Unit- 03 Faculty Of Business

BTEC L-5 Business

Centre-93142
Assessment Criteria
LO1) Understand the essential elements of a valid contract in a
business context
1.1) Explain the importance of the essential elements required for
the formation of a valid contract
Ans. All agreements are not contracts. Only that agreements which is
enforceable at law is a contract. An agreement which is enforceable at
law cannot be contract. Thus, the term agreement is more wider in scope
than contract. All Contracts are agreements but all agreements are not
contracts.

An agreement, to be enforceable by law, must possess the essential

elements of a valid contract as contained in section 10 of the Indian
Contract Act. According to Section 10, "All agreements are contract if
they are made by the free consent of the parties, competent to contract,
for a lawful consideration and with a lawful object and are not expressly
declared to be void." As the details of these essentials form the subject-
matter of our subsequent chapters, it is proposed to dismiss them in brief
here.

The following are the essential elements of a valid contract :

1. Offer and Acceptance. In order to create a valid contract, there must

be a 'lawful offer' by one party and 'lawful acceptance' of the same by
the other party.

2. Intention to Create Legal Relationship. In case, there is no such

intention on the part of parties, there is no contract. Agreements of social
or domestic nature do not contemplate legal relations.
Case :- Balfour vs. Balfour(1919)

3.Lawful Consideration. Consideration has been defined in various

ways. According to Blackstone, "Consideration is recompense given by
the party contracting to another." In other words of Pollock,
"Consideration is the price for which the promise of the another is
brought."
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consideration is known as quid pro-quo or something in return.

4. Capacity of parties. The parties to an agreement must be competent t

contract. If either of the parties does not have the capacity to contract,
the contract is not valid.
According the following persons are incompetent to contract.
(a) Miners,
(b) Persons of unsound mind, and
(c) persons disqualified by law to which they are subject.

5. Free Consent. 'Consent' means the parties must have agreed upon the
same thing in the same sense.
According to Section 14, Consent is said to be free when it is not caused
by-

(1) Coercion, or
(2) Undue influence, or
(3) Fraud, or
(4) Mis-representation, or
(5) Mistake.
An agreement should be made by the free consent of the parties.

6. Lawful Object. The object of an agreement must be valid. Object has

nothing to do with consideration. It means the purpose or design of the
contract. Thus, when one hires a house for use as a gambling house, the
object of the contract is to run a gambling house.

The Object is said to be unlawful if-

(a) it is forbidden by law;

(b) it is of such nature that if permitted it would defeat the provision of
any law;
(c) it is fraudulent;
(d) it involves an injury to the person or property of any other;
(e) the court regards it as immoral or opposed to public policy.

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7. Certainity of Meaning. According to Section 29,"Agreement the
meaning of which is not Certain or capable of being made certain are
void."

8. Possibility of Performance. If the act is impossible in itself,

physically or legally, if cannot be enforced at law. For example, Mr. A
agrees with B to discover treasure by magic. Such Agreements is not
enforceable.

9. Not Declared to be void or Illegal. The agreement though satisfying

all the conditions for a valid contract must not have been expressly
declared void by any law in force in the country. Agreements mentioned
in Section 24 to 30 of the Act have been expressly declared to be void
for example agreements in restraint of trade, marriage, legal proceedings
etc.

10. Legal Formalities. An oral Contract is a perfectly valid contract,

expect in those cases where writing, registration etc. is required by some
statute. In India writing is required in cases of sale, mortgage, lease and
gift of immovable property, negotiable instruments; memorandum and
articles of association of a company, etc. Registration is required in cases
of documents coming within the scope of section 17 of the Registration
Act.

All the elements mentioned above must be in order to make a valid

contract. If any one of them is absent the agreement does not become a
contract.

