Contractual Aspects and Business Negligence

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An agreement becomes a contract when all the required legal elements are met. Hence, not all agreements qualify as contracts. One of the most important conditions of a contract is that it must be between two or more parties. One of these parties makes an offer while the other accepts it (Elliott & Quinn 2007). This position means that the contract must have an offer that has to be accepted by the other party without any form of pressure to do so.

The third element is legal obligation, meaning that a contract must be legally bound. The agreement in the form of a contract should have stately relations within it (Elliott & Quinn 2007). This requirement brings about the fourth element, which is lawful consideration of the contract. Contemplation in an agreement may be presented as commodities or services. In most instances, money acts as the legitimate consideration in contracts (Elliott & Quinn 2007).

Competent parties constitute the other element of a valid contract where all the parties have to be competent. Areas of competence include age and state of mind among other legal qualifications (Elliott & Quinn 2007). The other element is that parties that are involved in the contract should give free consent. These parties need to agree freely on the matter in the contract without any form of coercion, misrepresentation, or fraud (Elliott & Quinn 2007).

The object of the agreement in a contract should be lawful with all areas of contract being legally bound. This prerequisite forms the seventh element of a contract, which implies that it is legal, non-fraudulent, moral, and non-injurious to the other parties. The contract should not be declared void in other laws in any part of the world or legal system. Besides, it should be certain and not vague. The last element is that a contract should have legal formalities, including being written down where necessary.

The business environment requires the creation of contracts, which are dependent on situation and need. One example of a contract is the work-for-hire contract between companies and external contractors (Holland & Burnett 2007). The confidentiality or non-disclosure contract is the other type of contract that protects any confidential information within organisations.

The other form of contract is the non-complete contract. This contract takes place between independent contractors and companies with the aim of preventing the stealing of ideas. A service agreement is a common contract in commerce, especially in online businesses. This contract ensures that clients get what they expect from the online organisations.

Another form of contract is the distance-selling contract, which has special rules and regulations that govern it. The party that is offering the goods or services must provide information to the accepting party. This information includes a description of the goods or services being provided, the prices for these commodities, delivery and cancelation provisions, and seller information (Holland & Burnett 2007). These legal impacts of distance-selling contract need to be respected in these contracts.

Different terms are used in business contracts. The definition of these terms and the scope of their application are important. Hence, the terms are defined in the following section.

  • Acceptance: Refers to the agreement of an offer, which is unconditional in most cases.
  • Agent: Denotes anybody who is appointed to act on behalf of another person or party.
  • Arbitration: Refers to the settlement of a contract, despite being out of court through another party.
  • Violation of agreement: Refers to the letdown of one of the stakeholders in a treaty to endorse a section of the deal that was agreed with other stakeholders.
  • Company emblem: Denotes the detection mark of a business that is usually reproduced using a trimming press.
  • Conditions: Designate the key stipulations that are present in an agreement.
  • Confidentiality accord: Refers to a conformity made between stakeholders in a contract to defend classified details or messages.
  • Consumer: Is any individual who acquires goods or services from another party or organisation.
  • Due diligence: Denotes a formal process where parties investigate each other before getting into a contract to ensure no hidden details that can affect the contract (Holland & Burnett 2007).
  • Service agreement: Denotes the existing deal between a worker and the company.
  • Express conditions: This expression defines the conditions that are specified in any deal. In a verbal contract, the express terms include the states as written in a printed contract.
  • Implied conditions: These conditions denote the aspects that are not essentially written down in a deal, despite them being components of the pact.
  • Liability: Refers to the responsibility of a certain part of the contract.
  • Void: The term is used to describe the situation when a pact cannot be approved. The term is commonly used in contract agreements. Some of the contrasting terms in contract agreements include implied and express terms. According to Holland and Burnett (2007), express terms describe the terms in a contract agreement that are central to the contract. On the other hand, implied terms are terms do not include states in the contract. However, they apply in the contract.

A common statement is that implied terms are more responsive to work with than express terms in a commercial agreement. The personal opinion is that this statement is valid based on the diverse aspects of the different types of contracts. Different parties in a business contract view the implied terms of a contract differently. Hence, they may become subject of contention. The express conditions in an industry pact are specified in the deal. Any party is obliged to respect the terms.

When Green Pharma placed the advert in a trade journal on the new offer that it had on its products, Mr. Khan was willing to purchase the moisturising creams. The decision of not selling the creams any more is enough for this party to seek legal action. The possible consequences from the legal action include heavy fines as a compensation for Mr. Khan.

