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Aspect of Contact and Negligence for
Business
Executive Summary
The agreement which defines and creates obligation between the parties is called contract. In
a contract have some important elements and a number of terms prevail. Numerous statements
are being made between the parties, when a contract start, who are imagine to carry on a
contract. The terms of the contract are these statements. For creating a contract parties have to
maintain some conditions. Fulfilment of the conditions is must for formatting a contract. But in
many times agreement can be refused by one side of parity that hamper the works of other party.
Basis of the duties of both parties we can measure compensate of any party to others. In this
report, we are going to find out different area of contacts. I am very happy to be a part of this
report

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Contents
Executive Summary...................................................................................................................... 0
Introduction .................................................................................................................................1
LO1 Understand the essential elements of a valid contract in a business context ............................... 1
1.1 Explain the importance of the essential elements required for the formation of a valid contract. ...1
1.2 Discuss the impact of different types of contract........................................................................ 1
1.3 Analyze terms in contracts with reference to their meaning and effect......................................... 2
LO2 Be able to apply the elements of a contract in business situations ............................................. 2
2.1 Apply the elements of contract in given business scenarios ........................................................ 2
2.2 Apply the law on terms in different contracts............................................................................ 3
2.3 Evaluate the effect of different terms in given contracts............................................................. 4
LO3 Understand principles of liability in negligence in business activities........................................ 4
3.1 contrast liability in tort with contractual liability ....................................................................... 4
3.2 explain the nature of liability in negligence............................................................................... 4
3.3 Explain how a business can be vicariously liable ....................................................................... 5
LO4 Be able to apply principles of liability in negligence in business situations................................ 6
4.1 Apply the elements of the tort of negligence and defences in different business situations ............ 6
4.2 Apply the elements of vicarious liability in given business situations.......................................... 7
Conclusion:..................................................................................................................................8
References ...................................................................................................................................8

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Introduction
Most of the business deal is done through contact. In the business it is basically written. It has
many different area and different effects. In this report, we are going to talk about the
different elements of contract, discussion about the impact of different types of contract,
analyzing the terms in contract and their effect, reflect on the impact a contract type can have
on parties involve, application of the elements of a contract, application of the law on terms
in different contracts, evaluation of the impact of different terms. This report will explore
each and every sector of contact in the perspective of business.
LO1 Understand the essential elements of a valid contract in a business context
1.1 Explain the importance of the essential elements required for the formation of
a valid contract.
An agreement should contain five elements. Lack of any element will result in the illegality
of the contact. The first element is offer where a party must offer another party to do a certain
job. The second condition is that what is offered should be accepted. The third condition is
intention of legal consequences in a contact; all parties are involved in some short of
agreement. This means the parties who involve with the contact should intended to create
lawful relation. They should know that this agreement should be varified by law. The forth
condition is consideration. In order to be considered as binding, a contact has to be supported
by valuable consideration. This means a party promise to do certain work in return the other
party promises to pay a value for the job. The forth condition is legal remedies. A court uses
legal remedies when there is any a claim or disputes between any parties(Beale, 1975).
1.2 Discuss the impact of different types of contract
Contacts can be categorized according to different views.
On the basis of mode of creation, a contact can be classified as executed contact and implied
contact. On the basis of enforceability and validity, contact can be classified as valid contact,

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voidable contact and void contact. On the basis of time of performance, contact can be
classified as executed contact and executor contact.
Contacts can be classified in many categories but the main category is express and
implemented contacts. Conditions are monitored fully in case of express contact. Both
parties are helped to perform the contact. This is also helpful when there is breach of contract
by the one party and helps the other party to claim about their damages.
It is also important is case of valid contact. In order to form a valid contact, the legality of
object and maintenance of legal document is important.
It is executed and executor contact which represent the timeframe of performance of the
contact(Belbow, 2005).
1.3 Analyze terms in contracts with reference to their meaning and effect.
According to the Durga(1982there are a number of terms at the time of forming contact. At
the time of forming contact, both parties make statement which is called as terms of contact.
These terms plays an important part in fulfilling the contact and maintain the rules of the
contact.The terms of the contact can be categorized into basically two parts as expressed
terms and implied terms.
The terms which are expressed specifically and both parties agreed on that are known as
express terms. The terms which are not expressed specifically but must be implied in case of
forming and maintain contact is called implied contact. The statements which are written can
be called as the terms of contact. The parties who are involve in forming the contact must
maintain the terms of this legal document.
LO2 Be able to apply the elements of a contract in business situations
2.1 Apply the elements of contract in given business scenarios
In case of making contact, at least two parties should be present. One party offer and another
party accept the offer.
In the business scenario, “Telephone Are us” makes the initial offer to enter into the contact.
Jack accepted the offer to enter into a legal business deal. So, here both parties involve in
offering and accepting are present.

