Aspects of Contract & Negligence


Agreement between two or more parties for mutual consideration which is enforceable by law is known as contract. For its validity it is important that agreement should be created after inclusion of all essential elements. Tort is liability which is raised due to negligence of defendant (Levinson, 2005). Present contract law project report is focused on "Aspects of contract and negligence". It will comprises of two parts. First part will include description of essential elements, types and terms of contract with its case studies which will reference for mini case laws. Second part of project is based on law of negligence which is part of civil law. Given case studies will be discussed with relevant examples and precedents for the valid conclusion.

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Types of contract

Contract creates legal obligations for the parties which is known as performance which is required to be completed. Liability can be arise in any form, that can be determined by persons linked to agreement. Types of contracts which are create legal obligation are listed below-

Face to face contract- such agreements are made in oral on the basis of trust and faith between parties (Karsten, and Sinai, 2003). Terms in these types of contracts are agreed by verbal communication. Example of such contract can be purchase of goods from local grocery stores, hire a cab for travel.

Written contract- in these contracts terms are determined in written. It is more authentic comparatively to oral contracts. In these clauses are written and legal agreement is formed and its validity is judged by signature of parties of the contract. Purchase of new car, lease of machinery are examples written contract.

Distance contract- in such type of contract parties are not together while formation of agreement. On the basis of telephonic or mail communication terms are determined and contractual obligation is created (DiMatteo, 2012). Online shopping is best example for distance contract.

In the case study Fontana v. Upp 128 Cal. App. 2d 205 initially there was written contract between the parties but in documents some crucial terms were missing as clause of consideration for which it was considered as oral contract.

Essential elements of contract

For the valid formation of contract it is essential that parties should have certain offer and acceptance which should be lawful and enforceable by law. Validity of offer is judged by that it should not be invitation to offer and no counter offer should be provided by other party. Acceptance should be unconditional and to the offer given by offeror without any modification. It is requires that parties have intention to create contractual relationship between them. It agreement is created by love and affected it will not be considered as contract (Craven, and Hay, 2004). For example charity and domestic agreements does to create obligation for performance by the parties it is voluntary. They cannot be sued for nonperformance. Contract should be created in against of consideration. It is not be adequate but it is necessary to be something which can be measured in value.

Mini case A

In the given case scenario there is distance contract between Fiona and Arnold. They have agreement for sale of dental equipments for £15,000. On the offer of Arnold counter offer is given by Fiona with modification of time. Offer of Fiona was not reached at Arnold so did not respond to it. Further Fiona had sent letter of acceptance but till that equipments was already sold (Best, and Banes, 2007). In the case precedent of Harvey v Facey [1893] AC 552 in this there was uncertainty of consideration as term was defined lowest price, which was cleared by acceptor that it will be £900. It was held by court that there is no contract between parties. Similarly in this case scenario there was no contract between Fiona and Arnold as it was stated that reply should be sent quickly fairly which is not defined.

Mini case B

According to case study offer in general was provided by Mrs. Smith through advertisement for giving reward of £10 in against for find her cat "Lucky". On the basis of advertisement David found the cat and occurred expenditure of £15. It was explained by him to Mrs. Smith but she refused to pay. In the case law of Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 Court of Appeal reward was announced for particular performance further which was refused to pay by company. Court held that claim of claimant is successful and company is liable to pay. With reference to this case in this scenario Mrs. Smith is obliged to pay only the amount defined in advertisement not additional amount of expenses occurred by David. Hence she is required to pay £10 to David.

Mini case C

As per described situation Mrs. Harris asked Ted to collect rent of property owned by her. Rent is collected by Ted. After returning she said she will pay him amount of £50 for his work. There is no intention of parties Mrs. Harris and Ted to enter into contractual obligation. Hence it is optional for Mrs. Harris ton pay Ted his amount. She cannot be forced by Ted for payment of his work. According to case precedent of Jones v Padavatton [1969] 1 WLR 328 promise was made by mother to her daughter to pay amount if she leave her job and agree for marriage (Levinson, 2005). It was accepted by her daughter but further mother denied to do so. It was held that there was no contract it is purely domestic agreement. Presumption was raised there was no intention of mother and daughter to create legal relationship hence mother cannot be for performance. Same is applied for Mrs. Harris she asked a favor from her neighbor which was done by Ted. It depends on her whether she wants ton pay or not as there is no contractual obligation between the parties.

