1. An assignment on
Aspect of contracts and Negligence’s for the
business
Submitted:
Name:
ID:
Submitted To:
Date of Submission

2. Table of Content
Executive Summary
02
1.1 Essential Elements of a Valid Contract:
03
1.2The Impacts of Contracts:
04
Analysis of Terms in
Contracts
04
2.1Application of the Elements of Contract
05
2.2Application of the Law:
06
2.3Evaluation of Effect of Terms:
07
3.1 Differentiate between Liability in Tort with Contractual
Liability
08
3.2 The Nature of Liability in Negligence
08
3.3 Vicarious Liability in Business
Task1
Page
No.
08
4.1 Application of the tort and negligence and defences:
10
4.2 Application of Vicarious Liability:
11
Conclusion
12
Reference
13
1.3
Task2
Task3
Task4
1

3. Executive Summary
TAM‟s college is one of the best educational institutions in UK. According to the case as they
are going to be the best so there are some legal issues which needed to be checked and revised
and that is why TAM is appointing new agents for marketing. To attract more attention more
exposure is a must and for this exposure TAM‟s college signed a contract with NAMS to
facilitate features and facilities of vocational qualifications. But during the contract the
marketing firm breached the agreement and asked for further extension and the management
team of TAM‟s college took legal actions based on the initial terms of the NAMS that stated; if
the NAMS cannot deliver satisfaction they will return the advance and also pay compensation of
£1500. On the other hand TAM‟s college management has faced also trial against them. The
reason behind this trial is the accident of one of their staffs for not wearing the proper clothing
and protective gear on duty. So TAM‟s college now has to face these legal prosecutions as
because of explicit liability doctrine in the business and at the same time the trial against NAMS.
2

4. Task-1:
1.1 Essential Elements of a Valid Contract:
A successful contract must have to have the eight important elements. The elements for making
the contract effective are given below:
1. Offer and Acceptance: The first step is offering the agreement and at the same time
acceptance of the other party with some conditions.
2. Free Consent: There are some free consent of the parties or unless the contract will be
void if avoided by any parties.
3. Lawful Consideration: The accepting parties must have to consider some legal issues
while taking decision are called lawful consideration.
4. Certainty: The contract must have to have certainty or else the importance will be low.
5. Writing and Registration: A valid contract is a formal written and registered document
supervised by Government authority.
6. Formal Relation: Formal relation makes the contract valid. Any kind of informal
approaches should be banned and informal agreements cannot be considered as a formal
contract.
7. Possibility of Performance: Performance according to the contract must have to show to
make the agreement valid and effective.
8. Enforceable by Law: A valid contract is enforced by legal authority or else it will be
considered as the event of breach of contract.
The essential elements of a valid contract
Offer and Acceptance
Free Consent
Lawful Consideration
Certainty
Writing and Registration
Formal Relation
Possibility of Performance
Enforceable by Law
3

5. 1.2 The Impacts of Contracts:
The impact could have been of various types according to the nature of the contract:
I.
Express Contract: Express contract could have been in both formal written document
and oral form governed by the authority to focus on the consent to terms. It is one of the
main forms of contract.
II.
Implied Contract: An implied contract is considered as a valid contract if one party
does not give any free consent. This type of contracts occurs when a person pretends to
own any assets and sell it.
III.
Executed Contact: Executed contract is the type of contract where both parties have to
follow and execute the terms and conditions of the contracts where there is nothing to be
performed by any parties.
IV.
Contract under Seal: One of the best techniques for making a contract valid is to seal
the legal documents that are enforceable. Once sealed then both the parties are obliged to
maintain the terms.
1.3 Analysis of Terms in Contracts:
It is really very important to understand the terms and conditions of the contract for both the
parties as the contracts may have different objectives. This will help to comply with the contracts
easily and minimize costs as well.
As the TAM‟s college is trying to be better they are mainly trying to grip the attention of the
customer and hire new marketing agents to help them out. They are signing with new agencies
for making their marketing more effective and solve legal issues. This will help them to be the
best college in UK. TAM‟s college is also trying to make difference by signing contracts with
NAMS and exchanging terms and conditions according to their need.
4

6. TASK-2
2.1 Application of the Elements of Contract
Both the parties have to follow the terms and conditions of the contract to make the contract
suitable and effective. The basic elements of the contract with NAMS are here:
Offer
Acceptance
Free Consent
Formal Ralation
Enforced by Law
NAMS is in a contract with TAM‟s college. NAMS is basically a marketing agency and
providing TAM‟s college one month of promotional service on behalf of them. TAM‟s college
has established the NAMS marketing offer for one month and paid the initial fee of £2500 and
entered in to a valid contract. Both the parties in the contract entered into the contract with free
consent and a written documentation turned the contract in a formal relation. Valid contract is
enforced by legal issues and governed by authority. As NAMS breached the contract agreement
with TAM‟s college and failed to give the marketing assistance, the management of TAMS
College has taken legal actions against NAMS.
5

