ELEMENTS REQUIRED FOR THE FORMATION OF A CONTRACT
The following report describes the concept Law of Contract. For this there will be an explanation of various essential elements in the formation of a contract which will help the contract to be enforceable by law. Further this report will emphasis over different kinds of contract involving “written contract, oral contract and distance selling contract”. Even an attempt will be noticed in regard with the comparison made towards the contractual liability and tortuous liability. In connection with this there is a description observed for the concepts like negligence and vicarious liability. All these concepts will be explained with their practical implications in different business situations.
Negligence is created because of the breach of duty of care the person having towards other resulting into some injury. On the other hand it will be observed that vicarious liability is resulted because of a special relationship between the parties. It creates an obligation over a person who does not committed any wrong.
The whole of the discussion of this report revolves around these concepts basically.
1.1 Explain the importance of the ‘essential elements’ required for the formation of a valid contract.
“ELEMENTS REQUIRED FOR THE FORMATION OF A CONTRACT”
- “Offer and acceptance”: In order to form a contract there should be minimum two peoples involved. This is because of the reason that one of the people should play the role to make an offer and the other person should accept the same.
It is very important to notice that there is a difference between offer and invitation to treat. In an offer a proposal is made by one party in order to establish a contractual relationship. While on the other hand an invitation to treat is made with an objective to show mere willingness “to covenant and bargain”.
A person is said to accept only when, the proposed offer without any kind of alterations made is ready to be followed.
- “Consideration”: In order to prove “the validation of a contract” it is necessary that the agreement should contain a valid consideration. A consideration is said to be valued only when it can be calculated in either in terms of money, benefits, rights or interests.
- “Intention”: Another important element required to prove the validation of the contract is intention. The involved parties should be indulge in a legal relationship which would further obliged all the parties towards a duty not to breach the contract and if any breach is made then in order to compensate for the caused damages.
- “Consent”: Consent of the available parties is another important factor required for the formation of the contract. It is necessary that the parties should freely give consent for all the terms and conditions of the contract. Here free consent means that the parties giving consent should not be influenced with none of the following factors:
- “Force of something”
- “Unconscionability of a party”
- “Legal capacity”: The majority age is required by each of the party for being the part of a valid contract.
- “Illegal and void contracts”: It is required that the contract formed should be between the involved parties only and not made for the “public at large”.
All the contracts missing any one of the above mentioned element is said to be a void contract. Whereas any contract violating any of the statutory provision is said to be an illegal contract (The Law Handbook, 2013).
1.2 Discuss the impact of these three methods in terms of forming binding and enforceable contracts under English law.
“TYPES OF CONTRACT”
- “Oral contract”: These contracts are also known as verbal contracts or face-to-face contracts. As the name suggest this kind of contract does not involve any kind of formal documentation of the specified terms and conditions fixed while establishing a contract. For these contracts the party faces problem to prove any term in the contract. This is because of its oral nature. In regard of proving it in the court the party should get the witness who should be there at the time of formation and heard all the terms and conditions of the contract. (Law Teacher, 2014)
- “Written contract”: It is another kind of contract. Here in these contracts as the name states is a formal presentation of the decided terms and conditions of the contract. Documentation is made of these terms decided by the parties which should be specifically verified by the parties and dully signed by them. Because of its high level evidentiary value the parties does not have to face any problem in regard with proving them in court. Even it helps the parties in clarifying any doubt regarding the terms and conditions because of its nature (Law Teacher, 2014)
- “Distance selling contract”: These type of contract includes all the contracts which are formed during the online transactions and even the dealings where the parties made it possible without meeting each other. Here the “distance sales or services regulation scheme” are decided by the supplier and the buyer had to follow them. The basic thing in these contracts is that the mode of the communication used by the parties while establishing the contractual relationship are the modes other than face to face communications like telephonic or through email, etc. (The office of fair trading, 2006)
2.1 Apply your understanding of the essential elements of a valid contract to advise Andrew if a contract has been formed in this situation.
This situation involves the given below concepts of Law of Contract:
- “Invitation to treat”: This is a stage initial to the formation of offer. Offer is a stage where the party offering gets bound for the offer made. But for the “invitation to treat” the person does not gets bound as this simply means that a person is willing to sell something. Therefore still the person is left with the choice to whom he wants to sell. It is said that “invitation to treat” is considered as a tool to negotiate and even express the willingness to accept, differ from offer which bound the party after an acceptance is made. (FindLaw UK, 2015)
The case (Fisher v Bell, 1961), states that displaying of knife does not considered as an offer rather it will be treated as “invitation to treat”. Hence the party is not bound to sell the same.
- “Postal Rule”: The rule of postal is applied over the situations where the mode of communication is done through post. According to this rule it is stated an offer is made as soon as the letter is delivered to the other party and acceptance is made from the point the letter is posted by the party stating the willingness to accept. (e-lawresources.co.uk, n.d.)
The case (Byrne & Co v Leon Van Tien Hoven & Co, 1880) states that when there is a direct communication the revocation can be done at random by speaking, but for the situation where postal rule it cannot be done. But an acceptance made with the help of posting the letter is considered valid.
While applying the above given principles in the given business scenario, it can be concluded that mere displaying of television will not be treated as offer rather it will be considered as invitation to treat which cannot bound the shopkeeper to sell the same as it can be done when an o9ffer is made.
2.2 Apply the law on contract terms to this guest’s dealings with the hotel to advise the Cheltenham hotel on this claim.
Terms of contract:
- Express terms:
- Implied terms:
- Exclusion terms:
- Condition terms:
- Warranty terms:
- In nominate terms:
· Evaluate the effect of the contract term quoted above in the software supply contract.
· Analyse the contract term with reference to its meaning and effect.
3.1 Contrast liability in tort with contractual liability.
3.2 Explain the nature of liability in negligence.
3.3 Explain how a business can be vicariously liable.
4.1 Apply your understanding of the elements of tort of negligence and defences to this situation in order to advise Head Office.
4.2 Apply your understanding of the elements of vicarious liability to this situation in order to advise Head Office.