Professional Documents
Culture Documents
First of all, I am grateful to the Almighty God for establishing me to complete this assignment. I
wish to express my sincere thanks to the principal of Oshwal college, for providing me with all
the necessary facilities needed for this work. I also thank Mr Nelson Ndalila my lecturer, lam
extremely grateful and indebted to him for his expert, sincere and valuable guidance and
encouragement extended to me.
ABSTRACT
In task one the assignment is all about understanding the importance of the essential elements
required for the formation of a valid contract, the impact of different types of a contract,
analyzing terms in contract with reference to their meaning and effects. In contract law the offer
and acceptance is extremely conventional and essential throughout to be acknowledged. The
principle of offer and acceptance incorporates a quality offer, acceptance and correspondence
around the two parties or people making the agreement is significant.
In task 2 the assignment mainly focuses in the liability in tort law, what is the characteristic of
tort, its aim and objective. It also contrast the liability in tort and liability in contractual in order
to help the clients to distinguish these two common law so that they can avoid it. After that, the
assignment will delve into two aspects of tort law, which is vicarious liability and negligence.
Through the assignment, I can now know the nature of liability in negligence and how a business
can be vicariously liable. In order to be success in the claim for negligence, claimant must be
prove to the court that the defendant owe them a duty of care, there is a breach in duty of care by
the defendant and the breach of this duty cause claimant damage. With business, employer can
be held liable for the employees tort if the employee is work under the command of employer
and he or she is on the course of employment. Knowing the way to avoid and claim for
compensation can benefit to employer and individual.
TABLE OF CONTENTS
ACKNOWLEDGEMENT...............................................................................................................1
ABSTRACT....................................................................................................................................2
1.1 BASIC REQUIREMENT THAT MINUTE MAID NEEDS TO MAKE A VALID
CONTRACT WITH ITS FRUITS SUPPLIERS.............................................................................4
Offer.................................................................................................................................................4
Intention to create legal relations:....................................................................................................6
Lawful consideration:......................................................................................................................7
Other factors that may induce equity to refuse relief include..........................................................9
1.2 IMPACT OF DIFFERENT TYPES OF A CONTRACT.........................................................13
2.1APPLICATION OF THE ELEMENTS OF CONTRACTS IN THE GIVEN SCENARIO.....16
2.2 APPLICATION OF THE LAW ON TERMS IN DIFFERENT CONTRACTS......................16
2.3 EVALUATE THE EFFECT OF DIFFERENT TERMS IN GIVEN CONTRACTS...............16
TASK 2..........................................................................................................................................18
3.1 CONTRAST LIABILITY IN TORT WITH CONTRACTUAL LIABILITY.........................18
3.2 EXPLAIN THE NATURE OF LIABILITY IN NEGLIGENCE AND HOW A BUSINESS
CAN BE VICARIOUSLY LIABLE..............................................................................................19
Duty of care...................................................................................................................................19
Breach duty of care: The standard of a reasonable man................................................................19
3.3 Explain how a business can be vicariously liable....................................................................21
4.1 APPLY THE ELEMENTS NEGLIGENCE TO THE SCENARIO.........................................22
4.2 APPLY THE ELEMENTS OF VICARIOUS LIABILITY TO THE SCENARIO..................22
Reference ....25
Offer
According to Macmilan and Stone there must be a lawful offer and a lawful acceptance of the
offer, thus resulting in what we call an agreement. The adjective lawful implies that the offer
must satisfy the requirements of the Contract Act in relation to. In this case fruit suppliers made
an offer to supply its fruits to minute Maid company whereby Minute Maid accepted the offer
which led to an agreement between the two companies and signing of a contract.
Carlill v. Carbolic Smoke Ball Co. Ltd1
Carbolic Smoke Ball Co. (D) manufactured and sold The Carbolic Smoke Ball. The company
placed ads in various newspapers offering a reward of 100 pounds to any person who used the
smoke ball three times per day as directed and contracted influenza, colds, or any other disease.
