1. An assignment on
Aspect of contracts and Negligence’s for the business
Submitted:
Name:
ID:
Submitted To:
Date of Submission

2. Table of Contents
Executive Summary ...................................................................................................... 02
Task 1 ........................................................................................................................... 03
1.1 Essential Elements of a Valid Contract .................................................................03
1.2The Impact of Different types of Contract ..............................................................04
1.3 Analysis of Terms in Contracts .............................................................................05
Task 2 ........................................................................................................................... 06
2.1 Application of the Elements of Contract ................................................................06
2.2 Application of the Law ...........................................................................................07
2.3 Evaluation of the Effect of Different Terms ...........................................................08
Task 3 ........................................................................................................................... 10
3.1 Contrasting Liability in Tort with Contractual Liability ............................................10
3.2 The Nature of Liability in Negligence ....................................................................10
3.3 Vicarious Liability in business ...............................................................................11
Task 4 ...............................................................................................................................
4.1 Application of the Tort of Negligence and Defences .............................................12
4.2 Application of Vicarious Liability............................................................................13
Conclusion .................................................................................................................... 15
References ...................................................................................................................16
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3. Executive Summary
Under the circumstances mentioned in the case it is obvious that TAM’s college will
be the best among all other educational institute in UK. That’s why they recruiting
agents to look over their legal issues. For the betterment of this progress of TAM’s
college, they are going to promote their features and facilities of vocational
qualifications. They also signed a contract with NAMS marketing firm for a month.
Unfortunately NAMS has failed to fulfill the conditions of the contract within the
month and apologizing to TAM’s college. In the mean time they are seeking for an
extension in their marketing program. But NAM’s college disproved them and took
legal actions against NAMS. The management of TAM’s college stated that, if the
NAMS cannot deliver satisfaction they will return the advance and also pay
compensation of £1500. They also charged NAMS for the accident of one of their
staffs for not wearing the proper clothing and protective gear on duty. The TAM’s
college has to go through the legal penalty because of the explicit liability principle in
the business.
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4. TASK 1
1.1/ Essential Elements of a Valid Contract
There are eight essential elements of a valid contract. Absence one of them would
make the contract worthless.
Those eight essential elements of a valid contract are mentioned below:
1. Offer and
Acceptaance
6. Certainty
2. Lawful
Consideration and
Capabilities of
Parties
5. Formal Relation
3. Free Consent
7. Possibility of
Performance
4. Writing and
Registration
8. Enforceable by
Law
Figure: Essential Elements of Valid Contract
Offer and Acceptance: The first step of a contract is to offer to the interested party.
Then the interested party analyzes the offer and accepts that with an agreement.
Lawful Consideration: During accepting the offer the interested party takes
decisions under lawful consideration and thus an agreement leads to a contract.
Free Consent: Both offering and offered parties should have their free consent
during the formation of a contract.
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5. Writing and Registration: To make the agreed contract valid, the contract has to be
written and registered by the government authority.
Formal Relation: To form a valid contract a formal relation must be maintained
within the conditions of the contract. Otherwise the contract would be invalid. For an
example; if a man make a contract to lend some money to another one and in the
contract if the amount of money and the time of lending is not mentioned, then the
contract will not be a valid one.
Certainty: All the elements of a contract have to be certain so that each parties are
able to recognize each and every issue on the subject of the contract.
Possibility of Performance: A valid contract must possess the performance which
is possible to do so. If the contract doesn’t possess the possible acts then that can’t
be considered as a valid contract.
Enforceable by Law: Every valid contract must be enforceable by law otherwise
that can’t be considered as a event of breach of contract.
1.2/ The Impact of Different types of Contract
There are several types of contracts, such as:

Contract under Seal: Sealing of the legal document which is enforceable by
the government authority is the traditional method of forming valid contract.
It’s essential to stamp the document with seals of various trade amount and
after being sealed both parties are bound to accept the results of the
agreement.

Express Contract: It is one of the several types of contracts. This can be
either in the form of written document or in the oral form which is
acknowledged to the governing body that focuses on the approval to terms.

Implied Contract:In case of implied contract free consent of both parties is
not needed. It happens when one party pretend to be the owner of any asset
and make a contract relating that asset. For an example, if a servant sells his
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6. owner’s staff as he is the real owner of the staff, then that will be an implied
contract.

Executed Contract: This type of contract is formed when both parties
execute their terms and conditions before going to sign the contract. They
don’t work out any contract as there is no contract formed between then. That
is an executed contract.

