1. An assignment on
Aspect of Contracts and Negligence’s for the
Business
Submitted:
Name:
ID:
Submitted To:
Date of Submission
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2. Executive Summary
In the given scenarios, TAM’s college has appointed agencies that will look after their
legal side of the institution and also an agency to market and promote TAM’s college to
the mass to become one of the best educational institutes in the Great Britain. During
the contract period NAMS marketing firm has broken their initial promise and TAM’s
college authority has taken legal steps against them. Though the management of TAM;s
college has ordered the staffs to wear proper uniform during duty, but the supervisors
were inattentive to the instructions and sent off an guard without proper uniform to the
duty and lead him to an accident. As the guard did not wear proper uniform the
management of TAM’s college denied the claim of the guard showing that he did not
follow the policies of the institute and faced legal actions from the victim’s family.
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3. Table of Contents
Executive Summary ........................................................................................................ 2
Task 1 ............................................................................................................................. 4
1.1 Essential Elements of a Valid Contract .................................................................. 4
1.2 The Impact of Different types of Contract .............................................................. 5
1.3 Analysis of Terms in Contracts .............................................................................. 6
Task 2 ............................................................................................................................. 7
2.1 Application of the Elements of Contract ................................................................. 7
2.2 Application of the Law ............................................................................................ 8
2.3 Evaluation of the Effect of Different Terms ............................................................ 9
Task 3 ........................................................................................................................... 11
3.1 Contrasting Liability in Tort with Contractual Liability ........................................... 11
3.2 The Nature of Liability in Negligence ................................................................... 11
3.3 Vicarious Liability in business .............................................................................. 11
Task 4 ........................................................................................................................... 13
4.1 Application of the Tort of Negligence and Defences ............................................ 13
4.2 Application of Vicarious Liability........................................................................... 14
Conclusion .................................................................................................................... 16
References .................................................................................................................... 17
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4. Task 1
1.1 Essential Elements of a Valid Contract
There are eight elements of valid contract. These elements are important in order to
make a valid contract.
The essential elements of a valid contract are given below.
1. Offer and Acceptance
2. Lawful Consideration Capabilities of Parties
3. Free Consent
4. Writing and Registration
5. Formal Relation
6. Certainty
7. Possibility of Performance
8. Enforceable by Law
Figure: Essential Elements of Valid Contract
1. Offer and Acceptance: In order to form valid contract an offer has to be made
and it is the first step towards an agreement (Horton, C., 2012). Followed by the
offer the interested party has to accept upon the offer and thus form an
agreement.
2. Lawful Consideration: An agreement lead to a contract when the person
accepting the offer takes decision based on some lawful consideration (Hampton,
J. 1976)
3. Free Consent: To form a valid contract the two parties must provide their free
consent, otherwise the contract will be considered as a void contract and it will be
avoidable (Hampton, J. 1976).
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5. 4. Writing and Registration: A formal contract has to be in written and registered
by the government authority to make the contract valid (Myer, J. W. 1978).
5. Formal Relation: Formal relation has to be present in order to make a valid
contract (Hampton, J. 1976). Any act of informal agreement cannot be considered
as a formal contract, for example; a person gave promise to another person that
he would give him some money but he did not mention any time. So, it will not be
count as a contract because there was no formal relation present.
6. Certainty: Each and every element of a contract has to be certain so that each
party is able to realize the issues regarding the contract (Horton, C., 2012).
7. Possibility of Performance: A valid contract should have the possibility of
performance because if the contract cannot perform the issues then it will not be
considered as a contract (Myer, J. W. 1978).
8. Enforceable by Law: A valid contract is enforceable by law otherwise it will be
considered as the event of breach of contract (Horton, C., 2012).
1.2 The Impact of Different Types of Contract
There are many types of contracts that are;

Contract under Seal: The traditional method of making a contract valid is the
sealing of the legal document that is enforceable (Horton, C., 2012). It is
important to stamp the document with various seals and the both parties are
liable to accept the results of the agreement after it is sealed.

Express Contract: Express contract is one of the many types of contracts. It is
either in the formation of a written document or it can even be in the oral form
which is accepted to the governing body that focuses on the consent to terms
(Myer, J. W. 1978).