After seeing the ad Carlill (P) purchased a ball and used it as directed. Carlill contracted
influenza and made a claim for the reward. Carbolic Smoke Ball refused to pay and Carlill sued
for damages arising from breach of contract. Judgment for 100 pounds was entered for Carlill
and Carbolic Smoke Ball appealed.
Does one who makes a unilateral offer for the sale of goods by means of an advertisement
impliedly waive notification of acceptance, if his purpose is to sell as much product as possible?
Holding and Rule (Lindley)
1 [1893] 1 QB 256; [1892] EWCA Civ 1
4
Yes. One who makes a unilateral offer for the sale of goods by means of an advertisement
impliedly waives notification of acceptance if his purpose is to sell as much product as possible.
The court held that a person who makes an offer may decline to require notice of acceptance if
he or she wishes. One who makes an offer dispenses with the requirement of notice of
acceptance if the form of the offer shows that notice of acceptance is not required. To accept an
offer, a person need only follow the indicated method of acceptance. If the offeror either
expressly or impliedly intimates in his offer that it will be sufficient to act without giving notice
of acceptance, performance is sufficient acceptance without notification.
The court held that an advertisement is considered to be an offer when it specifies the quantity of
persons who are eligible to accept its terms. If such an advertisement requires performance, the
offeree is not required to give notice of his performance.
The court addressed the issue of whether the ad was intended to be a promise or whether it was
merely puffing. The court pointed to Carbolic Smoke Balls claim in the advertisement that it
had deposited 1000 pounds with Alliance Bank, which the court decided was intended to
demonstrate the companys sincerity in paying the reward.
Concurring (Bowen)
Notification of acceptance is required under our law. The person who makes the offer may
dispense with notice to him if he thinks it desirable to do so. He may expressly or impliedly
create any method of acceptance for his offer. An offeree need only follow the method indicated
for acceptance. The requirement of notice of acceptance to the offeror must be determined by an
objective reasonable person standard.
In the advertisement case, it seems to me that an inference may be drawn from the transaction
itself that a person is not to notify his acceptance of the offer before he performs the condition,
but that if he performs the condition notification is dispensed with. We must look to the essence
of the transaction and what the offeror is bargaining for under the circumstances. Under these
facts, the defendant impliedly indicated that it did not require notification of acceptance of the
offer.
Disposition
Appeal dismissed.
The case shows the letters of comfort. In this case, the plaintiff (bank) agreed loan to MMC
Metals, subsidiary of MMC. The bank asked MMC to guarantee loan. MMC said not policy to
guarantee loans to subsides offered letter of comfort stating: "It is our policy to ensure that the
business of MMC (Metals) is at all times in a position to meet its liabilities under the
arrangements. The bank accepted but charged higher rate of interest and the market collapsed
and MMC went into liquidation. The plaintiffs tried to claim balance from MMC. First instance
the court found in favour of plaintiff, relying heavily on Skyways (1964) ruling overturned on
appeal and the judge said Skyways case not was about promise supported by consideration so not
applicable here. Hence, ruled no intention to create legally binding agreement statement was not
meant to act as guarantee, stating on current position, not future intention.
Lawful consideration:
The third essential element of a valid contract is the presence of consideration. Consideration
has been defined as the price paid by one party for the promise of the other. An agreement is
legally enforceable only when each of the parties to it gives something and gets something.
The something given or obtained is the price for the promise and is called consideration.
Subject to certain exceptions, gratuitous promises are not enforceable at law. The consideration
may be an act (doing something) or forbearance (not doing something) or a promise to do or not
to do something. It may be past, present or future. But only those considerations are valid which
are lawful.
In this case SFG has to pay a price if they fail to deliver late or if they fail or if they fail to meet
Minute Maid required standards which is deducting 15000 shillings from its invoice
Labriola V. Pollard Group, Inc. (2004) 3
In 1997, Pollard Group, Inc. hired Anthony Labriola as a commercial print salesperson. Upon
hiring, Labriola signed an employment agreement. Under this agreement, Labriola agreed to atwill employment, meaning he could be terminated without cause. Also included in the
employment contract was the agreed upon salary and commission structure.
