Aspects of Contract and Negligence of Business

Introduction to Aspects of Contract

Aspects of contract specifies all essential facets that should be there in the agreement which also makes the deal more legal and descriptive. While making contracts, it is essential for both the parties to ascertain the type of contract and what is being required under it (Hollingsworth, 2014). The present research study has been made with an attempt to analyze different aspects about contracts and legal frameworks. Some indifferent cases are also discussed so as to integrate all the essential elements of contract with principles and conditions. Thus in respect to that, essential elements for a contract are also mentioned in the study along with the impact of different types of contract on the parties. Furthermore, the study has also discussed the use of laws and legal frameworks in different types of contracts in different situations. The second section of the research has been describing contrast liability and nature of liability in negligence along with the conditions when business held liable vicariously towards the opposite party. Lastly, Donoghue V Stevenson and Mersey Docks V Coggins & Griffiths have discussed with different scenarios under third party liability

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1. Impact of types of contract

As per the above mentioned cases, the impact of different types of contracts can be identified on different  scenarios.

Face to face contract and Distance contract: Face to face contract refers to the agreement which is being made between two entities on verbal basis and usually it lacks credibility and feasibility since it does not specify any proof.  Here in such type of contract, offer and acceptance both can be acquired at the same time and hence on that basis, the terms and conditions of the contract can be maintained. The opportunities of conflicts are less in such type of contract as both the parties have voluntarily entered in the same contract. Face to face contract is highly beneficial at the time when the contract is made up for short period. As per the cases stated, face to face contract is existing in Jim's case wherein he paid for the ticket and entered in  the park (Bhadbhade, 2010). This specifies that stand council and Jim had made face to face agreement with the council to get entry ticket.

The distance contract on other hand is a type of contract that exists between two parties who are working at a distance with each other and who need to manage work processes with verbal and non verbal methods both. Case A is the exact example of distance contract in which both the parties share information verbally and non-verbally wherein Arnold and Fiona both wanted to make deal for dentist equipment.

In case of distance contract all parties are not present in order to establish contractual agreement. Henceforth, telephonic and postal conversations are required to enter into distance contract. In the case provided, Arnold and Fiona entered into distance contract and Jim and Fun park entered into face-to-face contract.

Postal rule: This is a case of distance contract in which both acceptance and feedback is required and in the case if it is not present, then parties will not be in a position to claim for the amount. This exists in the present case as Fiona has sent letter to her uncle of acceptance but since her uncle has not gone through with the letter, Fiona is not entitled to claim for any money. In such case, there is no contract between the parties.

Written contract and face to face contract: The written contract is another form of contract in which both the parties have to clearly specify the terms and conditions and all the circumstances that are required to consider while fulfilling the requisites of contract. This is considered as the most feasible and valid contract where parties have proof of existence. As per the case of Mrs Smith, there exists a written contract as she promised to give 100 pound to the person who will return Lucky to her and due to that legal contract only, David demanded for the amount. On the other hand, mini case E is also stating the example of written contract since the car seller is offering numerous deals to the customers (Chetwin, 2011).

Verbal communication on other hand is entered by acceptance of terms and conditions verbally. It is difficult to establish evidence in case of verbal contracts. The written contract exists between Paul and Slick Car sales in the given mini cases.

Unilateral and bilateral contract: Unilateral contracts emphasizes on providing general offer which is accepted by most of people. However, Bilateral contracts are entered with mutual agreement and consent. Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 is regarded as prevailing case precedent of unilateral contract.

2. Importance of essential elements of contract

The essential elements of contract are stated as under and they are directly related to case studies so as to showcase the actual impact of requisites on contracts. Offer and acceptance are the two main criteria which needs to be exist between parties so that legal framework can be maintained. On the other side, essential elements of offer is there in all the cases such as in case A, Arnold wrote letter to Fiona for the purpose of selling dentist equipment (Cibinic, Nash and Nagle, 2006). This has been accepted by Fiona by specifying that she is ready to accept the offer. Similarly, Mrs. Smith has also promised to give reward to the person who will find her cat which is being accepted by David. The other case in which Mrs. Harris offered to a deal to the tenant by stating that she will give 200 pounds to the neighbor if he will collect rent from all the tenants on timely basis. This also showcases that offer and acceptance both are mandatory and alongside it also showcases the details of consideration. Consideration is also crucial so as to specify that all the parties have mutually entered into the agreement (Defences to Negligence, 2014).

Objective of contract: One of the important element of the contract is that the terms of the contract should not be contradictory or contradict to the terms of law of government. It is essential to follow all the terms and conditions while entering into the contract.

Consent: In every contract it is essential for the parties that there should be consent from parties which are entering into the agreement.

