1.1 Essential elements of contract
1.Offer- It can be defined as proposal given by one party to another for the completion of certain performance. It can be given to general public or to a specific person. It is required to be specific and certain. In addition to this, invitation to treat will not be considered as offer because it is merely willingness of one party to another to represent their
2.Acceptance- Acceptance can be defined as consent of party to the provided offer. It is required to be unconditional and absolute. Acceptance provided by the party other than offeree will not be considered to form contract.
3.Consideration- Contract should be formed by parties in against of some beneficial value. It can be in monetary or non-monetary terms. However, past consideration is not valid to form contract between parties.
4.Legal intention of parties- Parties should intend to enter into legal relationship to form valid contract. Due to this aspect, charitable and domestic agreement does not have legal enforceablity.
5. Capacity- Parties should be able to form contractual relationship. If they are minor or lunatic or of unsound mind, then they will not be able to create contract.
Further, formation of contract should be done for fair objectives and contractual terms should not restrict fundamental rights of parties.
Importance of essential elements for a valid contract with respect to case study
With reference to mini-cases presented under report, the essential elements along with their importance can be described with respect to individual case study.
Mini-case A: Arnold that is offerer gives an open invitation to Fiona who is expected offeree under contract to buy the equipment used for their purpose. Arnold has kept a condition to get response in limited time duration. Fiona has over passed the duration and hence failed to create contract.
Elements with their importance: The following case involves two parties which are essential to create a contract. The two parties are offerer and offeree. It is a time bounded contract where the terms and conditions are adhered to limited tenure. Hence in the following precedent, time and number of parties are two essential elements (Mitchell, 2009).
Held: By observing the current situation, it is analyzed that the case carries unilateral type of contract where one party is keeping the proposal but does not make any promise with the specified person. It is also an implied contract bounded by the time limit of first come first serve. Since Fiona fails to restrict under the prescribed time limit, she fails to enter into the contract with Arnold (Koskina, 2013).
Mini-case B: Mrs. Smith is an offeror who kept a public offer for finding her cat and give them financial reward of £100. David is an offeree who accepts the offer and claims the reward announced by Mrs. Smith along with compensation of expenses incurred on searching the cat.
Elements with their importance: This is the case of finder of the lost goods. In this scenario, there was valid contract between parties supported by proper offer of acceptance. This is the reason for creation of the contract. It also includes monetary reward which is the right of offeree to claim. And lastly, it involves two parties under contract which are essential for legal obligations (Cruess, Cruess and Steinert, 2010).
Held: As elaborated above, it is the case of finder of the lost good. David has found the lost cat of Mrs. Smith and claimed the reward for which he is entitled. But he cannot claim the amount o expenses done over searching the cat. Hence, David cannot suit Mrs. David under law because no explanation of compensating the losses has been described under contract by Mrs. Smith.
Mini-case C: Mrs. Harris is the offerer under the following case. She offers payment to Mr. Ted who is offeree under the current circumstances. The offer was to collect payment from tenants on behalf of Mrs. Harris for which he will be paid £200.
Elements with their importance: Under the following condition, the important elements include two parties, consideration and amount as a reward. Parties are required to make contract and consideration is necessary to involve consent under an agreement. Reward has become the reason to create contract (Godfrey, 2009). There is presence of past consideration. The performance has been done in prior and then Ted is claiming for the amount. Hence, it will be considers as invalid and there is no contract formed between parties. There is also absence of intention of parties to create legal relationships.
Held: In this case, on fulfillment of duty, Mr. Ted was liable to claim the reward which has been promised to him by Mrs. Harris. But in the situation, he was not paid on completion of duty. Oral promise was made by Mrs. Harris which was accepted by Mr. Ted. The suffering person cannot file a suit under law because he does not have any proof to show that proves him right. There was no written consideration made between parties which is very essential and also absence of past consideration. Hence, on non-fulfillment of promise, Mr. Ted is not paid any amount for which he is entitled (Riley, 2010).
Mini-case D: The two parties are promisor who is Mr. Nash and promisee is Inman. Order to make waistcoats was made by Inman to Mr. Nash for which he refused later on. Mr. Nash is claiming for the cost of clothes.
