This document discusses the essential elements and principles of valid contracts in a business context, highlighting the importance of offer, acceptance, lawful consideration, and consent for contract formation. It further explores various types of contracts and their implications, including the distinctions between contractual and tort liability, as well as the nature of negligence and vicarious liability in business scenarios. Additionally, it provides case studies to illustrate the application of these legal principles in real-world situations.

1. Charlotte Alexander
Valid
Contract
Assignment
When a personwants to start a business then the most
important thing that needs to be understoodis the essentially
applying and understanding the norms
sun infosys

2. Introduction
When a person wants to start a business then the most important
thing that needs to be understood is the essentially applying and
understanding the norms, principles, rules and usages of contract
in an effective manner. Contract is the valid agreement between
two or more than two parties which is enforceable by the law. In
every deal of business contract plays an important role. So, it is
important for a business man goes through and keeps exact idea
regarding the contract law. This marketing
planning assignment explains the primary and basis areas of the
contract that should be known by businessmen. In this project
report the essentially of a contract and its impact will be
discussed. There are also various more aspects of the contracts
will be discussed in this assignment.
Task 1 Understand the essential elements of a
valid contract in a business context

3. Explain the importance of the essential
elements required for the formation of a valid
contract.
There are some necessary elements of a valid contract that Mr.
William wants every staff members to know and these are
describes as below:
Offer is considered as the primary step to initiate a contract and
which should be lawful and on the other side, by the other party
offer must be accepted in lawful manner. So to make a contract
valid there must be lawful offer and acceptance by both the
parties. [Meyer (2010)]
In a contract it is important to have a lawful consideration.
Consideration is the payment or recompense on which the legal
contract could be made. One party gives the reasonable
consideration to the other party and the amount and type of the
consideration is decided by the both party mutually.
Both parties of the contract should be able to create a
legal customer relationship with each other. Both the parties
should be mentally, legally and physically vigorous to enter into a
contract. [Collins (2008)]
A contract between both the parties should be free consent
without any forceful act or coercion. Both parties must be agreed
with their own consent and they must be agreed on the same

4. things and at the same manner. A consent would be free when is
not created by the undue influences, coercion, fraud, etc.
[Richards (2006)]
An object of the contract or an agreement should not be void.
Object is different from the consideration. Object defines the
reason and purpose of the agreement must be valid. Object is
considered as the lawful when it is not fraudulent, it is not
prohibited by the law, involves any injury, etc.
For example : A house is being taken on rent for gambling
purpose, in this case the object is gambling and that is illegal.
Discuss the impact of different types of contract in terms of
forming, binding and enforceable contracts under English law.
There are several types of contracts and they all have their own
impact.
In a contract when both parties do something in order to fulfill the
contract is known as bilateral contract whereas in unilateral
contract when only party has to do something and fulfill the
promise to make the contract valid and that promise needs to be
accepted by the second party only. [Vettori (2007). A contract said
to be implied when the behaviour, activities, conduct of both the
party shows that they came into the contract and on the other side
in express contract is defined as when both the parties articulate
or communicate the entire terms and condition

5. to each
other which are necessary for the contract is known as express
contracts.
When in a contract all the obligation have
been performed in a proper manner that needed to be performed
is known as executed contracts and on the other side when any
party or all the parties have not performed any responsibility or
obligation that needed to be performed is known as executor
contracts.
An agreement is said to be void when any party could not be able
to implement the agreement legally due to various reason. When
law pe
rmit any party to pull down the agreement in that case the
contract is said to be voidable. Unenforceable agreement is that
when all the parties mutually set the consideration but the
statement of law generate hurdle to force. Valid agreement is that

6. agreement when all the obligations have been fulfilled by all the
parties and that is easy to implement is known as valid agreement.
[Nel (2004)]
Analyse terms in contracts with reference to
their meaning and effect:
A condition is referred to such a term wherein the contract would
seize to exist if the same is not complied with. Therefore, the term
is considered to the elemental to the contract. Such a term is to be
fulfilled to complete the execution of the contract.Warranty is
referred to as a term wherein when breached the same may be
claimed for in damages. It is however to be noted that the contract
would continue to function even after claiming the damages in the
case of breach as it is secondary to the contract.[Giliker (2010)]
The contracting parties to safeguard the interests of the
consumers from the manufacturers and the sellers generally enter
into exclusion clauses. This is to show that the certain restrictions
on liabilities are valid and the others are not. The terms not valid
are specified under the Unfair Contracts Terms Act.The terms that
are not specifically mentioned or discussed but are to be