Implied Contact: To form a valid contract free consent is important of the both
parties. But in case of implied contract it will be considered as a valid contract if
one party does not give free consent (Hampton, J. 1976). This type of contracts
occurs when a person pretends to own any assets and sell it. For example; if a
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6. servant sells his or her owner’s stuffs as if s/he is the owner of the assets without
the free consent of the owner then it will be considered as an implied contract.

Executed Contact: It is a type of contract where both parties execute the terms
and conditions of the contracts before they go in to a contract and there is
nothing to be worked out by each party (Myer, J. W. 1978). The performance of
the parties signifies that there is no contract, and then it is an executed contract.

Unconscionable Contact: It is a contract in which both parties are concern
about the contract but one party gets the higher advantages than the other
(Hampton, J. 1976). This type contracts are unenforceable because there is lack of
free consent from one of the party.
1.3 Analysis of Terms in Contracts
There are many objectives of contracts. It is important for the parties to understand the
different types of contracts, terms, elements, and clues which not only helps the parties
to comply with the contract but also helps to diminish contract management costs
(Okeke, C.N. 1988). Major changes are necessary to align the emplacement
agreement.
The TAM’s college is trying to become one of the best educational institutes in UK. So,
they are trying to capture the attention and hiring agents and legal advisors to help them
to the quest. In order to become the best educational institute in UK they are going into
contracts with several agencies for their marketing purposes and solving the legal
issues. To form a valid contract there should be some differences among the
exchanging of terms, considerations and bargaining of the parties and TAM’s is trying to
bring the differences.
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7. Task 2
2.1 Application of the Elements of Contract
A valid contract is enforceable by law. The parties must honor the terms and conditions
of the contract and if one party or the other party differs from the promise of agreement
then the party honoring the agreement can go to court and take legal actions (Roberts,
M. & Zahay, D. 2012).
The basic elements of the contract with NAMS are:
Offer
Acceptance
Free consent
Formal relation
Valid contract is enforceable by law
NAMS gave offers for intensive marketing for one month to make TAM’s reputation high
and help them to become one of the best educational institutes in the UK. In a formal
valid contract offer is the initiation of a contract with another party and forms a business
relationship.
In order to make a valid contract the terms and conditions of the contract has to be
accepted by the parties participating in a contract, otherwise it will be considered as a
void contract. TAM’s college has accepted 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
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8. contract entered into the contract with free consent and a written documentation turned
the contract in a formal relation.
Valid contract is enforceable by law. The management of TAM’s college has the
authority and proof that NAMS has breached the contract agreement and the initial
term. NAMS were unable to provide marketing assistance to TAM’s college so that the
TAM’s college has taken legal actions against NAMS.
2.2 Application of the Law
When two parties make a contract then there are some essential elements that need to
be considered in order to make a valid contract. The parties involved in contract give
confidence and encourage the terms and conditions of a contract (Roberts, M. & Zahay,
D. 2012). Opinion of the parties may differ from the agreement which was supposed to
be in use as just a pre-declaration of the valid contract and consequently not part of the
contract (DiMatteo, L. A. 1998). Parties to an indenture follow only its terms, not by any
unimportant statements that may not be completed.
To form a valid contract certain requirements are needed. Such as;
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 created and intended as to make
sure to induce the main contract. Judges have
been organized to find a security convention
someplace to make the contract valid and
beneficial for the parties agreed upon the
contract.
Contract Includes Conditions and
Warranties
•The more imperative terms are describing
"Circumstances", the smaller amount
significant terms are called "Warranties”.
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.
Figure: Requirements of a Valid Contract
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9. Exclusion of responsibility of the terms:
Contract can be made where other organizations are probable to have a term in the
agreement which excludes one of the party’s accountability that may go wrong in the
presentation of the agreement or restrictions on that accountability. It is called
a “Prohibiting Paragraph” or a release clause (DiMatteo, L. A. 1998). Based on the
scenario, a prohibiting clause from “responsibility” for spoil done to the TAM’s marketing
campaign by NAMS might be included in the agreement between NAMS and TAM’s
college.
2.3 Evaluation of the Effect of Different Terms
There are many terms included in the contracts and some of them are for formalities.
These are formation of contract and it is necessary to be in a written and the seal is
needed to establish it (Okeke, C.N. 1988). There are many types of law and it needs