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1.2) Discuss the impact of different types of contract

Ans. Contract can be classified in different categories & the impact of
different types of contract may also vary from one to another (Feinman
et al. 2010).
Bilateral and Unilateral Contracts- when both parties of the contract
agreed on to do or to make something is called bilateral contract, where
both parties involve agreed to make or keep a particular promise. And
when one party of a contract make a promise in a way that the other
party to whom promise is made can accept the promise only when he
does something.
Express and Implied Contracts- when two parties in a contract express
all the terms & conditions, that are relevant to the contract, to each other
is called express contract. Most of the contracts happened in business are
express contracts. When the work, conduct, activities & behavior of the
parties of a contract indicate that they have entered into the contract,
then it is called implied contract.
Executory and Executed Contracts- when one or other parties or all the
parties in a contract do not perform the obligation they are supposed to
perform, then it is called executor contract. When all parties involved in
a contract perform all the activities & obligation they are supposed to
perform then it is called executed contract.
Valid, Unenforceable, Voidable, and Void Agreements- based on the
saying of P.S. Atiyah (1979), the contract that fulfills all the
requirements of law so that it will be easier for the court to enforce is
called valid agreement. When all the parties in a contract decided to
make a valid bargain but the declaration of some law by the court create
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obstacle to force it is known as unenforceable agreement. When the rules

of law allow any of the party of the contract to demolish the agreement
made is called voidable contract. When no party of the contract cannot
legally enforce the agreement, which can be because of various reason
like illegal deal or are not legally capable of making a contract, made
then it is called void agreement.

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1.3) Analyse terms in contracts with reference to their meaning and
effect
Ans. Several terms of a contract, that would have an effect. It is
important to analyze contracts to ensure that one is able to identify the
similarities and differences between different agreements according to
their clause elements and language. The terms of a valid contract
include:

Definitions and Interpretations

It is important to explain the terms that are not clear or may cause
misinterpretations. In the case scenario, it is important for Simone to
ensure that she explains well the different terms to Peter and ensure that
he understands them so that he can complete the task well. Failure to
understand the terms well and misinterpretations would result to
completing the work in a wrong way. The term such as rewiring should
be clear (Pinsent Masons LLP, 2008).

Parties

It is important to ensure that both parties have the right information

about each other. They should know each others names, addresses and
contact information. In any case, one does not have the right information
about Simone; he may end up communicating to the wrong person about
the contract.

Timescale
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It is important for the parties to show the exact time that the
contract should take. In the case scenario, One gives another up to 15
September for a good pay. This affects in that he ensures that he has
completed the task by the time Simone had given him.

Payment provision

It is important for the parties to state clearly the payments of the

services involved in the contract. The parties should as well specify the
dates the payments are to be met and the consequences in case of any
failure. In the scenario, One agrees to pay another an extra 1,000 if he
attains the work by 15 September. Peter completes the work by 15
September but Simone does not pay him as agreed. This then affects
Peter since they had not set any consequences in case one party fails to
attend to the other (Pinsent Masons LLP, 2008)

Implied terms are more sensitive to deal with. Four categories of implied
terms:
1. Implied by fact
2. Implied by law
3. Implied by custom
4. Implied by trade usage
Implied terms relied on those factors. So, in dealing with implied terms
we should be more sensitive

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LO2) Be able to apply the elements of a contract in business
situations
2.1) Apply the elements of contract in given business scenarios
Ans. In contract law the offer and acceptance is extremely conventional
and essential thought to be acknowledged. The principle of offer and
acceptance incorporates a quality offer, acceptance and correspondence
around the two party or people making the agreement is significant.
The key points are as follow-

The goods were not described properly.

The goods were not of good quality.
The goods were not fit for the purpose

As per the provisions of the sale of Goods Act-1979 the goods supplies
by the seller should be properly described about the ins and outs as much
as possible. The goods supplied should also be proved to be consistent
with the descriptions that were given by the seller before or during
selling the products or goods. Moreover, the goods supplied by the seller
should be fit for the purpose of the goods as were bought.