But the most important clause in Labriola's contract was the restrictive covenant that prohibited
him from working for a competitive company for a three-year period. Further, there was no predetermined geographical area mentioned. This meant that Labriola, if separated from Pollard
Group, Inc., would be restricted from working for any commercial printer for a period of three
years regardless of where on the planet the new job is located! That is a restrictive clause,
indeed!
3. (2004) 152 Wn.2d 828, __ P.3d ___, 2004 WL 2533876 (Wash. 2004).
7
Five years into Labriola's tenure, Pollard Group asked him to sign a Non-Competition and
Confidentiality Agreement requiring Labriola to refrain from accepting employment with a
competitor within a distance of 75 miles from Tacoma, Washington for a period of three years.
The problem with the new non-competitive agreement is that it did not contain legally sufficient
consideration.
Under contract law, consideration must be present and both benefit and cause detriment to both
parties. In this case, only Pollard benefited from the new non-competitive agreement. Labriola
essentially agreed to the same terms of the original contract: salary and commission, at-will
employment and non-competition clause. The employer incurred no new obligations either. In
fact, Pollard added a new clause further obligating Labriola for any attorney fees and costs
should the contract come into dispute.
Capacity of parties:
Held (Fullagar J)
Noted that the Courts approach with caution claims of intoxication as a ground for resiling from
contractual obligations.
This is, I think, not so much because intoxication is a self-induced state and a reprehensible
thing, but rather because it would be dangerous to lend any countenance to the view that a man
could escape the obligation of a contract by simply proving that he was "in liquor" when it was
made.
Mere drunkenness will not permit a person to get out of a contract. However, where one party
was to the knowledge of the other seriously affected by drink, equity will refuse specific
performance. In addition, if a court is satisfied a contract disadvantageous to the party affected
has been obtained by "drawing him in to drink", or that there has been real unfairness in taking
advantage of his condition, the contract may be set aside.
Free consent:
Free consent of all the parties to an agreement is another essential element of a valid contract.
Consent means that the parties must have agreed upon the same thing in the same sense
There is absence of free consent if the agreement is induced by (ii) coercion, (ii) undue
influence, (iii) fraud, (IV) misrepresentation, or (v) mistake (Sec.14 Indian law). If the agreement
is vitiated by any of the first four factors, the contract would be voidable and cannot be enforced
by the party guilty of coercion, undue influence etc.
The other party (that is, the aggrieved party) can either reject the contract or accept it, subject to
the rules laid down in the Act. If the agreement is induced by mutual mistake which is material to
the agreement, it would be void. (Macmilan and Stone 2012)
The fruit Suppliers agreed to supply the fruits to Minute Maid and Minute Maid agreed to
receive the fruits, hence both of them had a free consent about what they were getting into.
US v. Wilburn, (7th Cir. 2007) klll; 5
The police went to Wilburn's house to investigate his unlawful possession of firearms after
felony conviction. When they arrived, they observed Wilburn exit the rear of his residence, get
into his vehicle and pull around the block to the front the house.
The officers stopped Wilburn on traffic and arrested him for driving under suspension. Wilburn
was detained in the police car proximity 40ft. for his residence. While Wilburn was being
detained in the patrol car, the police contacted Wilburn's roommate. The officers obtained
consent to search of the apartment from the roommate and entered the residence to conduct a
search. The officers searched the bedroom and closet area that was shared by the roommate and
Wilburn. During the search, they found a handgun. Wilburn later objected to the consent to
search because it was obtained from the roommate and not from him. The court ruled that the
roommate could give a valid consent because Wilburn was not present to object to the search. As
long as the police did not deliberately detain Wilburn and remove him to keep him from
objecting to the consent, the consent was valid.
Lawful object:
For the formation of a valid contract it is also necessary that the parties to an agreement must
agree for a lawful object. The object for which the agreement has been entered into must not be
fraudulent or illegal or immoral or opposed to public policy or must not imply injury to the
person or property of another (Sec. 23 of Indian law).
If the object is unlawful for one or the other of the reasons mentioned above the agreement is
void.