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Mini case D

In the situation there is agreement between Lynx Cars Ltd. And Roadstar Ltd for dealership of time period of 5 years. In the contractual document there was a clause which says there is no legal binding but the parties honorably pledge and they will carry out its terms. Further contract was not completed by them due to production difficulties (Karsten, and Sinai, 2003). Dealership was withdrawn by them from the end of 2007. In the case of Rose & Frank Co v Crompton Bros [1925] AC 445 there was contract of supply of carbonized tissue paper. Due to clause of honorably pledge it was held by court that there is presumption that parties do not have intention to create legal relations which is usually present in commercial agreements. Hence Roadstar Ltd. Cannot sue Lynx Cars Ltd. as there agreement is not enforceable by law. As clause of honorably pledge removes legal effect.

Terms of contract and its effect

Statements inserted while formation of contract could be considered as contractual term or a representation. Terms are main part of contracts which are required to be fulfilled or it will lead to breach of contract. Representation are mere sayings at the time of negotiations. If representations are not fulfilled only damages for misrepresentation can be recovered claimant cannot breach contract on basis of it (Gray, 2010). Terms of contract can be expressed and implied. Expressed term are specifically included by parties while implied terms are implied through custom, in fact and at law. Contracts can be discharges by breach if terms are not fulfilled by defendant. If parties has bilaterally performed they have fulfilled their obligation which automatically discharge contract. If objective of agreement becomes illegal so performance cannot be given by the parties (Best, and Banes, 2007). Trader's puff is a statement which is not specific and said in confidence which is said in the context of goods or service. It is tuff to determine whether it was true or false so damages are provided on the basis of Trader's puff.

Mini case E

In the given situation agreement was between Paul and Slick car sales ltd. for 1994 Monedo which is used for 30000 miles and had only one owner. At the time of agreement which provide description of car as "1994 Ford Monedo" and color of it is 'Cayman Blue with registration number L931 AJU.' In this case the representation was that car is used for 30000 miles and trader's puff that the car is of single owner. For second hand car no one can be sure about its ownership status (Faure, 2009). Mile can be scientifically determined by the meter so it can be specific and ascertainable. Condition in this agreement was that car which will be delivered to Paul should be of same color and model. Implied term in this contract is transaction should be fair without any misrepresentation. Consideration should be provided in full. In warranties and conditions are not satisfied by Slick car sales ltd. contract can be breached at the option of Paul. In representations that are speed is false damages can be claimed by him.

Mini case F

In the described scenario there is contract between Jim and management of fun park. Initially he paid for £1 for car parking which was managed by stand council. At the entrance it was written that Cars parked entirely at the risk of owner. Written warning was obscured by overgrown shrubs. The contract of Jim was with stand council hence management of fun park will not be liable form any injury. Further car of Jim was damaged by Strand council refuse van. Jim can claim for damages to owner of van and even to organization (Elements of Law of Contracts. 2012). As they should take care warning should be clearly visible to visitors. In second contract £7 was paid by Jim for admission ticket of his family. There was clear warning behind that ticket was company cannot be held liable for death or personal injury to visitors, howsoever caused. It is contradictory to implied term by law which remove this express term of business. Hence Mr. Jim and his wife can claim damages for their personal injury which was caused by metal bar. Company should be careful while carrying out their operation that it should not be the reason of injury of their visitors.

Difference between contract and tort law

Contract law is applicable when there is contractual relationship between the parties but tort law is applicable to act of negligence. Parties to the contract are familiar to each other as they have intention to create legal relationship. While in tort law parties are stranger and obligation between them is enforceable by law (Epstein, 2003). Contractual obligation arises when parties are not capable to give their performance and claimant claims for damages. The objective of damages is to bring claimant in condition if performance was given by the parties. In tort law obligation arises due to act of negligence of defendant which is main reason for injury of claimant (Karsten, and Sinai, 2003). In tort law objective of damages is to bring claimant in position if negligence was not occurred by party. In contract law amount of damages are determined according to terms and conditions of agreement. While in tort law damages are determined according to injury which is matter of fact determined by court of law.

Esso Petroleum v Mardon [1976] QB 801 in this case there was agreement of tenancy between Mr. Mardon and Esso Petroleum. On the base of estimation sales and rent were planned to achieve profits form business. Due to alteration in planning permission business was in loss and terms were breached. In this case there was contractual liability between the parties. Due to breach of condition damages will be provided to claimant (Craven, and Hay, 2004). Amount of damages will be determined on the basis that loss will be recovered and claimant should attain profit if performance was according to contract.

In the case of Rylands v Fletcher [1868] UKHL 1 owner of land was defendant who was running mill and he constructed as reservoir on their land. Due to negligence of business there was extensive damage to claimant (Craven, and Hay, 2004). In this case reason of injury was act of negligence of defendant. It was held by court that defendants were strictly liable for damages for making non-natural use of land. There was no contractual relationship between parties. Obligation was imposes over them by court of law. Damages are provided by court according to injuries of claimant.