Business Scenario 1:
Miss Kaur can legally take action against the auctioneer because the
auctioneer didnt mention in the notice that the authority can cancel the
auction of any item, the pen, mentioned rather they mentioned the name
of the pen in the auction list & thats why Miss Kaur travel so far for that
pen. Now Miss Kaur can legally claim travel expense from the
auctioneer as they didnt mention in the notice about the cancellation of
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any item from the auction.

On the other hand, she cannot take legal action against the shop
assistant, Hary, to manage another pen or that pen for her as the assistant
agreed with her that he will wait until her return but she didnt mention
the time when she will return. Besides there may be possibilities that she
may not return any more. So, there is no way that the shop assistant will
wait for her till her return.
Business Scenario 2:
Yes, Murphy has the legal right to claim or force Charles to pay
additional 10,000 because Charles was agreed to pay that additional
amount after the argument & after receiving confirmation from Charles,
Murphy completed the work on time. So, here Charles is legally bound
to pay the additional 10,000 to Murphy.
Business Scenario 3:
Yes, Mia can claim & force legally Hakim, his brother, & Jane, his
friend, as they did not tell him that they are giving the work to Mia only
to gain experience rather both of them mentioned a specific amount of
money, Hakim said he would give 2000 & Jane said he would give
1000 if he can get the work done. And as Mia completed the work as
per the requirement of his brother & friend, he can legally claim the
money he is supposed to get.

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2.2) Apply the law on terms in different contracts

Ans. The contents of a contract are known as terms or clauses. An
agreement will generally consist of various terms. Even the simplest
forms of contract will have terms. The main terms generally being the
price paid and the subject matter of the contract, eg. the goods or
services provided. It is common for businesses to have standard
form written terms which can be quite lengthy. It is not a requirement
that terms are written in simple contracts, although writing is required in
certain types of contract eg. contracts for the sale of land, mortgages and
consumer credit agreements. Contract terms may be express or
implied and they may be classed as either conditions, warranties or in
nominate terms. Where a contract is formed orally it may be difficult to
establish which statements made in negotiating the contract amount
to terms and which statements are merely representations.
Before entering into a contract, various statements will often be made by
one party in order to encourage or induce the other party to enter into the
contract. A dispute may later arise as to which of the statements made
should be considered a part, or a term, of the contract, and which should
be taken as merely pre-contract talk, and therefore not a part or term of
the contract. Parties to a contract are bound only by its terms, not by any
peripheral statements that may have been made.

The courts can look at evidence of intention by one or other of the

parties that the statement should be part of the contract. For example, the
longer the interval is between the making of the statement and the
reaching of the final agreement and contract, the less likely it is that the
statement will be considered to be a term of the contract.

The fact that the maker of the statement had a special knowledge or skill
compared with the other party will make the statement more likely to be
a term. Where the agreement was subsequently reduced to writing and
the statement was not included, it is less likely to be a term.
Contract terms can come from a number of different sources. For
example they could be:

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1.Verbally agreed
2.In a written contract, or similar document
3.In an employee handbook or on a company notice board
4.In an offer letter from your employer
5.Required by law, like the requirement by your employer to pay
you at least the minimum wage
6.In collective agreements
7.Implied terms

The application of law on terms in different condition based on a real

case of JAG company voice LLC &LYCOS, Inc.
1. Content Agreement- this agreement is made between & by JAG
Company Voice LLC a Delaware public limited company & LYCOS,
Inc. which is a Virginia Company.
2. Recitals- WHEREAS LYCOS, Inc. is a web-based service
company whose site can be accessed using different URLs
including www.lycos.com. This Company is going to produce, distribute
& edits videos according to the needs of the clients. All the videos that
this company is going to produce for JAG Company Voice LLC shall be
under the content of this agreement.
3. Terms- Includes the following
Content- provision of content, availability of content & launch date.
Revenue & Fees- advertising, placement fee
1. LYCOS Videos
2. Exclusivity
3. Licenses
4. Representations & Warranties includes corporate power, binding
authorization & due agreement.
5. Disclaimer
6. Indemnification includes indemnification, insurance & settlement
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7. Press release & official promotion
8. Confidentiality
9. User information
10. Termination
11. Relationship of parties
12. Choice of Law & Forum
13. Entire agreement
14. Counterparts & facsimile signature
15. Limitation of liability
16. Notices
17. Survival

