonging to them.
Contractual liabilities are strict for the contract, same time tortuous liability is based on the fault.
Contractual liabilities are attached with person who does not complete his promises under contracts. In tort implemented on someone who has to do something or has failed to do something, at that situation those tortious liabilities are imaged.
Objective of awarding damages in the contract is to put contract breached party in the position to perform it when it tort. Sometimes contract breached party would not put claimant position; because of he would have not been break tort.
3b. Liability of ODA as an occupier of Olympic premises
Under the occupier liability act has defined “occupier is any person who has a sufficient degree of control over premises. See:
Wheat v Lacon  1 All ER 582 – landlord and tenant of pub both owed duty of care to guest injured on stairs. However, no breach on the facts
Harris v Birkenhead Corp  1 All ER 341 – council was the occupier of a compulsorily purchased house, which was no longer resided in by previous owner.
ODA is having liability to care Visitors of Olympic park
As occupiers of ODA owes a duty of care to all lawful visitors (s1(2)). Relevant cases include:
Greenlagh v BRB  2 All ER 114 – no liability for injury to P on bridge built under statute for owners and occupiers of land adjoining railway. Nor was P a visitor.
Stone v Taffe  3 All ER 1016 – duty owed to visitor who did not know that the licensee who managed a pub had exceeded permission to use it after 10.30pm.
McGeown v NI Housing Executive  3 All ER 53 – no liability on occupier to maintain a public right of way.
The common duty of care is a duty to take such care as in all the circumstances of the case is reasonable to see that the visitor will be reasonably safe in using the premises for the purposes for which he is invited or permitted to be there (s2(2)).
Simms v Leigh RFC  2 All ER 923 – P injured by hitting concrete wall surrounding rugby field. D not liable as injury foreseeable but so improbable that it was not necessary to guard against it. D also accepted risk of playing on field complying with bye-laws.
Cunningham v Reading FC  Times LR 153 – D liable to police injured by concrete loosened from terraces. D neglected to take precautions against clearly foreseeable acts of violent supporters.
ODA is having liability to care children’s safety
An occupier must be prepared for children to be less careful than adults (s2(3)(a)). Therefore, if an occupier admits children to the premises the child visitor must be reasonably safe. See:
Glasgow Corp v Taylor  1 AC 44 – 7 year old died after eating poisonous berries in park. D knew of the berries but took no precautions against children. Held: good cause of action to proceed to trial.
Pearson v Coleman Bros  2 KB 359 – 7 year old girl left circus tent to find toilet; walked past lions cage in separate zoo enclosure and mauled. D liable as the prohibited area had not been adequately marked off.
Phipps v Rochester Corp  1 All ER 129 – D not liable to boy aged 5 who fell into trench while walking across open ground with his sister aged 7. No breach of duty as reasonable parents will not permit young children to be sent into danger without protection.
Titchener v BRB  3 All ER 770 – no duty owed to 15 year old walking across a railway line at night, hit by train. P knew of the line, dangers involved and the need to look out for trains.
Jolley v Sutton LBC  3 All ER 409 – D liable to boy injured repairing boat abandoned on council land. D knew of boat and that it was a danger.
3b.Nature of liability of ODA as an employer and effect of doctrine of vicarious liability
The employer’s duty to his employees is commonly dealt four headings, the provision of:
(a) Competent staff
(b) A safe place of work
(c) Proper plant and equipment
(d) A safe system of work.
These are simply aspects of the broader duty to see that reasonable care for the safety of employees is taken. Under safe place of work ODA must take action as an employer take such steps as are reasonable to see that the premises are safe. this was not mentioned by Lord Wright in Wilson & Clyde Coal (above), it has been accepted by the courts, eg Lord Greene MR in: Davidson v Handley. Therefore ODA must look at the following areas as an employer regarding their employers.
ODA need to provide better working conditions for their employees. Ex. Allow employees to rest after having heavy duties.
Ensuring health & safety of employee – As an employer, ODA is liable, care about the employee’s safety & health at office premises, plant, factory, etc. To ensure employer safety & health has to apply following rules;
Providing clear instructions regarding works and usage of instruments
Providing safety guards & safety equipment (Ex eye guard, helmet, boots)
Other provision for health & safety instructions (Ex. first aid box)
3d.Difference of strict liability and tortious liability
Strict liability is the liability that comes under employer liability to have reasonable care to provide proper appliances, and to maintain employer’s proper working conditions. As an employer, ODA is having strict liability. But, Tortious liability is bigger than strict liability. Under that Tortious liability ODA need look at the broader sense in the following ares;
Liability as an occupier need to look at visitors, children’s, sportsman’s ,womens and audience.
To protect employers safety & helath
Other property , lands and buildings
4a.Key elements to prove negligence and damage for claim Element of the tort negligence
To prove a claim in negligence against the ODA, plaintiff must prove mainly 3 key facts and court is analyzing those situations fact presence by plaintiff, to deter mine whether it is negligence or not, those major facts are
A duty of care
A breach of duty
Damage to plaintiff caused by the breach
Basically negligence is a tort law that is determined based on the existence of breaking the duty of care. To get analyze the negligece, Donoghue v.Stevenson case provides better avenue.
Mrs. Donoghue consumed part of a ginger beer drink that was contained braked (decomposed) snail .Once after having drink she was got sick at that time snail was invisible. Bottle of beer drink that was contained was opaque. Friend were aware of the snail’s presence. Beer manufacturer was the Mr.Stevenson and Mrs. Donoghue sued against Mr.Stevenson by demanding damage for negligence. Because of there was no contract between Mrs. Donoghue and Mr.Stevenson. Therefore Mrs. Donoghue was not possibility to prove breach of contract because of there were no contract between Mrs. Donoghue and Mr.Stevenson. As result of this case court were decided that
Mrs. Donoghue having right to claim, but disagree to as to why such claim should exist.
Judged board was treated as a new liability case.
Lord Atkin argued that the law should be recognized a unifying principle that we owe a duty reasonable care to neighbours and get support from the bible for his argument.
In the Bible is highlighting that “thou shalt love thy neighbour” which was create avenue determine the liability under negligence; those main determined facts are;
Defendant is having duty of care to the plaintiff
Breach of that duty by defendant which is as per se negligence
Harm in fact suffered by plaintiff
Defendant’s breach being a cause of that harm.
4b.Case study analysis Therefore to prove any negligence that made by ODA need highlight the above main three facts to determine to court whether it is harm or damage happening to third parties
In this case prove ODA has not fulfilled strict liability and tortuous liability against their employee. Because of Doctor also does not the care of that employer nausea. This situation is serious that is because food poisoning case employee might die as an ultimate result but it was not happen. But ODA has neglected reasonable care of their employee in that case. In the case of arsenic poisoning, if ODA has provided reasonable safety instructions and equipment, that situation could consider as reasonable duty of care. If the ODA has not provided reasonable safety instructions and equipment for that employee ODA need pay compensation for that family, because of ODA has breached tortuous duties.
According to the case studies the following main head point can be concluded;
This case study highlighted importance of commercial law for any type of commercial and noncommercial activity.
As well as, that is mainly pointed out, application of different law theories, different context
It is highlight different parties duties and responsibilities and legal implication.
Specially to expand the business activities contract law is providing the bridge for that.
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