Aspect of Contract and Negligence

Aspect of Contract and Negligence

Individual Assignment

Acknowledgement
I would like to express my gratitude to Mr.Frank Gunasekara who gave me the possi ility to complete this assignment and for the guidance and support they gave in preparation of this study. !specially" I would like to give my special thanks to my parents who ena led me to complete this work. #owever" it would not have een possi le without the kind support and help from my friends. $ast ut not the least I would like to thank all our peers and staff at I.C.%.& and specially Mr.'ilum our coordinator who were ready to lend a hand in whatever way they can. I am making this pro(ect not only for marks &hanks again to all who helped me. ut also to increase my knowledge.

Page )

Aspect of Contract and Negligence

Individual Assignment

Executive Summary
&he reason of this study is to learn the asic legal principles for which we can use in the practical aspect of usiness. Also from the case studies which is given is very helpful for practical day to day issues. &his study is focused on non*lawyers therefore we should give a clear picture of the concepts such as the contracts" negligence torts " reach of conditions etc. this is also helpful to understand and learn the legal terms used in usiness contracts. &his study helped me to understand the key elements of a usiness contract" &ort of Negligence and also the conse+uences of reach" and also to apply the rules and laws for practical scenarios. &his assignments help to me understand the key elements of the valid contract and conse+uence of %reach of Condition" Contract" ,arrantee" Intermediate term.

Page -

Aspect of Contract and Negligence

Individual Assignment

Table of Contents
1. Introduction !. Task "ne
Sim$le contract Contract under seal Signature 'nilateral Contract (ilateral Contract *ultilateral Contract

0 0#
0% 0% 0& 0& 0) 0)

+. Task Two

1#

(reac, of Condition (reac, of -arrantee (reac, of Intermediate term

1% 1% 1&

.. Task T,ree

!0

. Task /our 0Case Study1 #. Conclusion

!. !&

Page .

Aspect of Contract and Negligence

Individual Assignment

%. 2eference 3ist Introduction

!)

In this modern world every one facing so many pro lems in their life style. /ome situations people they do not know how to face their pro lems. If we know the rules of the law it is easy to manage and solve our pro lems. In this assignment I go through some cases and refer that answer my +uestions. &he case /tudy I have the famous case of 'onogue vs /tevanson. &his is very help for the usiness. And the minor0s contracts and agreements cases also I have to answer that.

Page 1

Aspect of Contract and Negligence

Individual Assignment

Page 2

Aspect of Contract and Negligence

Individual Assignment

Task "ne 0411 1. Sim$le Contract &he evidence of which is merely oral" or in writing" not under seal" or of record it called /imple Contract. As contracts of this nature are fre+uently entered into without thought or proper deli eration" the law re+uires that there e some good cause" consideration or motive" efore they can e enforced in the courts. &he party who making the promise must have o tained some enefits or the party to whom it is made must have constant some inconvenience in conse+uence of such promise3 %ut it must e recollected this rule does not apply to promissory notes" ills of exchange or commercial papers. A num er of people thinking +uite wrongly a out" that a contract must e made in writing and e signed y the party making it. &his is a reasona le fault ecause a very large num er of contacts are in writing. %ut the asis for that is ecause it is sometimes more convenient to have a written record of the terms of the contract rather than ecause the law re+uires it so.

Page 4

Aspect of Contract and Negligence

Individual Assignment

!. Contract under Seal A contract under seal is a formal contract which does not want any thought and has the seal of the signer attached. A contract under seal must e in writing or printed on paper. It is conclusive etween the parties when signed" sealed" and delivered. A contract under seal is also termed as sealed contract" special contract" deed" covenant" specialty" specialty contract or common*law specialty. 'elivery is made either y actually handing it to the other party or y stating an intention that the deed e operative even if it is retained in the possession of the party executing it. A contract under seal is a written promise or set of promises which derives its validity from the form" and the form alone" of the executing instrument. &he only re+uirements are that the deed should e intended and should e signed" sealed" and delivered.