Capacity: The parties that are entered in the contract should be liable and he should also cover the age of majority so that the actual purpose of contract can be fulfilled. In order to make a valid contract, it is essential for the parties to cover the age of majority else the contract will be deemed as void.

Legal framework also plays crucial role in elements of contract where in both the parties have to consider all the legal requirements by fulfilling the specifications of contract and agreements. However as per the case of Mrs Harris, she refused to give the specified amount to Ted for the work done which does not fulfills the requisites of legal obligations (Díaz and et. al., 2012). Voluntarily interest is also imperative since through that, both the parties can claim for the actions being directed to them. As per the case of Arnold, Fiona voluntarily entered into the contract where she agreed in terms of accepting the offer of her uncle Arnold.   This also states legal relationships should exist between all the entered parties so that they can manage accomplishment of the actual purpose of the deal.

Mini case A:

In the present case, it is being mentioned that on 13 September, Fiona a qualified dentist received note from her uncle stating that is she wants to buy dental equipment in 15,000 pounds. He also specified that he want quick reply from her since he has another offer from one of the colleagues (Hollingsworth, 2014).  This clearly showcases that Arnold has offered something to Fiona which is later accepted by Fiona as she also sent accepted letter to Arnold by stating her willingness to buy the equipment; however she also asked for a favor in which she mentioned that she would pay the entire amount in installments. For such purpose she called her uncle but Arnold did not pick up due to immediate conference so Fiona leaves a message.  After passing two weeks, she got a call from her uncle and at that time he said that he has already sold the equipment to someone else (Poole, 2012). Here Fiona can claim since she had made immediate reply to her uncle by arranging the specific amount for the deal. It was the duty of the secretary of Arnold to inform him about the call received so as to make fair and specified deal.

Here there exists counter offer in which Fiona got agreed for the offer on a specific condition. While she was not sure if she will buy the equipments on agreed amount in a single pay. Hence prior approval for the offer, she wrote a letter to Arnold stating that she would pay the amount in installments due to her bad financial position. Afterwards, until the letter reaches to her uncle, he sold the equipment to another person.  Hence in this case, main issue raised due to lack of presence of contractual liability between both the parties.

The case indicates that distance agreement was existed between Arnold and Fiona. The offer made on part of Arnold for sale of dental equipments was accepted by Fiona with condition of payment after Christmas. This in turn results in establishing of contractual relationship between the parties. However, the conditional acceptance on part of Fiona indicates existence of counter offer between the parties. Henceforth, Arnold possesses rights to sell dental equipments to third party. Due to counter offer no parties no parties are legally bound to exchange products as per the agreement.

Mini case B:

The subsequent case is showcasing that Mrs Smith promises to give reward of 100 pounds to the person who will return her cat, After seeing the offer, David finds the cat and he also spent 25 pounds for a taxi to return the cat to Mrs Smith (Jones, 2002). After reaching David explains the entire scene to Mrs Smith and then he demanded for 125 pounds including other expenses as well. Mrs Smith refuses to pay the amount as she had mentioned in the advertisement the specific amount which she will spent on the return. She is not liable to pay any extra charges as he stated that she will give only 100 pounds, so here David cannot claim for the taxi charges.

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Mini case C:

Mrs Harris, the owner of three rented houses asked her next door neighbor to collect rent from all the tenants when she is in abroad. Thus to consider the same, Ted collects the same amount of rent from all the tenants and he give it Mrs Harris. Similarly Mrs Harris also promised Ted to give 200 pounds for the work; however later on she refuses to pay to Ted which is against the legal requirements of a contract. Here Ted is liable to claim for the amount for which he did collect the amount (Kantarelis, 2008). Here Mrs Smith should be treated under breach of contract as she had promised to pay the amount prior and afterwards finishing the task, she is probably refusing to pay such amount. She is entitled to pay the entire amount to Ted. However on other hand, one of the major aspect revealed in the case that this seems to be a verbal contract in  which Ted does not have any proof against Mrs Harris. Here in this case, Harris merely offered a favor to Ted and she has not promised Ted to pay benefit against the favor. This is the case of past consideration in which Harris is not liable to pay for the amount as she just asked for a favor. At the same time, the case does not show any sort of contract present between both the parties.

In present case agreement was entered verbally due to affection and relationships. However, all kind of agreements that are formed on basis of love and affection are not enforceable by law. Henceforth, tend cannot be made liable for making payment to Mrs. Harris since no valid contract has been established.

