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Banking Academy of Vietnam: Assignment Front Sheet
Banking Academy of Vietnam: Assignment Front Sheet
Y/601/0563
Pearson BTEC Level 5 HND Diploma in Business
(Accounting) Unit 5: Aspects of Contract and Negligence for
Business
Student name (vn) Student name (en) Student ID Assessor name
John M. Andre
Student declaration
I certify that the work submitted for this assignment is my own. I have clearly referenced any sources
used in the work. I understand that false declaration is a form of misconduct.
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In addition to the above PASS criteria, this assignment gives you the opportunity to submit
evidence in order to achieve the following MERIT and DISTINCTION grades
Indicative
Grade Descriptor Contextualisation
characteristic/s
M1 Identify and apply An effective approach to To achieve M1, you will have participated
strategies to find study and research has been actively (showing you have done the
appropriate solutions applied. recommended reading) during in-class
discussions.
(Task 5)
M2 Select / design
and apply appropriate
methods / techniques
M3 Present and The appropriate structure and To achieve M3, you will have presented
communicate approach has been used. the report in a professional manner
appropriate findings (proper formatting, proper use of
referencing, depending only on accepted
academic references and avoided
referencing any public websites, using a
proper structure, using persuasive
arguments, etc.) and appropriate for
those familiar and unfamiliar with the
subject of contracts.
(Task 5)
D1 Use critical Self-criticism has been shown To achieve D1, you will have evaluated
reflection to evaluate regarding analysis and your judgements against existing UK or
own work and justify recommendations. Commonwealth case law.
valid conclusions
(Task 5)
D2 Take responsibility Activities have been To achieve D2, you will have included
for managing and managed. evidence of relevant, wide reading of
organising activities academic sources within your report.
(Task 5)
D3 Demonstrate Innovative and creative To achieve D3, you will have used
convergent / lateral / thought have been applied. innovative and creative thought with
creative thinking regards to arguments and counter-
arguments.
(Task 5)
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Assignment Brief
Unit number and title Unit 5: Aspects of Contract and Negligence for Business
Tony and Suzi sat down and were talking. Suzi said that she had been selling cars for 3 years
now and enjoys the work. Tony said he could use her help. After a long discussion, Tony said
“I would love to get that 2010 Porsche 911. Is it in good shape mechanically?”
Suzi responded, “The car runs like new and you can see it looks amazing! Since you’re only
17, do you have a driver’s license?”
Tony said, “Yes, here it is. Plus, I’ll be 18 in one week. You should come to my birthday party.”
Suzi said, “Great. Well, the car is £30,000. Do you have that much money?”
Suzi said, “Yes, it will be £970 per month for 60 months with no money down.”
That day, Tony drove home in his 2010 Porsche 911. He was so happy.
One month later, two weeks after his birthday party, Tony received his first notice to make
his payment of £970. He decided that the car was great but, actually, it was not for him. He
preferred to ride his bicycle around and save the £970 per month. On 16 September 2016,
Tony called his sister to tell her he was going to return the car.
His sister said she was not authorized to approve that and Tony must talk with Suzi’s
manager, Frank.
When Tony called Frank, Frank said “Look, Tony. You bought the car already. It is yours. It
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became yours when you took delivery of the car which means when you drove it off the car
lot. Now, you’re an owner and you must take responsibility for your purchase. You must now
pay £970 per month for 60 months.”
What are the most important elements when determining if a contract exists between two
parties? Which are required? What tests do the courts use for each element to decide if it is
present?
Explain the differences between the following types of contract and how they each could
impact The Car case.
Valid
Voidable
Void
Explain the similarities and difference between these three terms of contract:
expressed orally
implied in law
Identify if all the necessary elements are there in The Car case above to form a contract. Show
how the tests you included in Task 1 would be applied to this case.
Identify what implied terms are present in The Car case. What is the impact of these implied
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terms?
Identify what conditions or warranties exist in The Car case. What is the impact of these
terms?
To achieve M1, you will have participated actively (showing you have done the recommended
reading) during in-class discussions.
To achieve M3, you will have presented the report in a professional manner (proper
formatting, proper use of referencing, depending only on accepted academic references and
avoided referencing any public websites, using a proper structure, using persuasive
arguments, etc.) and appropriate for those familiar and unfamiliar with the subject of
contracts.
To achieve D1, you will have evaluated your judgements against existing UK or
Commonwealth case law.
To achieve D2, you will have included evidence of relevant, wide reading of academic sources
within your report.