Organisations enter into an implied contract with their customers when they make advertisements such as the one made by Green Pharma on the sale of moisturising creams (Smith & Baker 2010). The decision to revoke the agreement without advising customers constitutes a breach of contract that may warrant legal actions (Smith & Baker 2010). In some of the cases where individuals sue organisations for breach of contract, the implied contract is usually the subject of controversy where the organisations do not live up to the contract terms.

Tania who is my immediate boss makes an offer to me that he will pay for the efforts made at the company’s report. The promise is that there is an extra £200 in addition to the monthly salary. This pronunciation constitutes an implied contract where the offer is an extra £200 at the end of the month. The violation of this contract has legal implications. This claim means that the implied contract is legally binding. Hence, I am at liberty to seek legal redress.

However, other considerations, including goodwill, allow Tania to pay without coercion. The implied contract is present in various forms in organisations, including the example of an extra £200 for the extra effort at the end of the month. Legal implications if the immediate boss does not deliver on the promise include financial and legal implications.

Contracts exist between two or more parties that come to a legal agreement. They take different forms, with the main difference being whether they are written or implied. When Joe offers to drive me to work in exchange for petrol contribution, a contract is made between us. However, this contract is not legally enforceable since no terms in the agreement are legally binding. The two parties come agree that they may not stand in a court of law.

Legal responsibilities in tort vary from contractual stipulations. In a tort law, a plaintiff is required to prove in a court of law that the defendant is responsible for any injures or damages (Gergen 2013). Therefore, the defendant compensates the plaintiff in this case. In tort situation, these liabilities are either strict or based on fault (Gergen 2013).

Therefore, there is no liability in a tort law without fault. In contractual liabilities, the parties engaging in an agreement have the right to keep the terms of the agreement. When any of the parties breaches the contract, he or she has the liability in terms of penalties for the breach of contract. This situation is a major difference between tort law and negligence laws.

The concept of ‘duty of care’ in the law of negligence is common among commonwealth nations (Gergen 2013). This concept applies where individuals and parties are required to do good to the society. Liabilities occur where the parties do not do general good. The actions of one party are required to make the duty of care apply in the legal framework.

Day-to-day applications of duty of care occur in cases where individuals and other parties are sued for neglecting their roles in the society even where these roles are implied (Gergen 2013). Customers may sue a company when they buy a product from the company that ends up being harmful to their health.

Causation and remoteness are some common terms in the tort of negligence. Causation is applied when an action of an individual or party results in harm or loss to another party. In a case where the tort of negligence is being argued, the defendant may only be held liable if it is proven that the loss or damage occurred because of his or her omission or any particular acts (Gergen 2013). Most researchers state that the main reason for the existence of causation is the link between breach of duty and contract. This position means is that there should be a link between harm and breach of duty (Craig & Barnes 2007).

The concept of remoteness as applied in the tort of negligence attempts to relate the defendant to the negligence. It describes how the events that led to the tort were foreseeable. If they were not easily foreseeable, the negligence is remote and hence the defendant is not liable in the case (Craig & Barnes 2007). Remote responsibility means that organisations try to prove that the events were not foreseeable. Most of the nations that have these laws also have provisions so that the defendants are accorded the right put up adequate defence in a court of law.

Liability in negligence means taking responsibility for the effects of the negligence. When a defendant is found guilty of negligence, he or she is responsible for the effects that are experienced by the plaintiff. In the tort of negligence, a party that is deemed liable faces legal obligation (Craig & Barnes 2007).

This case means that any party that breaks a contract or commits a wrong is liable or responsible for the wrongdoing (Craig & Barnes 2007). An organisation is liable if it provides products that are harmful to its customers. Businesses that sell goods and services are also liable if they provide substandard goods. This form of negligence from organisations is punishable by law as provided for in the legal systems of most countries.

Bosses may be held responsible for the deeds of their workers. This case is termed as vicarious liability. However, some legal requirements for the application of vicarious liability in organisations are available. Four main characteristics of vicarious liability doctrine must be present for it to apply between employees and employers (Brodie 2007).

The first condition is that the tort must be committed by the employee and must have adverse effects on the plaintiff (Brodie 2007). The second stipulation is that at the time that the tort is committed, the employee must be working under the employer or be an agent of the employer (Wickham 2011). The third condition is that the tort must be committed while the employee is working for the employer. The last condition is that the fact that the employer is liable for the employee’s tort does not insulate the employee from liability (Neild 2013).