+. Signature A /ignature simply means handwritten y a person or at the direction of the person for purposes of authentication of a document. It may also e a duplicate signature" affixed y a special machine at the person0s order" or a uni+ue digital code that is necessary for e* commerce. In contracts" the act of writing one0s name upon a deed" note" contract" or other insure" either to identify or authenticate it" or to give it validity as one0s own act. &he name so written is also called a 5signature.6

Page 7

Aspect of Contract and Negligence

Individual Assignment

.. 'nilateral Contract

A contract is which only one party makes an express promise, or undertakes a performance without first securing a reciprocal agreement from the other party. &he unilateral contract means one party 8the offeror9" makes a promise in exchange for an act y another party" known as the offeree. If the offeree acts on the offeror:s promise" the offeror is legally o ligated to fulfill the contract" ut an offeree cannot e forced to act 8or not act9" ecause no return promise has een made to the offeror. After an offeree has performed" only one enforcea le promise exists" that of the offeror. A unilateral contract differs from a %ilateral Contract" in which the parties exchange mutual promises. %ilateral contracts are commonly used in usiness transactions3 a sale of goods is a type of ilateral contract. ;eward offers are usually unilateral contracts.

. (ilateral Contract A ilateral contract means a mutual arrangement etween two parties where each

promises to perform an act in exchange for the other party:s act. !ach party is to its own promise" and a person to whom another is re+uired or ound on the other party:s promise. A ilateral contract" as opposed to a unilateral contract" is the type of contract that fre+uently comes to mind when contemplating contracts. An example would e the contract for the sale of a land. A land uyer agrees to pay the seller a certain amount of money in exchange for the title to the land3 the land seller agrees to deliver the title in exchange for the specified sale price.

Page <

Aspect of Contract and Negligence

Individual Assignment

#. *ultilateral Contract A Multilateral contract is an agreement among two or more than two persons" firms" or governments. Multilateral agreements have ecome an increasingly important means for nations to resolve important issues in a way that esta lishes common ground and resolves actual and potential points of difference. It is fre+uently re+uire complex negotiations necessary to resolve the differences etween the various parties and ring them into agreement. 41.1.!

5ey Elements of a 6alid Contract

1. "ffer. &he =ffer itself must e certain3 it must e notified to the party to whom it was made 8the offeree9 although an offer may e made to no one person in particular. An offer can e oral or written as long as it is not re+uired to e written y law. It is simply what is offered to another for the return of that other party:s promise to act. It must e spelled out in terms that are specific and certain" such as the identity the o (ect which is eing offered and under what conditions it is offered. Offeror :- the person making an offer Offeree :- the person who receives an offer from another party

Page >?

Aspect of Contract and Negligence

Individual Assignment

!. Acce$tance. &he acceptance is an offer must e accepted exactly as it stands and the acceptance must e completely in accordance with the terms of the offer. &he acceptance of the offer made y one party y the other party is what creates the contract. &his acceptance" as a general rule" cannot e withdrawn" or can it vary the terms of the offer" or modify it. &hough this proposition may vary from state to state" the general rule is that there are no conditional acceptances y law. In fact" y making a conditional acceptance" the offeree is re(ecting the offer. #owever the offerer" at his choosing" y act or word which shows acceptance of the counter*offer" can e ound y the conditions tendered y the offeree. Essentials of a Valid acceptance Acceptance must e a solute and un+ualified. It must e communicated. It must e according to the mode prescri ed. It must e given within the time specified or within reasona le time. It must e response to offer. It must e given y the person to whom the offer is mode.

Page >>

Aspect of Contract and Negligence

Individual Assignment

+. Consideration. &his has een defined y @ollock as 5the price for which a promise is ought6.

