Aspects of Contract and Negligence for Business

Regent College London

Unit No: 5
Aspects of Contract and Negligence for Business

Unit Title: ASPECTS OF CONTRACT AND NEGLIGENCE

FOR BUSINESS
Assignment Cover Sheet

Assignment

1 and 2

No:

I hereby confirm that this assignment is my own work. I have identified and
acknowledged all sources used in this assignment and have referenced
according to the Harvard referencing system. I have read and understood the
Plagiarism and Collusion section provided with the assignment brief and
understood the consequences of plagiarising.

Name:

Mihaela Alina Glogojeanu

Registration
Number:
ET91946

Signature:M.A.
G

Date:

30.01.2014

(Your work will not be accepted without a signed copy of this authentication.)

Aspects of Contract and Negligence for Business

Aspects of Contract
And
Negligence for
Business

Assignment

Aspects of Contract and Negligence for Business

Table of Contents
Table of Contents.............................................................................................................................4
Task1-1.1,1.2,1.3.............................................................................................................................5
Task 2-2.1,2.2,2.36
Task3-3.1,3.2,3.3.7
Task 4: Applying Principles of Liability in Negligence..................................................................9
4.1. Application of elements of tort of negligence and defences.................................................9
4.2. Application of elements of vicarious liability in different situations..................................11
Conclusion.....................................................................................................................................12
References......................................................................................................................................13

Aspects of Contract and Negligence for Business

Subject: Legal Advice

Dear Sir/ Madam,
The legal advice for the information provided has been drafted as per the essential aspects of the
relevant business law knowledge and the case law; the detailed advice for the given situations is
as below:
1. The book placed on the shelf for sale is not an offer to make a sale / purchase agreement
instead an invitation to treat. An invitation to treat is an indication that a person or entity
is prepared to receive offers from another person and offer made can be subsequently
accepted or rejected (Dooley, 2006). The display items in the shop are an invitation to
treat, as it was held in the case Fisher v. Bell 1960 (LegalMax, 2013), the situation here is
similar so in accordance with doctrine of precedence, the point of law held in the case of
Fisher v. Bell can be applied. In addition, the book has already been sold to Carl, so
selling it to another person is not possible, as this book has become the prospective
property of the Carl; the right of ownership has been transferred to Carl although Sam has
retained the book. The book has not been physically transferred to the custody of Carl,
however this book has become the property of Carl as the sale of the book to the Carl has
been made following the essentials of the legally binding contract in the given context.
The contract to be valid, it must have the essentials of the contract, which are stated
below:
Competent parties i.e. adult person of 18 years of age
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Aspects of Contract and Negligence for Business

Offer and acceptance

Consideration
Legality of the object

Source (Lank, 2004).

In the given scenario, an offer has been made, and the amount of the offer has been
provided, which is the consideration, usually expressed in the monetary value i.e. money;
however this offer has not been accepted by Sam. The rejection of Sam is valid for two
reasons, first the book was not an offer or acceptance of an offer, it was mere an
invitation to treat, secondly the book has been sold to Carl; therefore Sam is not allowed
to sell this book to Bob. If Carl was not of the legal age to make the contract, the contract
would not remain legally enforceable, however the essential elements of the contract are
present, the book is legally allowed to be purchased and sold, and also the other elements
of contract as mentioned above are also present, therefore agreement with Carl is valid.
2. Barry goes into a park and hires a chair by paying the charges. Barry thus pays the
consideration and makes a legal contract. However due to the negligence, as per the claim
of Barry, the damage has been caused to this clothes, and therefore he makes complain.
Although there is a contractual relationship between Barry and the council, the clause is
also there for not accepting any responsibility for the damaged cause, but there is a duty
of care. A duty of care is the exercise a reasonable amount of care when deadlines with
others (Miller, 2012). A duty of care is present although when there is no contractual
relationship. As the contractual relationship is not required for the claim of negligence,
therefore conversely the clause of exclusion of responsibility of damage will have no
relevance. A person or entity cannot limit or exclude his liability for the death or injury of
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Aspects of Contract and Negligence for Business

