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Table of Contents Contents Introduction 1.1 Importance of the essential elements required for the formation of a valid contract 1.2 The impact of different types of contract 1.3 Analysis of the terms in contracts with reference to their meaning and effect 2.1 Application of the elements of contract in given business scenarios 2.2 Application of the law on terms in different contracts 2.3 Evaluation of the effect of different terms in given contracts 3.1 Contrast liability in tort with contractual liability 3.2 Explanation of the nature of liability in negligence 3.3 Explanation of how a business can be vicariously liable 4.1 Application of the elements of the tort of negligence and defenses in different business situations 4.2 Application of the elements of vicarious liability in given business situations Conclusion References Page No. 01 01 03 03 05 05 06 06 08 08 09 09 10 11

Introduction This assignment is related with the aspects of contract and negligence for business. Contract is basically an accord that takes place in between two or some particular business groups or companies that can get enforced by the court. To make a contract there needs to have some legal procedures and policies and there should have mutual understanding among the parties in this regard in enforcing the rules. Before going for the establishment through the enforcement of legal process, there should have the clear rights and responsibilities in the agreement (Kuchhal, 2007). 1.1 Importance of the essential elements required for the formation of a valid contract For making a valid and useful contract its important to go through the legal process by

maintaining all the rationale. These can be the followingAn intention to create a legal relationship Offer & Acceptance Consideration Capacity to contract Legality

An intention to create a legal relationship Giving the word in between is one of the keys in making such agreement or contract for better future. It cannot be possible to keep all promise or pass by the parties in the front. The assurance that takes by the personal discussion among the partners cannot be taken as obvious or integral part to follow on. Its like the understanding among the family members thats tough to take as granted. For making a promise and to maintain it, its an important requirement that the person, who is to promise, have the intension to maintain this strongly (Kuchhal, 2007). For a valid and authentic contract its important to display a legal relation between the parties. As the financial transaction is necessary here in this type of agreement, its important to go for the treaty based on the legal customs and factors. Offer: The interest of the party to enter or the basis to enter in the contract is the offer made by the counterpart. When the formal agreement done, the offer becomes the legal demand and it should be accepted by all parties. Offer has different types and it may be specific or general. When the offer made towards an individual group or a person, its specific and when it focuses on public implementation it becomes general (Kuchhal, 2007). Acceptance It is the conformity of the party with understanding all the terms and conditions given by the counterpart. This is the symbolic acceptance of the offer given by other party in unconditional manner. The pattern of acceptance can be different types. It may be verbal or in a written statement where some example of acceptance can be included. If the party wants to change the offer or some points it can give a reply back with putting some extra or reverse offer (Kuchhal, 2007). There should have some standard of word in harmony with the offer back that included later and the assurance to agree on the proposals. If there needs to address some post for the offer and the acceptance process, it need to post a letter of acceptance. Consideration It may be a pleasing word or the payment of money or even perform in the service more than expatiations or the demand. This is something that has value in the eye of a person just bound to a promise. Its kinds of return back for the agreement among the parties (Kuchhal, 2007). Its kinds of inherent right or a sense of deserve by the promised person, in better way it is the promise in reply to a promise. Capacity to contract If the person or the party is fit according to the law that is subjected to the issue of agreement can go for the contract. If a person never face such charge on illegal activities, can easily go for the contract or the agreement and there will be no legal complexity at all (Kuchhal, 2007). Legality The subject of the contract should be the legal meaning or the process and the features should have the legal acceptance. Nothing contrary to the legal affairs can put in the paper of contracts (Kuchhal, 2007). 1.2 The impact of different types of contract As mentioned earlier, there can be various types of contracts. In written contracts, the agreements are included in the piece of paper by the writing of the responsible officials. Verbal contract made orally and there is no need to have the written statement. On the other hand, the implied contract

