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    Aspects Of Contract And Negligence For Business

    Introduction Aspects Of Contract And Negligence For Business

    In today’s living world, every agreement is a form of contract without which no business activities is viable or feasible. Most of the operations of business depend on the type of contracts formed among the parties. Formation of contracts holds an enormous proportion of significance in forming any business relations or proceeding with any activity. The paper deals with showing of the importance of various elements in the formation of any valid contract and the principles which lie behind identifying of principles concerning negligence liability. Each of the tasks contains a case scenario, based on which the whole study had been done.

    1. Understanding law as well as the essential elements to form a valid contract


    Contract is any agreement among two or more parties which engages in taking up of a mutual decision about the business transactions or activities. In words of Han, contracts are mutually signed or agreed upon documents formed through written or verbal expression of both the parties. Various types of contract could be identified in case of any business scenario- valid contract, voidable contract, void agreement, executed contract, executory contract and option contract. The contract between buyers and sellers could be identified as executed contract since everything is being completely performed. As per the discussions of Mak, contract among principal and the agent could be regarded as option contract since it lets one party to enter into any contract with the other party such as the agents might form contracts with their clients in the business circumstances. Executory type of contract exists between the insurer and the insured since there are few things which are still left to be accomplished. Valid contract exist among the creditors ad debtors since they are formed in accordance with every legal requirement. The impacts of each of the contract might be fatal or light since they are ambiguous to be known about.


    The formation of a valid contract depends on the presence of few typical elements within them. As per the statements of Friedmann, the key elements could be classified as - offer, acceptance, consideration, mutual consent and intention. Any party speaking out of the proposal of forming any agreement is termed as an offer. Acceptance is the admissible conduct projected out by other party to whom the offer is provided. Consideration refers to the value or the worth the agreement possess which is mutually decided for each of the parties. Mutual consent is the mutual acceptance of both the parties or all the parties involved in a particular contract. As per the opinions of Carter et al, intention of forming any contract must be specific, legally valid and authentic.


    Express terms of any contract refer to specific agreements among the parties either in verbal or in the written form. On the other hand, implied terms of contracts exist within contract without being expressed verbally or in a written form. As per the observations of Yeung and Huang, express terms are already stated in the contracts by the parties. Implied contracts are inferred from relevant facts as well as circumstances of cases or conduct of different parties. These contracts might not be explicitly or formally stated in clear terms or words which is contradictory for the express terms. Under the express terms of a contract, the intention of both the parties involved is crucially reflected.

    2. Applying elements of contracts in a business situation


    Forming such a unilateral contract, Beauty and beast was supposed to keep their words as stated in the advertisement. It could be easily regarded as a breach of act that has cost Ms, Jenny a lot on the basis of her time and energy. She must have called up the salon and cleared up the terms and conditions before driving up to there. The impacts of this breach of act on the contract laws might be recognisable in the form of damages. As per the facts stated by Robertson, compensatory damages, punitive damages and nominal damages could be identified as severe impacts on the contract laws. Several elements of contract law could be identified as consideration, mutuality in obligation, offer, acceptance and legal capacity of forming the contract. She must have rung the salon for getting sure and consideration had been faulty in this case. The contract of Ms. Jenny had been based on implied terms since, the actual terms were hidden from the main content which resulted in a breach of act. Basically three certain contractual terms are there to support a contract- implied terms, explicit terms and innominate terms.


    The contract might be discharged based on the following contractual terms or elements that are needed to be provided importance such as performance, subsequent agreement, frustration, operation of law and election after breach. Relating to the case study, it could be evaluated that frustration was the real cause of discharge since she did not know about acceptance or rejection from other side. A comprehensive contract must follow explicit terms and must clearly consist of elements required to form the contract which are offer, acceptance, mutual consent, consideration and legal capacity.

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    Being an advisor, it could be suggested that Alan might not have overlooked the phrase ‘public parade’ for which he had to end up being the ultimate sufferer. Overlooking the terms could abruptly lead to flaws in a contract and damage any of the parties who suffer at last. According to the views of Wright, consideration refers to the exchange of a thing that is worthy for any other thing. It is basically the value of the contract which is supposed to be legally sufficient as well bargained by receiving party. Depending on the element of consideration, a contract belongs to its kinds or types. Negotiable consideration would lead the contract for being a valid one.