a person resulting from negligence (Roach, 2012). The claim for the damage can be
made, first the duty of care must be proved, second the breach of duty of care, and thirdly
the breach of duty of care resulting in the damage. The relevancy of the exclusion clause
can be contrasted in the light of the case Andrews Bros v Singer(1934) in which all
conditions and warranties ere excluded, and this exclusion caluse was disregarded by the
court as the contract there was to sell new cars, as with exclusion clause the company
claimed the act was valid according to the exclusion clause (Koffman & MacDonald,
2010). Although the collapse did not cause injury, however, there was damage, Barry was
a consumer, and therefore the exclusion clause will not limit the liability. Council owed a
duty of care to Barry, there is a breach of duty of care as the chair collapsed in a normal
working condition, therefore the company was in the breach of duty of care, as the
company did not inspect the condition of the chair, or it was of unsatisfactory quality at
the time when Barry hired the chair. Liability in the tort will arise when someone owes a
duty of care, the duty of care can also exist alongside contractual liability, when there is a
breach of duty of care to consumers, it can be sued as a breach of duty of care as well as
contract (Rush & Ottley, 2006). Barry can make the claim against the council for damage
that the collapse of the chair has caused to Barry. The compensation for the damage will
be the remedy for the breach of contract; however, this compensation will be limited to
the amount of economic loss that the injured party or the claimant suffered.
3. An offer can be made to public, and the example for this is the case of Carbolic v.
Carbolic Smoke Ball (Pathak, 2007). In the given context, the offer was made to public,
and the performance according to the offer would be deemed as acceptance. If the notice
of withdrawal of an offer is made before the acceptance of an offer, the offer cannot be
accepted (Sheth, 2012). The act of the paddle across the English Channel by Brian was
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Aspects of Contract and Negligence for Business

the acceptance of an offer, and it was an act fulfilling the conditions of the offer made to
the public resulted in the offer and acceptance, therefore a contractual liability. Further,
the revocation of offer was made, however it was not communicated to the Brian, as the
offer had been accepted as per the initiation of an action, which would be deemed as an
acceptance. Brian completed the action of crossing the English Channel, and he was
made known when the offer had been accepted and the action associated with it had also
been performed in full. As Brian has accomplished the contractual liability of
performance in full, therefore Brian can claim the reward for his contract. Adam was
responsible for the action of Brain, and a person responsible for the conduct of other
person will have vicarious liability (Lanham, 2006), therefore there is vicarious liability
of Adam to Brian. The amount of 1,000 should be paid to Brian as he has fulfilled the
contract, and now the reward has become the legal right of Brian.

Sincerely,
Legal Advisor
Signature

Aspects of Contract and Negligence for Business

Task 4: Applying Principles of Liability in Negligence

4.1. Application of elements of tort of negligence and defences
Negligence: Negligence can be defined as a conduct that falls short of behaviour accepted by
law for the security and protection of others against uncertain and unreasonable risk of harm
(Steele, 2010). Negligence as an example: In the rainy day, John increases the speed of his car to
get through the yellow traffic light and causes himself an accident. To succeed in a claim in
negligence, the claimant must prove the following four criteria:
The essential elements of ordinary negligence

Fig.1: Source Adapted from: (Steele, 2010)

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Aspects of Contract and Negligence for Business

Contributory Negligence: It is the failure of plaintiff to take necessary precautions for their
safety (Statsky, 2011). It is available as a defence to breach of statutory duty in all the same
circumstances.

Statement A: The non- delegable duty under contacts states that an employer is liable for the
safety of the employees at workplace, even if an external entity is hired for safety requirements
(Lunney & Oliphant, 2008). Also non- delegable duties in general are those duties which cannot
be delegated to third person. However in this case, neither Neil nor Roger is the employer of the
hotel. Neil is the gardener and Roger, the dishwasher are both employees working for Ben, the
employer of the hotel. Therefore, Neil does not owe Roger a non- delegable duty of care for safe
working environment.
Statement C: The Occupier under the Occupier Liability Act 1957 is someone who owns and
occupies land or other premises and who has actual use of that premises (Chappell, et al., 2009).
The Occupiers Liability Act 1957, states that an occupier of premises owes the common duty of
care to visitors who are invited or permitted by the occupier. Therefore in the given situation,
Poshplace Hotel is liable to Mark as he is the lawful visitor who is paying for his stay at the
hotel. Mark is the guest or visitor of the Hotel who can claim for the loss of his jewellery at the
premises. The only relief to the occupier to lessens the liability can be when the damage is
caused to the visitor of which he has been warned and the warning was in all the circumstance
was enough to enable the visitor to be reasonable safe (Chappell, et al., 2009).
Statement D: The Occupier Liability Act 1984, states that the duty to take care does not impose
on the occupier any obligation in respect of risks willingly accepted by the visitor and has
considered that a trespasser is not a visitor and (Strong & Williams, 2011). However, trespassers
are owed a lesser duty under 1984 act, and an occupier owes a duty to trespasser only when he is
aware that there is a possibility of danger and in this case the occupier owes for personal injury
only and not for the damage of personal property caused on the premises. The Occupier Liability
Act 1984, discharges the duty of the occupier if he/she has given prior warning or notices of
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Aspects of Contract and Negligence for Business