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In the scenario, both parties have the intention to face legal consequences. Jack is using the
phone. And the contact says that he is liable for any short of replacement. So there is a deal
and both parties can face the legal consequences.
Consideration is that when one party promises to another party in return of their services. In
that business case, the Jack has paid a certain amount of money for their service.
The time period is an important factor in making any contact. The time period for the contact
is 12 months.
The total agreement is written in the business document and must be signed by both parties in
order to be considered as legal document. So, violation of contact by any parties can be
solved in the court by means of enforcing laws(Graw, 2000).
2.2 Apply the law on terms in different contracts
Contracts are made between different parties which can be oral or documental. But most of
the cases in business it is written in order to make it future clarity. And this document then
signed by both parties. A contract is made of on the terms discussed below:
1. Parties which participate- Parties which are involved in making contact should be
described clearly.
2. Definition and clarification- There are some terms which should be defined and
clarified clearly. For example, weekend means the last working day of the business.
3. Payment requirement- In making contact, one party expect service and other party
expect payment. In the written document it should be clearly stated what kind of
service is expected and what amount of payment is going to be paid.
4. Description of goods and services Description about the services or goods should be
identified. This can also include which kind of service of product is needed.
5. Timescale of a contract- The time period for which the contact is going to make
should be identified. It gives the idea about the time table for which the contact is
going to make.
6. Information about liability- When a contact is made, both parties have some
liabilities. The liability of both parties should be identified or described clearly.
7. Cancellation of the contract- After making a legal contact, a contact can be cancelled
by any party. But there are some rules and reasons for cancelling the contact. It should
be stated clearly.

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8. Warranties- The party which provide the goods and services is likely to guarantee
about their services. It should be stated which kind of guarantee is given to give about
the product (Graw, 2000).
2.3 Evaluate the effect of different terms in given contracts
In the given business scenario A, we will find the following terms of contacts.
1. Participating parties- Here the client Jackand telephone company “Telephone Are us”
are the participant party.
2. Payment requirement: Jackhas to pay certain amount of money for the product.
3. Description of goods and services: The called telephone company “Telephone Are us”
had provided Jack a telephone.
4. Timescale of a contract: The time period of the contact is 12 month.
5. Liability: In the contact “Telephone Are us” gave the liability to Jack and Jack
accepted and signed the contact. So, the liability goes to Jack(Jhabvala, 2008).
LO3 Understand principles of liability in negligence in business activities
3.1 contrast liability in tort with contractual liability
Tortuous liability is the liability which arises from the violation right of ram whereas the
contractual liability is the liability which arises from the infringement of a right of a right in
person. In case of tortuous liability, laws force the duty and society owns it in general. In case
of contractual liability, mutual agreement of the parties forces the duty. In case of tortuous
liability, privities don’t exist. In case of contractual liability, privities exist between the
parties.In case of tortuous liability, the damage is liquated to plaintiff. In case of contractual
liability, the damage is not liquidated.
3.2 explain the nature of liability in negligence

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Gardner (1992) says negligence can be described as the failure of exercising that care which
could be exercised by a wise and prudent person in some circumstances. Negligence involved
harm causes by carelessness is the area of tort law.
It has five elements.
1. Duty of care: Continuation of legal duty to take care on the part of one person against
another.
2. Breach of duty: After establishing the defendant owned a duty to the plaintiff, the
matter of whether or not that duty was breached must be settled.
3. Factual causation: In order to show that the defendant was liable, it must be shown
that some short of particular activities or actions were the cause of that damage.
4. Legal causation or remoteness: Factual causation can be differentiated from legal
causation to avert the danger of defendants being exposed to.
5. Harm: Even though there is breach of duty, and the cause of some injury to the
defendant, a plaintiff may not recover unless he can prove that the defendant's breach
caused a pecuniary injury.
Professional liability of negligence
Appropriate standard of professional care must be practiced by professionals. An affidavit
must be filed with the complaint
Natures:
1. Plaintiff should be foreseeable.
2. The damages should be of foreseeable kind.
3. The standard of care in negligence is that of a reasonable man (Mckendrick,
1990).
3.3 Explain how a business can be vicariously liable
Generally a man is responsible for his own act, there are some exceptional cases in which
the law imposes on him vicarious liability for the acts of others, though he had no part in
those act. In the case of vicarious liability, liability arises because of the relationship of the
principal with the wrongdoer, who may be his agent or servant.

