NGUYEN TRAI UNIVERSITY BTEC HND IN BUSINESS (MANAGEMENT

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ASSIGNMENT COVER SHEET
NAME OF STUDENT REGISTRATION NO. UNIT TITLE ASSIGNMENT TITLE ASSIGNMENT NO NAME OF ASSESSOR SUBMISSION DEADLINE Dai Hong Ngoc 1050001001 Unit 5 Aspects of Contract and Negligence for Business Contract In Business Situations 1 of 2

I, __________________________ hereby confirm that this assignment is my own work and not copied or plagiarized from any source. I have referenced the sources from which information is obtained by me for this assignment.

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_________________________ Date

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FOR OFFICIAL USE

Unit Outcomes
Outcome Evidence for the criteria Feedback Assessor’s decision
First attempt Rework

Internal Verification

Explain the importance of the key essential elements required to the formation of a valid contract

1.1

Understand the essential elements of a valid contract in a business context LO1

Discuss the impact of different types of contract

1.2

Analyse terms in contracts with reference to their meaning and effect

1.3

Apply the elements of a contract in a given business scenarios

2.1

Be able to apply the elements of a business contract in business situation LO2

Apply the law on terms in different contracts

2.2

Evaluate the effect of different terms in given contracts

2.3

Merit grades awarded Distinction grades awarded

M1 D1

M2 D2

M3 D3

...................... FOR INTERNAL USE ONLY VERIFIED YES NO DATE : .................................................................................... NAME : .................................................................... ...Assignment ( ) Well-structured....................................................... you’ve Areas for improvement: ASSESSOR SIGNATURE DATE / / NAME: ................................... VERIFIED BY : .............................................. (Oral feedback was also provided) STUDENT SIGNATURE DATE / / NAME : ..................... Reference is done properly / should be done (if any) Overall.............................................................

Ms May is part of an initial set-up of a small British based company. Analyzingterms in contracts with reference to their meaning and effect. Apply the elements of a contract in a given business scenarios. Evaluate the effect of different terms in given contracts. particularly in business situations. in a British firm located in Vietnam. reference material.Introduction In this report Iam required to present : Discussion about the impact of different types of contracts. Iam reporting to the legal Clark.Be able to apply the principles of liability in negligence in business situations. which is new to her. Apply the law on terms in different contracts. tutorials. books . Be able to apply the elements of a business contract in business situation. including surveys.to find the appropriate method for each question Expect to achieve in your learning after making the report: Understanding of aspects of the law of contract and tort and the skill to apply them. ... programmes and initiatives. centres. She is to be located in Vietnam to seek dress makers to make specific dresses for both UK and the Internet Market.Be able to apply the elements of a contract in business situations . Brit Ltd (a fictitious company) selling dresses and ladies apparels both in UK and through their own website.Understand the essential elements of a valid contract in a business context . data services.Understand principles of liability in negligence in business activities . A client (Ms May from UK) has come to seek my company‘s advice on several legal issues. Methods and resources in doing the report: Access all of the current research resources. I need to pen down notes and to provide my opinions to the legal officer who is assigned to May on the following legal matters and possible nature of the claims .

This can be called a concurrence of wills or consensus ad idem (meeting of the minds) of two or more parties. from an objective perspective. intention to create legal relations. Elements At common law. 6th ed.[7] There must be evidence that the parties had each.[8] An objective perspective means that it is only . the elements of a contract are offer. which actually means 'agreement to the [same] thing'.[6] Richard Austen-Baker has suggested that the perpetuation of the idea of 'meeting of minds' may come from a misunderstanding of the Latin term 'consensus ad idem'.‖ [Black’s Law Dictionary. The latter requirement is known as the "mirror image" rule. After that I will apply the regular form to May‘s stuation. The concept is somewhat contested. it is not an acceptance but a counteroffer and. The obvious objection is that a court cannot read minds and the existence or otherwise of agreement is judged objectively. The Uniform Commercial Code notably disposes of the mirror image rule in § 2-207. If a purported acceptance does vary the terms of an offer. Explain to May the importance of the elements required for the formation of a valid contract (1. although the UCC only governs transactions in goods in the USA. simultaneously a rejection of the original offer. and consideration. acceptance. Mutual assent At common law. Hughes. engaged in conduct manifesting their assent.1) In this part I will give May the primary information and knowleadge of making a contract. therefore. that is. when an offer is met with an acceptance that is unqualified and that does not vary the offer's terms. and a contract will be formed when the parties have met such a requirement. mutual assent is typically reached through offer and acceptance. Offer and acceptance Main article: Offer and acceptance The most important feature of a contract is that one party makes an offer for an arrangement that another accepts. First of all we will find out the concept of a contract : an agreement between two or more persons which creates an obligation to do or not do a particular thing… A legal relationship consisting of the rights and promises constituting an agreement between the parties that gives each a legal duty to the other and also the right to seek a remedy for the breach of those duties. with only limited room for questioning subjective intention: see Smith v.

