Assignment title - Business Contract Law
Task One
Write a report
LO1 Understand the essential elements of a valid contract in a business context.
LO2 Be able to apply the elements of a contract in business situations.
Scenario:
Bill advertised a printing press in a specialist trade journal for £100,000. Cathy wrote to Bill offering to buy it for £80,000. Bill replied by return of post saying he would accept £90,000. When he heard nothing from Cathy, Bill wrote again saying he would accept £80,000.
Bill wrote specifically to Liza offering for sale an office computer for £550. The morning that she received the letter Liza wrote to Bill agreeing to buy for the asking price, she posted the letter later that day. After she had posted the letter, but before it was delivered, Liza changed her mind and sent Bill a fax asking him to ignore the letter when it arrived.
Task One -- Write a Report
As a Junior Legal Executive in a small law firm, write a report to your manager including the following:
1.1 What are the essential elements required for the formation of a contract in the UK and explain their importance. Include an explanation of what is meant by ‘an invitation to treat’ with reference to the scenario above.
1.2 In the report, identify and discuss the main types of contracts that may be entered into in the UK by individuals and businesses and discuss their impact.
2.1 Discuss the above scenarios in detail in context of various elements of a contract. In other words are the contracts between ‘Bill and Cathy’, and ‘Bill and Liza’ valid?
MERITS AND DISTINCTIONS
M3 Use a report format throughout task one.
D2 In the report, add an exploration and explanation of the term of the term ‘promissory estoppel’using case law to support your explanation.
Task Two
Short Answers
LO1 Understand the essential elements of a valid contract in a business context.
LO2 Be able to apply the elements of a contract in business situations.
Scenario A:
Opera singer Joyce DiDonato entered into a contact to perform as an opera singer for 3 months for the Royal Albert Hall company. She became ill five days before the opening night and was not able to perform for the first four nights. The Royal Albert Company replaced Joyce DiDonato.
Subsequently Joyce DiDonato sued the Royal Albert Hall Company for Breach of contract.
Subsequently Joyce DiDonato, agreed by contract to perform as an opera singer for another company. She again became ill and missed 6 days of rehearsals. The employer sacked her and replaced her with another singer.
Again Joyce DiDonato sued for Breach of contract.
Express and Implied Terms
The parties entered an agreement whereby Scammell were to supply a van for £286 on Hire Purchase (HP) terms over 2 years and Ouston was to trade in his old van for £100. There was then some disagreement and Scammel refused to supply the van. The claimant was a farmer who had a tenancy on the defendant's fields. The claimant had planted corn and Barley on the fields and worked the fields to ensure the crops would grow.
Before the field was due to be harvested the tenancy was terminated. The claimant then submitted a bill to the defendant for the work and cost of seed spent on the field as was customary in farming tenancies. The defendant refused to pay stating there was nothing in the tenancy agreement stating that such compensation was payable.
Task Two: Short Answers
The following must be included in your answers:
1.3/2.2 Analyse terms in contracts with reference to their meaning and effect. What would be the impact of such terms? Use these in reference to the cases above and apply the law on these terms in these two contracts.
2.3 Evaluate the effect of Expressed and Implied terms using the cases above.
Task Two
Short Answers
LO1 Understand the essential elements of a valid contract in a business context.
LO2 Be able to apply the elements of a contract in business situations.
Scenario B: for Merit and Distinctions ONLY
Adriana hires a car from City Cars Rental. When she arrived at the rental depot she was presented with a form which had terms and conditions in small print on the back, and she was asked to sign it. Adriana signed the form straight away and paid the hire charge. When she got into the car, she happened to look in the glove compartment and saw a laminated document titled ‘Limitation of Liability’. This is an exclusion clause. This document says that City Car Rentals will not be liable for any injury caused by a defect in the car unless the defect was as a result of City Cars Rental’s negligence.
Whilst Adriana was driving the car home along a busy dual-carriageway, the airbag inflated which caused Adriana to crash. As a result of the crash, Adriana was injured.
M1 Assuming that there was no negligence, is the exclusion clause valid and why?
D1 “Exclusion clauses are always valid, regardless of when introduced to a contract.” Critically evaluate this statement using case law to explain and justify your answer.
Task Three
Write a letter
LO3 Understand principles of liability in negligence in business activities.
LO4 Be able to apply the principles of liability in negligence in business situations.
Scenario
Albert wishes to rent a flat. He views 116 High Street and applies to be a tenant. He completes a form giving his accountant’s details. The landlord, Brad, applies to the accountant for a reference relating to Albert’s financial situation. The accountant, Charles, confuses Albert with another client and does not bother to check the file properly. He replies to Brad that Albert is an excellent client with high income and capital and recommends him as a good tenant.
In fact, had he looked at the correct file, he would have seen that Albert was continuously in overdraft and had been in serious debt with various banks on and off for several years. Some months later, Albert disappears having taken the flat on and run up several thousand pounds worth of rent arrears.
Task Three
Write a Letter
Write a letter to Brad and include the following:
4.1 Advise Brad as to whether he can recover his losses from Charles applying the elements of tort of negligence and state possible defences from different cases.
3.1 Contrast how the nature of liability in ‘Contract’ differs from the nature of liability in ‘Tort’?
3.2Explain the importance of ‘Donoghue v Stevenson 1932’ in the development of the concept of ‘duty of care’. Include an explanation of the ‘neighbour principle’.
MERITS AND DISTINCTIONS
M2 Explain what is meant by ‘strict liability’ in tort with particular reference to ‘Rylands v Fletcher 1868’.
Task Four – Short answers
LO3 Understand principles of liability in negligence in business activities
LO4 be able to apply the principles of liability in negligence in business activities
Scenario
1. Bill, a local milkman, contrary to express prohibition from his employers XYZ Dairies, engaged a 14 year old boy to help him deliver milk. Bill had told the teenager that he was not supposed to hire him but they could keep it between themselves and that he (the teenager) worked directly for Bill. XYZ Dairies become aware of this arrangement but had not done anything about it. As a result of Bill’s careless driving, the boy was injured.
Can Bill be sued for negligence, and can XYZ Dairies be held vicariously liable in this situation?
2. A vintage vehicles museum owner asked a friend to drive a vintage bus to Barnstable in Devon where the museum owner was going to take part in a vintage bus rally. The friend drove negligently and damaged Mrs Smith’s car.
As the friend was not employed at the Vintage Vehicles Museum can the owner of the museum be held liable?
Task Four
Short answers
4.2Discuss whether Bill is liable of negligence and if XYZ Dairies can be held vicariously liable.
3.3 Explain how a business can be held responsible for the ‘wrongs’ committed by its employees, and give an example of when the employer would not be held vicariously liable for the ‘wrongs’ of its employee.
MERITS AND DISTINCTIONS
D3 Explain what is meant by the occupier’s duty of care to visitors, and demonstrate what steps can be taken to help discharge this duty.