To achieve D3, you will have used innovative and creative thought with regards to arguments
and counter-arguments.
Evidence Evidence
Summary of evidence required by student
checklist presented
PRESENTATION
1. The assignment should have a cover page that includes the assignment
title, assignment number, course title, module title, Lecturer name,
student’s name and student’s ID.
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3. You are to submit the assignment in the electronic submission system and
also email your report (to Students@JohnMAndre.com) before the
submission deadline in .DOCX format with the filename ACNB_A1_F01-
001.docx (where F01-001 is your student ID). Failure to properly submit
may cause you to fail all outcomes.
6. Word count limit includes only the introduction, body, and conclusion.
8. The assignment should contain a list of any references used in the report.
Check carefully the submission date and the instructions given with the
assignment. Late assignments will not be accepted.
Ensure that you give yourself enough time to complete the assignment by
the due date.
Do not leave things such as printing to the last minute – excuses of this
nature will not be accepted for failure to hand-in the work on time.
You must take responsibility for managing your own time effectively.
If you are unable to hand in your assignment on time and have valid
reasons such as illness, you may apply (in writing) for an extension.
Failure to achieve a PASS grade will results in a REFERRAL grade being
given.
Take great care that if you use other people’s work or ideas in your
assignment, you properly reference them in your text and any
bibliography.
NOTE: If you are caught plagiarizing, the University policies and
procedures will apply.
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Achievement Summary
Pearson BTEC Level 5 HND Diploma
Qualification Assessor name John M. Andre
in Business (Accounting)
1.3 Analyse terms in contracts with reference to their meaning and effect
LO 2
D3: Demonstrate
M3: Present and communicate
convergent/lateral
appropriate findings
/creative thinking
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Assignment Feedback
Formative Feedback: Assessor to Student
Action Plan
Summative feedback
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Table of Contents
Introduction ............................................................................................................................ 10
(Task 1) Explain the importance of the essential elements required for the formation of a
valid contract. ....................................................................................................................... 11
(Task 2) Discuss the impact of different types of contract. ................................................. 14
(Task 3) Apply the elements of contract in given business scenarios Analyse terms in
contracts with reference to their meaning and effect. .......................................................... 16
(Task 4) Apply the elements of contract in given business scenarios .................................. 18
(Task 5) Apply the law on terms in different contracts and evaluate the effect of different
terms in given contracts........................................................................................................ 20
Conclusion .............................................................................................................................. 23
Reference ................................................................................................................................ 24
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Introduction
Contract plays an essential part of every business transactions. Business contracts typically
include a negotiation process in which various terms to which each party must abide are
stipulated. The assignment is divided into three main parts. The first part discusses about the
essential elements of a valid contract, the second part discuss the impact of different types of
contract and the last one demonstrates the theories applications of these term of contract in
given business situation. This assignment will help me connect theory to practice by applying
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(Task 1) Explain the importance of the essential elements required for the formation of
a valid contract.
First of all, a contract may be defined as an agreement which legally binds the parties
The most important elements when determining if a contract exists between two parties
Offer
An offer is an important first step in the formation of the contract. A communication will
be treated as an offer if it indicates the terms on which the offeror is prepare to make a
contract and give a clear indication that the offeror in tends to be bound by those tern if
- The content of the offer must always be specific and enough precise.
Acceptance
Acceptance of an offer means unconditional agreement to all the term of that offer
(Elliot and Quinn, 2009). It is know that an acceptance can be seen as the confirmation
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- The offeree must accept the whole, absolutely and unconditionally to the contents of
- Answer to accept the offer must be presented in specific writing, behavior or words.
- The offeree can reply to accept the offer any given time, provided that before the end of
the deadline for reply if such offers to have fixed the deadline for reply.
Offer and acceptance not always need to be expressed verbally or in writing. An implied
contract is one in which some of the terms are not expressed in words.
1.1.2 Consideration
benefit to the person making a promise (the promisor) or some detriment to the person to
whom the promise is made (the promisee), or both (Elliot and Quinn, 2009).
- Consideration must be sufficiency but no need to adequacy, this means that the
consideration need not have the same value to the parties to the contract, but it must be
- Consideration in contract, each party must exchange something with the other side in
order to determine. When contract has consideration means two parties also have
something that they wish and must give up something for that.
An agreement will only become a legally binding contract if the parties intend this to be
so. This will be strong presumed in the case of business agreement but presumed
Media, 2010).
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Social, domestic and family arrangement are an agreement between husband and wife,
other family member and also between who have a close relationship of some form but
Commercial agreements, when business people take part in commercial agreements, they
- Commercial agreements.