According to the Indian Contract Act, a contract may be oral or in writing. But in certain special
cases it lays down that the agreement, to be valid, must be in writing or/and registered. For
example, it requires that an agreement to pay a time barred debt must be in writing and an
agreement to make a gift for natural love and affection must be in writing and registered (Sec.
25).
Similarly, certain other Acts also require writing or and registration to make the agreement
enforceable by law which must be observed.
Thus, (i) an arbitration agreement must be in writing as per the Arbitration and Conciliation Act,
1996; (ii) an agreement for a sale of immovable property must be in writing and registered under
the Transfer of Property Act, 1882 before they can be legally enforced.
Certainty:
Section 29 of the Contract Act provides that Agreements, the meaning of which is not certain or
capable of being made certain, are void. In order to give rise to a valid contract the terms of the
agreement must not be vague or uncertain. It must be possible to ascertain the meaning of the
agreement, for otherwise, it cannot be enforced
Hillas & Co v. Arcos Ltd6
Arcos agreed to supply Hillas with lumber in a contract stating the sale of "22,000 standards of
softwood of fair specification". In the contract there was an option to purchase additional
"100,000 standards" of lumber. The only terms of the option stated,
"Whatever the conditions are, buyers shall obtain the goods on conditions and at prices which
show to them a reduction of 5 per cent on the FOB value of the official price list at any time
ruling during 1931."
Hillas tried to exercise the option but Arcos claimed the contract was cancelled. At trial the jury
found that the contract had not been cancelled but Arcos put forward the claim that the option
"was an agreement to make an agreement, the terms of which were not defined, and so was
unenforceable."
Though they expressed regret for doing so, MacKinnon J of the Court of Appeal followed the
rule set out in the case of May & Butcher v R which stated that if there are any essential terms of
a contract of sale that are to be set by a future agreement then the contract is void.
6 1932-43-ll-l-rep-3
11
There were two issues put to the Court. First, whether the description of the goods in the option
clause was sufficient, and second, whether the option clause "contemplated a future bargain the
terms of which remained to be settled."
Lord Tomlin noted that the words of the option clause were also present in the rest of the contract
which was certain. He argued that the context of the language could suggest a precise meaning
that would give certainty to the option clause.
Lord Wright noted that businessmen familiar with their trade often "record the most important
agreements in crude and summary fashion; modes of expression sufficient and clear to them in
the course of their business may appear to those unfamiliar with the business far from complete
or precise." To which he concluded, that Courts must interpret contracts "fairly and broadly"
following the maxim that "Words are to be so understood that the subject-matter may be
preserved rather than destroyed." Wright qualified this statement by saying that courts can never
create a contract where there is none.
Wright further noted that it would be mistaken to interpret the option as an offer into a new
contract despite the wording suggesting otherwise. The contract for the option was formed as
part of the initial agreement and was only to be executed at a later date. Lord Wright also noted
that "a contract de praesenti to enter into what, in law, is an enforceable contract is simply that
enforceable contract, and no more and no less".
In application to the facts, the court ruled that "fair specification" was not vague enough to void
the contract. Both parties had experience in the trade and had completed similar bargains in the
past thus each would have known each other's intentions at the time. Therefore, the option
contract was valid.
Possibility of performance:
Another essential feature of a valid contract is that it must be capable of performance. Section 56
lays down that An agreement to do an act impossible in itself is void. If the act is impossible in
itself, physically or legally, the agreement cannot be enforced at law.
The agreement must not have been expressly declared to be void under the Act. Sections 24-30
specify certain types of agreements which have been expressly declared to be void.
For example, an agreement in restraint of marriage, an agreement in restraint of trade, and an
agreement by way of wager have been expressly declared void under Sections 26, 27 and 30
respectively.
12
14
CONDITIONS
A condition is a significant term which is basic to the principle reason for the agreement.
A break of condition will qualifies the harmed party for deny the agreement and case
harms. The harmed party may additionally decide to happen with the agreement,
regardless of the rupture, and recoup harms.