Again it does not usually

ecause the courts must difficulty in esta lishing that

consideration is present ecause it is the element of exchange in a argain. =nly when a person has made a gift to another person will there e no consideration. If there is no consideration and then the party who has made a promise reaks his promise then the other party will not e a le to sue successfully as he gave no consideration in return for the promise of the other. Consideration for a contract may e money or may e another right" or enefit" or loss or responsi ility given up to someone else. Consideration is a necessary element of a contract. As a word of caution" it should e noted that consideration has to e expressly agreed upon y oth parties to the contract or it must e expressly implied y the terms of the contract. &he consideration must e explicit and sufficient to support the promise to do or not to do" whatever is applica le. .. Ca$acity of t,e 4arties to Contract. &he common presumption of the law is that all people have a capacity to contract. A person who is trying to avoid a contract would have to plead his or her lack of capacity to contract against the party who is trying to enforce the contract. For example" he would have to prove that he was a minor" ad(udged incompetent or drunk or drugged" and so forth. =ften this is the most difficult urdens of proof to overcome due to the presumption of one:s a ility to contract.

Page >)

Aspect of Contract and Negligence

Individual Assignment

. Intent of t,e 4arties to Contract. It is a asic re+uirement to the formation of any contract" e it oral or written" that there has to e a mutual assent or a Ameeting of the mindsA of the parties on all proposed terms and essential elements of the contract. It has een held y the courts that there can e no contract unless all the parties involved intended to enter into one. &herefore" mere negotiations to arrive at a mutual agreement or assent to a contract would not e considered an offer and acceptance even thought the parties agree on some of the terms which are eing negotiated. %oth parties must have intended to enter into the contract and one can not have een misled y the other. #. "b7ect of t,e Contract. An o (ect of the contract is not enforcea le if its o (ect is considered to e illegal or against pu lic policy. In many (urisdictions contracts predicated upon lotteries" horse races" or other forms of gam ling would e considered illegal contracts. /o far in some states these types of contracts are valid. /ome state laws make contracts in restraint of trade" price*fixing and monopolies illegal. &herefore" a contract which violates those statutes would e illegal and unenforcea le. &his is true for drugs and prostitution or any other activity if considered criminal.

Page >-

Aspect of Contract and Negligence

Individual Assignment

41.!. BuestionC

=n .th Dan Eera makes $iam on offer y letter. =n ?<th Dan $iam writes accepting the offer on >?th Dan $iam sends Eera a fax"Ahave changed my mind. Ignore letter of ?<thA. #aving received the fax" Eera sells the goods to Max on >>th Dan. =n >)th Dan $iam:s $etter arrives. &hat afternoon $iam telephones Eera to tell her he now wishes to proceed. Advice Eera.

AnswerC =ffer is accepted y the letter posted on the < th Dan" according to the postal rule 8Adams case9. %y post at the movement of the post it ecomes as acceptance. Further fax* may not e considered as revocation. %ut it is only the agreement stage and not for the contract. In order to have remedied it should e a contract. In order to esta lish the lia ility it is necessary to prove the consideration. If there is no consideration there is no contract. $iam could not succeed against the Eera.

Page >.

Aspect of Contract and Negligence

Individual Assignment

41.+.1. BuestionC

%efore they married" Frank @romised Gail a monthly allowance for her own use. &hey separated and Frank stopped payment. ,hat are Gail0s rightsF ,ould your answer e different if" following their separation" Frank had agreed to continue the payment as maintenanceF AnswerC ,hen Frank promised to Gail at the time they don0t had any relationship. According to the law without the marriage there is no legal right and o ligations will e created in etween them. Further Gail could not go against Frank since the promise is made efore the marriage. &here is no legal o ligation to maintain Gail. 41.+.!. BuestionC /tuart agreed to purchase ?) tons of copper tu ing from &im" to e delivered no later than )? March. =n >?th March" /tuart agreed to sell part of the order to Glla. &o ensure delivery" Glla offered to pay &im H>?? if the tu ing was delivered to /tuart y )? th March. &im delivered it on ><th March and demanded the H>??. Glla refused to pay. Advice &im.

