Contents

Introduction:..........................................................................................................................................1
Essential elements of a valid contract:...................................................................................................1
Importance of essential elements of a valid contract (LO 1.1):..............................................................1
Impact of different type of contract (LO 1.2):.......................................................................................2
Different terms in a valid contract: (LO 1.3).........................................................................................2
Elements of contract in Business situation: (LO 1.3).............................................................................3
Different terms of laws and effect on terms (LO 2.2 & 2.3):.................................................................3
Principle of liability of negligence (LO 3.1, 3.2 & 3.3).........................................................................3
Principles of liability of Negligence in Business situation (LO 4.1, 4.2 & 4.3):....................................4
Statement A:......................................................................................................................................4
Statement B:......................................................................................................................................5
Statement C:......................................................................................................................................5
Statement D:......................................................................................................................................5
Statement E:......................................................................................................................................5
Statement F:.......................................................................................................................................5
Statement G:......................................................................................................................................6
Recommendation:..................................................................................................................................6
References:............................................................................................................................................6
Bibliography..........................................................................................................................................7

Introduction:
At the time of running the business organisations makes different types of
contracts with customers and suppliers. Therefore to avoid unexpected
situations into the business the organisations need to have clear understanding
about the elements of valid contract, terms of valid contract and types of the
contract. It helps them to run their business within legal boundary.

On the other hand, organisations need have clear idea about negligence of
liability as well. It helps them to avoid unexpected problems with their
employees and with their customers as well. It helps the organisation to run

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their business according to their strategy and it helps them to earn goodwill as
well.

This report has done by showing different types of contracts, elements of valid
contracts and terms of contract as well. Second part has explained negligence of
liability. Both parts has been explained by using case study which would be
helpful for the audiences to get deep understanding about the key points of this
assignment.

Essential elements of a valid contract:

Jess and Mr Powell’s case study would be useful to explain the essential
elements of a valid contract. According to the case study, Jess wants to sell her
car and Mr Powell is interested to buy that car. However Mr Powell lives far
from Jess and that’s why he want to pay advance to stop Jess for 3days to not to
sell the car. Jess agreed with that.

Importance of essential elements of a valid contract (LO 1.1):

At the beginning of explaining about a case that related about contract, it is
important to determine that the contract between two parties is valid or the
objectives of contract between two parties meets with the objectives of a valid
contract. There are mainly four essential elements which need to meet at the
time of count a contract as a valid contract. Those four essential elements are
offer, agreement, intention of legal consequences and consideration.

Form the case study it could be said that,

A valid offer has been made by Mr Powell which Jess has accepted. By those
way two elements of a valid contract’s objectives has been achieved. Both
parties intension for that contract does not meet with any illegal activities and
therefore third objectives of a valid contract have been achieved. Finally the jess
is waiting for 3days by getting money in advance and Mr Powell paid in
advance to hold Jess which meets with the fourth elements of a valid contract.
As a result it could be said that, the contract between Jess and Mr Powell could
be considered as valid contract (Boundy 2010).

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Impact of different type of contract (LO 1.2):
Different contracts has made by using different types. On the base of the criteria
of making the contract it could be said that, contracts could be divided by two
groups. One is written contract and another one is oral contract. Written contract
is the contract where both parties indicates all terms and condition of the
contract by written and put sigh as agreement of those terms and conditions. On
the other hand, at the time of making oral contract both parties verbally explain
the terms and conditions and accept on the base of that. However court always
suggests making written contract. It is because in written contract the parties
have evidence and low possibility to breach that contract (Boundy, 2010). The
case study has shown that, two parties has made oral contract as they could not
get change to make any written contract because they lives in far distance.

Different terms in a valid contract: (LO 1.3)

At the time of making a contract, two parties agree with different types of terms
and conditions. Both parties mainly agree with two types of terms at the time of
making a valid contract. Those are express terms of contract and implied terms
of contract. Express terms of contract are the terms that have been expressed at
the time of making the contract. On the other hand, implied terms in a contract
are terms that have not been expressed in a contract but would be applicable for
that contract. Into the case study express contract is the amount of money that
has been paid in advance to hold the car sell and implied contract is Jess would
not make any damage of the car within those three days (Cooke, 2007).