WARRANTIES
A warranty is a less essential term: it does not head off to the foundation of the
agreement. A rupture of warranty will just give the harmed party the right to claim
harms; he can't revoke the agreement.
INTERMEDIATE TERMS
It may be difficult to characterize a term perfectly ahead of time as either a condition or
a warranty. A few endeavors may involve a moderate position, in that the term could be
surveyed just in the light of the outcomes of a break. Assuming that a rupture of the term
brings about extreme misfortune and harm, the harmed party will be qualified for revoke
the agreement; where the break includes minor misfortune, the harmed partys cures will
be limited to harm.
Implied terms are more sensitive to deal with. There are four categories of implied
terms:
Implied by fact
Implied by law
Implied by custom
Implied by trade usage
Implied terms are relied on those factors. Therefore, when dealing with implied terms
we should be more sensitive.
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a few terms escaped the individual who is tolerating the agreement is not lawful, all the terms
and conditions incorporated in an understanding must be clear and well defined.
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TASK 2
3.1 CONTRAST LIABILITY IN TORT WITH CONTRACTUAL LIABILITY
A tort is a civil wrong based on the failure of one to perform ones duty to act in a reasonable
manner so as not to harm others (Annon, 2010). Torts generally involve an intrusion by one party
into the safety, health, profit, or privacy of the victim (Williams, 1982). The liability in tort is
held in the party which their wrongful act cause injury or damage to other party, and therefore,
they have to pay compensation for the injured party. The tort law incident that the party may be
held liable even their act is not intentionally. One of the most common cases in tort law is
negligence, where the tort is committed by the carelessness one party. In a tort claim, the
damages are usually awarded to compensate the injured party for their loss
A contract is basically an agreement between parties. In the contract, it clearly outlines duties
and responsibilities of one party to one another. Contract laws outline what a person can or
cannot include in a contract, and what the remedies are if a party breaches their contractual
duties.
Contract and tort law are common law for a long time. According to ACCAGLOBAL, contract
and tort are two different aspects in common law; they have a certain amount in common
1. They are both civil law
2. They claimant will sue the defendant in order to ask for compensation, not for
punishment
3. The claimant will bring an action against the defendant and must prove that the
In this case we the act of Negligence where Telcom Kenya fails to test its poles and to establish
how easily the can break. Furthermore, the poles were of low quality trees and were not treated
in any significance manner except for the coating of tar
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
Donoghue v Stevenson 19327
The fact: Mrs Donoghue went to a cafe with a friend. The friend brought her a bottle of ginger
beer and an ice cream. The ginger beer came in an opaque bottle so that the contents could not be
seen. Mrs Donoghue poured half the contents of the bottle over her ice cream and also drank
some from the bottle. After eating part of the ice cream, she then poured the remaining contents
of the bottle over the ice cream and a decomposed snail emerged from the bottle. Mrs Donoghue
suffered personal injury as a result. She commenced a claim against the manufacturer of the
ginger beer.
Decision: Her claim was successful. This case established the modern law of negligence and
established the neighbour test.
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 .
7 Donoghue v Stevenson 1932
19
In this case there was a breach of duty of care where David had to swerve into the other lane to
avoid kelvin whereby in the process he hits peters car that was speeding past him going in the
same direction.
Nettleship v Weston 19718
Negligence) Act 1945 to reflect the degree to which he was also at fault. The defendant was a
learner driver. She was taking lessons from a friend. The friend checked that the defendant's
insurance covered her for passengers before agreeing to go out with her. On one of the lessons
Mrs Weston turned a bend, Mr Nettleship told her to straighten the wheel but Mrs Weston
panicked and failed to straighten the wheel. She approached the pavement and Mr Nettleship
grabbed the handbrake and tried to straighten the wheel but it was too late. She mounted the
pavement and hit a lamp post. Mr Nettleship fractured his knee. The defendant argued that the
standard of care should be lowered for learner drivers and she also raised the defence of volenti
non fit injuria in that in agreeing to get in the car knowing she was a learner, he had voluntarily
accepted the risk.