7. 2.2 Application of the Law:
The requirements for valid contracts are as follows:
1.4 Collateral Contracts: It is one kind of contract in which the terms and conditions are
normally written as the basis of the contract. Where the statement have been shaped and
planned as to make sure to persuade the main contract. Authority has been organized to
find a security convention to make the contract valid and beneficial for the parties
agreed upon the contract.
1.5 Conditions and Warranties: Warranties may be described as the circumstances under
which a contract is followed. These parts are so important that in absence of any one or
supplementary of the parties would not go into the indenture. As a result, to construct a
circumstance falsely, or to breach a condition, is viewed so dangerously and considered
as a mistreated agreement. The indenture itself provides motivation to the both parties.
In decision making process whether it is conditions or warranties the court will consider
all the surrounding circumstances, including the seriousness of the consequences if the
contract is held to be non-binding and the intentions of the parties at the time they made
the contract.
Exclusion of responsibility of the terms:
“Prohibiting Paragraph” or a release clause is called as contract can be made where the other
organizations are probable to have a term which excludes one of the party‟s accountability which
somehow may cause miss presentation. According to the case, NAMS has spoiled TAM‟s
college marketing campaign which is a prohibiting clause from „responsibility‟.
6

8. 2.3 Evaluation of Effect of Terms:
There are several terms in the contracts for maintaining the formalities and also laws and
regulations which needed to be written and sealed. They are as follows:
1.6 The Patrol Evidence Rule: Oral evidences are recorded here. Oral evidence may not be
adduced to connect to say that the opposite to or shown to be a bogus written article.
This rule helps to keep track of law of confirmation and applies to both contracts and all
kinds of credentials.
1.7 Establishments of Implied Terms: Sometimes for the benefit of both the parties some
implied conditions are formally made from one parties to another.
1.8 Various Types of Conditions: The preparation for committing a breach of
circumstance at universal law is refutation and indemnity as various types of conditions
may affect the contracts and cause disparities between the parties.
7

9. TASK-3
3.1 Differentiate between Liability in Tort with Contractual Liability:
Tort and Contract Liability:The law of tort and of contract is described as part of the "Law of
Obligations", but the law of tort applies to everyone that it is relevant to, while in the law of
contract or in trusts obligation is "Voluntarily Assumed". Contract damages are based on losses
that are expected, while tort damages are compensatory.
3.2The Nature of Liability in Negligence:
Breach of Contract:It is the behavior of people acting as an irresponsible person, not obliging
the terms and conditions of the contract. It is the most important part in contract tort of
negligence which reflects the pre-existence of a benchmark of proper behavior that must be
followed.
Duty:Duty is an obligation that has to be performed for another person which is created from
social needs, religion, and belief and so on. The glue of social duty is the threaded that binds
humans to one another in groups where preferences are considered inappropriate if they
contravene a pre-existing impulse and restore carelessly.
Similar Cause: The issue of factual causation and the elements just examined and factual
connection between protection breach and plaintiff.
Cause in Fact:There are some problems which with resolution more identifiable than causation.
Based on situation people might take few stapes to avoid doing from armature dramatics in
convinced.
3.3Vicarious Liability in Business:
Vicarious responsibility can be defined as detaining somebody legally for his or her indifferent
or inattentive acts towards the contract even after someone has not done any mistakes or tortuous
acts. Usually an employer can be detained legally responsible while his or her employees are
doing anything wrong. It is a doctrine of English tort law that imposes strict liability on
8

10. employers for the wrongdoings of their employees. As the situation created by the case the
management team of TAM‟s college fell in the doctrine of vicarious liability due to the
initiatives taken by the night of the organization. Although the workers were advised about the
protective clothing wear and at the same time warned about the accidents.
In spite of not maintaining the policy of the organization by the workers TAM‟s college has to
pay compensation for the accident as per the law of vicarious responsibility.
The figure of vicarious liability is shown below here:
Principle
Agent
ThirdParty
9

11. TASK-4
4.1 Application of the tort and negligence and defences:
Tort negligence has different types of elements and defences differing according to the business
situation. The detail is given here:
Tort negligence law: This is a kind of law where it is founded and operated in the realm of
international tort law at the same time controlling and protecting employees from injuries to their
line. According to the case TAM‟s college‟s illiterate employees were advised and warned about
the accidents and the facts of wearing protective clothes (Hessein 2006).
Duty of Care:Duty of kind is a strong tool used to protect employees from any harm and
accidents for any uncertain reasons. If such duty is breached, a legal liability is imposed.
Sources of negligence:Negligence can be defined as being failed to install protection against
loss or accidents. It is the unintentional breach of a legal duty causing damage reasonably
foreseeable without which the breach would have not occurred. Due to negligence both the
employees and the organization have to face trouble that may need to compensate in a huge
amount. Unintentionally breaching the legal duty may cause damage. The potential sources of
negligence are given here:
1.9 Usage of defective equipment: Defective equipments may cause accidents. So all the
machines must be checked at a daily basis to prevent from potential threat.
1.10
Poor selection of activities:Every employee has their own limit. If more tasks are
given than the capabilities of the worker he or she must fail. It‟s like vomiting. So
activities selection is a vital task should be chosen carefully.
1.11
Inadequate protection: Results of lack of carefulness cause accidents which
indicate inadequate protection against the danger. It can also be categorized as negligent
in the behaviour of an employee of not wearing protective gears while working.
1.12
Dangerous condition: Hazardous conditions are unforeseen and unavoidable.
They may happen any time, so effective measures must have been installed.
10