or forbearance to act. This can take two forms. If that knowledge could not be proven. A contract which is implied in fact is one in which the circumstances imply that parties have reached an agreement even though they have not done so expressly.necessary that somebody gives the impression of offering or accepting contractual terms in the eyes of a reasonable person.[13]] Consideration Main article: Consideration Entertainers evaluating the terms of a contract. he sees the plumber installing them in his lawn."[12] Offer and acceptance does not always need to be expressed orally or in writing. or voluntarily doing or refraining from doing something. he would not be liable. such as an adult refraining from smoking. the patient has breached a contract implied in fact. A bargain is something the promisor (the party making promise or offer) wants. The term unilateral contract is used in contract law although ultimately there is an offerer and an offeree and a consideration (which may be an act). Consideration consists of a legal detriment and a bargain. A contract which is implied in law is also called a quasi-contract. Will the man be held liable for payment? Yes.[10] the High Court of Australia considered the term "unscientific and misleading". If one refuses to pay after being examined. if it could be proven that the man knew that the sprinklers were being installed mistakenly. and then refuses to pay when the plumber delivers the bill. the thing of value is a payment. usually being one of the legal detriments. not that they actually did want to form a contract. a patient agrees that he will pay a fair price for the service. by going to a doctor for a checkup. rather. Consideration is something of value given by a promissor to a promisee in exchange for something of value given by a promisee to a promissor. as the offeree chooses. when one is privileged to do so. A legal detriment is a promise to do something or refrain from doing something that you have the legal right to do. because it is not in fact a contract. The legal detriment and . it is a means for the courts to remedy situations in which one party would be unjustly enriched were he or she not required to compensate the other. The owner of the house had learned the previous day that his neighbor was getting new sprinklers. and in Australian Mills v The Commonwealth. in the context of an agreement.[11] Obligations are only imposed upon one party upon acceptance by performance of a condition. For example. the general rule is that in "case of doubt. he says nothing. That morning. an offer is interpreted as inviting the offeree to accept either by promising to perform what the offer requests or by rendering the performance. In the United States. An implied contract is one in which some of the terms are not expressed in words. Pleased at the mistake. a plumber accidentally installs a sprinkler system in the lawn of the wrong house. Such a claim is also referred to as "quantum meruit". For example. although it may be an act. Typically. the court would make him pay because of a quasi-contract. The case of Carlill v Carbolic Smoke Ball Company[9] is an example of a 'unilateral contract'.

in Eastwood v.[16] the guardian of a young girl obtained a loan to educate the girl and to improve her marriage prospects. After her marriage. courts will look to a bargained-for exchange. courts will occasionally turn to the common law benefit/detriment analysis to aid in the determination of the enforceability of a contract. The preexisting duty rule also extends beyond an underlying contract. Indeed. This is known as the peppercorn rule. not an inquiry into the relative value of consideration. The emphasis is on the bargaining process. attempting to disguise gift transactions as contracts. where both parties agree to exchange something that the other wishes to have. Transfer of money is typically recognized as an example of sufficient consideration. it is an oxymoron. whereas "adequacy" would require an additional and subjective element of fairness or equivalence. It would not constitute sufficient consideration for a party to promise to refrain from committing a tort or crime. Myrick. Sidway.[17] in which a captain's promise to divide the wages of two deserters among the remaining crew if they would sail home from the Baltic short-handed.[14] All that must be shown is that the seller actually wanted the penny. was found unenforceable on the grounds that the crew were already contracted to sail the ship through all perils of the sea. It was held that the guardian could not enforce the promise because taking out the loan to raise and educate the girl was past consideration—it was completed before the husband promised to repay it. For instance. for example. depending the jurisdiction. that the promises of the parties are reciprocally induced. Kenyon. Consideration is "sufficient" if it meets the test of law. a promise from A to do something for B if B will perform a contractual obligation B owes to C. when one party agrees to make partial payment of a debt in exchange for being released from the full amount. The purpose of consideration is to ensure that there is a present bargain. The classic theory of consideration required that a promise be of detriment to the promissor or benefit to the promisee. The insufficiency of past consideration is related to the preexisting duty rule. the penny would constitute legally insufficient nominal consideration. This principle was articulated in Hamer v.[15] Past consideration is not sufficient. for example. agreeing to sell a car for a penny may constitute a binding contract. Otherwise. rather than making inquiries into whether an individual was subject to a detriment or not. her husband promised to pay off the loan. . For instance. [edit]Sufficiency Consideration must be sufficient.[18] However. but in some cases it will not suffice. but courts will not weigh the adequacy of consideration. Yet in cases of ambiguity. Parties may do this for tax purposes. typically. This is no longer the case in the USA.bargain principles come together in consideration and create an exchange relationship. The classic instance is Stilk v.

"[24] http://en.[22] Estoppel is an equitable doctrine that provides for the creation of legal obligations if a party has given another an assurance and the other has relied on the assurance to his detriment.will be enforceable . rather than an exchange in valuable rights is the correct basis.wikipedia. it is good consideration for person A to pay person C in return for services rendered by person B. rather than judicial development.org/wiki/Contract Or in other word A contract is a legally enforceable promise  A contract can be written or oral Contracts for the sale of goods over $500  Contracts for the sale of real property . So if you promised to give me a book. legislation. and I accepted your offer without giving anything in return.B is suffering a legal detriment by making his performance of his contract with A enforceable by C as well as by A. especially John Stuart Mill's influential ideas on free will. Lord Justice Denning famously stated that "The doctrine of consideration is too firmly fixed to be overthrown by a side-wind.[23] However. or a concurrence of wills alone. The latter chimed well with the fashionable will theories of the time. a form of 'estoppel'. [edit]Other jurisdictions Roman law-based systems[20] (including Scotland) do not require consideration. in common law systems the concept of culpa in contrahendo. has been touted as the only way to remove this entrenched common law doctrine. However. and got grafted on to the traditional common law requirement for consideration to ground an action in assumpsit.[21] Civil law systems take the approach that an exchange of promises. promoted by the 18th century French writer Pothier in his Traite des Obligations. when the old forms of action were abolished. secondly. I would have a legal right to the book and you could not change your mind about giving me it as a gift.[19] Consideration must move from the promisee. The reason that both exist in common law jurisdictions is thought by leading scholars to be the result of the combining by 19th century judges of two distinct threads: first the consideration requirement was at the heart of the action of assumpsit. and estoppel be used to replace it as a basis for contracts. the notion of agreement between two or more parties as being the essential legal and moral foundation of contract in all legal systems. much read (especially after translation into English in 1805) by English judges and jurists. and some commentators consider it unnecessary—the requirement of intent by both parties to create legal relations by both parties performs the same function under contract. is increasingly used to create obligations during pre-contractual negotiations. If there are joint promisees. which had grown up in the Middle Ages and remained the normal action for breach of a simple contract in England & Wales until 1884. then consideration need only to move from one of the promisees. For instance. A number of commentators have suggested that consideration be abandoned.