Mini case D

In this case, Mr. Nash, took an order to make 11 fancy waistcoats from Inman with other things.  Inman was a minor studying in Cambrige University hence Mr. Nash decided to make clothes as per the life style and status of minor. The total expenses were £145. Inman was already adequately supplied with clothes by his father. However Inmam failed to pay the amount and due to lack of capacity aspect, Mr. Nash is not entitled to claim for the amount which he spent on making clothes for Inmam. Legal law is not applicable in this case since Inmam is a child and also there exists no such specific consideration in the offer.

3. Analysis of the terms in the contract with reference to their meaning

Express terms: Express terms are those terms in which the parties are agreed on the basis of mutual agreements. These include two specific terms conditions and warranties.
Conditions are the important part of the express terms which implies that if the contract is not fulfil on the basis of conditions, than party can reject the contract. On the other side, warranties are the ancillary terms. It implies that if warranties are not fulfil damages can be claimed by the party for any injury.

Implied Terms: Implies terms are those terms which are already present in the deed of the contract or agreement. These are already assumed by the parties and if these terms are not fulfilled in appropriate manner, than the party can breach the contract.

It is apparent that every contract bounds with some legal frameworks and obligations that should be probably fulfilled by all the parties so that validity of the contract can be made (Klass,  2010).

Implied terms are those which are included in the contract as per the directions by the entered parties and that can be changed anytime when required since this is quite similar to warranty and guarantee.

Conditions on the other side are required to consider so that the amount of damage and liability clauses can be understood properly.

Nonetheless warranties specify the time limit in which any company is entitled to pay for the whole amount in specific period as per the conditions. The amount of warranty can be defined by the company only and in certain cases, company also replaces the product with another one for fulfilling the terms and conditions of warranty. English Contract Act has been specifying the specifications of warranty in which the amount of damage is yet not specified.

Conditions and warranties both are required in the present cases; however they are entirely diverse with that to breach of contract (Lando, 2003). In case of negligence and breach of contract, the parties are entitled to pay for the specified amount, hence this clearly showcases the accomplishment of legal frameworks.

Exclusion clause:

This is the kind of clause in which the parties in the contract can minimize the obligations of defendants which is being present in particular situations. However here the amount needs to be specifically mentioned in the contract and that should be agreed by both the parties. This should be entirely integrated with legal norms and beliefs so that public interest can be made. The amount of compensation needs to be clearly specified so that both the parties can fulfill all the legal requirements (Nysten-Haarala, Lee and Lehto, 2010). This also satiates the need of claimants and recipients. The amount of damage can be recovered in the case if both the parties are required to satiate the terms and conditions. On the other side, inclusive clauses are defined as the specifications in which both the parties are critically required to manage legal frameworks in effective manner.

Mini case E:

Here in the subsequent case, Paul is looking to buy second hand car on lowest prices and thus he sees a local advertisement by Slick Car sales Ltd that sells hundreds of used cars on bargaining and definitely the lowest price in Britain, the company is providing cars to the public (Padhi, 2012). The advertisement stated that the company will include Road Fund Tax, Radio and a full tank of petrol. Paul visits the showroom of Slick Cars and he selected a car priced at 3995 pounds which a salesman tell him is a 1994 Mondeo which has done 30,000 miles and has had only one owner. Thus on that basis, Paul signs the contract which describes the car as 1994 Ford Mondeo. Paul is not sure about the statements and he had no idea about trader's puff and conditions and he also wants to know implied terms in the agreement and the remedies available to him along with the things that could turn out to be false. Here in the subsequent case, he is entitled to ask for any type of information as he claim for all type of information (Platz, 2007).

Conditions: In this situation Paul can terminate the contract when the he is not satisfied with the terms of Slick Cars Sales or the primary stipulations than Paul can terminate the contract. In this case, terms inserted in the deed will be treated as conditions (colour, model and registration number)

Warranties and representation: In case of warranties, Paul can claim for only the damages in case Slick cars have led to cause any remedy to the Paul or the any primary terms of the contract. Both the term clarifies aspects of contract and if both does not satisfactory present in the contract, then parties are not held liable for the remedy. In the present case also, Slick Car Sales Ltd has not performed in adequate manner; therefore Paul is entitled to claim against the remedy. Further other terms (additional amenities, facts for usage) will be representation or warranties of the contract.

Trader’s Puff: It stats that the statement does not have any assurance with the real terms of the contract between the parties. In case of Paul and Slick Cars, there is any statement which is not untrue than it will be considered as Trader’s Puff and Paul will not entitled for any remedy. It is a kind of document or a statement which does not assure anything regarding actual and specific connections. In the present case, remedy will not be provided to Paul if the statement of Trader's Puff proves to be untrue. Term inserted in the advertisement that lower price ever will be considered as Trader's Puff.