This contract is going to be executed as a legal instrument according to

the date mentioned by both parties.
LYCOS, Inc.
BY: /S/ Michael Freddie
Name: Michael Freddie
Title: Chief Operating Officer
JAG Company Voice LLC
By: /S/ Mac Henry
Name: Mac Henry
Title: Vice President
In case of expressed terms the term that made based on the
understandings and the discussion among the parties. It may be the
written or the oral statement. There may have condition or warranties.
Both parties agree on this before the final establishment. For example,
if the offer or makes the condition in the offer that the acceptance must
be within a certain time and through post office and the letter must be
communicated to him. In this case the offer or can lapse the contact if
the acceptance of the offer does not sent the acceptance in accordance
with the condition and the acceptance is not communicated to the offer
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or.

Under the implied contracts, it is the duty of the agents to work

according to the terms and conditions of the contract. The clients have a
right of taking a legal action against them if they try to go against the
rules of the contract.

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2.3) Evaluate the effect of different terms in given contracts

Ans. The Main issues that are to be considered before going to take any
future credit agreement with the creditors are as follow:

According to the consumer credit act 1974, a credit agreement is an

agreement between an individual (the debtor) and any other person
(the creditor) by which the creditor provides the debtor with credit of
any amount. It covers all the areas related to the credit agreements, rights
of the parties, and conditions of the breach of the contract (Hansard,
1973).

The following issues are considered to be important during embarking

on the credit agreement with the creditors:

a. Contents and forms of credit arrangements.

b. Processes related to the default, payment and the aspects related to

the termination of the contract.

c. The amount of credit and the duration of the credit period.

d. The terms and conditions under which breach of the contract will
be counted.

e. The rights and responsibilities of the parties of the credit

agreement and other related aspects.

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Different terms of contracts have different effects to the agent as well as
the client of the contract. If the parties have not given their correct
names and addresses then there would be a problem of communication
in sealing the contract. In the scenario for instance, if Jackie did not have
the right name and address of Norman then she would end up sending
the letter to the wrong person and Norman would not be able to know if
his offer was accepted. Payment provisions affect the parties of the
contract when the payment id not conducted as agreed and in the right
time. In the scenario, Jackie agrees that Norman pays 5000 for the car
in two installments 4500 in May and 500 In September (Martin,
2012). In any case, Norman does not complete the payments as agreed,
and then Jackie has a right of taking a legal action. The timescale of the
contract affect it in that the parties have to work with the given time. In
the scenario, Norman has up to September to complete the payment of
the car whereas Jackie has up to September to hand over the car in any
case Norman will have completed paying for it. Termination provisions
are the situations under which the parties could do away with the
contract. This ensures that the parties are able to control the problem
before it is too late. In the scenario, it would be important to come up
with a provision such as if Normal will not have paid the full amount of
the first installment by May, then the contract be terminated (Martin,
2012).

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LO3) Understand principles of liability in negligence in business
activities
3.1) Contrast liability in tort with contractual liability
Ans. Torts are some wrong acts that cause the loss or damage of another
persons body, property or other legal rights. It caused by contravening
duty under the terms and legal process. Tort is the violation of civil
rights and the accused person should face trial in the civil court and that
leads to financial compensation or an embargo in the fame and image of
the responsible person or company.
Contractual liability comes in the table when both parties have a formal
or informal agreement over the terms and conditions of the contract. It
can apply to both companies effectively and equally. In the law of Tort
or the contract, there is categorization under the branch of obligatory
laws. The law of tort can apply to everyone who is entitled to the
system. In the law of contract its voluntarily assumed that everyone is
bound to obey and follow the rules.
Contract and tort law are common law for a long time. According to
ACCAGLOBAL, even thought contract and tort are two different
aspects in common law, they have a certain amount in common
They are both civil law
The claimant will sue the defendant in order to ask for
compensation, not for punishment.
The claimant will bring an action against the defendant and must
prove that the claimants loss is not too remote a consequence of
the defendants breach
Difference between liability in tort and contractual liability:
Generally, contractual obligations are voluntarily undertaken,
while tortious obligations are imposed by the law.
A person who enters into a contractual obligation owes a duty
only to a party to the contract. In tort we owe a duty to everyone