counter-offer. An offer is a definite promise to be bound. An offer need not be made to a specific person. This means that there must be acceptance of precisely what has been offered Acceptance: Acceptance occurs when the party answering the offer agrees to the offer by way of a statement or an act. or to the whole world. provided the terms of the offer are accepted. Contracts that are incapable of being performed within 1 year. Acceptance must be unequivocal and communicated to the offeror: the law will not deem a person to have accepted an offer merely because they have not expressly rejected it. It may be made to a person.  Promises to answer for or discharge the debts of another (Guarantee) Contracts can have many names and stay in other form such as:  Contract  Agreement  Purchase Order  Memorandum of Understanding  Terms and Conditions  Appointment Letter  Handbook (―implied contract‖)  License  Ticket A contract has 4 elements:  Offer  Acceptance  Consideration  Mutuality Offer: A proposal to do a thing or pay an amount. usually accompanied by an expected acceptance. return promise or act The offeror is the ―master of his offer‖. a class of people.Compliance by the offer with terms and conditions of an offer A manifestation of assent to terms of offer in a manner invited or required by the offer The offer and acceptance must match (―mutuality‖ …more on this soon…) Does not necessarily occur only by signature of a contract Acceptance can occur by: *Action .using goods -opening the package (software) .

‖ but it is still sufficient Contracts of Adhesion: -. .e. a promise to refrain from doing something). So long as consideration exists. For example. but also: • • What the University agrees NOT to do : . detriment.―Take it or leave it‖ terms -.Not bargained for Consideration: Something of legal value.non-compete clauses What risks and liabilities the University is exposed to Mutuality: A ―meeting of the minds‖ with respect to material contract terms A signature is deemed to be sufficient to evidence this requirement Therefore. Of course. the consideration must not be illegal or impossible to perform. Consideration is the price paid for the promise of the other party. anything that induces you to give up something May be something other than money (i. Consideration may be some right. the promise to pay a peppercorn in return for the lease of a house would be good consideration. the court will not question its adequacy.confidentiality clauses . a promise to do something..-entering an establishment or participating in *Inaction –not returning goods an activity Sometimes acceptance does not appear ―voluntary. provided that it is of some value. it is crucial that you read carefully and understand all of the terms of a contract before you sign it Application to May‘s case. The value of a contract: It‘s not only what the University receives or pays. There is an exception to the rule: documents under seal (deeds) do not require consideration for there to be a binding contract. loss or responsibility given. suffered or undertaken by the other party. although it need not be money. The price must be something of value. interest or benefit going to one party or some forbearance.

For example. There are some interesting things to note here. May needs to find out a company this match with her company condittions. In May case. they need to accept to may a valid contract.They must notify the other party and add it to the contract. It must contain the offer which is a defined promise to be bound on specific term and acceptance which is unqualified agreement to the terms of the offer . Mutuality seem to be the last step of making of a contract. If the promise is made in a written document called a "deed". For example. May or the other company cannot unilaterally impose additional terms. A contract to sell a Gucci bag for $1 is a valid and legally binding contract. all the parties meet togerther and discuss the terms of the contract. As a customer. there is one big exception to this rule. With first element ―offer‖. For instance. If May offer to buy 1000 dresses for $30.In May situation. consideration. mutuality. However.  Discuss the impact of different types of contract to May by providing explanations on comparison with face to face and distance selling modes (1. May should makes the offer to the party that she attent to buy deal with. If she want to make a bussiness with a company she need to do a contract. there is no contract as I do get anything for promising to do the repairs. It is important to note that consideration does not have to be adequate to form a binding contract. "Consideration" is the second half of the bargain. After the contract has been made. There is no consideration. if the party that May willing to contract with promise to repair all Brit Lted products for free. Firstly the agreement which is determined by the rules of offer and acceptance.000 is the "consideration". Another interesting fact is that if May sends an offer to other parties.000. if Brit Ltd if Brit Ltd. May need to communicate to any person before they accept the terms of the contract. then the promise to do something for free is legally binding. A mere promise is not legally binding. In order to make a contract there are 4 keys elements which a contract must contain in order to be valid and enforceable by the law which are offer. Go along with offer is acceptance. This means Brit Ltd must make an offer and the other party must accept that offer. acceptant. then the $30.2) . do not want their products orderd have nylon fibers. in fact. if you want to buy somethings in a market. the goods does not come naturely. when all parties are satisfied they will use sign in the contrace as proof of collaboration. you have to ask for it. It is often the price paid.