various types of formalities.
The Patrol Evidences
Rule
Establishing Implied
Terms
Various Types of
Conditions
•It is a role that includes oral evidences. Oral evidence may not
be adduced to adjoin to say that the opposite to or shown to
be a bogus written article (Okeke, C.N. 1988). The contract
always tries to the law of confirmation and applies not only to
contracts but also all kinds of credentials.
•There are some situations in which contracts need to establish
the implied terms formally and it is made from one person to
another person (Roberts, M. & Zahay, D. 2012).
•Various types of conditions may affect the contract and
technical judiciousness of the word is a good amount of
central grouping of contractual expression (Okeke, C.N.
1988). The preparation for committing a breach of
circumstance at universal law is refutation and indemnity.
Figure: Effects of Different Terms
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10. The Up-To-The-Minute Observation
The violation of a circumstance allows the above misgiving gathering to reckless
spending the indenture as rejected, extravagance in the indenture and the parties are
enable to compel to the activities and performance (Roberts, M. & Zahay, D. 2012).
In the given situation, TAM’s college has agreed to provide the marketing contract to
NAMS based on their oral evidence of intense marketing for one month only for £6000
and established an implied contract between TAM’s college and NAMS.
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11. Task 3
3.1 Contrasting Liability in Tort with Contractual Liability
Tort and contact liability:
The law of tort and of contract is categorized 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" (DiMatteo, L. A. 1998). Contract damages are
based on losses that are expected, while tort damages are compensatory.
3.2 The Nature of Liability in Negligence
1. DUTY: The duty is an obligation of one person to another person, it is created
form the social needs, philosophy and various types of religion (DiMatteo, L. A.
1998). 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.
2. Breach of Contract: Breach of contract is most important thing in the contract
tort of negligence. It is the behaviour of the people to act as an irresponsible
person or party and not performing the contract terms and conditions (DiMatteo,
L. A. 1998). This element implies the pre-existence of a standard of proper
behaviour to avoid imposing undue risks of harm to people. NAMS has breached
the contract when they have stopped the marketing of TAM’s for one week.
3. Cause in Fact: A small number of trouble are more fascinating, with resolution
more indefinable then causation (DiMatteo, L. A. 1998). Based on the grounds
and performances a person might choose to take steps and avoid doing from
amateur dramatics in convinced.
4. Similar Cause: There are some close causes in different forms, the issue of
factual causation and the elements just examined and factual connection
between protection breach and plaintiff (DiMatteo, L. A. 1998).
3.3 Vicarious Liability in business
It is a doctrine of English tort law that imposes strict liability on employers for the
wrongdoings of their employees. Generally, an employer will be held liable for any tort
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12. committed while an employee is conducting their duties (Leibee, B. C. 1976). Vicarious
responsibility means that somebody can be detained legally responsible for the
inattentive acts of a different individual even despite the fact that someone overcomes
no mistake in furtherance of the inattentive or tortuous acts (DiMatteo, L. A. 1998).
In the given scenario the management of TAM’s college fell in the doctrine of vicarious
liability because the night guard’s family has taken legal actions against the institution.
Though the management and the supervisors were warned about the accidents and
were also advised to wear protective clothing for the non-teaching staffs to avoid
injuries.
The staff who got hurt did not maintained the organization’s policy so the management
refused to give any compensation to the victim but The TAM’s College are bound to pay
the compensation because of the doctrine of vicarious liability.
Figure: Vicarious Liability
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13. Task 4
4.1 Application of the Tort of Negligence and Defences
There are some elements of the tort negligence and defences in various business
situations, they are given below
Tort Negligence Law: It is a form of law in which it is founded and operated in the
realm of intentional tort law and the basic purpose of negligence law, is to control and
protect the employees from injuries related to their line (Leibee, B. C. 1976). TAM’s
college’s non-teaching employees were advised to use protective clothing for their
safety and security.
Duty of care: An individual may owe a duty of care to ensure that they do not suffer
from any unreasonable harm or loss (Leibee, B. C. 1976). If such duty is breached, a
legal liability is imposed. TAM’s college employees were warned about the harm and
losses that the employees might face.
Sources of negligence: Negligence can be defined as failure to take proper care of
precaution. It is the unintentional breach of a legal duty causing damage reasonably
foreseeable without which the breach would have not occurred.
Potential sources of negligence
Defence against Negligence
Poor selection of activities
Assumption of risk
Use of faulty equipment
Sudden emergency
Inadequate protection
Hazardous conditions
An act of God
Figure: Sources of Negligence
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14. Potential sources of negligence are:

