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

IntroductionWhen 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

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 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

 to each other which are necessary for the contract is known as express contracts.When in a contract all the obligation havebeen 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 permit 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 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 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 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 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

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

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 under the law of tort.The factors considered under the law of contract are that of offer, acceptance, consideration and privity wherein 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 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 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 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 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 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.