Social, domestic and family arrangements are not usually intended to be biding but
binding.
1.1.4 Capacity
Capacity refers to the fact that the law regards some groups as being unable to enter into
understand the agreement they have entered into (BPP Learning Media, 2010). There are
some kinds of party whose capacity is limited such as: minors, people suffering from a
The people who participation a contract do not have civil act capacity
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- Mental ill.
=> These people will not have enough awareness and the unfulfilled understanding and
awareness about the contract law to make a contract. Without capacity and good
condition, there is no valid contract because nobody can force them to keep a promise so
A contract which affected by such "vitiating factors" may be void, voidable and
unenforceable (BPP Learning Media, 2010). Some of the parties link completely, while
others are not. The terms of the contract determine whether a contract can be fully
A valid contract is an agreement which legally binds the parties to it. A valid contract
must have to three essential elements to make a contract: offer, acceptance and
consideration.
In the Car case, if the contract of buy a car between Tony and Car Max is valid contract.
Tony cannot return the car, he must to pay back payments he missed and must to
A void contract is not a contract at all. The parties are not bound by it and if they transfer
property under it they can sometimes recover their goods even from third party (BPP
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Learning Media, 2010). Generally, the invalidity will be considered only, if it is referred
by making an objection against the other party or bringing a legal action in court.
There are many causes for the contract to be disabled. Example, the contract invalidated
does not comply with the conditions set by the law in effect the provisions and do not
have essential elements required for the formation so it have no legal value.
Furthermore, void contracts are those contracts were unlawful terms, infringe upon the
interests of the state or public interests and contract is false, deceptive etc. If the Car
case is void contract, Tony does not need to pay money and must return the car.
A voidable contract is a contract which one party may avoid, that is terminating, at his
opinion (BPP Learning Media, 2010). Voidable contracts also include those entered into
by a person who lacks capacity or by a person who entered into the contract under duress
or undue influence. A minor can be bound by the contract is a contract to provide the
basic necessities. Necessities are interpreted as including not just the supply of necessary
goods and services, but also contract of service for the minor’s benefit (Elliot and Queen,
2009).
The Car case in here is voidable contract because Suzy has makes a contract to buy the
car with Tony when Tony was only 17 years old although he will be 18 in one week. But
he is still just under 18 and he is a minor. Tony was not even paid any instalment
payments before and the car was not his necessities because no car he can ride a bike as
he wishes. And one more thing to prove it was not his necessities because the car is not a
good suitable to the condition in his life and it is not his actual requirements at the time
he buy it, he did not even have the capacity to pay for the car. This case is voidable
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contract so Tony completely can return the car for Car Max and he do not need to
(Task 3) Apply the elements of contract in given business scenarios Analyse terms in
The contents of a contract are known as terms or clauses. An agreement will generally
consist of various terms. Even the simplest forms of contract will have terms. Here are
The Similarities:
- Terms of contract set out duties of each party under that agreement.
- The similar between three terms; expressed orally, implied in law and implied in trade
usage is the rights and obligations of parties to some contract are defined by these term.
- The term must be sufficiently complete and precise to produce an agreement which can
- When assessing contractual terms it is important to keep in mind that both pre-
contractual negotiations of the parties and their post-contractual conduct may give rise to
The Difference:
The general difference between three terms is expressed orally term can laid down by the
parties themselves meanwhile implied on law and implied in trade usage are deemed
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from part of a contract even though not expressly mentioned and on the basis of law on
- Expressed orally is one which has been specifically stated or expressed in the contract
that is they are expressly, specifically stated by oral. To determine the oral statement is a
+ Importance of statement: If the statement is very important that one party would not
otherwise have entered into the contract, the statement can be seen as a term
+ Timing of statement: Generally, the more time between statement and conclusion of
+ Strength of statement: The more emphatically a statement is made, the more likely the
+ Special knowledge and skill of parties: If the statement of the party with the special
knowledge and expertise on this issue, the court is likely to declare a term deeming if
Example before make a contract, the parties must be negotiation as asked the price of
- Implied in law: These are terms which the law dictates must be present in certain types
of contract – in some cases and sometimes irrespective of the wishes of the parties
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Follow by Liverpool City Council v Irwin (1977), rental agreement will include a
number of implied terms as the host must ensure that the condition of rental house must
Statute will also include the terms: for example, sales to consumers will have the implied
term that the goods "satisfactory quality" (Sale of Goods Act, 1979 and Unfair Contract
- Implied in trade usage: Terms routinely used in contracts within a particular trade or
Follow by British Crane Hire Corp Ltdv Ipswich Plant Hire Ltd (1975), the hirer was
bound by the owner’s usual terms, even though these were not actually stated at the time
the contract was made. The owner’s terms were based on a model supplied by a trade
association, and were common in the trade, and could therefore be implied into the
All the necessary elements are there in The Car case above to form a contract
Test Evidence
The content of the offer must Offer 2: Suzy offer a payment will be £970 per month for
always be specific and enough 60 months with no money down for Porsche 911.
precise.