exist regardless of assent. but the seal has lost some or all of its effect by statute in many jurisdictions.. as the seal was a symbol of the solemn acceptance of the legal effect and consequences of the agreement. Implied contracts are as binding as express contracts. Types of contract Contracts under Seal Traditionally. Contracts implied in fact do not arise contrary to either the law or the express declaration of the parties.In this part May will be shown the purpose of a contract is to establish the agreement that the parties have made and to fix their rights and duties in accordance with that agreement.e. rather. The term quasi-contract is a more accurate designation of contracts implied in law. Recognition by the courts of informal contracts. The courts must enforce a valid contract as it is made. Express Contracts In an express contract. The seal represented that the parties intended the agreement to entail legal consequences. the parties state the terms. Statutes prescribe and restrict the terms of a contract where the general public is affected. An implied contract depends on substance for its existence. there must be some act or conduct of a party. at the time of its formation. The terms of an insurance contract that protect a common carrier are controlled by statute in order to safeguard the public by guaranteeing that there will be financial resources available in the event of an accident. There is a definite written or oral offer that is accepted by the offeree (i. The implication of a mutual agreement must be a reasonable deduction from all of the circumstances and relations that contemplate parties when they enter into the contract or which are necessary to effectuate . but. all contracts were required to be under seal in order to be valid. Contracts implied in law (quasi-contracts) are distinguishable in that they are not predicated on the assent of the parties. No legal benefit or detriment to any party was required. It is misleading to label as an implied contract one that is implied in law because a contract implied in law lacks the requisites of a true contract. for an implied contract to arise. Circumstances exist that. which have not been expressed in words. A contract implied in fact is not expressed by the parties but. a contract was an enforceable legal document only if it was stamped with a seal. either orally or in writing. in order for them to be bound. Implied Contracts Although contracts that are implied in fact and contracts implied in law are both called implied contracts. unless there are grounds that bar its enforcement. a true implied contract consists of obligations arising from a mutual agreement and intent to promise. has also diminished the importance and employment of formal contracts under seal. such as implied contracts. suggested from facts and circumstances that indicate a mutual intention to contract. demonstrate such an intent that is sufficient to support a finding of an implied contract. In the past. the person to whom the offer is made) in a manner that explicitly demonstrates consent to its terms. rather. therefore. according to the ordinary course of dealing and common understanding.

The performance constitutes an acceptance of the offer. The phrase is. Courts find that unconscionable contracts usually result from the exploitation of consumers who are poorly educated. with respect to each party. which is inferred from the circumstances. or may refrain from acting. to a certain extent. Executed and Executory Contracts An executed contract is one in which nothing remains to be done by either party. or forbearance from the performance of an act. The offeree may act as requested. a misnomer because the completion of performances by the parties signifies that a contract no longer exists. the parties continue to perform according to its terms. however. because he or she did not make any promises. is a true contract. or even for abandoning performance once it has begun. Unconscionable Contracts An Unconscionable contract is one that is unjust or unduly one-sided in favor of the party who has the superior bargaining power.. the contract defines the duty. . The offeror (i. A bilateral contract is sometimes called a two-sided contract because of the two promises that constitute it. An executory contract is one in which some future act or obligation remains to be performed according to its terms. an implication arises that they have mutually assented to a new contract that contains the same provisions as the old agreement.e. With respect to contracts implied in fact. but may not be sued for failing to perform. The promise that one party makes constitutes sufficient consideration (see discussion below) for the promise made by the other. If. after an agreement expires. and the contract then becomes executed. the court may not infer a contractual relation-ship. Acceptance of the offer may be revoked. No implied promise will exist where the relations between the parties prevent the inference of a contract. impoverished. a person who makes a proposal) promises to do a certain thing if the offeree performs a requested act that he or she knows is the basis of a legally enforceable contract. The adjective unconscionable implies an affront to fairness and decency. A contract implied in fact. reciprocal promises between entities that entails the performance of an act. Where doubt and divergence exist in the minds of the parties. the duty defines and imposes the agreement upon the parties. who makes the promise. A unilateral contract involves a promise that is made by only one party. Bilateral and Unilateral Contracts The exchange of mutual. and unable to shop around for the best price available in the competitive marketplace. will be legally bound. An unconscionable contract is one that no mentally competent person would accept and that no fair and honest person would enter into. This is a one-sided type of contract because only the offeror. until the performance has been completed. A contract will not be implied where it would result in inequity or harm. is a Bilateral Contract. in the case of quasicontracts. whereas a contract implied in law is actually an obligation imposed by law and treated as a contract only for the purposes of a remedy.their intention.