These four conditions are present for any theory of vicarious liability to hold. Vicarious liability allows organisations to take responsibility for the actions of their employees and other people who are affiliated to it. In this case, the organisations are forced to discipline their employees whilst ensuring that their industry has the basic operational discipline.

The relevant duty of care that is applicable for a learner driver is remote since the learner driver is not acquainted with road rules or driving. The status of such learners allows them a limited duty of care in the event of an accident. In the case of a Chinese doctor working in England, the duty of care is similar to that for any other medical practitioner in the country because the doctor operates on the same level where he or she aims to achieve the same results as any other doctor in the country.

A junior doctor in a hospital should enjoy the same level of care as the learner driver because the junior doctor is in the process of learning. Hence, he or she is expected to make a few mistakes in the first few days of practice.

When Leo is electrocuted in Green Pharma’s offices, the company is liable for the accident. The company engages a local electrician to wire the offices. Hence, it is responsible for the state of the offices. The organisation is responsible for the safety of any visitor to its offices. If the organisation had put up a sign exempting itself from responsibility, there would be no tort.

The argument would be different. Leo who is the visitor would be responsible for his own safety while at the institution. Hence, the accident would not amount to a tort. Hence, the organisation should manage to keep off any liabilities from such matters. The electrocution incidence occurred in Green Pharma’s offices. Hence, the organisation bears liability for the incidence. Green Pharma is legally bound to contribute towards Leo’s medical management. This individual may sue the company if it withholds justice.

It is crucial to specify the conditions under which an organisation may or may not take responsibility for any event that happens within its premises. Just because an individual encounters an accident within the premises of a company does not automatically push the respective company to bear the burden of any suffered damage. Things such as the specific mission that the injured person was accomplishing at the time of the injury must be addressed. When Kelly is injured by the van that belongs to green Pharma, John is doing his personal activities. Green Pharma is not liable for the accident as the employee is carrying on with his own personal activities.

The organisation can claim inapplicability of vicarious liability since the employee is not carrying out the activities of the company. Therefore, the injured pedestrian should seek liability from John and not the company. Any case against the company is likely to fail. For vicarious liability to apply in this case, the plaintiff should demonstrate that John was on the operations of Green Pharma. Some legal experts state that the assumption of liability is because the incident occurred between persons belonging to individual parties. In this incident, the van that injured Kelly belonged to an organisation that should bear individual responsibility.

When Robert, Green Pharma’s security guard, stabs Mr. Mattis in the back, the company is responsible for this tort based on the concept of vicarious liability. The tort qualifies as vicarious liability and fulfils all the requirements (Neild 2013). The first condition is fulfilled because Robert is a Green Pharma employee. At the time of the incident, Robert was also working for the organisation. The tort was also committed while he was on duty at the company.

The last condition is that despite the organisation bearing responsibility for the tort, Robert is also responsible for the same matter. The requirements for a tort to qualify for vicarious liability are satisfied since the incident is related to Green Pharma’s staff members. The legal argument is that Robert Green is employed in the organisation and that he is working for it at the time, and hence the reason behind the said vicarious liability.


Brodie, D 2007, ‘Enterprise Liability: Justifying Vicarious Liability’, Oxford Journal Of Legal Studies, vol. 27 no. 3, pp. 493-508.

Craig, R & Barnes, W 2007, ‘Professional employees’ exposure to risk of negligence claims from the client’, Construction Management & Economics, vol. 25 no. 7, pp. 811-819.

Elliott, C & Quinn, F 2007. Contract law. Pearson Longman, Harlow.

Gergen, P 2013, ‘Negligent Misrepresentation as Contract’, California Law Review, vol. 101 no. 4, pp. 953-1011.

Holland, J & Burnett, S 2007, Employment law, Oxford University Press, Oxford.

Neild, D 2013, ‘Vicarious Liability and the Employment Rationale’, Victoria University Of Wellington Law Review, vol. 44 no. 1, p. 707.

Smith, I & Baker, A, 2010, Smith & Wood’s employment law, Oxford University Press, Oxford.

Wickham, B 2011, ‘Vicarious Liability in Tort: A Comparative Perspective’, The Sydney Law Review, vol. 33 no. 1, p. 849.

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