7. performed in general are referred to as the terms that are implied.
Such terms are not required to be mentioned as the performance
management is implied in nature.
Terms that are essential to the contracts and specific to the
contract are considered as the express terms. Such terms are
generally present in writing and require to be fulfilled in order to
fulfil the terms of the contract. [Meyer (2010)]
Task 2: Be able to apply the elements of
a contract in business situations
2.1: Apply the elements of contract in given
business scenarios
In the given situation the advertisement so posted by the East End
Airways in the trade journal for the second hand Airbus 320 is
that of an invitation to offer. The price so quoted to be 12.5 million
pounds is a price that may be negotiated once the offer has been
made. When the Chief Executive Officer of West Aviation Ltd.
Expresses his intention to the EEA’s Managing Director for the
purchase of the same airbus. However, he also expressed his
unavailability for the next five days as he is visiting New York for a

8. business matter. To this, William specified that in the meantime if
another buyer comes along then the same would be sold to that
buyer. Furthermore, Harry offered to pay 100,000 Pounds if the
same is not sold for the next five days. William thereby agrees to
the offer. It is noted that the offer to not sell the air bus for the
next five days was made. The agreement so formed is considered
to be a valid contract as the offer was made by Harry that was
accepted by William. The same was done a consideration and
between the legally capacitate parties. Therefore, the agreements
so formed in the situation comprised of express terms such as not
selling the airbus for the next five days. Thereby the contract so
formed would lapse after five days. The implied term is that
William would maintain the airbus for the next five days and that
the claim may be made if the same is breached by William. It is
thereby said that the contract so formed is valid contract
according to the elements of the contract. [Cooke (2007)]
2.2: Apply the law on terms in different
contracts
The present case illustrates that the Mr. Peters had entered into
an agreement with the cycle shop for the repairs of the bicycle that
is to be used by him in the cycle race. The same was entered into

9. on basis of the specific terms so agreed to. The repair of the
bicycle was a condition to the contract as well acceptance of the
goods subject to the terms and conditions. The implied term was
that the equipments so used in the repair would be of standard
quality. The express terms as well as the warranty was that care
would be taken of the bicycles all brought in for the repair?The
exclusion term that may be referred to as the essential part is that
the care would be taken but the responsibility for the goods would
not be taken that are left for the repairs. However, the sign
illustrating the terms was put behind the counter and hidden by
the bicycle so hung. Mr. Peters was not able to read the same. As
the owner of the shop it is required to make the stament expressly
clear and noticeable in order to enforce it. As Mr. Peters went to
collect the bicycle the same was not repaired and misplaced as it
was put into storage along with the wrong tag. This results in a
breach of a contract. As the condition to repair was not met and
the exclusion clause was not clear the contract can be voided at
the end of Mr. Peters and damages may be claimed for the loss so
suffered. [Vettori (2007)]
2.3: Evaluate the effect of different
terms in given contracts

10. The present scenario had a contract that refers to the purchase of
30 cars being made by The Best Cars Ltd from Car World if the
same were ready to be used on the roads. In the case whereby the
cars so supplied are illegal and no amount of modifications would
make a difference would make the term of being immediately able
to use the cars would be a condition as the cars cannot be driven
unless they are legal. Whereby the repairs are needed to the
performed with respect to the engines, the term would be
regarded as a warranty as the repair would only amount to a
minor delay.Whereby the repairs needed would require a storage
time of 3 months, the term in question would be regarded as an
innominate term only to be considered condition or warranty if
the same is not complied with. [Collins (2008)]
Task 3: Understand principles of
liability in negligence in business
activities
3.1: Contrast liability in tort with contractual
liability

11. For a person to be liable without any cause is referred to as a case
of strict liability. To analyse the different strict liabilities the areas
of law to be considered are that of Criminal Law, Law of Contracts
and Law of Tort. Whereby the damaging party has to pay for
damages without having to be proven guilty is known to be strict
liability. It arises from an pre-existent duty and hence is strict in
nature. The difference in the types of liability in law of contracts
and l
aw of tort is as follows:
The consent of the parties is relevant under the law of contract,
the same is not the case in the law of tort.The damages under the
law of contract may be quantified but the same may not be
quantified unde
r the law of tort.The factors considered under the law of contract