Page >1

Aspect of Contract and Negligence AnswerC

Individual Assignment

In this case" /tuart has to pay the money to &im. According their promises Glla offered to pay H >?? to &im if he delivered the tu ing to /tuart y )?th March. If a person does not perform him part of contract at the stipulated time" he will e lia le for its reach. %ut &im delivered the items efore )?th march. &herefore &im is entitled to sue Glla for %reach of promises.

41... BuestionC 'an aged >4" marries and purchases two dresses on credit for his wife !rma. ,hen the accounts. Arrives he refuses to pay. Advice the shopkeeper.

AnswerC
One who has not attained full age is treated as a minor. Infancy under the law, means the period of life which precedes the completion of the twenty- first year. In this case, Even Dan is under 18 he is liable for the purchase two dresses to his wife. cannot ma!e a contract. minor can be a promisee or beneficiary. minor ccording to the law

of contract minors can involve into contract to fulfill basic necessities. "he owner can sue Dan pay the money. If he could not pay money, his wife shall pay for it or those may be returned as the same.

Page >2

Aspect of Contract and Negligence

Individual Assignment

Page >4

Aspect of Contract and Negligence

Individual Assignment

Task Two 04!1 4!.0 8efinition of Conse9uence of t,e breac,

2.1.1 Consequence of the breach of condition A condition is a ma(or term that goes to the root of the contract. /uch term is essentials to the main purpose of the contract and therefore the in(ured party is entitled to repudiate the contract as well as make a claim for damages.

2.1.1 Consequence of the breach of warrantee ,arranties are certain kinds of express or implied representations of fact that the law will enforce against the warrantor. Page >7

Aspect of Contract and Negligence

Individual Assignment

&he action for reach of one of these warranties has aspects of oth tort and contract law. Its greatest value to the in(ured product user lies in the fact that lia ility for reach is strict. No negligence or other fault need e shown. #owever" in addition to the private limitation" certain contract*related defenses have impaired the remedy:s usefulness. &his word has several significations" as it is applied to the conveyance and sale of lands" to the sale of goods" and to the contract of insurance.

2.1.1 Consequence of the breach of Intermediate term An intermediate term" fre+uently descri ed as an 5innominate term6" is a contractual term the importance of which lies somewhere etween a condition and a warranty. !very reach of such a term gives rise to a right to claim damages" ut only a serious reach gives rise to a right to terminate the performance of the contract. &he reach of such a term may eit,er entitle the innocent party3 I to rescind the contract or I otherwise entitle him to claim damages I depending upon the circumstances

4!.! BuestionC

Page ><

Aspect of Contract and Negligence

Individual Assignment

'elma signed a document she did not read ecause her glasses had een roken. /he was informed that it was a mortgage re+uired to satisfy a finance company. In fact" it was a memorandum of transfer of her property to !ric" a rogue who proffered the document. Advice 'elma. AnswerC 'elma shall have duty to read the contents efore him sign. !ven he could not read she has a duty to ask any responsi le person to read the contents. If he was told differently he may prosecute criminal action against the finance company for cheating and file a caveat in the land registry soon. 4!.! BuestionC Alma takes her expensive fur coat to %en0s dry*cleaning esta lishment. /he is handed a ticket" the face of which contains a num er" her name" a description of the coat and an annotation to the effect that the coat will e ready the following Friday. =n the reverse side in small print are the wordsC 5we will not e responsi le for any loss or damage of whatever nature or howsoever caused6. =n Alma0s return the coat is adly torn. Advice her

AnswerC According to exemption clauses law here the given exemption clause is not valid since it was not given to the Alma at the time of the contract or efore. It is necessary the notice of the exemption shall e given efore Alma hand over the cloths or pay the money.

Page )?

