In situations where parties are doing business, it is essential to understand and apply the rules, norms, principles and usage of a contract. Currently, it is impossible to find a business without contract preview. It is, therefore, vital to have a clear and knowledgeable idea on the issue of contract law. In this work, I have tried to outline the elements necessary for the formation of a contract and its application in some practical cases. There will be a demonstration of basic and primary areas concerning a contract such as an offer, acceptance, consideration and others.
Elements of a Valid Contract
Offer is the initial point of a contract in which the agreements starts and may ultimately become and contract with legal binding. Offer is legally defined as the formal expression of the intention of the need of one party to participate or refrain from taking action so as to obtain an ascent of the other party in the contract to such an act or omission. An offer is made when one party to contract shows willingness to another party to take consent of that about any dealing. The person making the offer is known as the offeror, and the one to whom it is made is called the offeree. It is important to note that the offer must be communicated and it can be revoked or called off before the acceptance.
An offer becomes a contract after acceptance. The offer is considered to have been accepted if the party to whom the offer was made signifies his assent. The importance of the acceptance is the consent coming from the offeree to the offeror. The offer must be communicated and must be to the initial proposal and if otherwise, it is called a counter offer. The acceptance bids will regard to the mode of communication of acceptance to the offeror. For example in the postal mode, it is on the date the message is posted, and in the case of electronic mode, it occurs when the message is received.
Competencies of the parties
The law provides that any party entering a contract must be of majority age, sound mind and not have been disqualified from forming by the law to which he is subject. This means that minors, persons of unsound mind and individuals disqualified by law cannot contract.
The parties must have consented to the contract, and that means the consent must be given to the same thing and in the same sense. The parties should not be forced or coerced to enter into a contract.
The contract must have legal consideration, and this means the exchange of price. It can be said that consideration is the cause of acceptance and must be valuable and lawful. It should also not be past consideration.
For a contract to a bid both the object and consideration must be lawful. The object and consideration are lawful unless they are forbidden by law or in the situation of permitted would defeat the purpose of law. They should also not be fraudulent and not cause injury or destruction of property.
Enforceability in law
Despite an agreement having all the essentials, there might be issues with its enforceability. This is so if there would be the impossibility of performance and if it would restrict someone in their trade.
Contract for sale of goods
InXs and CP entered a contract for the sale of good in which CP sold goods to InXs. A contract for the sale of goods is described as a contract between two parties in which the parties agree to the sale of goods. The contract specifies the quantities of goods, price per unit, total price and also the terms of payment. The contract for the sale of goods contains the terms concerning failure and default by either party. This also includes the provision for the unforeseen situations that stops the contract from completion. The buyer of the goods can include terms in the contract that would prevent them from being accepted on quality inspection. It is usually referred to as the destination contract and outlines that the seller has not fulfilled their contract obligation.
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An example is the sale of a phone. The contract outlines all the details such as the time which on sale and the parties in agreement. The details of payment are also given and also liabilities, and warranties.
The contract should prevail. The InXs made a counter offer after the initial offer which CP accepted. CP also sent emails outlining the times and dates of delivery of products. The goods were duly delivered, and one of the InXs's employees signed to ascertain that the goods were received and in good conditions. This means that CP fulfilled all the obligations of the contract. On the issues of price variation clause, CP has outlined the notice in the original contract, and it was the responsibility of InXs to read the details of the contract. It was the responsibility of InXs to check the condition and quality of the goods after delivery. It is not clear if the furniture becomes defective while in InXs store.
Explain terms which apply in this scenario
Timing: This is the time lapse between making the statement and the conclusion of the contract. In this case, the type lapse was appropriate.
Conditions: It is essential for the main function of the contract. In the case of breach of the condition, the party that encounters loss is supposed to claim damages. In case InXs realized on time the defective furniture, he should have claimed for defects.
Warranty: A warranty is not if utmost importance and the party that incurs loss can only claim for damages and not repudiate the contract.
The exclusion clause, in this case, is valid. For exclusion clause to prevail it must:
Be properly incorporated through notice: The exclusion clause should be provided before the contract is made with the necessary notice. The exclusion clause is only referred to after the purchase of the goods.
Legally: The exclusion clause is not valid if it is aimed at protecting a party from being held liable for providing misleading information and being deceptive. Therefore the exclusion clause is invalid and not legal.
Negligence: An exclusion clause can be valid if it protects a party from being liable and for negligence and that it is clearly stated in the contract.
In this case, CP had included an exclusion clause but InXs, and this was to the payment of 5% increment of the total amount in case the price of materials increased. The clause was properly incorporated in the contract; it was legal and sought to prevent CP from negligence.