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payment
The offeree must accept the whole,
absolutely and unconditionally to Acceptance 2: Tony said “OK, I’ll take it.” when Suzy
the contents of the proposal into a offer price of the payment for 60 months.
contract.
much money right now to pay. Tony must pay per moths
Consideration must be sufficiency
for Car Max to get Porsche 911 right now and Car Max
but no need to adequacy.
must take delivery of the car to Tony to get £ 970 per
Consideration is each party must
month for 60 months.
exchange something.
Commercial agreements are Tony has the demand to buy a car and Car Max is where
usually intended by the parties automotive business so this case is belongs to commercial
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(Task 5) Apply the law on terms in different contracts and evaluate the effect of
The implied terms are present in The Car case is implied in law. The Car case is a
contract of sale of goods so statute will also include the terms: the protection given by
the Sale of Goods Act 1979 to a consumer who buys goods from trader.
A set of terms concerning the goods is implied into all contracts covered by the Act:
Title, sale buy description, satisfactory quality, fitness for purpose and correspondence
with sample.
In The Car case, it has 2 implied terms concerning the goods: Sale buy description and
satisfactory quality.
Section 13(1) of the 1979 Act states that ‘where there is a contract for the sale of goods
by description, there is an implied condition that the goods will correspond with the
description’. In The Car case, when Suzy description the Porsche 911 that “the car run
like new” it means that the car are sold by description there is an implied term that the
Porsche 911 will correspond to Suzy's description. If after receive the car, Tony
discovered the car has old engine and untrue depictions of Suzy, The Court of Appeal
said that the car is clearly not fit this description, Car Max with a violation of section
13(1).
Satisfactory Quality
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Under s. 14(2) goods sold in the course of a business should be of ‘satisfactory quality’.
The price of the goods can be relevant in determining whether the goods are of a
satisfactory quality.
Car Max must always have implied that Porsche 911 must ensure quality though it is not
give directly to contract. And Car Max must to provide a reasonable price for the quality
of the Porsche 911. If Tony found out the manufacturer's fault and the quality cannot be
guaranteed. Tony can bring his car to the Car Max to sue for damage.
Condition
Condition is a term which is vital to the contract, going to the root of the contract (BPP
Learning Media, 2010). Where a condition is breached, the innocent party is entitled to
regard the contract as repudiated, and so need not render any further performance, and
In The Car case, condition in this case is Tony agree with Car Max to make a payment
with £970 per month for 60 months with no money down for a car. But when Tony
received his first notice to make his payment he did not paid and decided to return the
If Tony makes this contract when he above 18 years old, Car Max can sued Tony for
breach of condition and ends the contract also Car Max can sue for damages. But in this
case Tony just only 17 years old (a minor) so not only Car Max cannot sue Tony for
breach of condition, but also Tony can return the car and do not need to continue make a
payment.
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Warranty
Warranty is a less important term. It does not go to the root of the contract, but is
subsidiary to the main purpose of the agreement (BPP Learning Media, 2010).
In the Car case include a warranty of merchantability. When Tony asks “Is it in good
shape mechanically?”. Suzy has confirmed that the engine of the car as new meaning
So if after Tony drove the car to home and it does not work, Tony realizes any problems
from his car without cause or not true to describe through words of Suzy. Tony has the
right to bring the car to Car Max could give rise to a claim for breach of warranty
entitling the buyer to damages. Under the contract, seller's sole liability and buyer's sole
remedy are Car Max must replace another car for Tony or repair them so that they
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Conclusion
After all the report, I have obtained valuable knowledge have a deep understanding
about how the law works and how five of those elements combine with other terms to
create many cases. It is important to know what you are dealing with and before
executing a contract, pay close attention to the terms and the elements of the contract to
avoid the disadvantages, especially the implementation of the contract with a minor.
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Reference
British Crane Hire Corp Ltdv Ipswich Plant Hire Ltd (1975)
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