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not to defame them, not to trespass on their property etc.
The law of tort is primarily derived from the writ of trespass. The
law of contract developed mainly from the three forms of action
known as debt, covenant and as sumps it.
Duty of care:
The principal component of carelessness is the legitimate obligation of
consideration. This concerns the relationship between the respondent and
the petitioner, which must be such that there is a commitment upon the
litigant to take fitting consideration to abstain from bringing on damage
to the offended party in all the circumstances of the case. There are two
routes in which an obligation of consideration may be built:

The litigant and petitioner are inside one of the 'unique

relationship'; or
Outside of these connections, as indicated by the standards
created by case law.
Causation & Remoteness
Causation in English law concerns the legitimate tests of remoteness,
causation and predictability in the tort of carelessness. Causation
demonstrates an immediate connection between the respondent's
carelessness and the petitioner's misfortune and harm. For these reasons,
obligation in carelessness is built when there is a break of the obligation
of forethought owed by the litigant to the inquirer that causes misfortune
and harm, and it is sensible that the respondent ought to remunerate the
petitioner for that misfortune and harm.
Remoteness is a situated of standards in both tort and contract, which
restrains the measure of compensatory harms for an off. In carelessness,
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the test of causation not just obliges that the litigant was the reason
actually, additionally obliges that the misfortune or harm supported by
the inquirer was not excessively remote. Remoteness is outlined as a
further point of confinement on a reason for activity to guarantee that the
risk to pay harms is equitably set on the litig.
There are generally three types of business organizations as
acknowledged by the law of the country. The three business
organizations are- sole trading business, partnership business and the
company. In a sole trading business organization, there is only one
owner of the business. The only one owner is responsible for the gain/
profit or loss of the business. In this business organization, the
businessman has to bear the losses by himself even with his personal
assets. Another type of business organization is called partnership
business. There are two or more partners in a partnership business. The
partners are responsible for the profit and loss of the firm (Simon and
Gillian, 2005). The risks and liabilities are constrained to the partners of
the organization. Another important type of business organization is the
company. The company may of two types: private and public limited
company. In a company the firm is a separate entity to do its job by itself
without the help of a particular person or persons. The risks are limited
in this type of business organization. No single person or shareholder is
responsible for the act of the firm. The liabilities of the shareholders are
limited to their amount of share.

A sole trader legal requirement refers to the acquiring of the trade

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license from the local authority and conducting business abiding by the
relevant laws and regulations. A sole trader must be able define personal
transactions from business for proper tax computations. He is legally
liable for all the losses and if his business falters, his personal assets are
liable to be liquidated. In case of partnership business, the agreement
between the partners must be written and should conform to the Limited
Liability Partnerships Act. The partners can profit from limited liability
and reap tax advantages. Sole-trader or a partnership firm should notify
the Inland Revenue (IR) and National Insurance Contributions (NIC)
Agency .The limited company is to be registered under the Companies
Act of 1985 and becomes a legally separate entity and has authorized
shareholding which defines the limit of the shareholders liability (Simon
and Gillian, 2005).