Aspect of Contract and Negligence

Individual Assignment

According to the facts given %en is responsi le for the damaged cloths. 4arker v. Sout, Eastern 2ailway

Page )>

Aspect of Contract and Negligence

Individual Assignment

Task T,ree 04+1 4+.1 &his situation is well illustrated in the famous case of 'onoghue vs /tevanson. In that case Ms. 'onoghue0s friend ought for her a ottle of ginger eer which contained the decomposed remains of a snail. Ms.'onoghue0s friend gave the ginger eer to Ms.'onoghue who" having drunk some of the poisonous li+uid and seen the remains of the snail out on her ice cream" suffered in(ury. As Ms.'onoghue had not herself purchased the ginger eer she was not in contractual relationship with the seller of the ginger eer therefore there was no +uestion of suing that person under the /ale of Goods Act. &he only possi le person who might e lia le was the manufacturer of the ginger eer Mr./tevanson. Finally Ms.'onoghue succeeds in her action against Mr./tevanson ut there was no contract etween Ms.'onoghue and Mr./tevanson. Accordingly the situation is that the uyer of ginger eer can sue the seller of the ginger eer" and in this case the seller will e strictly lia le to the uyer. &his means that the

Page ))

Aspect of Contract and Negligence

Individual Assignment

uyer who has een in(ured is not re+uired to show any mistake on the part of the seller. &he seller will e automatically lia le simply ecause the person has sold ginger eer. &hus it has made it impressive for producers to e careful as regards the packaging of their products" and they must not suggest y the packaging that the product can e used in any manner which is unsafe. Liability will fall upon the following. >. &he producer. 'efines the producer asC a. &he person who manufactured the product3 . In the case of a su stance that has not een manufactured ut has een won or a stracted" the person who won or a stracted it" which covers mining and +uarrying. c. In any case a person who has applied an industrial or any other process affecting the essential characteristics of the product. ). Any person who puts his own name on the product or uses a trademark or other distinguishing mark in relation to the product in other words has held himself out as eing the manufacturer of the ginger eer 8 Mr./tevanson9. &his is 4+.! A fireman is in(ured at a fire negligently started y the occupier. Gnder the 5'uty of occupier6 the fireman can claims against the occupier. According the 5=ccupiers Act6 of ><14 the fireman who is a visitor is not knowledgea le of safety in an activity taken place in the premises of occupier. &herefore the occupier is lia le in this case. &he fireman cannot claim under reach of duty of care. Gnder the duty of care occupier is not lia le for the damages.

Page )-

Aspect of Contract and Negligence

Individual Assignment

4+.+ A $td owns a num er of nightclu s. % Co hires % Co hire ouncers for nightclu work. Eevin hired on % Co0s ooks for six months. A $td tells Eevin that under no circumstances must he drink on duty or strike a customer unless he is attached first. %ut he gets drunk with his friend of his C " and Eevin chases him. C is seriously in(ured. According the Act of employment etween and A and C no lia ilities no terms and conditions. %etween % and C no lia ilities ut According the (oint lia ility % they have to protect their customers. At this situation C in(ured ecause of their employee. %etween Eevin and C there is %ridge of contract. In this case %.Co can sue Eevin with the law rules of ridge of contract. C cannot apply for claim with A $td or % Co. #e can apply the claim with Eevin who in(ured C. 4+.. ' and ! are neigh ours and they have een stalls in Meadow $ane for hundreds of years. F started a mo ile stall in the same lane. F stall makes smell. ! tries to sell her property ecause of the smell she has to reduce the price. After that ! ask to F move on and send a letter. F starts to fire and !0s property where it urnt down an outhouse. %ut F vows to continue selling chestnuts from the same place in the future. In this case ! cannot send a letter or legal notice to F ecause he has the stall in the pu lic lane not a private one. According the /tatutory Nuisance" @arliament has declared certain activities nuisance y statute. &hey are usually part of pu lic health reform and so pre(udicial to health more than pre(udicial to land" e.g. Clean Air Act ><12. 8 F stalls makes smell to others9 &hey provide a means of stopping nuisance and save the victim the cost and inconvenience of Civil action.