Nature of liability in negligence

It is liability of every person to held duty of care. If anyone is unable to perform their duty it will considered as negligence. Following rule was established by principal of neighbor. According to this principle a person should love their neighbor and to take care that their actions should not be reason of their injury. In law neighbor are persons who are directly or indirectly linked to the act of person (Employer Vicarious Liability. 2013). Liability of negligence is imposed on person if his negligence is primary reason for injury of claimant. Obligation can be removed if there is bilateral mistake of parties then damages cannot be claimed by defendant. Basic idea of negligence is that people should take reasonable care during the act by taking account of potential harm which are likely ton occur harm to other peoples.

Defenses for liability of negligence can be provided on the basis of consent, in this negligence is done by defendant by the choice of claimant. It there is contributory negligence that means bilateral mistake of the parties then no one can be held liable for the act of negligence (Best, and Banes, 2007). If there are statutory and common law justifications for the act of negligence by defendant then defense is provided. In the circumstances of necessity and illegality claim of claimant will not be successful.

In the case of Donoghue V Stevenson [1932] AC 562 in this case Mrs. Donoghue went to cafe and given order for ginger beer and ice cream. Beer was in opaque bottle so drink under it cannot be seen consumer. While Mrs. Donoghue was consuming beer a snail emerged and she had brought claim against manufacturer. In the case defendant Stevenson should take care of his act (DiMatteo, 2012). While production he should be careful that product should not contain things which are harmful. Due to omission of defendant snail emerged from the drink of Mrs. Donoghue. She is neighbor of defendant so the act of Stevenson was considered as negligence. It was held be court that defendant is liable and under obligation to pay damages to Mrs. Donoghue.

Concepts of vicarious liability and its reasons for impose

Vicarious liability is part of tort law in which one person can be held liable for the negligence of another. For example employer can be help liable for tort of their employee if torturous act is committed under course of employment. Such liability can be arise between agent and principle or between partners (Craven, and Hay, 2004). Reason for this liability is employee is in position to control the act of there employees. In this additional defendant is provided to claimant whom it can sue and recover damages for their injury. Vicarious liability does not remove obligation.

If there is temporary transfer of employee from one employer to other so liability will also be transferred to other employee. As under act of vicarious liability it is clearly defined that if torturous act is committed under term of employment (Craven, and Hay, 2004). Hence with the transfer of employee obligation for the vicarious liability will also be transferred to other employer. So if after transfer act of tort is committed by employee current employer will be held vicariously liable.

In the given case study of Mersey Docks and Harbour Board -v- Coggins & Griffith (Liverpool) Ltd; HL 1946 a worker was negligently injured by crane. In this case employees and cranes was hired by board for unload a ship (Collins, 2004). Operations of whole work was controlled by stevedores, but operations of driver who was controlling crane was directed by stevedores. It was held by the court of law original employer will be responsible for the act of negligence. The reason of the conclusion was responsibility of driver of crane was retained by original that is general employer.

Such decisions are matter of fact which includes that burden of responsibility is with which employer general or temporary. If responsibility is categorized vicarious liability is determined on the basis of who contain major obligation for employees. Second factor is by whom negligent employee is engages who was payer of salary of employee at that particular period and who retains the power to terminate him (Best, and Banes, 2007). Hence vicarious liability is imposed on the basis of responsibility which is lying with that master in whose act was some kind of fault. It is said by Viscount Simon that heavy burden in always stays with general or permanent employer. For shift of responsibility are power and obligations for that employee is required to be transferred to the employer who hired and had benefits of services rendered by that employee.


From the accomplishment of current project report it can be concluded that elements of contracts are essential for agreement to make it enforceable by law. For the formation of legal contract there should be certain and unconditional offer and acceptance (Schaffer, 2009). With the included case precedents it can be said that if there is uncertainty there is contract between parties so there is no obligation for them to perform. With the principle of neighbor and vicarious liability all person should take their acts and omission to prevent chances of injuries to parties who are linked to them.


  • Best, A., and Banes, W. D., 2007. Basic tort law: cases, statutes, ad problems. Aspen Publishers Online.
  • Collins, H. 2004. Good Faith in European Contract Law. Oxford Journal of Legal Studies.
  • Craven, P. and Hay, D. 2004. The criminalization of free labour: Master and Servant in comparative perspective. Slavery and Abolition.
  • DiMatteo, A. L., 2012. Common European Sales Law: A critique of its rationales, functions, and unanswered questions. Journal of International Trade Law and Policy.
  • Epstein, R. 2003. A common law for labor relations: a critique of the New Deal labor legislation. Yale Law Journal.
  • Faure, M., 2009. Tort law and economics. Edward Elgar publishing.
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