    3. Understanding principles of negligence liability in the business activities


    Consent is defined as the mutual understanding of the parties involved in a contract which must be genuine and voluntary. As per the findings of Burns et al, free consent in a contract happens when it is not due to the following reasons- coercion, fraud, undue influence, mistake, misinterpretation. Legal consent is the consent which needs legal attention or which already possess legal value in its contribution in making a contract valid and viable.


    Negligence liability focuses on certain situations which have arisen due to the physical damage or personal injury that has been caused to life and property respectively. As per the opinions of Hammer (2016, p.559), the negligence liability works under the following aspects- constituent harm, reparation and remoteness pertaining to losses as well as breach of duty. Vicariously liable refers to any situation under which, any individual is responsible for omissions or actions of any other person. For instance, in the context of a workplace, the employer feels vicariously liable for omissions or acts of employees, if they took place at the time period of their employment.


    Various methods by which any valid contract could be terminated involves breach of contract, rescission, completion, performance impossibility and prior commitment or agreement. Any of the parties who had not been able to prove its capability in the performance of being in a contract would be termed as performance impossibility. In that case, as suggested by Aryan and Mirabbasi, the contract might be terminated based on express terms of a contract. In the cases of breach of contract, the contract might be terminated as well and in most of the cases, the terms are implied terms, for which the possibility of breach of act is higher. Terminating contract based on prior agreement seems to be valid only of the reason that has been provided for terminating the contract would be legally acceptable and authentic. For example, while working in a company with a contract of 3 years might not leave the company until and unless the reason for leaving the company is justifiable to the employers and board of directors.

    4. Applying principles of negligence liability in a business situation


    Remedies in case of violating conditions would include prior determination until fulfilling of the period of contract which would avoid incurring huge losses to both the parties. Each and every term and condition related to the contract must be reviewed thoroughly for avoiding any kind of discrepancy during the course of contract.


    Negotiable instrument is regarded as any document that guarantees payment of any particular amount, either on specified demand or under a perfectly set time along with the payer’s name in the document. According to Alavi, various types of negotiable instruments include drafts, checks, promissory notes and bills of exchange. The distinct elements that might occur dealing with negligence liability includes- presence of car duty, breach of the duty, causes and proximate causes along with provision of monetary losses. An insurance contract could be typically explained as an arrangement where, one party accepts risk of insurance being an insurer from other party who belongs to the professionalism of policyholder. This acceptance of risk is undertaken for compensating the impacts of any uncertain event of future on the policyholder. In the context of contract law, an implied covenant regarding good faith along with honest and fair dealing is considered to be a general presumption which the parties are supposed to deal with each other in a contract.


    Through the above study, it could be understood that elements forming a valid contract must be significantly present while making the contract else it could be termed as void. Features of negligence liability as well as its elements are explained in the study. Some advices on breach of contract and negligence had been provided in the study.


    • Alavi, H., (2016). Documentary Letters of Credit, Legal Nature and Sources of Law.Journal of legal studies.
    • Aryan, S. and Mirabbasi, B., (2016). The Good Faith Principle and Its Consequences in Pre-Contractual Period: A Comparative Study on English and French Law.J.
    • Burns, K.E., Hebert, P., Fergusson, D. and Lacroix, J., (2016). Standard And Deferred Consent In The Age Of Transfused Blood (ABLE) Trial in Critically Ill Adults.
    • Carter, J.W., Courtney, W. and Tolhurst, G., (2017). AN ASSIMILATED APPROACH TO DISCHARGE FOR BREACH OF CONTRACT BY DELAY.The Cambridge Law Journal.
    • Friedmann, D., (2016). Disgorgement of Benefits Gained by Breach of Contract.Osservatorio del diritto civile e commerciale.
    • Hammer, M.J., (2016), September. Informed Consent in the Changing Landscape of Research. In Oncology nursing forum.
    • Han, S., (2016). Force majeure, change of circumstances and termination of contract.Journal of Law, Society and Development.
    • Mak, V., (2016). Private Law Perspectives on Platform Services.Journal of European Consumer and Market Law.
    • Ooi, M., (2016). The ramifications of fragmentation in the choice of law for shares.Journal of Private International Law.
    • Robertson, A., (2016). The limits of interpretation in the law of contract.Victoria U. Wellington L. Rev.
    • Wright, D., (2016). The Terms of the Contract.Using Commercial Contracts: A Practical Guide for Engineers and Project Managers.
    • Yeung, H. and Huang, F., (2016). Certainty Over Clemency: English Contract Law in the Face of Financial Crisis.

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