Elements with their importance: The main element involve under this scenario is not in capacity to contract. A person must possess the age of 18 years for entering into the contract. The other elements are two parties which are essential and amount of compensation for breach of contract (Grant and et.al., 2015).
Held: The following case involves the capacity of party to contract. It is seen that Inman is a minor and according to English law, a person must be a major that is above 18 years of age to enter into contract. On non-fulfillment of obligation by Inman, Mr. Nash cannot file a suit because the contract is void from the beginning. He is not entitled to claim any amount from Inman for the cost incurred over tailoring of waistcoats (McClelland, 2013).
From the above case scenarios, it is analyzed that the major elements required for formation of a valid contract along with their importance are:
- Parties – There should be at least two or more than two persons to enter into the contract.
- Capacity of parties – The members entering into a contract must be a major that is above 18 years of age to understand the terms of contract (Rowlinson, 2010).
- Consensus-ad-idem – Consent of all the parties is required to form a valid contract.
- Non violation of law – To complete a valid contract, parties must be adhere to completion of duties (De Geest, 2011).
- Penalty – On breach of contract, there must be an amount of compensation described under the legal document (Koffman and Macdonald, 2010).
Every contract is bounded with some terms and conditions which must be fulfilled. On non-completion of those regulations, the victim party is entitled to claim damages (McKendrick, 2014). In the following cases, it could be well described as under:
Mini-case E: Paul is the person looking for a second hand car. He saw an advertisement for the firm dealing in second hand cars. Paul made an agreement with the dealing firm and obtains all the legal documents after purchasing the car. But he has observed few negative aspects while dealing with the firm.
Legality of exemption is a provision under a contract where one party id being saved from getting sued by other party on account of damages, loss, negligence or nonperformance and breach of any duty. Condition is the root of contract. If condition is not fulfilled under a contract, then the innocent party has the right to end the contract. The other important aspect is warranty and representation. Under warranty, the innocent party cannot breach the contract but it possesses right to claim for the damages. In the following case, Paul is entitled to claim for damages but cannot repudiate the contract if organization fails to accomplish the warranties and representation that it has made. Traders puff is another element which is not a particular statement for confidence on goods or services and no remedy is given to any party is traders puff turn out to be false. In the following situation, trader's puff is the legality of exemption clause with respect to the dealing firm. Company has provided the document making sure that they are providing the least prices of cars all over the city. For acknowledgment of Paul, traders puff is a document which confirms that the relevant company is offering best prices of any particular product (Stone and Devenney, 2013).
Remedies – The facilities involved under contract are road fund tax, radio, stereo and a full tank of petrol. Description of this facility comes under the terms of contract including the separate document of condition and warranty which are the legal norms and regulations. On breach of any of these terms and conditions by the dealing firm, Paul is entitled to the following remedies
There are some other important points also which needs to be considered. They are:
Express and implied – The expressed terms are promises made by company to sell the car and the implied conditions are compensations which company have to made on non-fulfillment of their duties. File a suit against the dealing firm who has made fraud promises on non-fulfillment of any duty or damage of any part in the car (Vettori, 2011).
Condition – It is the main element under contract and if it is not fulfilled then the innocent party has right to breach the contract.
Warranty and representation – under warranty, the innocent party has no right to breach the contract but they can ask for compensation. In the following case, Paul is entitled to claim for the damages if company is unable to satisfy the representation made under contract.
Traders puff – they are non-confident evidences under which the party will not receive any remedy or compensation if the obligations are presented as traders puff.
Mini-case F: Jim has visited to the fun park for family picnic where he faced some difficulties. He has paid £7 for the entry ticket and £1 for parking his vehicle at the parking area. During the picnic time, he gets injured with a metal bar and simultaneously his car also got damaged at the parking area.
Legality of exemption – Under the concerning scenario, the fun park authority seeks legality of exemption on his ticket where they have clearly stated that people visiting the park are at their own risk. The legal authorities are not liable to pay any kind of compensation in case of any damage. Hence, Jim is not entitled to claim any amount incurred over his treatment. He has to borne all the medical expenses.