danger however the court also suggest that the owner will only be discharged or allow defence of
volenti non fit injuria ,if the given warning is enough to avoid accidents (Strong & Williams,
2011). The defence for occupier exists in case Tomlinson v Congleton Borough Council 2013,
where occupier was not held liable because a man was paralysed after diving despite the warning
signs Dangerous Water- No swimming (Strong & Williams, 2011).
In the given scenario Mark becomes trespasser and ignores the warning sign that pool will be
closed between 7:00 pm 7:00 am, however it was no where mentioned that the pool has been
emptied. Therefore, Poshplace Hotel will be liable to Mark for the personal injuries caused
because the waning was not enough to avoid damages but will owe a lesser protection.
Statement E: In the given statement Mark can use the ordinary negligence principles against the
occupier of the Poshplace Hotel. According to Black (1979), ordinary negligence is the failure to
use care as a reasonable careful person would use under similar circumstances (Schwab, 2005).
The plaintiff can claim for negligence if he is able to prove that the owner has the legal duty to
take care and has breached the duty, which caused damage and the plaintiff has suffered. The
owner of the hotel has a legal duty to take care of the visitors under all circumstances and the
breach of duty has caused mark to suffer and bear losses.
Statement F: The Occupies Liability Act, states that if the warning given is not enough to avoid
danger or damages than the owner or occupier will be liable to claimant for personal injury only.
The claimant who has ignored the warning and has caused damage will not be able to claim for
the loss of his personal property. Therefore, Mark will not be claim for the cost incurred to his
swim suit because of the damage because he has ignored the hotels warning.

4.2. Application of elements of vicarious liability in different situations

Vicarious Liability: The vicarious liability operates to impose liability on an employer but
several conditions must be applied or satisfied. The employer will be liable for the acts of the
employee if there is a contract of employment between the two parties (Faure, 2009). Also an
employer is liable only for the acts of employee conducted during the course of employment.

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Aspects of Contract and Negligence for Business

Statement B: Roger cannot bring claim under vicarious liability against Neil because both are
employees of the hotel and there is no legal contract or agreement between the two. The
employer is Ben who has employed both of them and therefore Roger cannot claim against Neil
for Colins action. Also Colin has done nothing to cause harm to Neil who is a gardener.
Statement G: The law of vicarious liability states that if the employee is liable during the course
of employment then the employer is also liable. Here, Neil is the employee of Poshplace hotel
and was found liable for stealing Marks jewellery during the course of employment. Therefore,
Poshplace is liable to Mark for the loss of his jewellery.

Conclusion
The applications of legal principles of negligence are elaborated. Ordinary and contributory
negligence along with the elements of the tort of negligence and defences in different business
situations are explained. The responsibilities and liabilities of owner with respect to Occupier
Liability Acts were illustrated along with the application of elements of vicarious liability in
given business situations.

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Aspects of Contract and Negligence for Business

References
Chappell, D., Dunn, M. & Cowlin, M., (2009) Occupiers Liability Act 1957. In: Building Law
Encyclopaedia. New Jersey: John Wiley & Sons.
Dooley, D. (2006). BTEC National Business, Book 2. Heinemann.
Faure, M., (2009) Vicarious Liability. In: Tort Law and Economics. Cheltenham: Edward Elgar
Publishing.
Koffman, L., & MacDonald, E. (2010). The Law of Contract. Oxford University Press.
Lanham, D. (2006). Criminal Laws in Australia. Federation Press.
Lank, E. (2004). Essentials of New Jersey Real Estate. Dearborn Real Estate.
LegalMax. (2013). Fisher v Bell (1960). Retrieved 11 28, 2013, from legalmax.info:
http://www.legalmax.info/members2/conlec/fisherquote.htm
Lunney, M. & Oliphant, K., (2008) The Non- delegable Nature of Employers Duty. In: Tort Law:
Text and Materials. Oxford: Oxford University Press.
Miller, R. L. (2012). Business Law Today: The Essentials, 10th ed. Cengage Learning.
Pathak. (2007). Legal Aspects Of Business. Tata McGraw-Hill Education.
Roach, L. (2012). Card & James' Business Law for Business, Accounting, & Finance Students.
Oxford University Press.
Rush, J., & Ottley, M. (2006). Business Law. Cengage Learning EMEA.
Schwab, N., (2005) Ordinary Negligence. In: Legal Issues in School Health Services: A
Resource for School Administrators, School Attorneys, School Nurses. Bloomington: iUniverse.
Sheth, T. (2012). Business Law. Pearson Education India.
Statsky, W., (2011) Contributory Negligence. In: Essentials of Torts. New York: Cengage
Learning.
Steele, J., (2010) Negligence. In: Tort Law: Text, Cases, and Materials. Oxford: Oxford
University Press.
Strong, S. & Williams, L., (2011) The Occupiers Liability Act 1984. In: Complete Tort Law:
Text, Cases, & Materials. Oxford: Oxford University Press.

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