. or disclaiming a Warranty (i. by his or her conduct. This doctrine is applied only where it would be an affront to the integrity of the judicial system to enforce such a contract. or that there was no acceptance of the offer because the purchaser actually had no choice in the bargain. Courts. Not all adhesion contracts are unconscionable. given in order to induce the sale. Unconscionability is ascertained by examining the circumstances of the parties when the contract was made. one or both parties assume risk.The majority of unconscionable contracts occur in consumer transactions. a statement of fact concerning the nature or caliber of goods sold the seller. A voidable contract may be ratified either expressly or impliedly by the party who has the right to avoid it. Aleatory Contracts An aleatory contract is a mutual agreement the effects of which are triggered by the occurrence of an uncertain event. It is. A void contract imposes no legal rights or obligations upon the parties and is not enforceable by a court. however. A voidable contract is a legally enforceable agreement. Adhesion Contracts Adhesion contracts are those that are drafted by the party who has the greater bargaining advantage. as the terms of such contracts do not necessarily exploit the party who assents to the contract. Contractual provisions that indicate gross one-sidedness in favor of the seller include limiting damages or the rights of the purchaser to seek court relief against the seller. The party who was legally competent at the time that a voidable contract was signed may not. often refuse to enforce contracts of adhesion on the grounds that a true meeting of the minds never existed. and relied upon by the purchaser). as an insured will not receive the proceeds of the policy unless a fire occurs.. An implied ratification occurs when the party. such as by performing according to its terms. The contract is not void unless or until the party chooses to treat it as such by opposing its enforcement.e. but it may be treated as never having been binding on a party who was suffering from some legal disability or who was a victim of fraud at the time of its execution. Oral Acknowledgment of a contract and a promise to perform constitute sufficient ratification. manifests an intent to ratify a contract. Ratification of a contract entails the same elements as formation of a new contract. An express ratification occurs when that party who has become legally competent to act declares that he or she accepts the terms and obligations of the contract. In this type of contract. however. .e. assert its voidable nature to escape the enforcement of its terms.") They are frequently employed because most businesses could not transact business if it were necessary to negotiate all of the terms of every contract. no contract at all. an event that is uncertain to occur. A fire insurance policy is a form of aleatory contract. in effect. (These types of contract are often described by the saying "Take it or leave it. to accept) the contract or to reject it. There must be intent and complete knowledge of all material facts and circumstances. providing the weaker party with only the opportunity to adhere to (i. Void and Voidable Contracts Contracts can be either void or Voidable.

letters. You can build trust by showing your personality. It is not necessary to establish branches. While the consumer may have the advantage. which will aid in making you much more confident. Further. and to tell if you are truly confident in what you are selling. Distance selling mode There are contracts where the supplier and the consumer are not dealing face to face which have exclusive use of distance communication.http://legal-dictionary. telephone with or without human intervention. It is convenient of finding products and time spent on shopping. because they can see every reaction that you make to their questions. press advertising with order forms. It is because of this.thefreedictionary. As a sales person you need to get the consumer excited about a product and The methods of distance selling are tools for the sellers to break down the geographical barriers and reach the global community of buyers. companies or other entities in their target countries. unaddressed or addressed printed matter (this could include leaflets dropped through letter boxes). Being face to face with the customer allows the sales person to use a variety of sales strategies and to build a relationship with the customer in a way that they wouldn't be able to if they were using another method of selling. Face to face selling mode Face to face selling is one of the most productive and most popular sales techniques. It makes making things time-efficient and simple. catalogues. this sort of contracts is called distance selling. but this doesn't mean that a sales person can't make the most of the situation. that a consumer generally has the advantage in a face to face meeting. Definition Advantages In a face to face selling situation. It takes a truly gifted sales person to be able to show confidence even when they are not confident in what they are selling. Therefore. fax. consumers can compare product features. the consumer has the ability to see how you react to their questions. and television (teleshopping). It can be done by a single point-of-contact. wholesale retailer) involved between the buyer and the seller. . you have the advantage in creating a deal. with less effort. There is no mediatory party (example broker. Having many types of distance methods encourage consumers to do shopping easy and quickly. Consumers are free to spend time as much as they want deciding the right product before they buy. prices to make a better decision. Distance communication would include web pages. email. Consumers can buy goods and service from their home without the hassle of finding a parking space.com/Types+of+Contracts Comparision between face to face and distance selling mode.

There is less reliability. reps may take several visits or calls to actually make sales. When a person enters a store and can ask for advice. the sales reps' salaries and benefits must be factored into the costs of all sales appointments. share information with them as they share it with you. there is a significant delay in receiving the ordered goods. Consumers prefer to shop in the conventional way for purchasing food products. the shop and the staff. and can be dishonestly priced and overinflated. Consumer knows the brand. she may need to ask questions. Moreover. Because of this. Sales reps must also be trained in classrooms and on the job before they can even call on customers. Each direct sales call can cost over $300 in some industries. you are giving them a piece of you. returning the product and getting a refund can be even more trouble and time consuming than purchasing the product. Time Consuming Sales calls can be time consuming. A sales rep may spend an hour or more introducing the features and benefits of her products. Companies that sell directly must hire sales reps. You have to show them that you are a person outside of sales. tell them about your kids. because you were able to gain their trust. overcome objections and try to close the sale. By doing this. gain information. This is not suitable for perishable commodities like food items. there might be hidden fees in methods of distance selling. Sales reps also incur expenses traveling by air or car as not all customers are local.Disadvantages show them that you aren't just a sales person. Expensive Direct selling is relatively expensive compared to other forms of marketing. If they have kids. Some there is lack of human interaction. Enjoyment of doing shopping with others and making social connections will be lost when doing distance shopping. With this level of trust built up. Buying from a local retailer gives purchasers a certain confidence. in case if the customer is not satisfied with the ordered product. Moreover. they may discount this lack of confidence and let your personality take over. During this process. However. they may just equate this to being nervous or new. according to "Know This" online. These training programs often last several weeks. and interact with a human being. Moreover. a reputable business reference site. even if you don't seem as confident as they would like. Some people will not trust the distance shopping because transaction does not happen face to face. which can get expensive. Hence. . while keeping them away from questions that could potentially damage your sale.