Decision: A learner driver is expected to meet the same standard as a reasonable qualified
competent driver. Volenti did not apply as he had checked the insurance cover which
demonstrated he did not waive any rights to compensation. His damages were reduced by 50%
under the Law Reform
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
81971] 2 QB 691
9 1 WLR 246, [1980] UKHL 12, [1981] 1 All ER 267
20
Decision: Even though all three men were off-duty, the Captain could have ordered the soldiers
not to jump. Military discipline and rank remained important even in an off-duty situation. The
solders reliance on the Captains granting of permission made it fair and reasonable to impose a
duty of care. The Ministry of Defence, as the Captains employer, was vicariously liable.
4.1 APPLY THE ELEMENTS NEGLIGENCE TO THE SCENARIO
According to the tort of negligence and defences, the employers need to take the responsibility of
any kind of loss or injury happened to their employees due to any kind of negligence.
In this case, there are two problems that need to be considered. First problem is that Telcom
Kenya owe peter a duty of care. They never did any testing of its poles to establish how easily
the poles broke. Telcom Kenya still owe peter a duty of care because according to the neighbour
test every person owes a general duty of care to person so closely and directly affected by my
act that I ought reasonably to have them in contemplation as being so affected (Annon, 2010).
Peter can sue Telcom Kenya for he was seriously and permanently injured due to negligence of
Telcom Kenya. Telcom Kenya has to pay for the loss caused by peter including catering for
Kelvin hospital bill because he was seriously injured too.
The second problem is the irresponsibility of peter who was speeding and overtook Davids cab
on the left side which is wrong if in any case Davids car is damaged he can sue peter for over
speeding and over taking.
4.2 APPLY THE ELEMENTS OF VICARIOUS LIABILITY TO THE SCENARIO
Case 1: Davids accident.
The case have clearly state that David work for Autocabs as a driver. The task of David is
to drive the passengers. This job does not require much, Autocabs can control how David
performs his task, and how he is driving the car, is he driving carelessly or is he over speeding.
The Autocabs can do this by getting feedback from customers through calls. Therefore, Autocabs
passed the control test. Obviously, Autocabs Ltd has the power to recruit and assign duty for
employee. The time that the accident occurred David was on the course of employment and
therefore Autocabs is vicariously liable to the accident that occurred under the employer and
employee relationship and sues peter for over speeding and overtaking
22
employment. Peters employer is vicariously liable and will definitely sue Telcom Kenya for its
negligence which someone how contributed to his employee injury and seek for compensation.
Case 3: Telcom Kenya
Telcom Kenya is somehow liable for Kelvin injury due to its negligence the poles easily
broke down after being knocked by peter. Though Telcom Kenya is not 100% the cause of
Kelvins injury, kelvin can still sue it and demand for compensation
23
Reference
Books
Annon (2010) Business Essentials: Business Law, 2nd edition, London: BPP Learning Media
LTD.
Atiyah, P.S. (2000) An introduction to the law of contract.clarendon
Allen and Overy (n.d). Goode on commercial law. 4th edition
Beatson, J. (2010). A Burrows and J Cartwright, Ansons Law of contract. 29th edition
Collins, H, 2003 contract law in contest, 4th edition
Department of employment and learning (2004). Individual right of employees, Employment
booklet series
Online
Annon (2012) Understanding what vicarious liability means for employers, March, [Online],
Available: http://www.acas.org.uk/index.aspx?articleid=3715 [25 march 2016].
Annon Negligence - duty of care, [Online], Available: http://www.e-lawresources.co.uk/Duty-ofcare.php [24 march 2016].
Meriam Webster (2011) Encyclopdia Britannica, [Online], Available: http://www.merriamwebster.com/dictionary/negligence [27 march2016].
Williams, G. (1982) Learning the Law, Eleventh edition.
Case Laws
Carlill v. Carbolic Smoke Ball Co. Ltd
Ministry of Defence v Radcliffe 2009
The case Mersey Docks & Harbour Board v Coggins & Griffiths (Liverpool) 1947
Whitehouse v Jordan 1981
Nettleship v Weston 1971
Donoghue v Stevenson 1932
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