Poor selection of activities: The activities that are beyond the capabilities of
individuals or inadequate knowledge of activities are poor selection of activities
(Emenike, E.U.I. 1989).

Use of faulty equipment: Another potential source of negligence is the use of
faulty equipment which can cause harm (Emenike, E.U.I. 1989).

Inadequate protection: Inadequate protection refers to negligent behaviour on
part of the person who is unwilling to wear protective gears (Emenike, E.U.I.
1989).

Hazardous conditions: Hazardous conditions are unforeseen and unavoidable
(Emenike, E.U.I. 1989).
Defence against Negligence:

Assumption of risk: It is assumed that a person takes measure of the risks
when engaging in activity (Emenike, E.U.I. 1989).

Sudden emergency: Any act of immediate action to help the person in danger.
Such as, attempt to rescue a person drowning in the water is an act of sudden
emergency (Emenike, E.U.I. 1989).

An act of God: The conditions or situations that is uncontrollable by human
beings. This assumption is only applicable when adequate safety measures are
taken to avoid injuries (Emenike, E.U.I. 1989).
4.2 Application of Vicarious Liability
The TAM’s college has enforced the wearing for school’s non-teaching staffs for
example guards and labors in order to avoid future accidents. However the senior
supervisors have overlooked the warning and he has sent off a night guard on duty
without the proper clothing. It is against the company policy.
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
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15. non-teaching staffs (Roberts, M. & Zahay, D. 2012). But in this scenario the supervisors
did not follow the instructions and lead one of their staffs to duty without proper clothing.
However, vicarious responsibility means that somebody can be detained legally
responsible for the inattentive 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.
The authority denied the compensation to the staff because he was not following the
rules of the TAM’s college. But under the vicarious liability doctrine no matter how faulty
the staffs are the TAM’s authority will be legally responsible for the staff’s wrong doing.
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16. Conclusion
After analysing the scenarios it can be deduced that TAM’s college wanted to become
one of the leading institute in the UK and for this reason hired law agencies and
marketing firm but the management of TAM’s college faced many difficulties. They have
sued against their marketing agency for breaching the contract agreement. An accident
with their night guard has made TAM’s college authority liable to pay the compensation
to the victim because of the English doctrine “Vicarious Liability”. The victim’s family
also sued the TAM’s college because the management have denied the compensation
as the guard was not attentive to the institute’s policies.
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17. References
DiMatteo, L. A. 1998. Contract Theory: The Evolution of Contractual Intent. East
Lansing: Michigan State Univ. Press.
Emenike, E.U.I. (1989). Safety Measures associated with Physical and Health
Education Journals. Vol. 3, No. 1, vol. 48, no. 1, pp. 54-82.
Hampton, J. 1976. “Legal Responsibilities in Business”, Reston: Prentice Hall.
Horton, C., 2012. Legal aspects in Business and Contractual Intent, Journals. Vol. 2, pp.
54-82.
Leibee, B. C. (1976). Tort Liability for Injuries to employees. Organisation and
Administration. Philadelphia W.B. Saunders Company Journal Of Tort Law ,vol.
18, no. 1, p. 1.
Myer, J. W. 1978. “Negligence in Contract and practice”, Delhi: Prentice Hall of India,
3rd edition.
Okeke, C.N. (1988). Some Legal aspects of Organizations. A paper presented at a two
day conference organized by the National Sports Commission, Enugu, vol. 13,
no. 5, pp. 707-719.
Roberts, M. & Zahay, D. 2012, Laws and Regulation in practice in Business, 6th Edition,
Wadsworth Publishing Co, Belmont, USA.
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