The claimant must establish various elements to prove negligence. The claimant is left with a burden of proof, and this should be beyond the general balance of probabilities. The major question is usually the duty of care as many legal systems litigate a duty of care as a preliminary matter. This is usually so since if a duty is not found as a legal matter, there is no need to try and prove other elements of negligence which have established as factual in nature. To prove negligence, a claimant needs to establish a duty of care, a breach of that duty, factual causation, proximate, and damages.
Explain the principles difference between obligations in contract and negligence
On contracts, the obligation is from two parties have a legally abiding agreement and while in negligence it is failure one responsible party to exercise reasonable care.
Elements needed for claimant to succeed in an action for negligence
Duty: The outcome of many negligence cases depends on whether the defendant owed a duty of care to the claimant. The duty of care is established when the law establishes a relationship between the defendant and the claimant, and due to this relationship, the defendant is required by law to act a certain way towards the claimant. A judge usually determines whether a defendant owed a duty of care to the claimant where a reasonable person would find the existence of a duty under a specific set of circumstances and in this case the court will establish as a duty of care.
Breach of Duty: A defendant is said to be liable for negligence if the defendant breaches the duty that they owe the claimant. The breaches arise when the defendant fails to exercise reasonable care. A jury establishes the issue of breach of duty unlike the duty of care.
Cause in Fact: Regarding the traditional rules in issues of negligence, the claimant is supposed to prove that defendant actions had something to do with the injury. Courts refer this as but-for causation. This means but for the actions performed by the defendant's actions the claimant would not have been injured.
Proximate Cause: In a negligence case, the proximate case is based on the scope of the responsibility of the defendant. Responsibility lies on the defendant only if he could have foreseen his/her actions in causing harm. The Claimant could not prove proximate cause if the defendant were acting out of the scope of the risk.
Damages: The claimant in a negligence case must legally prove a recognized harm, which in most cases must be in the form of physical injury to a person or claimant's property. It is not enough to claim that the defendant did not exercise reasonable care. The failure of the defendant to exercise reasonable care should be proved through actual damages to the claimant who the defendant owed a duty of care.
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Fiona is justified in her claim for a personal injury she sustained. CP owed Fiona a duty of care by ensuring the place was clean and no possibility of slipping. CP ought to have ensured that the spill of water was cleaned. CP is, therefore, liable for injuries sustained.
County Pine is liable for the injuries sustained by Bob in the course of his duty. According to the concept of respondent superior, CP is legally responsible for the actions of its employees if they are acting within the course of the employment. The employer is responsible for the costs including costs of employee carelessness. CP should, therefore, compensate Bob for the injuries sustained.
Explain the doctrine of vicarious liability.
Vicarious liability is word constituting of two elements. Vicarious is used to describe feeling or experiencing by reading or watching someone else do some work instead of doing it yourself. Liability is the state of being responsible legally for something. Vicarious liability is therefore used to impose strict liability on an individual who lacks primary liability meaning they are not at fault. It is essential to note that vicarious liability is not a tort, but it means one individual is responsible for the torts of another party. For instance, employers are liable for the torts of their workforce. It usually determined if the employees are acting the course of their employment. Vicarious liability can arise in some situations. For instance, an employer may be held liable for the injuries to persons or property caused by negligent operation of a delivery vehicle. It can also be established where a duty of care duty has been broken, and the plaintiff cannot identify the person who bleached it. In the case no employee who can be identified, the employer will not escape liability.
In vicarious liability, there are elements to be established and are a relationship between employer and employee, the tortuous act of negligence committed and within the course of employment.
CP is liable for the damage caused by Jason. In the time of accident caused by Jason who was overspending, the driver had an act of negligence. It is good to note that Jason was transporting consignment on behalf of CP making him liable as a result of Jason's actions. The accident resulted in damages and therefore can be said that it occurred during Jason's course of service to CP and consequently making CP liable for the accident.
- D’Angelo Legal. 2016. Validity of Exclusion Clauses in Contract Law. [online] Available at: http://www.dangelolegal.com.au/news/validity-exclusion-clauses-contract-law/ Accessed on: 28th November 2016
- Rocket Lawyer. 2016. Contracts for services Vs. Goods: What’s the difference? [Online] Available at:https://www.rocketlawyer.com/article/contract-for-goods-vs-contract-for-services-cb.rl Accessed on: 28th November 2016
- PMAgroup. 2016. Conditions of Sale. [Online] Available at: http://www.pmagroup.co.uk/tos Accessed on: 28th November 2016
- Thomson Reuters. 2016. Elements of a Negligence Case. [Online] Available at: http://injury.findlaw.com/accident-injury-law/elements-of-a-negligence-case.html Accessed on: 28th November 2016