Elements of contract in Business situation: (LO 1.3)

A case study has been given to explain the elements of contract in business
situation. Into the case study it has shown that, Berry and the City council had
some problem when berry was damaged by an accident. The accident was
happened by the City Council’s chair. Berry hired that chair at the time of
visiting in the park.

This situation could be explained by using the validity of the contract and
different terms of contract. First of all it is important to evaluate the contract to
determine that the contract between two parties can be considered as valid
contract.

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The offer had given by the city council and Berry was accepted that offer by
buying the ticket. That achieved the two objectives of elements of contract.
Both parties have made the contract by keeping legal intension. In addition
money has expended by Berry and the city council has given their chair on hire
which covers final elements of a valid contract. Therefore the contract between
Berry and the city council could be consider as valid contract (Emerson 2009).

Different terms of laws and effect on terms (LO 2.2 & 2.3):
This case study needs to be explained by using both terms into the contract. It is
because one term gives favour to 1st parity and another term gives favour to
another party. Therefore both terms need to be considered at the time of
explaining the terms of the contract. According to express terms Berry would
not be eligible to claim against the city council. It is because at the time of
buying the ticket he was accepted the express terms and on the ticket it is
written that, the city council would not be liable for any damaged caused by the
hired equipment.

Therefore Berry can use implied terms of the contract. According to implied
terms, the city council cannot provide damaged chair to the visitors. Therefore
Berry can claim against the city council with the help of implied terms (Cooke
2007).

Principle of liability of negligence (LO 3.1, 3.2 & 3.3)

A case study could be shown to explain the principle of liability of negligence.
Into the case study it has shown that, Adam gave an advertisement where he has
offered that, the person who will first paddle the English Channel will get the
price. Brain have seen the advertisement and joined in the competition.
However the advertisement has withdrawn by Adams at the middle of the
competition.

This case study could be explained by using liability of tort. It is because Brain
could be claim for this price to Adam by using liability of tort. On the other
hand, Contractual liability cannot take place in this situation because Brain and
Adam did not make any valid contract (Gillikin, 2014).

Nature of Liability of Negligence could take place into the case study. It is
because according to the nature of liability of negligence, a person is liable if
that person does something that he was not suppose to do and later on the takes

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steps to stop that work. Into the case study, Adam did the same thing. Therefore
Adam is liable on the base of nature of liability of Negligence (Gillikin, 2014).

According to the case study, Adam gave an advertisement and Brain started the
competition by looking at that advertisement. In there not any employee or
employer’s relation has taken place. Therefore Brain cannot use vicarious
liability to claim for his price. Vicarious liability only take place if there was a
internal problem between two employees and their managers did not take steps
to solve that problem (Gillikin, 2014).

Principles of liability of Negligence in Business situation (LO 4.1, 4.2 &

4.3):
The posh Palace hotels’ case study could be helpful to explain the Principle of
liability of Negligence in Business situation. Into the case study some situation
has been shown which could be explained by using the principles of liability of
negligence.
Statement A:
According to Non delegable duty of care, it is the Posh Palace hotel
management’s responsibility to determine that they have provided safe working
environment to their employees. The case study shows that, Rodger did long
time washing without wearing any gloves. As a result he got rashes and for that
they can claim against the posh palace hotel’s management. However Neil is
not related with the management of the posh palace hotel. He is a gardener of
the hotel. Therefore the statement is acceptable (Gerald & Kathleen 2005).
Statement B:
The case study shows that, Colin knocked Rodger’s head by a frying pan.
Rodger and Colin both work in the posh palace hotel. Therefore according to
vicarious liability, it is the hotel management’s duty to solve their employee’s
internal problem. However in that situation the hotel management was failed to
do that. Therefore it could be said that, Rodger can claim against the posh
palace hotel for that situation by using vicarious liability. However Neil is not
related with the hotel’s management. Therefore the statement would not be
acceptable (Gerald & Kathleen 2005).
Statement C:
Mark was robbed by the hotel’s gardener Neil. Neil did the robbery by stole the
master key of the posh palace hotel. He did the robbery intentionally and
5
therefore he would be responsible for that robbery. Occupiers’ liability act 1957
shows that, Hotel would be liable to give full security to their guests which the
hotel has ensured. Therefore in this situation it could be say that, the statement
is not correct (Hassett, 2012).
Statement D:
The case study shows that, Mark faced accident at the posh palace hotel. The
hotel pool was empty and the hotel management put a notice to keep away their
visitors from the Pool. However Mark did not care about that and he jumped
into the pool. As a result his designer cloth was damaged.