3.2) Explain the nature of liability in negligence

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Ans. Negligence is the oversight by the smart person when he faces
something that is out of consideration and not regular in the meaning of
activities. When the contract is in question, then the negligence is not a
big factor even a good strategy. But when because of negligence, the
counter party faces problems or loss; the responsible person should stand
in front of the tort laws (Cooke, 2010). There is o objective standard in
the reason of negligence. Negligence is a failure to exercise the care that
a reasonably prudent person would exercise in like circumstances
(Meriam Webster, 2011). Negligence involves harm caused by
carelessness, not intentional harm. In order to be successful in a
negligence claim, the claimant must prove:

- The defendant owed him a duty of care.

- The defendant had breach that duty.
- The defendants breach of duty caused damage to the claimant.
1. Duty of care
Duty of care refers to the circumstances and relationships which
the law recognizes as giving rise to a legal duty to take care (Annon,
n.d.). If the defendant fails to take such care to the claimant, the
defendant will be liable to pay compensation for claimant because
according to the law, the defendant had breach of duty of care.
The existence of a duty of care for injury was originally decided by Lord
Atkins neighbour test from the case Donoghue v Stevenson 1932.
To do the neighbor test, the judge will look into two requirements:

- Reasonable foresight of harm: if the damage that caused injure to

the claimant could be foreseeable, the defendant will owe a duty of
care to the claimant [The case Home Office v Dorset Yacht Co
Ltd 1970 (Appendix 2, pg.10). A person will not be liable for the
acts of third parties unless they were under his control [The case
Topp v London Country Bus 1993 (Appendix 3, pg.10)].
- A relationship of proximity: if the claimant successful in proving
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that there is a close, or neighborhood relationship between him and
the defendant when the incident occurred, the defendant will be
liable a duty. The case Chadwick v British Railways Board 1967
(Appendix 4, pg.10) is an example of the claimants success in
showing the relationship of proximity.
2. Breach duty of care:
The standard of a reasonable man
To successful in the claim of negligence, claimant must give evidence
that there was a breach of duty of care of defendant that caused the
damage to him. The court will consider whether the defendants act fell
below the standard of reasonable care, the person concerned should do
what a reasonable man would do, that could be expected of a
reasonable person in the same circumstances (Annon, 2010). The
standard that is mentioned here is not the standard of an average man but
the standard that require for a person act or job, for example, the
standard of doctor or car driver [The case Nettleship v Weston 1971
(Appendix 5, pg.11)]. In order to identify if a person act fell below
standard of a reasonable man, the court will consider the following
factors:

- Particular skill: A person who professes to have a particular skill,

for example, a doctor, is required to use the skill which he purports
to have. An error of judgment is not automatically a case of
negligence.[The case Whitehouse v Jordan 1981 (Appendix 6,
pg.11)].
- Emergency situation: certain behavior will not be acceptable in
ordinary situation but it will be accept in emergency situation.
3. Damage to the claimant
Claimant only be compensated if he has suffered actual loss, injury,
damage or harm as a consequence of anothers action. A claim for

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compensation for negligence will succeed unless these elements could
be proved:

- The breach of duty gave rise to the harm

- The harm was not too remote from the breach

3.3) Explain how a business can be vicariously liable

Ans. Vicarious liability means liability for the torts of others and arises

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because of a relationship between the parties. 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
committed while an employee is conducting their duties.

An employer, regardless of their size, may be legally responsible for

discrimination and harassment which occurs in the workplace or in
connection with a persons employment unless it can be shown that all
reasonable steps have been taken to reduce this liability. This legal
responsibility is called vicarious liability.

All reasonable steps is not defined in the legislation because what is

reasonable for a large corporation may not be reasonable for a small
business. Rather it is worked out on a case-by-case basis. However, it
does mean that employers must actively implement precautionary
measures to minimize the risk of discrimination and harassment
occurring. An all reasonable steps checklist is included as a guide in
this fact sheet.

Where is vicarious liability applicable?