is the practically applied contract through the establishment of law and other legal procedures. It imposed in protection from any unfair or illegal benefit by the parties (Evans, 1966). There can be an example of wrong painting in the residential houses of a residential area. The owner of the home contracted a painter to paint in his house no 42, but instead of 42 the painter painted the 142 no house. If the owner of 142 didnt correct him seeing his mistake, the court will punish and make the owner of 142 to pay the charges. Otherwise, the second house owner will get benefit illegally. The same implication will go in the implied contracts and it will maintain the effective involvement of the actions of the parties in the treaties. 1.3 Analysis of the terms in contracts with reference to their meaning and effect A contractual term is the agreement based on acceptance of all the provisions of a contract. Every term in the contract has the legal proceedings and it focus on the obligations of the features in the contract (Evans, 1966). All terms are not same in weight as there are some explanations which are much peripheral to get equal importance to others. Kinds of Terms: Basically there are two types of terms and these are implied and expressed terms. Implied Terms: This is the term that never mentioned by the party in the contract or has the written document. It comes automatically by practice. In many cases this term cannot create any commercial meanings to the parties (Evans, 1966). There are basically 2 types of this term Implied by Statue Implied by Court Express Terms: This is the term that made based on the understandings and the discussion among the parties. It may be the written or the oral statement. Both parties agree on this before the final establishment (Evans, 1966). Terms may be Conditions or Warranties In a contract there is difference and variations of terms. It may be written or orally established. Besides, there are some core factors or terms which are important. The most important terms are known as condition and the less important terms are known as assurance or in clear meaning its warranty (Kuchhal, 2007). In these terms, the conditions are most important and without conditions no party can enter into the contract formally. On the other hand, if the contract stands on some false conditions, any party can void the contract in future that is too risky for the business. If the contract focuses on the warranties, then the wrong intentional party cannot take the advantage by asking monetary demand (Kuchhal, 2007). The contract will be in force by the support of both parties. Exclusion of responsibility terms There can be a term impose in the contract by excluding one party out of the responsibility for any kinds of wrong performance or it can limit the responsibility of the parties. It is well known as exclusion clause. It is like a treaty takes place in between the builders and the house owners where a contract force by establishing terms without including any damage warranty or demurrage for the wrong construction (Kuchhal, 2007). 2.1 Application of the elements of contract in given business scenarios In the given business scenario 2 it is seen that on 2 September Mr. Jamal expressed his intention through advertisement to sell a 1998 Porsche for 21,000. On 7 September Bob expressed his intention by writing a letter to Jamal that he wants to by the car for 20,000. Here we see that both the parties have legal intention to enter into a contract and the consideration is the car to the offeree (Bob) and the money to the offeror (Jamal). But it will not be a contract until Bob accept the offer without giving any condition. Here we see that Bob made a counter offer, therefore, the original offer becomes terminated by the counter offer. If Jamal would accept Bobs counter offer there would be a new valid contract between them but here we see that on 9 September Jamal wrote back that he could not sell the car for less than 20,500. So, there was no valid contract

between them. On 10 September he wrote again to Bob that he would now sell the car for 20,000. It was the new offer from Jamal to Bob. If Bob would accept this offer unconditionally there would be a valid contract. In the given business scenario 2 it is seen that on 12 September the letters sent on 9 and 10 September arrived together at Bobs house. The general rule for acceptances by post is that they take effect when they are posted, rather than when they are communicated. So, the letter sent on 9 September had more priority to Bob. If Bob rejects the letter sent on 9 September there will be no valid contract between them. Now Bob can accept the offer or refuse to collect and pay for the car. Bob is not legally bound to collect and pay for the car.

2.2 Application of the law on terms in different contracts In the contract terms may be implied or expressed. In case of implied terms term never mentioned by the party in the contract or has the written document. It comes automatically by practice. There can be an example of wrong painting in the residential houses of a residential area. The owner of the home contracted a painter to paint in his house no 42, but instead of 42 the painter painted the 142 no house. If the owner of 142 didnt correct him seeing his mistake, the court will punish and make the owner of 142 to pay the charges. Otherwise, the second house owner will get benefit illegally. The same implication will go in the implied contracts and it will maintain the effective involvement of the actions of the parties in the treaties. For example, if someone gives his cloths to wash, he cannot discuss how clean it should be or the process of cleaning; it comes automatically. When the person drops his cloths to the cleaner, he cannot oppose giving the money in return for the wash, if the dress wash dont go appropriately. Though there is no legal binding but it becomes an implied contract to pay the cleaner money for washing the cloths. This is better described as implied in fact contract. In case of expressed terms the term that made based on the understandings and the discussion among the parties. It may be the written or the oral statement. There may have condition or warranties. Both parties agree on this before the final establishment. For example, if the offeror makes the condition in the offer that the acceptance must be within a certain time and through post office and the letter must be communicated to him. In this case the offeror can lapse the contact if the acceptance of the offeree does not sent the acceptance in accordance with the condition and the acceptance is not communicated to the offeror. 2.3 Evaluation of the effect of different terms in given contracts In the given business scenario 2 we see that there is no term in the offer made by Jamal. He would make the term that acceptance must be over phone by giving phone number in the advertisement. If he did this he would communicate with the offeree that he would not sell the car for less than 20,500 and later he would make a contact by accepting the counter offer of Bob. 3.1 Contrast liability in tort with contractual liability Torts are some wrong acts that cause the loss or damage of another persons body, property or other legal rights. It caused by contravening duty under the terms and legal process. Tort is the violation of civil rights and the accused person should face trial in the civil court and that leads to financial compensation or an embargo in the fame and image of the responsible person or company (Bermingham and Brennan, 2010). Contractual liability comes in the table when both parties have a formal or informal agreement over the terms and conditions of the contract. It can apply to both companies effectively and equally. In the law of Tort or the contract, there is categorization under the branch of obligatory laws (Bermingham and Brennan, 2010). The law of tort can apply to everyone who is entitled to the system. In the law of contract its voluntarily assumed that everyone is bound to obey and follow the rules. The difference between the law of Tort and law of Contracts is that the first one is the result of the agreement and the last one is the result of the law. Contract damage is based on the assumption while the damage of Tort is based on compensation. In the law of tort, the liability is related to the responsibility of care and there is a variation of responsibility regarding the importance or obligations (Bermingham and Brennan, 2010). For an example, if the property owner fails to maintain his property and somehow it created a loss or damage to other persons property, the owner is liable for the damage of that persons property