Unconscionable Contract: In this type of contract both parties hold concern
about the contract but any one party gets more advantage than the other one.
There may be lack of free consent of one party in this type of contract.
1.3/ Analysis of Terms in Contracts:
Contracts possess a lot of objectives. It is significant for both the parties to be aware
ofdiverse types of contracts, conditions, fundamentals, and clues which not only
helps the parties to act in accordance with the contract but also helps to moderate
contract management expenses. Key changes are compulsory to support 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 awareness and recruiting agents and legal advisors
to help them to the pursuit. To be the best educational institute in UK, TAM’’s are
going into contracts with more than a few agencies for their marketing purposes and
fixing the legal issues. To form a valid contract there should be some differences
among the exchanging of conditions, considerations and bargaining of the parties
and TAM’s is trying to fetch the differences.
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7. Task 2
2.1/ Application of the Elements of Contract:
All the valid contracts are enforceable by law of the government. Both offering and
offered parties must obey the terms and conditions of the contract. If any party differs
from the conditions of agreement then the other party obeying the conditions of the
agreement can go to court and take authorized trial.
The basic elements of the contract with NAMS are:
NAMS offered TAM’s to help them to be one of the best educational institutes in UK
and to make their reputation higher by intensive marketing for one month. In case of
a valid contract offer is the initial stage of a contract between two parties and the
formation of formal relationship. 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 TAM’s college and NAMS entered into the contract with free consent
and a written documentation turned the contract in a formal relation.
As every valid contract is enforceable by law.The management of TAM’s college has
the right and proof that NAMS has violated the contract. As NAMS has failed to
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8. provide the committed result within the time, so TAM’s college has taken
authorizedtrial against NAMS.
2.2/ Application of the Law:
In order to make a valid contract both parties need to consider some essential
elements and they need to have confidence on it and mutually encourage some
terms and conditions for the contract. Those opinions of any party which are differing
from the actual agreement are used as a pre-declaration of the actual contract but
finally they don’t get any part in the valid contract. Those who must obey the rules of
the contract follow only the terms mentioned in the contract, no need to bother about
the unimportant statements.
Requirements needed to form a valid contract are:
Collateral Cotracts
• In this type of contract, terms and conditions are mentioned as the basis of
the contract. Here the conditions are stated to encourage the main
contract. Judgements are maintained for the beneficial of both parties and
to make the contract secure and valid.
Contract Includes Conditions and Warranties
• The more terms and conditions are mentioned relating to the term
circumstances the smaller need to bother for the terms of warrantis. Both
the the terms are much important for a valid contract are works
supplimentary to each other. It helps to make the contract firm and
confident. Because of these it is not easy to construct a false circumstance
and get rid of the accusation of breaching the conditions. Here in this case
the indenture works as a motivation to both parties. The court will go
through all the surrounding circumstances to make a decision that wheter
the breach were a condition or a warranty.
Figure: Requirements of a Valid Contract
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9. Exclusion of Responsibility of the Terms:
When other organizations are willing to have a term along with an agreement which
excludes any party’s accountability then a valid contracts are made. That agreement
may go wrong in the presentation of the terms of the agreement or restriction on the
accountability. It is called a “Prohibiting Paragraph” or a release clause. According to
the circumstances, a prohibiting clause from “responsibility” for spoil done to the
TAM’s marketing campaign by NAMS might be incorporated in the agreement
between NAMS and TAM’s college.
2.3/ Evaluation of the Effect of Different Terms:
There are lot of terms are mentioned in a contract and many of them are used to
maintain formalities. Those are essential for a valid contract which are ascertained
by the seal.
There are many types of law and it needs various types of formalities.
The Patrol Evidences
Rule
• It represents a role
that includes oral
evidences. This oral
evidence is not used
to show that the
written document is
bogus or to say any
opposite of that
rather it is used to
make the contract
lawfully confirmed in
course of all
credential.
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Establishing Implied
Terms
• There are some
circumstances in
which contracts need
to ascertain the
implied terms
officially and it is
ended from one
person to another
person..
Various Types of
Conditions
• Various types of
circumstances may
influence the contract
and methodological
caution of the word is
a good amount of
central alignment of
contractual
appearance. The
groundwork for
committing a breach
of circumstance at
universal law is
repudiation and
compensation

10. The Up-To-The-Minute Observation
The breach of a condition allows the mentioned misgiving meeting to thoughtless
expenses the indenture as rejected, over-spending in the agreement and the parties
are enable to induce to the actions and performances (Count 1976).
In the above situation, TAM’s college has approved to make available the marketing
contract to NAMS founded on their oral evidence of powerful 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 Contract liability:
Both law of tort and the law of contract is obligatory part of a valid contract. But they
possess their individuality with characteristics. Tort is applied to parties which is
relevant on the other hand law of contract complies with the trust or voluntarily
assumed. Contract damages occur for the losses and it is normal to except, while
tort damages are compensatory.
3.2/ The Nature of Liability in Negligence:

Duty: The term duty is the obligation of a man towards another man. It is
derived from religion, philosophy and social needs. It is social duty or
responsibility that binds all human in groups in the society. Here preferences
are considered unsuitable if they breach a pre-existing desire and renovate
imprecisely.