The occupiers’ liability act 1987 clearly shows that, the occupiers need to make
sure that their visitors stay away from danger areas. The posh palace hotel did
their best but it was Mark’s fault that he did not care about the notice. Therefore
it could be said that, the statement is correct (Hassett, 2012).
Statement E:
Ordinary negligence would be applicable to the occupiers when the occupiers
would not provide enough security for their guests. However the posh palace
hotel has done that. In that situation Mark can use ordinary negligence principle
to claim against the hotel by showing that, the hotel could avoid this type of
situation by providing motivation to their employees. Therefore it could be said
that, the statement is correct (Emerson 2009).
Statement F:
The posh palace hotel did their best to keep away their visitors from the pool by
hanging the sign board. Mark did not care the sign board and that is not the
hotel’s authority’s fault. Therefore it could be said that, the statement is correct
and Mark would not able to claim for this expensive swimming suit by using
occupiers liability act (Emerson 2009).
Statement G:
The posh palace hotel is the occupier of Mark. Mark was robbed and he lost his
jewellery. In that situation Mark cannot use vicarious liability act to claim
against the posh palace hotel. It is because the vicarious liability act would
applicable only applicable for employees when their employer does not stand to
solve that employees’ problem with other employees. Therefore it could be said
that, the statement is not correct (Emerson 2009).

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Recommendation:
Finally it could be recommended that, every organisation need to determine
about the terms of contract and elements of contract. It helps them run their
business without facing any unexpected problems. Employers need to be
considered liability of negligence’s as well at the time of running the business.
It would be helpful for the organisation to run their problem successfully
without having any unexpected problems.

References:

1. Boundy, C. (2010) Business Contracts Handbook, 3rd Edition, Gower

Publishing Limited, ISBN: 978-0-566-09222-0

2. Cooke, J. (2007) Law of Tort, Foundation Studies in Law Series,

Illustrated, Pearson Education, ISBN: 9781405846943

3. Edwards, J.S. and Wells, P.K. (2012) Tort Law, 5th Edition, ISBN: 978-1-
1113-1215-X

4. Emerson, R.W. (2009) Business Law: Contracts, 5th Edition, Barron’s

Educational Series Inc, ISBN: 0-7641-4240-2

5. Gerald, N.H. & Kathleen, T.H. (2005) Vicarious Liability Legal

Definition of Vicarious Liability, [Online] available at: http://www.legal-
dictionary.thefreedictionary.com/Vicarious [Accessed on 18th May, 2014]

6. Gillikin, J. (2014) What Does Negligence Liability Involve?, [Online]

available at: http://www.smallbusiness.chron.com/negligence-liability-
involve [Accessed on 18th May, 2014]

7. Hassett, M. (2012) Occupiers’ Liability: The Extent of the Study,

[Online] available at: http://www.forsters.co.uk/MJJH_PLJ_Occupiers
%20Liability [Accessed on 18th May, 2014]

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 8. Larson, A. (2003) Negligence and Tort Law, [Online] available at:
http://www.expertlaw.com/library/personal_injury [Accessed on 18th
May, 2014]

Bibliography

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2. Businessballs (2014) Business Contracts Legal Terms and Definitions

Glossary, [Online] available at:
http://www.businessballs.com/businesscontractstermsdefinitions
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6. Nolo (2014) Contracts: The Basics What Goes Into a Legally Binding
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