Brit Ltd. the decision maker or owner may not even be available at the time of the sales call. Also. Some customers refuse to make online payments at all because of the danger that hackers may steal their credit card numbers. an online marketer may receive several sales in the same time period. No matter how friendly you are an an email. companies using advertising or online sales methods can cover entire regions or the national market with single promotions. online sales more and more popular by the development of the internet.html Brit Ltd is a trading company based in the form of online sales is one way distance selling. Also Brit Ltd also advertise their website easier and cheaper. can easily introduce their products to millions of people online every day. online communication rarely provides you with the opportunity to build the kind of customer relationships that are possible when you can look customers in the eye and gauge their needs and their level of satisfaction. they can only cover one or more markets at a time. They may then move on to a contiguous market and complete coverage for the next directory. http://smallbusiness.chron. this method significantly reduces the cost of stores and warehouses. Contrarily.consumer or business clients need to think about their purchasing decisions. It is easy for email recipients to misunderstand your tone. depending on the number of sales reps they employ. yellow pages sales reps may spend 3 to 6 weeks in one market to visit all advertisers. Limited Coverage Small companies have limited coverage when they sell to clients directly. Processing customer payments can be tricky for online businesses. complicating business relationships. In addition. Contrarily. . Sales reps can only make one sale at a time. Internet customer service can never match the intimacy of face-to-face interactions. For example.com/disadvantages-direct-selling-23209. In other words.

The terms must be incorporated into the contract whether that is by them being written terms. it is still entitled to damages for breach. Where the party not in breach chooses to affirm the contract. warranty. There are also other ways that terms can be incorporated into a contract. innominate terms and exclusion clauses. Warranties Warranties are those terms which are not serious enough for breach to be a repudiatory breach. By doing so it waives its right to accept repudiation and cannot at a later date treat the contract as at an end due to the other party's repudiatory breach. If the breach is serious enough then it will be a repudiatory breach. Analyse terms in contracts with reference to their meaning and effect by providing examples in relation to dresses for condition. The party not in breach can only recover damages. At the same time that party could seek damages from the party in breach. then evaluate and make specific analysis based on given situations. Contractual Terms The main body of a contract is its terms. Intermediate Terms Intermediate (or innominate) terms are neither conditions nor warranties. Conditions Conditions are terms which are of such importance that if one party breaches that term (known as a repudiatory breach) the other party has the right to rescind the contract (accept repudiation). Whether a breach of an intermediate term is a repudiatory breach is a question of fact.3) We will give the definition of the condition. Terms can be divided into conditions. The party not in breach does not have to rescind the contract but can elect to affirm the contract. Care must be taken to communicate acceptance of the repudiatory breach in case it is otherwise deemed that the party has waived its right to rescind. In other words the party not in breach could elect to treat the contract at an end and would no longer have to perform its obligations. warranties and intermediate terms. innominate terms and exclusion clauses (1. . otherwise it will not be. warranty. implied into the contract by trade custom or whether one party makes a representation to the other party where it is clear that the other party treats the representation to be of great importance.

They are: · · damages. It should also be considered whether any of the contracting parties entered into the contract under a mistaken belief as to the subject matter of the contract. Remedies for Breach of Contract There are two principal remedies for breach of contract. The doctrines of misrepresentation and undue influence. injunctions for specific performance. are considered in the chapter on the law relating to fraud. causes a significant imbalance in the parties' rights and obligations under the contract to the detriment of the consumer. It should be considered whether there has been a misrepresentation of facts made by any of the contracting parties. · · · Was the contract tainted by illegality? Was there a question as to the capacity of any contracting party to enter into a contract? Did any of the contracting parties enter into the contract as a result of undue influence? There is no general duty on a contracting party to disclose all material facts to the other party. There are statutory rules as to the extent of such clauses and these are to be found in the Unfair Contract Terms Act 1977 (UCTA). The Courts have tended to be less harsh with such clauses.Exclusion Clauses One particularly important type of term is the exclusion clause. There are also rules in the common law. The Unfair Terms in Consumer Contracts Regulations 1999 apply. with certain exceptions. Policing the Contract There are various factors that need to be considered in deciding whether a contract is void and therefore unenforceable or voidable which allows a party to treat the contract as void. such as the rule that exclusion clauses will be construed against the party seeking to rely on them (contra proferentem rule). in the context of fraud rather than contract. . contrary to the requirement of good faith. These are clauses that purport to exclude liability for breach. to unfair terms in contracts concluded between a consumer and a seller or supplier. Exclusion clauses should be contrasted with limitation clauses which seek to limit liability. The Regulations provide that an unfair term is one which has not been individually negotiated and which.