The vicarious liability provisions of the legislation only apply where the
alleged discrimination and harassment occurs in connection with the
persons employment. This means the employer may be held vicariously
liable for the actions of employees if they have not taken all reasonable
steps to prevent the discrimination and harassment from occurring both
within the usual work environment and at employer events, such as
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sponsored seminars, conferences, work functions, Christmas parties,

business or field trips.

Whose conduct is covered?

An employer may be vicariously liable for the conduct of:

individual employees or groups of employees

directors, supervisors or managers
workplace participants (where two people work on the same
premises, but have different employers)
agents (e.g. insurance salespersons operating on a companys
behalf )
contract workers or people being paid commission
a partner of a company harassing another partner
members of organizations which grant occupational qualificationsa
person employed by a trade union harassing a membera person
operating an employment agency who harasses someone who uses
the agency

Liability of individuals

The vicarious liability provisions of the legislation do not preclude

individual persons from being held liable for their own discriminatory or
harassing behavior in the workplace or in connection with their
employment. It may be that both the employer, who has been found to
have not taken all reasonable steps to prevent the discrimination and
harassment from occurring, and the individual, who is the alleged
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discriminator or harasser, will be held jointly liable for the behavior.

Factors for employers to consider

When deciding what level of preventative action is reasonable, an

employer should consider:

the size and structure of the organization

available resources
the nature of the work undertaken
gender imbalances in the workplace
the employment of women in non-traditional areas
the number of junior staff
the workplace culture
cultural diversity in the workplace
any history of harassment
any relevant provisions in industrial awards or agreements
working hours
level of supervision
Any other relevant factor, such as geographic isolation of the work
location, duties which require working in close physical proximity,
live-in arrangements, etc.

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LO4) 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
Ans. There are diverse components of Negligence which obliges that an
offended party demonstrates the accompanying four variables by a
"dominance of the proof":

The litigant owed an obligation to the offended party (or an

obligation to the overall population, incorporating the offended
party);
The litigant abused that obligation;

As a consequence of the respondent's violation of that obligation,

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the offended party endured damage; and

The damage was a sensibly predictable result of the litigant's

activity or inaction.

There are four main elements of the tort of negligence in different

business situations. A duty of care is the first element. A duty that the
law identifies needs to compliance with a certain standard of conduct to
be able to protect other people against any reasonable risks. In business,
the owners should ensure that they consider risks that may befall on
people around the business. They should put measures to ensure that
individuals around are protected against the risks that the business may
cause. In the scenario, Tony should have found out if Jane was in a
position to drive before giving her that responsibility. In the other
scenario, James should have been careful all through in making the
deliveries to avoid the crash (Miller & Jentz, 2010, pp.125-152). A
breach of the duty of care is the second element. This is whereby the
business does not conform to the needed standards of care. It therefore
ends up operating without considering the safety of the people within it.
In the first scenario, Jane drives the forklift truck and loses control. In
the second scenario, James negligently crashes the van. The third
element is damage. This is the resulting injury to a person due to
inconsideration of the business. The damage in the first scenario is
Simon being injured by the boxes whereas the damage in the second
scenario is Richard being severely injures by the crashing van. The last
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element is the close relationship between the conduct of the offender and
the injury. In the first scenario, it was clearly that Jane trying to do
something she did not have skills in could lead to injury. In the second
scenario, as much as Richard was not wearing his seatbelt, James
crashing the van would all the same cause injuries to him (Girod, 2013,
pp. 135-142).

To be able to defend against negligence successfully, the defendant

will attempt to negate one of the elements of negligence. The defenses
can be either contributory negligence or voluntary assumption of risks.
Contributory negligence happens when a plaintiff is unable to attain the
standards of care needed of them for their individual protection. It is
failure of the appellant to avoid the injury due to the conduct of the
defendant. In the second scenario, it is failure of Richard to maintain his
own safety by not wearing his seatbelt. In this case, both parties will
cater for the responsibility of the injury based on the degree of
responsibility. Under the voluntary assumption of risks, the plaintiff
willingly assumes the risk of the injury and may not recover anything.
The defendant in this case is not liable in any way. In the second
scenario, Richard may take all the responsibility by claiming he was not
being careful by not wearing a seatbelt (Martin, 2012).