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Mini case F:

In the present case, it is being mentioned that Jim agrees to take his family on Fun Park and he pays 1 pound to park his car run by the Stand Council and at the notice affixed to the entrance of the car park stated that the council is not held responsible for any sort of damage and property loss. Jim pays 7 pounds for the family and he purchased tickets for the entire family. The company does not accept liability for death and any other personal injury to visitors (Pollock and Maitland, 2007). While watching the kids, Jim and his wife got injured as a meta bar flies off and injured both the person and after receiving treatment, Jim returns to his car to discover that it has been damaged by a Strand Council refuse van which is quite difficult, thus Jim and his wife both are seeking advice to consult the clauses being mentioned in the tickets and other provisions. From the case, it is clear that Jim could have to read the clause mentioned in the ticket as that includes all those aspects which are legal and which cannot be mentioned under the Occupier's Liability Act. Thus in respect to that, subsequent act has been stated which clearly showcases that in the case of damage and injury, the opposite party have to pay the entire amount since he is held responsible for the same. On the other side, Jim has also paid for the parking, thus he posses full right to claim for the security of his car and any such damage could make the council liable for specified amount (Defences to the Tort of Negligence, n.d). But instead of that, the Council could provide medical amenities to Jim and his wife so that to avoid legal constraints.


Contrast liability in tort with contractual liability

Tort and contractual liability both are considered a part of civil law and both the liabilities provides remedies to the injured parties. Tort liability is being imposed in the case of negligence when any of the party fails to meet the standards of contract. In such case, relationship is formed by  the court of law and here consent of parties is indeed not required. Remedy is being provided to the parties after considering the deed of contract. However on the other hand, contractual liability arises if the party does not performs in satisfactory way. It is also created by the parties within mutual consent. The main objective of tort liability is to recover the injury which caused due to act of negligence.

Nature of liability in negligence

Negligence is the act which causes injury to another party present in the contract and it is also the actual result when any party fails to provide reasonable care to the another one. Remedy is indeed not possible for all the cases embodied in act of negligence.

  • Duty of care: Under duty of care, defendant can claim for the injury caused and it is also imposed by the applicability of principle of neighbour concern.   
  • Breach of duty: It is occurred by the act of negligence by defendant. Here objectivity test can be applied by judicial party to prove the applicability of principle.
  • Causation: Injury of the party should be from the act of negligence of the defendant.
  • Remote damages: Remote damages of the claimant should be predictable from the negligent action of defendant. 

Defense under negligence

  • Contributory negligence: If claimant contributed in the act of negligence of the defendant then they will not be eligible to claim for the remedy and injury.
  • Justified: Liability on defendant will not be considered as justified if it is not from the provision of the law. Hence the party is not liable to pay for the damage.
  • Necessary: If the act of negligence is obliged to conduct for another party, then defendant is not held liable to pay for any cause and damage.

Vicarious liability of the business

Vicarious liability is a form of secondary liability that arises under common law of doctrine of agency.  In this aspect, innocent party is held responsible for the act of negligence of another party. It is also imposed by the law to control and prevent the act of negligence. Certain rules for vicarious liability are mentioned here:

  • Individual must be employee of the employer
  • Misconduct should occur in the course of employment

The type of damage is also required to specify so that the state of act can be declared. This can also assist the third party to claim for the respective amount. At the same time, while setting the claim, there exists different types of negotiation categories, among which the subsequent one cane be selected.


On the basis of entire research study, it is identified that contracts are being made so that all  the entered parties can fulfill the terms and conditions and this is also essential for managing the rights and interest of both the parties. Different cases have shown understanding on different concepts which are most likely useful in the contemporary scenario. As per the given cases, legality of exemption clauses and remedies for damages are outlined under different clauses and conditions. In order to prove the suitability of case laws, researcher has taken accurate materials and coursework which makes the study more authentic and readable. Hence articulating the entire research, it is being explored that legal frameworks are mandatory in all cases and contracts.


  • Bhadbhade, N., 2010. Contract Law in UK. Kluwer Law International.       
  • Chetwin, M., 2011. "Comparative analysis of some aspects of assessment of damages for contractual breaches in England and Wales, Australia and New Zealand". International Journal of Law in the Built Environment. 3(2).
  • Cibinic, J., Nash, C. R. and Nagle, F. J., 2006. Administration of Government Contracts. CCH Incorporated.
  • Díaz, P. G. V. and et. al., 2012. "Contractual and quality aspects on warranty: Best practices for the warranty management and its maturity assessment". International Journal of Quality & Reliability Management. 29(3). pp. 320 – 348.
  • Jones, M., 2002. Textbook on Torts. Prentice Hall.
  • Kantarelis, D., 2008. Internalization of costs, liability and negligence, performance and reliance. International Journal of Law and Management. 50(6).
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