Contract Law: Types of Business Contracts and its Forming - Assignment Example

 Aspects of Contract and Negligence for Business Task 1 The four essential elements of a valid contract involve an offer, acceptance, intention of legal consequences and consideration. Offer refers to an expression to perform a given duty. Acceptance entails entering into an agreement based on an underlying offer. Acceptance signifies a willingness to perform a specified duty. Intention is the element that establishes a legal relationship between parties entering into an agreement. Acceptance of an offer indicates that both parties have the intention of honoring subsequent legal consequences. Finally, consideration is the benefits derived by both parties. It could be economic benefits in terms of money paid for services offered. Types of contracts in the UK include written, verbal, online and deed contracts. Written contracts involve agreements documented and signed by parties on paper. Parties sign such contracts after reading all terms and conditions therein. Verbal contracts are expressed by word of mouth. Offer and acceptance are expressed verbally. Execution of such contract depends on good faith of both parties. Online contracts are agreements formed through the internet. Such agreements contain all basic requirements of written contracts. Finally, contract of deed refers to those agreements entered by parties dealing with real estate and related properties like land. Such contracts contain a third party which may be a trustee or mortgage provider. Contractual terms and conditions refer to single and independent expression of both offer and acceptance. These single expressions constitute legally binding obligations since each term and condition is independent and complete in meaning. According to Frey and Smith (2011), breach of a term or condition attracts litigation and subsequent payment of damages. Contractual terms can either be warranties or innominate terms. Warranties form the basis of agreements and breach of these expression's results in inevitable payment of damages. On the contrary, innominate terms address damages caused by a breach to innocent parties. They may or may not attract penalties in the form of damages. Task 2 In the case of the contractor and non-trained workers, offer is an expression of interest to employ workers meant to operate heavy equipment while acceptance involves the workers’ willing expression to work on the site with all machinery present. Intention is the presumption that the workers will perform the work satisfactorily using all equipment on site while the contractor will deliver quality work with the current labor force and machinery present. Finally, consideration is employees’ wages for fork done resulting from excellent services offered on site. With respect to a small grocery shop in London, offer is the shop’s intention to sell consumer products to customers. Acceptance is the inherent willingness of customers to purchase items from the shop, irrespective of their quality. Intention of legal consequences is the presumed responsibility of the grocery shop to provide quality goods to clients. Finally, consideration, which refers to prices and benefits derived from the shop-customer agreement, is money from consumers as exchange for products sold. Task 3 Under the terms of the contract, the agreement must have stipulated time of performance. The time must be agreed upon by both the owner and the contractor. A common application of this term is that when no contrary intention is there, as in this case, time is considered to be of the essence. Thus, if one of the parties involved in the contract fails to perform on time, the contract cannot be enforced on the other party. When time is of the essence, the failed party has the right to damage accrued but no right to have the contract terminated. In this case, the contractor has only completed 85% of the work contracted and will, therefore, have to go beyond the agreed time of completion. Besides this having an economic impact on the contractor, it also compromises the plans and the calendar of the owner of the project. He will have to adjust timelines for subsequent projects and may even lose prospective contractors due to the time lag. The third parties and the community will also be impacted. The suppliers of commodities will have to adjust their deliveries to conform to the new timelines. The people will have to bear with the inconveniences in their daily lives a little longer. Task 4 Innominate terms are also called intermediate terms. These are terms that lie somewhere between conditions and warranty. Their being either conditions or warranties are dependent on the effects of a breach. Every breach of the contract term gives a right to a claim of damage while the contract may not be terminated unless the breach is serious. In the first case, the cars supplied were illegal and no amount of modification could change this. The effects of the breach in this case is serious since the innocent party will have nothing to do with the cars. The contract should be terminated. In the second case, only the engines of the cars supplied did not conform to the laws, adjustment (5 minutes) could change this. The breach in this case is minimal and has little damage that may not warrant a claim. In the third case, where adjustment for a single car could take 3 months, the innocent party will be forced to incur a cost. The breach is, however, not serious to warrant termination of the contract, but damage claims are in order. Task 5 To be liable for something means that an individual or business is responsible for an outcome that although not exactly meant to cause, happened and resulted to some form of harm or to a law breaking. Frey and Smith (2011) says that liability in negligence refers to a situation whereby a party in a contract is held responsible for an outcome that resulted from their lack of making proper and sound decisions. A business or individual is, therefore, liable of the outcome of their activities, in this case due to their failure in decision making. Liability in contract, on the other hand, refers to the situation whereby an undesirable outcome resulted from the failure of one party in a contract to honor the details of the contract. Task 6 Donoghue v Stevenson case in 1932 formed the foundation of the modern concept of negligence. Donoghue sued the ginger beer company after she found a decomposing snail in a beer bottle, she had consumed before she fell ill. Although there was no written contract between her and the company, because she did not personally purchase the beer, her lawyers claimed that the manufacturers of the beer had a duty of care to the consumers. This has over time brought about the neighbor principle which indicates that actions or omissions of one person are illegal if they negatively affect another person. The duty of care is, therefore, owed to the ‘neighbor’ and not to the world. The decision reached in this case was that even without an existing contract, there is liability in negligence for injury caused by the beer manufacturer and, therefore, the plaintiff was granted appeal and damages later on. Task 7 In the case of Peter, it would be in order to regard him as an independent contractor. In this perspective, the terms of the service that he provides can be in a written contract or verbal. The principal company will, therefore, be vicariously liable for the damage that will be proven not to be out of negligence. His decision to fix the climate control unit for Pardeep was allowed by his boss over the phone. Therefore, the boss and the company are liable for the damage. However, his involvement in an accident resulting to injury on the pedestrian can take the form of personal liability if his mistakes led to the accident or the liability could be taken by the company if the van were in bad condition for the road. In this case, the insurance company will cover the damage. Sideline Ltd and Frozone can claim damage from Top Tooling Plc. Task 8 In the trespass case, the general rule is that the owner of the property will not be liable for any injury or damage caused by trespass. However, in some cases the claim can be awarded and the owner held liable. The exceptions to this rule are when the owner is aware of regular trespass and the hazards in his property that can be injurious. In this view, the property owner will be required to post a warning of the hazard. Smith, therefore, has no legal claims since such an incidence is uncommon in the park. In the second case, the council was aware of the obstruction that caused the injury to Allen, they also knew that Allen was likely to be swimming in the harbor, in summer and did not warn him. They, therefore, owe Allen duty of care and he can have legal claims against them. Task 9 When bill contracted an underage person to help in his work, he reached the labor law and was fully liable for the minor’s life and work. Just as the company will always hold Bill accountable for even the actions of a minor since they do not know about the arrangement, the same way he will be accountable for the injury on the minor. The company will, however, assume the responsibility for the injury on bill and the damage caused by the vehicle. When an employee is driving a company vehicle for the purpose of the job contracted, the company is held liable even for the reckless and negligent driving of the employee. However, when the vehicle is driven by another person, who is not employed by the company or outside the job contract, the driver is held liable for any damage. The car owner, Mrs. Smith, will thus not have a legal claim against the museum for the damage of her car. Reference Frey, M. A. & Smith, P. H. (2001). Essentials of contract law. Albany, NY: West/Thomson Learning Read More