12. As we know every problem must have solutions so some initiatives may definitely help to
prevent loss against the damage caused by negligence (Steve 2009). The defence mechanisms are
given here:
1.13
Assumption of risk and act accordingly: It means acting according to the
situation and previously predicting the risks by analysing the previous facts.
1.14
Sudden emergency for any accidents: The act of immediate actions against any
accidents called sudden emergency. Such as, attempt to rescue a person drowning in the
water is an act of sudden emergency.
1.15
An act of God: This type of situation is uncontrollable by human being as
everything is not driven by us. This assumption is only applicable when adequate safety
measures are taken to avoid injuries.
4.2Application of Vicarious Liability:
As per case TAM‟s college has enforced the employees to wear protective clothes against danger
for instance labour and guard. They have taken these measures to avoid future accidents. And the
senior manager has sent he guard at night to the factory without following the company policy I
mean without wearing protective clothes. And thus the guard was a victim of an accident due to
not taking necessary clothes. As the senior managers are instructed strictly to check whether the
employees are following the company policies or not they should have done this before sending
the guard to the factory. As supervisors has the inherent authority to control over the employees
and the supervisors were asked to maintain the right clothing and proper protecting gears of the
non-teaching staffs they must instructed the employees properly.
According to the vicarious liability doctrine any employee must be punished due to indifferent
behaviour. However, vicarious responsibility refers that anyone can be detained legally
responsible for the careless acts of a different individual. In this case the supervisors were
inattentive to the instructions and that lead one of the staffs to get hurt. But the authority of the
TAM‟s college will be found responsible because of vicarious liability doctrine (Lambert 2012).
TAM‟s management refused to compensate as the employee was not following the company
policies in spite of having accident. Although the guard‟s family claimed against the accident the
management detained to compensate. But under the vicarious liability doctrine no matter how
11

13. defective the staffs are the TAM‟s authority will be legally responsible for the staff‟s wrong
doing and needed to compensate for the accident.
Conclusion:
According to the circumstance the given situations in the case, from scenario 1, 2, and 3 the
authority has contacted with legal advisors to prevent such legal issues. As they have the
ambition of being number one so any act which is harmful for them should be prevented and act
accordingly. For being number one in whole UK they have hired the NAMS the leading agency
whose main task is to advertise on behalf of the hiring organization (Margerate 2009).NAMS
marketing consulting firm gave the brightest offer that they can use extensive marketing tool and
promote the college name for one month only for £6000. NAMS had to stall the marketing
program due to financial issues and TAM‟s college were not happy about it and they have taken
legal actions against NAMS marketing firm based on the initial terms of NAMS. On the other
hand in scenario 3 TAM‟s college has to pay compensation for the accident faced by the
employee although he guard was not maintaining the company policies (Knight 2006). And
TAM‟s college authority denied compensating against the loss. As a result the TAM‟s college
management have to face English doctrine called “Vicarious Liability” that indicates that they
were obliged to compensate. Thus according to some business law and doctrines any
organization has to face legal issues.
12

14. REFERENCE
Hessein, D, & Smith, R 2006, Preparation Of A Learning Manager In The BLM Program
[Electronic Resource] / David Lynch And Richard Smith, n.p.: FrenchsForest, N.S.W. : Pearson
Education Australia, c2006., CQUniversity Library Catalogue, EBSCOhost, viewed 20 March
2013.
Knight, C 2006, Building Resilience In Learning Managers [Electronic Resource] /
Cecily Knight, n.p.: FrenchsForest, NSW : Pearson Education Australia, 2007., CQUniversity
Library Catalogue, EBSCOhost, viewed 20 March 2013.
Lambert, G, Shepherd, C, Ridnour, R, &Weilbaker, D 2012, 'The training of sales managers:
current practices', Journal Of Business & Industrial Marketing, 27, 8, pp. 659-672, Business
Source Complete, EBSCOhost, viewed 20 March 2013.
Margerate, L, & Cray, D 2009, 'Career Paths for Managers in the Arts', Australian Journal Of
Career Development, 21, 3, pp. 23-32, ERIC, EBSCOhost, viewed 20 March 2013.
Steve, P, & Reeve, J 2009, 'Training Corporate Managers to Adopt a More AutonomySupportive Motivating Style toward Employees: An Intervention Study', International Journal
Of Training And Development, 13, 3, pp. 165-184, ERIC, EBSCOhost, viewed 20 March 2013.
13