Page ).

Aspect of Contract and Negligence

Individual Assignment

Page )1

Aspect of Contract and Negligence

Individual Assignment

Task /our 04.1 4..1.1 4roximity test

In common law" a person can claim damages from another person where that other person owed the first person a duty of care and harmed that person during their conduct in reach of that duty. &his concept existed prior to Ms.'onoghue" ut it was generally held that a duty of care was only owed in very specific circumstances" such as where a contract existed etween two parties or where a manufacturer 8Mr./tevenson9 was making inherently defective goods or was acting fraudulently. &here was no contractual relationship etween Ms.'onoghue and the ginger eer

manufacturer or even the cafe owner" as Ms.'onoghue had not ordered or paid for the drink herself. Although there was a contractual relationship etween the cafe owner and Ms.'onoghue:s friend" the friend had not een harmed y the ginger eer. As ginger eer was not a dangerous product" and the manufacturer had not fraudulently

Page )2

Aspect of Contract and Negligence

Individual Assignment

misrepresented it" the case also fell outside the scope of the esta lished cases on product lia ility. =n the face of it" the law therefore did not provide a remedy for Ms.'onoghue. 4..1.! 2easonable foresee ability test In negligence and nuisance nowadays foresee a ility is the test to e applied in

determining inaccessi ility of damage. &he defendant must also foresee the type of harm for which the applicant seeks to make him or her lia le. &he defendant is not lia le if he or she could not foresee any damage3 neither is the defendant lia le for a particular type of damage if he or she could not have foreseen this type of damage. According to this rule if the defendant could foresee a particular psychological in(ury to the applicant then he or she will e held lia le for all the psychological in(ury that follows on account of the applicant:s particularly weak pre*accident condition" even if it turns out that the in(uries to the" applicant were far more than might reasona ly have een expected in normal conditions. 4..! 8efense for :egligence :egligence is a failure to exercise the care that a reasona ly prudent person would exercise in like circumstances. Ginger eer sold y the manufacturer 8Mr./tevenson9 to a distri utor in circumstances which prevent the distri utor or the ultimate purchaser or consumer from discovering y inspection any defect" is under a legal duty to the final uyer or consumer to take reasona le care that the case is free from defect likely to cause in(ury to health.

'uty

Negligence

%reach

'amage Page )4

Aspect of Contract and Negligence

Individual Assignment

Causation

;emoteness

In order to support an action for damages for negligence the complainant has to show that he has een in(ured y the reach of a duty owed to him in the circumstances y the defendant to take reasona le care to avoid such in(ury. In the present case we are not concerned with the reach of the duty.

Conclusion
&he purpose of this assignment is to find asic legal principles which can e applied in the practical aspects of %usiness. &his assignment helped me to understand the most legal terms in a usiness contract J applied the /pecific tort of negligence. !very case help to face the present situations and pro lems. After done this assignment I can understand the contract agreement and etc. ,e are non* lawyers ut now we can manage our pro lems in usiness and other part of situations. Get the information a out the key elements of a valid contract. ,ith the example of cases I feel easy to advice the parties.

Page )7

Aspect of Contract and Negligence

Individual Assignment

2eferences
httpCKKcase rief.wikia.comKwikiK'onoghueLvL/tevenson httpCKKen.wikipedia.orgKwikiK'onoghueLvL/tevenson httpCKKlegal*dictionary.thefreedictionary.comKcontract httpCKKlegal*dictionary.thefreedictionary.comKwarranty httpCKKwww.ehow.comKa outL1?211>>Lmultilateral*agreement.html httpCKKwww.lavery.caKuploadKpdfKenK'/L?7>)?-a.pdf httpCKKwww.lawhand ook.org.auKhand ookKch>)s?>s?).php

Page )<

Aspect of Contract and Negligence httpCKKwww.thefreedictionary.comKcondition

Individual Assignment

Page -?