Breach of Contract: The most essential part of a contract tort of negligence
is the breach of contract. It represents the irresponsible behavior of a person
for which he is not fulfilling the contract according to the terms and conditions.
This part of the contract fixes the standard of the behavior of the indenture
and resists the risk of loss. NAMS has breached the contract when they have
stopped the marketing of TAM’s for one week

Cause in Fact:A minute trouble is more enthralling, with declaration more
imperceptible then causation. Based on the justification and acts a person
might
choose
to
take
steps
and
steer
clear
of
doing
from
recreationalemotional behaviour in swayed.

Similar Cause: There are different forms of causes which are very close to
each other. Issues of main causation and the elements are examined and
factual connection to protection breach is made.
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12. 3.3/ Vicarious Liability in Business:
The doctrine of English states that employers are directly liable for the misdeeds of
their employees. Vicarious responsibility implies that someone can be incarcerated
legally for the wrongdoings of entirely different individual (Rerrwood 1998).
Under the above circumstances, management of TAM’s college are accused by the
night guard’s family and detained under the Doctrine of vicarious liability. Though the
management and the supervisors warned the staffs about the accidents and asked
them to wear protective clothing to avoid injuries.
As the victim of the accident disobeyed the order of authority, so management
refused to give them compensation. But according to the Doctrine vicarious liability
rule TAM’s management are bound to give the compensation to the staff who got
hurt.
Direct Liability
Tort
Principal
Agent
Third
Party
Vicarious Liability
Figure: Vicarious Liability
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13. Task 4
4.1/ Application of the Tort of Negligence and Defences:
There are various elements of the tort negligence and defences in various business
situations, they are mentioned below:
Tort negligence law:This law is founded and operated in the monarchy of
intentional tort and negligence law. It is formed to control and prevent employee
injuries related to their line of work. As TAM’s college’s employee were ordered to
use protective clothing for their own safety.
Duty of care: It is a responsibility of any individual who will act duty of care to make
sure that no one is facing any unintentional sufferings. If this type of duty is breached
then necessary legal action can be taken against. Staffs of TAM’s college were
warned about the harm they might face.
Sources of negligence: Negligence can be termed as the failure to ensure proper
care and precaution. Though it is an unintentional deed, but it causes damage and
accept that negligence no breach would have occurred.
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14. Potential sources of negligence are:

Poor activity selection:The selection of activities that are impossible or
beyond capabilities of any individual is poor selection of activities.

Using faulty equipment: Using defective of expired equipment may cause
harm.

Inadequate Protection: It refers to negligent behaviour holder who express
unwillingness to wear protective clothing.

Hazardous
condition:
Hazardous
conditions
are
unforeseen
and
unavoidable.
Defence against negligence:

Risk assumption: Risk happens to be occur when an individual engage in
activity.
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15. 
Sudden emergency: Any act of immediate action to protect or help any
individual in danger. For an example: Attempt to rescue a drowning person.

An act of God:The situation or result that is out of bound of human capability.
This term can only be used when necessary actions were previously taken to
avoid injuries.
4.2/ Application of Vicarious Liability:
The management of TAM’s college has advised to illiterate staffs such as guard,
labours etc to wear protective clothing (Emenike1989). On the other hand, senior
supervisors overlooked the staff that they weren’t wearing proper clothing and sent
them to work. That is against the company policy.
Senior supervisor have complete authority over the employees and they were asked
to maintain the proper clothing among the staffs. But supervisors didn’t performed
his duty properly and sent employees without checking their clothing.
Though, here senior supervisor is totally responsible for the accident as he let the
staff work without protective clothing. But the management of TAM’s college will be
detained for it’s responsibility according to Doctrine vicarious liability rule.
The management of TAM’s college denied the compensation to the staff as; he was
not abiding by 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
In 1, 2, and 3 number scenarios we found that management of TAM’s college are
recruiting legal consultants to deal with some of their legal issues which has shown
some threat to them recently. They also possess ambition to be one of the best
educational institutes in UK (Maerean 2012). For this purpose they are hiring
agencies to promote their college so that students, who want quality education with
best facility, become attracted to their college. NAMS marketing consulting firm gave
the best offer that they can use extensive marketing tool and promote the college
name for one month only for £6000. NAMS had to stall the marketing program due to
financial issues and TAM’s college were unhappy about it and they have taken legal
actions against NAMS marketing firm based on the initial terms of NAMS. From third
scenario we get a new topic as TAM’s college management were accused for one of
their staff’s accident for negligent act and asked to pay compensation for that. But
TAM’s college denied to pay compensation as the staff got himself in accident by not
following company policy. As a result, TAM’s college faced law suits and detained
under Doctrine vicarious liability rule. That’s why now the management of TAM’s
college is bound to pay compensation to the staff who got hurt.
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17. References
Count, 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.
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.
Maerean, 2012. “Business law and commercial law and practical use of these” (Online)
availableat
:<http://law.maerean.edu/pdf/Academics/Journals/LawReview/lrv_issues_v35n04_i01
.pdf>(Accessed on November 29, 2013)
Rerrwood, L. A. 1998. Contract Theory: The Evolution of Contractual Intent. East Lansing:
Michigan State Univ. Press.
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