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It is a one kind of torts where the liability of a person is independent of his own wrongful
intention or negligence and is, therefore, otherwise classified as liability without fault.
In the cases of joint and several liability, the wrongdoer himself is liable, though he is a
servant or agent, because everybody must answer for his own acts-it is no excuse that he was
acting on behalf of or for the benefit of another. The principal who has authorized the
wrongdoer expressly or impliedly, is also responsible under this rule of vicarious liability.
Again where, a master is liable for the servant’s tort, obviously, the servants or agents is
also liable individually, and the relationship between the two is one of joint wrongdoers. In
such a case the master would be entitled, after meeting his liability to the third party, to
contribution from his agents,-the joint wrongdoer. He can also sue him for damages for
negligence in performance of his duty. In the absence of any contractual stipulation to the
contrary, a servant or agent is under contract, express or implied, to take due care in the
performance of his work, and is liable to pay compensation to his master for loss caused to
him by his failure to take such care.(Rawlings, 1979).
A firm can be vicariously liable for the action of their employees. It may happen to the
marketing company like the business scenario given above. In order to avoid this type of
problem, the company can make rules for the company employee who is in charge of making
contact on behalf of the company. These rules will give the guideline what the employee can
promise to the clients and their responsibility. This also defines the attitude of employee
towards the client.
So that the company may not be liable for the act of their employee, they can supply the
basic rules of making contract to the parties which whom they are going to make contact.
This will aware them what the company promises them and what to not. This document must
be returned to the company with the signature of the party before making contact so that the
company can avoid vicarious liability.
LO4 Be able to apply principles of liability in negligence in business situations.
4.1 Apply the elements of the tort of negligence and defences in different business
situations

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We know that the elements of the tort of negligence are duty to care, breach of duty and
damages. In the above business scenario, we will find the element of the tort of negligence.
1. Duty to care: Continuation of legal duty to take care on the part of one person against
another. In the given business scenario, the duty of care is to Pushing and Pulling
Ltd.
2. Breach of duty: Degree of care varies with circumstances. Breach of duty actually
proves the negligence. In the given case,, not talking care of the cable is the breach of
dutyof Pushing and Pulling Ltd
3. Damages: In fact damages are not of the essential conditions of liability in the
negligence. Paula falls with the cable and may have injured. It was the damage in that
business case (Teague, 2006).
4.2 Apply the elements of vicarious liability in given business situations.
According to British Jurisprudence (2006)a firm can be liable for various reasons. The
basic reasons are:
The company makes promises to the parties. The company promises to carry out different
type of work for different parties. This is not financial liability but it has an impact on future
financial position.
The company has internal liability to the employees. The company is fully responsible for the
welfare of the employee of organization.
Vicarious liability for the action of the employee is an important type of liability. A company
can be hold responsible for the action of its employer.
Company’s obligation to different parties is an external liability. A company usually has
different types of liability in day to day operation. The company usually meets the obligation
after a certain time.
The rule in the law of tort is that joint wrongdoers are jointly liable for the whole damage.
Joint wrongdoer’s means- In this case it was the liability of is going to Pushing and
Pulling Ltd. But the vicarious liability is going to the owner of the building. Paula can hold
responsible Pushing and Pulling Ltd not talking care of the cable. Again, Pushing and Pulling
Ltd can say Paula that it was the responsibility of the owner.

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Recommendation: As the full building is occupied by Pushing and Pulling Ltd., the owner
must have a contact that the total responsibility of maintain is going to Pushing and Pulling
Ltd. Here the owner can be vicariously liable.
Conclusion:
In finally it can be said that a contract is such an agreement between two or more parties
which is enforceable by laws. Contract has some elements also. Fulfillment of the conditions
is important for formatting a contract. Here we again mention that the agreement of contract
has no use if the conditions are not fulfilled. In many times contract is a fact of negligence for
the business parties at the causes of ignore of condition. By the co-operation of both parties a
successful contract may be created .
References
1. Beale and Dugdale, (1975), “Contracts between businessmen” British Journal of Law
and Society 45
2. Belbow, B. A. (2005). Guide to Criminal Law for Texas,. 3
rd
ed. Belmont, CA:
Thomson-Wadsworth, ch. 5.
3. Durga, D.(1982),”The Law of Tort” 11th edition, , Kamal Law House.p-2
4. Gardner, (1992), “Trashing with Trollope: a deconstruction of the postal rules in
contract” , Oxford Journal of Legal Studies 170
5. Graw,(2000) “Puff,Pepsi and “That Plane” – the John Leonard Saga” 15 Journal of
Contract Law 281
6. Jhabvala H. Noshirvan,“The Law of Tort” 26th edition, , C Jamandas& Co.p-07
7. Mckendrick, E, (1990), “Contract Law “8th edition, , Palgrave Macmillan publishers
limited.p-35
8. Rawlings, (1979) “The battle of the forms” 42 Modern Law Review 715
9. Teague, M.O. &Helft, B. P. (2006). British Criminal Practice Guide. San Francisco:
Matthew Bender. ch. 121
10. British Jurisprudence 3rd (2006). Criminal Law Law, sec. 151-55.