and he should face the compensation. Even if the other person may be the passerby, with whom the owner has no legal contract. In a contractual liability, there establish some promises and both parties gives their consent with understanding the facts. A person can involve someone to clean his house in exchange of financial benefit. If the other person fails to do this accordingly, it is the break of the contract and thats why there can be a legal initiatives taken by the parties. Injured party will get benefit according to the legal procedures (Cooke, 2010). In the contract, it requires two or more parties but in tort it is not necessary to have more than two parties in the agreement. The major difference between this two is the pattern of duty and responsibility. In the tort, the duty are fixed by the law and in the contractual liabilities, the responsibilities are fixed by the parties in the agreement. Tort laws are more structured than the contractual liability (Bermingham and Brennan, 2010). 3.2 Explanation of the nature of liability in negligence Negligence is the oversight by the smart person when he faces something that is out of consideration and not regular in the meaning of activities. When the contract is in question, then the negligence is not a big factor even a good strategy. But when because of negligence, the counter party faces problems or loss; the responsible person should stand in front of the tort laws (Cooke, 2010). There is o objective standard in the reason of negligence. Negligence exposes in three ways and these areExist from the duty of care Break of duty without reason Damage following the absence from duty

3.3 Explanation of how a business can be vicariously liable Employees are vicariously liable for the torts especially when they are in the duty of the company. For a company the employees are keys to create the values and to maximize the profit. Vicarious liability is the position when someone is responsible for the action or the omission of other person judging his role and responsibility. When an employee commit the tort in the time of agreement with an employer, the employer will be responsible for time out or other related causes in the office (Cooke, 2010). In the creation of value and profit for the business employees are the main force. So they should have right to entitle into the benefits which may be the responsibilities of the employer, such as (Cooke, 2010):

The idea of this liability creates a better environment in the office and makes the responsibilities of the employees well decorated. Many employee managers are not well informed about the chance of their liability for any action or any change that committed by their employees and it can even lead to the cancellation of their job (Gardner, 1992). Discriminatory act, harassment, break of rules and ignoring the management are some key reasons here. The employers should take all the necessary steps to prevent this and the keep the environment safe and secured by updating rules regulation and maintaining check and balance (Gardner, 1992). 4.1 Application of the elements of the tort of negligence and defenses in different business situations In the given business scenario 3 (A) we see that Amir was using a power saw at work and Amir suffered cut to his arm as a result of carelessness of Rani who threw a tool down. It is a tort of negligence caused from the duty of care. These created legal liability for Rani to Amer. Therefore, Amin could sue for his physical damage.

In the given business scenario 3 (B) we see that Ahmed was left to work on his colleagues position. Ahmed lifted a heavy piece of machinery for which 2 people were needed but he negligently lifted it himself. As a result his leg got injured. It is also a tort of negligence. 4.2 Application of the elements of vicarious liability in given business situations In the given business scenario 3 (C) we found that Adnan was using a screwdriver which showed no faults but and suddenly broke and a piece of flying metal injured his eye. Here there was no fault of Adnan. It was a vicarious liability. Though this tort created from the duty of Adnan the employer is liable to compensate Adnan. In the given business scenario 3 (C) we found that near Bills workstation a container of oil has been leaking for several weeks. Bill has complained to the management but it has not been fixed and one day he slipped on the oil and broke his wrist. This was also a vicarious liability for Kool Kars Ltd. For this liability the management is legally bound to compensate Adnan.

Conclusion Contract is basically an accord that takes place in between two or some particular business groups or companies that can get enforced by the court. For a contract to exist, usually one party must have made an offer, and the other must have accepted it. Once acceptance takes effect, a contract will usually be binding on both parties. Tort is the violation of civil rights and the accused person should face trial in the civil court and that leads to financial compensation or an embargo in the fame and image of the responsible person or company and contractual liability comes in the table when both parties have a formal or informal agreement over the terms and conditions of the contract. It can apply to both companies effectively and equally. Vicarious liability is the position when someone is responsible for the action or the omission of other person judging his role and responsibility. The idea of this liability creates a better environment in the office and makes the responsibilities of the employees well decorated.

References Bermingham and Brennan (2010), Tort Law Directions, 2nd edn. Oxford University Press Beale and Dugdale (1975), Contracts between businessmen. British Journal of Law and Society Cooke (2010), Law of Torts, 9th edn. Pearson. Evans (1966), The Anglo-American mailing rule: some problems of offer and acceptance in contracts by correspondence. International and Comparative Law Quarterly Gardner (1992), Trashing with Trollope: a deconstruction of the postal rules in contract. Oxford Journal of Legal Studies Kuchhal, M. C. (2007). Mercantile Law, 6th ed., Vikas Publishing House Pvt Ltd.

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