Gaming Contracts and Bills of Exchange Gaming contracts are unenforceable at law as a matter of public policy. the other party is entitled to treat the contract as at an end. Specific performance is a remedy available in many actions for the sale of land. like a condition). If the gambler defaults on a cheque then the casino has a remedy as there is in general no defence to a bill of exchange not being honoured. the customer may choose to Regard this as a Breach of an essential condition and sue the seller for Damages he has suffered. These are both questions of fact.htm for example May requires her partners 1000 dress. Once the breach of a condition has been established. For instance.com/regulation/standards_7_1_6. However it is still possible for a casino to enforce payment by a gambler defaulting on payment of its gambling debts. and obtain other remedies.Damages are awarded on the basis that they should put the party not in breach in the position that it would have been in had the contract been properly performed. warranty). the innocent party may not terminate. or even terminate the . http://legal. Some wrong about orgin of product occurs. The level of damages is limited to natural consequences of the breach and consequences that are in the contemplation of the parties. regardless of whether the defaulting party has a counterclaim with which to set off the debt. However. one such condition could be expressly stipulated by the parties. This is because by its very nature a parcel of land is unique. Usually this will be by cash or cheque. the relevant conditions in the contract can occur as following: ‗Conditions‘ are terms that the parties consider so important that it must be performed. if it is read to be a minor term (ie. ‗Innominate terms‘ are terms that lie in limbo. If a party fails to perform a condition. or Affirm the contract and sue for damages and pursue other remedies like injunctions or specific performance. the innocent party may choose to either: Terminate the contract and sue for damages. The dress should have belonged to Dolce and Gabana summer 2012 collection but when Brit Ltd delivers the products to customer it is a counterfeit product of one company is headquartered in Shanghai. However it must always be remembered when seeking an equitable remedy that the equitable maxims apply. If the innominate term is an important one (ie.practitioner. the innocent party may terminate the contract. The gambler pays for chips in order to gamble. in a contract for selling dresses..

after two years of operation. For example After customers buy D & G dress from Brit Ltd by purchased online. the customer may choose to regard this as a breach of an essential condition and sue the seller for damages he has suffered. May ordered four batches. the commitment to repair or replace being the warranty. before agreeing to the contract. however the batch was proved unsatisfactory as it contained some colour difference in the fabric.A ship was Chartered to the defendants for a 5 year period. entered into a contract with Jim (represents Neovision JSC manufacturer in Vietnam) under which Jim agreed to make dresses during the year 2011 'as and when required'. An exclusion clause is a clause in a contract which excuses a party to the contract of liability in situations covered by the exclusion clause.contract.so Brit Ltd terminated the contract. Warranties term: For example. After receiving a number of tenders.Desipe the dress still has 3 months until out of warranty that given by Brit Ltd. who had indicated that they would supply the dresses at 10% cheaper. The agreement contained the following provisions: 1.But customer accidentally spill paint on the dress. Immediately after rejecting the forth-quarter order. She paid for the first three quarter. will not be responsible for this dress Case 1 May. (dress color fading after the first wash) Innominate term Brit Ltd hired a ship to transport their products. brit Ltd. 2. it may be in common and widespread use. ‗It is agreed between the parties that in return for executing this agreement Brit Ltd will call upon any other dress manufacturer in Vietnam during the year 2011.under exclusion clause term. If a contract has exclusion clauses. while in other cases. while in UK. It is agreed that no undertaking as to quality is given by Jim (representing Neovision) and no compensation shall be payable in respect of the suitability or otherwise of the dresses to be manufactured. if necessary. machinery degraded boat can not continue to operate. Case 2 . it is important to get familiar with them before signing and to contest them. May said to Jim that she would not be wanting any more unless they could rectifier the situation within one week after the order. or even terminate the contract. May seek another supplier in Vietnam. Brit Ltd products come with warranties under which the manufacturer will repair or replace any product that fails during the warranty period. called for a tender to a specific design for a dress in the year 2011.However. May. to utilise subpar replacement parts. for customers before buying the dress. This type of term in a contract can be illegal in certain settings. In the fourth quarter.

made so that another party is justified in understanding that his or her assent to the bargain is invited and will conclude it. acceptance. this may brings to Neovision an advantage. large computer software multinational. An acceptance is valid only if the offeree knows of the offer. ‗It is agreed between the parties that in return for executing this agreement Brit Ltd will call upon any other dress manufacturer in Vietnam during the year 2011.  Apply the elements of contract in the 1st case business scenarios (2. May calculate the loss was close to £1M. consideration.000.therefore the contract has the 4 basic elements necessary. mutuality). May still be able to find another company representative to finish the job from previous) 2. It is also known that ICL has a world wide liability software insurance of £50M. and the acceptance is manifested according to the terms of the offer. 1. It is a demonstration of willingness to enter into a bargain. which means that Neovison volunted and accepted this contract in the begining.ICL. the acceptance is unequivocal and unconditional. (Thís agreement was made to protect Brit Ltd in case Neovision dose not have ability to complete the contract. and communication of the offer to the identified. Considerasion: when making contract Jim and May gave the agreement to two constraints together. Jim attended the tender organized by the May preset for Brit Ltd organized. this represents M ay also accepts Jim will be their business partners in the contract. there is no offer to form the basis of a contract. Offer: May offered for bidding on the design for one dress. however. prospective offeree. They will not be responsible for errors on their products) . and after considered Jim representing for Neovision company was chosen to get in the contract. the two sides have agreed and signed the contract. a definite proposal that is certain in its terms. If any of these elements are missing. the offeree manifests an intention to accept. (This could be a flaw in the agreement of the two companies. was to supply a computer software system for administration including charges and supply chain set-up for May in Vietnam in 2011.) and Jim (Represents Neovision JSC manufacturer in Vietnam). The supply contract however contains a clause limiting the liability for ICL to £ 100. Any offer must consist of a statement of present intent to enter a contract. It is agreed that no undertaking as to quality is given by Jim (representing Neovision) and no compensation shall be payable in respect of the suitability or otherwise of the dresses to be manufactured. Based on what is given in the scenario. we can see two representatives of the two parties: May (Brit Ltd. Acceptance: Acceptance of an offer is an expression of assent to its terms.1) In this section I will present the evaluation and analysis of the situation based on the elements of the contract (offer. Jim has been selected. The software was defective causing the inability to track and collect full payments.After considering from other tenders.