Remedies – The norms described under remedies belong to the victim who has observed adverse condition. In the following case study, Jim is the victim who is entitled to the following remedies:
While keeping his car in the parking area, it has got damaged. Jim who is the owner of that car has purchased ticket to park his vehicle. Exclusion clause inserted by Strand council is not valid because it is not visible to visitors. Hence, Jim is entitled to claim for the amount which has been spent over repair of car.
Other than protection of his car, Jim can file a suit against the security of Fun Park which has been careless in their duties. Term inserted on the back of ticket is not valid because it is against the Consumer Protection Act. Thus, Jim is in position to claim damages.
3.1 Liabilities in tort with contractual liability
The liability in tort is a part of English common law which governs the right to those people who have conceived some injury in any way by the fault of company. Tort liability is differentiated by contractual liability by the principle of non-accumulation of contractual and tort liabilities.
3.2 Nature of liability in negligence
Tortuous conduct can be defined as a situation in which individual fails to take care of their general responsibilities. In order to make successful claim to attain remedy for negligence, claimant is required to satisfy following principles-
- Duty of care- Defendant should have duty of care to the claimant to prevent possibility of injury.
- Breach of duty- There should be breach of duty by the defendant due to which negligent action was occurred.
- Causation- Further, due to negligence of parties injury should be occurred to claimant.
- Foreseeablity- Damages of claimant should be foreseeable from negligent action of defendant.
Types of negligence
- Gross negligence- It can be defined as voluntary or conscious disregard of the requirement to implement duty of care. Due to this act, foreseeable grave injury or harm is occurred to persons or to their property or to the both.
- Comparative negligence- It can be defined as non-absolute contributory negligence. Such act provides partial negligence to the plaintiff by considering their contribution in the act of negligence.
- Minor negligence- If negligent act is conducted by minor then individual will be responsible for their actions. However, in these situations lenient standards of intent or negligence may be applied.
Liabilities for damage – there are different liabilities of the person which are presented as below:
General damage – They are provided to those persons who have suffered from any kind of misshapen, accident or injury (Donoghue V Stevenson). Generally these damages are related to physical or mental injury of the defendant.
Special damage – it is the financial remedy which is provided to the claimant who have suffered such major loss. Special damages denotes to the economic loss to the party. It can be material or monetary injury.
Punitive damage – it is an intentional kind of damage which is done by one party to the other person associated with him. This act is considered as deliberate misconduct for which damages to the victim is provided.
Defense under negligence
In several cases, the victim is not entitled to claim damages if damage has been occurred by the fault of victim himself. If under certain conditions, there are implied risks associated with any activity and a person still performs that particular activity, then they are not entitled to claim damages.
3.3 Business being vicariously liable
Vicariously liable is the situation when any party falls culprit by the fault of other member associated with them. This approach is implemented due to influential relationship between parties. On the basis of this provision, when any employee commits mistake or any faulty activity that injures the innocent person, then employer is deemed to be responsible for such accidents. In such cases, often the business hiring such peoples comes under fault and cases are done over the organization instead of the individual employee (Guest, Isaksson and De Witte, 2010). There are certain rules for vicarious liabilities which are presented as below:
- Presence of legal relationship between the parties.
- Injury must be there during employment.
- Misconduct should be occurred in course of employment in the provided authorities by employer.
There are presences of types of employment under vicarious liabilities which are:
Self-employed – In this condition, no vicarious liability falls because party himself is the owner and he cannot claim any damage for the injury caused to him. In addition to this, he or she is only providing services to the employer and they are working according to them. Thus, in case of self-employed vicarious liability cannot be imposed on employer.
Part-time or full-time employed – There is no difference in partial or full time employment because in both the situation individual is working as an employee. In these conditions, claimant can claim for remedy in case of injury because negligent person is working under some other authority who will be held liable.
Ways to reduce the chance of liabilities are:
- Proper guidelines should be given before performance of any task by the employees.
- Warning must be given to employees to pay attention where there are chances for injury.
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