12. are that of offer, acceptance, consideration and privity wher
ein the factors considered under the law of tort are that of
remoteness of damage and causation. [Cooke (2007)]. The parties
are required to be of capacity under the contracts wherein the
same is not the case with law of tort. The motive of breach is not
considered under the law of contracts whereas it is considered
under the law of tort.The right breached under law of contracts is
that of right in personam and right in rem with the law of tort.
[Giliker (2010)]
3.2: Explain the nature of liability in negligence
The liability of negligence under the law of tort is referred to as
the breach of a duty that was suppose to be undertaken against
the world for the protection and safety of the people possibly
affected by the breach. For the tort of negligence it is required that
the duty of care existed among the parties, that the same was
breached and the damages so arising are in terms of
psychological, monetary or physical terms. [Nel (2004)].
According to the case of Donoghue v Stevenson, 1932, a test of
neighbour’s principle was established wherein it was held that the
neighbour is a person that is directly or closely related to the
effects of the acts that are performed by the tortfeasor. Such care

13. shall be undertaken towards the users both direct and indirect so
that the possible effects may be minimised. Lord Atkin’s
judgement mandates the maintenance of safety by the person
causing the harm or the effects. It shall be assessed beforehand in
terms of foreseeability and proximity to study the extent of
liability that may arise if the duty in question is not undertaken.
[Richards (2006)]
3.3: Explain how a business can be vicariously
liable
The business may be made vicariously liable for the acts of the
employees. The employer-employee relationship shall exist
between eh parties in order to be responsible for the actions of the
other party. The same may arise out of a professional duty and not
the personal motives. Thereby it is essential to assess if the action
resulting in damage or harm are from the professional duty or the
personal preference. The same is discussed according to the
Doctrine of Respondent Superior. Vicarious liability also arises
from the duty to provide a safe and healthy working business
environment to the employees. As discussed under the Health and
Safety at Work etc of 1974, the employer has to maintain the
standards of the safety. Accordingly, it is also essential to know

14. that the vicarious liability goes beyond the employer-employee
relationship in the case of master- servant, partnership and the
agency wherein the acts are so performed for the benefit or
instructions of another party. [Collins (2008)]
Task 4: 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
Mark had a claim against the holiday park because as an occupier
the holiday park required to maintain the area for the safety of the
visitors. Thereby the fences provided by the holiday park was not
enough as no warning sign of the sorts that climbing over to the
other side would be harmful. As an occupier it the liability of the
holiday park to include all the signs and attempts safeguarding
the visitors both permanent and temporary. A duty of care existed
from the end of the council as the Occupier’s Liability Act
mandates the occupier’s to take necessary steps for the precaution
of the harm that may be caused to the trespassers, visitors and

15. non-visitors both permanent or temporary. Thereby when the
council was aware of the given possible breakage that may be
harmful for the person swimming it should have expressly put out
a sign or notice for the person so concerned. [Meyer (2010)]
Therefore, the responsibility towards the visitors was from the
park’s and council’s end in both the cases. Under the case of
Hedley Byrne & Co. Ltd. V Heller & Partners Ltd. [1946] AC 465
whereby Hedley was approached to outline the extent of
credibility of a potential buyer. Therein on incorrect review he
forwarded the wrong information resulting in the loss at the end
of the seller. Thereby, Hedley was held responsible, as it was his
fault because the amount went in arrears. Thereby, in determining
the negligence the source of liability has to be studied to derive
the correct remedy. [Pratt (2000)]
4.2: Apply the elements of vicarious liability in
given business situations
The given case study presents a situation wherein the Museum
owner of Vintage Vehicles asked her friend to take the vintage bus
for the vintage rally. While driving over the bus the friend’s
conduct was negligent and thereby it resulted in the damage to
Mrs. Williams car. It is to be noted that the car driven by the

16. friend was not a n employee in the given scenario and thereby the
vicarious liability would not arise from the end of Mrs. Williams.
It is also noticed that according to the according to the occupier’s
liability it is essential for the person driving for the time to
maintain the security of the people both inside and outside the
car. Therefore, it was the duty of the friend to take all the steps
towards safeguard the pedestrians and the people travelling in the
car. The task of delivery of the van was met however; the same
was not done in accordance with the standards as prescribed
under the act. Therefore, the liability in the present case arises
from the friends for not taking the necessary precautions and
risking the safety while driving the car negligently. [Vettori
(2007)]
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Conclusion:
In the present assignment a detail discussion was undertaken
with respect to the formation of the contract and presenting the
basic elements. The structure of a contract based on terms such as
the express, implied, conditions and warranties was studied to
develop a better understanding. Furthermore the effect of the

17. terms on different types of contracts was referred to, in detail to
solve the case studies so provided. The assignment also requires
to understand the difference between he contractual liability as
well as the liability under the tort to determine the effects of the
two. Furthermore, an analysis of the tort of negligence and the
vicarious liability is to be made to solve the case studies so
provided.