May will pay when there is a deman from Brit Ltd for Neovison. Rather.  Analyse and evaluate the effect of different the law on terms in the above two different contracts (2.2) (2. ICL is responsible for providing software and upgrades for May to financial management in 2011. it is an illusory promise. In this case. Jim and May already have one of mutuality plan such as May ordered four batches but she only paid for the first three quarter. It means May will ask Jim when Brit Ltd has any demans for Neovision In the scenario It is agreed that no undertaking as to quality is given by Jim (representing Neovision) and no compensation shall be payable in respect of the suitability or otherwise of the dresses to be manufactured the losses caused by software ICL. the employee is expected to be on-call and receive compensation only for hours worked. they must be mutually binding. and to add credibility ICL are responsible for their products if the error was discovered Condition Warranties As and required contract or A zero-hour contract (or zero-hours contract) is a recent type of contract under which an employer does not guarantee the employee a fixed number of hours per week. If one party's promise does not actually bind him or hers to some performance or forbearance.Mutuality: Where promises constitute the consideration in a bilateral contract.Meanwhile the software product can be repaired quickly. and there is no enforceable contract. in 1st case. One party cannot expect to have different rules or standards than another held in contract with it. ICL will be responsible for the damages and repair softwarethat . large computer software multinational.3) Case 1 Case 2 ICL. This concept is known as mutuality of obligation. Evaluation both the contracts May represents for Brit Ltd are the buyer means to pay. was to supply a computer software system for administration including charges and supply chain set-up for May in Vietnam in 2011. The expectation that the standards and agreements within a contract made between two parties is either upheld or rejected by both parties. in the second case by the ICL is a company providing pc software so May could have to pay recurring each cycle because clothes are disadvantages of repair products (fabric sewed is not able to recyle for other products) so Neovision were wisely in not taking responsibility for the defects.

but we can implicitly. . Stevenson – here a friend of Ms. Vertical privity involves a contract between two parties. but it was established that the manufacturer has a duty of care owed to their consumers and she was awarded damages in tort. but there are still other stuation occur. and ICL in both cases Neovison and ICL are companies offering their products should have their exclusion clause to prevent risks in the production process. Horizontal privity arises when the benefits from a contract are to be given to a third party.if ICL can not provide a full range of software features for May or May not be able to pay that ICL had previously set out in the contract both parties have the right to cancel the contract The supply contract however contains a clause limiting the liability for ICL to £ 100. Donoghue could not sue under the contract. most commonly contract of sale of goods or services.Innominate It is agreed between the parties that in return for executing this agreement Brit Ltd will call upon any other dress manufacturer in Vietnam during the year 2011 Eclusion clause It is agreed between the parties that in return for executing this agreement Brit Ltd will call upon any other dress manufacturer in Vietnam during the year 2011 This is not clearly stated. Donoghue bought her a bottle of ginger beer. however. which was defective. If a third party gets a benefit under a contract. If Neovision accept the revised their products within a week and promise not to repeat the contract would remain in force. This. it does not have the right to go against the parties to the contract beyond its entitlement to a benefit. Donoghue v.it is essential to avoid damage from unexpected incidents In 1st Case because the contract says available on terms innominate term. with an independent contract between one of the parties and another individual or company. so May can simply go find another manufacturer. the ginger beer contained the partially decomposed remains of a snail. Innominate term was mentioned in warraties. In 2nd case bases on Third-party rights Privity of contract occurs only between the parties to the contract. Since the contract was between her friend and the shop owner. it proved to be a bound between Brit Ltd.000 in the 1st case innominate term is explicitly mentioned that May can call any other manufacturer apart from Neovision. There is no privity of contract between the manufacturer and the consumer. does not mean that the parties do not have another form of action e. case 2 innominate term is not specified. The retailer then sells the product to a consumer.g. Mrs. An example of this occurs when a manufacturer sells a product to a distributor and the distributor sells the product to a retailer. Specifically.

http://en.amount of damages the court will decide. mutual. base on Privity of contract.However. .wikipedia.org/wiki/Privity_of_contract May be able to sue ICL because of the damage they cause. or successive relationship to the same right of property or the power to enforce a promise or warranty.000 for the damage caused by ICL software. May is entitled to compensation from the insurance company of the ICL. even in the contract between Brit Ltd and Neovison only accept compensation £100.Privity is the legal term for a close.

Be able to apply the elements of a contract in business situations . I understood some aspects of the law of contract and tort and the skill to apply them. Apply the elements of a contract in a given business scenarios.Conclusion After this report.Understand the essential elements of a valid contract in a business context . Evaluate the effect of different terms in given contracts. .Be able to apply the principles of liability in negligence in business situations . Discuss the impact of different types of contract Be able to apply the elements of a business contract in business situation.Understand principles of liability in negligence in business activities . particularly in business situations. Apply the law on terms in different contracts. I have obtained valuable knowledge : the importance of the key essential elements required to the formation of a valid contract.

com/regulation/standards_7_1_6.practitioner.htm http://legal.thefreedictionary. 6th ed.practitioner. http://en.org/wiki/Privity_of_contract Mr Anthony’s Silde .org/wiki/Contract http://legal-dictionary.com/Types+of+Contracts http://legal.Referrence list [Black’s Law Dictionary.wikipedia.com/regulation/standards_7_1_6.wikipedia.htm http://en.