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4.2) Apply the elements of vicarious liability in given business

situations
Ans. Case 1: Mimis accident.
The case have clearly state that Vincent work for Mr. Johnson as
home delivery driver. The task of Vincent is to deliver the product from
Mr. Johnsons cafe to customer home. This job does not require much.
Mr. Johnson can control how Vincent perform his task, what he has to
deliver and where he has to deliver product to. Therefore, Mr. Johnson
passed the control test. Furthermore, Mr. Johnson is owner of the cafe.
Obviously, he has the power to recruit and assign duty for employee.
Another point is that Mr. Johnson has provided the vehicle for Vincent
because according to scenario, Mr. Johnson forbidden Vincent to give
lift to his girl friend. If Vincent used his own vehicle to delivery,
obviously he can use his OWN VEHICLE for his OWN PURPOSE and
Mr. Johnson cannot forbid him. It can be concluded that there are
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relationship between employee and employer. When the accident
occurred, Vincent supposed to deliver to clients house but he didnt do
his job. Instead, he gave Mimi a lift and uses the vehicle for personal. In
this case Mimi is a trespasser. Therefore, it can be conclude that at the
time the accident occurred, Vincent was not on the course of
employment [The case Twine v Beans Express 1946 (Appendix 9,
pg.12)]. According to the principle of vicarious liability, Mr. Johnson
and Vincent are in a relationship between employer and employee but
when the accident occurred, Vincent wasnt on the course of
employment. Therefore, Mr. Johnson isnt held liability to the death of
Mimi and Vincent is the one who have to pay compensation for Mimis
family.
Case 2: Benny and Scott
In this case, Benny is employee of Mr. Johnsons cafe. He is the
deputy manager of Mr. Johnsons cafe, which mean Mr. Johnson
assigned his task is to manage and control the operation of the cafe when
Mr. Johnson absence. The task of Benny could be: manage and assign
task to other subordinates .etc...Furthermore, because Benny is manager
of Mr. Johnsons cafe, obviously he cannot restrict place of work and
have to work there. It can be conclude that there is a relationship of
employer and employee between Mr. Johnson and Benny. Furthermore,
Benny was on the course of employment when he was attack by Scott.
Therefore, Mr. Johnson is held liability to Benny.
However, the act of Scott mainly stem from the feud with Benny
because Tanny left Scott for Benny. Furthermore, when Benny called
Scott for working, which is the duty of Benny when the cafe lack of
staff, Scott was off-duty and drunk. Therefore, he felt a little bit upset
when being call to go to work plus the alcohol effect. All of this factors
led to the act of Scott is assault. The act of Scott is considered as battery.
Battery is criminal offense involving unlawful physical contact. It is an
criminal act, not tort anymore because Scott violently attacked Benny
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illegally without provocation and it came from Scotts personal grudge
[The case DYKES v. McROBERTS PROTECTIVE AGENCY, INC
1998 (Appendix 10, pg.12)]. In conclusion, because this is criminal act,
Scott has to responsible to pay Benny compensation by himself, not Mr.
Johnson.

Reference Page.

Books.

Bermingham and Brennan (2010), Tort Law Directions, 2nd edn. Oxford
University Press
Beale and Dugdale (1975), Contracts between businessmen. British
Journal of Law and Society
Cooke (2010), Law of Torts, 9th edn. Pearson.

TURNER, C., & MARTIN, J. (2011). Key Cases: Contract Law.

London: Hodder Education

PINSENT MASONS LLP. (2008). Formation of Contracts

Atiyah, P. S. (2000). An Introduction to the Law of Contract. Clarendon.

Beatson, J. (2010). A Burrows and J Cartwright, Anson's Law of
Contract.OUP, 29th edition.

Collins, H (2003). Contract Law in Context. 4th edition.

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