Introduction
Businesses and individuals for contracts when doing business. However, not all contracts are enforceable by the law as they are not well-formed. They do not contain the necessary elements of an agreement like offer, acceptance, consideration, intention, and capacity. Businesses and employees are sued for negligence due to the failure to perform their duties or omissions. Thus, it is imperative to understand the contract and tort of negligence to avoid such problems. Hence, the paper analyses two scenarios. One of them is based on contract and the other one tort law.
Number 1
Contract
A contract is a legally binding agreement between two or more parties. There are different types of contracts, such as bilateral contracts and unilateral contracts. In a bilateral contract, the obligation is on two parties, wherein in a unilateral contract, only one party (the promisor) has obligations. An agreement consists of different elements: an offer, consideration, capacity, acceptance, legality, consent, and intentions.
Offer
An offer is an expression of willingness to contract on specified terms that will become binding once accepting. An offer can be made in various ways, such as orally, by conduct, or in writing. The person making the offer is the offeror and the person whom the offer is the offeree. An offer is generally communicated and can be offered to an individual, company, a group. However, every member of the group must accept the offer. The Carlill V Carbolic Smoke Ball Company (1892) case indicated the relationship between an offer and acceptance. The Court of Appeal ruled that an advert that contained specific terns to get a reward amounted to a binding unilateral offer that could be accepted by a person who performed the terms. The firm advertised a flu treatment known as carbolic smoke ball, and it indicated that buyers who found it was not useful would be given 100 pounds. The court found the advert legally bound the organization as it was considered an offer in which people buying the smoke ball accepted and hence created a contract. There is a difference between an invitation to treat and an offer. An invitation to treat is an expression that one is willing to enter into negotiations, which can lead to a contract’s formation. It is an invitation to another person to make an offer. An offer is a statement by a party of the readiness to contract based on the terms defined. The terms are binding if the other party accepts the offer (Barnes and Davies, 2009, p. 10). In the scenario, BKS Supplies is making an invitation to treat or make an offer to any party through the advert in the catalog, and there is no contract formed.
Consideration
Consideration can be defined in many ways. It is the contract’s subject, the value, or ‘the price for which the promise or act is bought’ (Field, 2016), and must be given by the contractual party. Consideration ensures the promises can be enforced. Consideration also gives one side of the party a ‘promise to sue’, if a breach in the contract occurs or the promise is not fulfilled. Consideration must have economic value, even if it does not need to benefit parties. A consideration must not be from the past. For example, suppose something has been voluntarily completed, and a promise of payment is declared. In that case, it is not part of what has been done because the consideration would not be looked at as motivation or the contract’s bargain element.
Regarding consideration from the past, there are two exceptions. First, if the past consideration was provided of the promisor’s request. Second, or the consideration can be from the past in terms of the Bill of Exchange act 1882. In Thomas v Thomas (1842), the executor’s statement did not create a contract as it only communicated their motive for agreeing. The statement indicated the £1 rent was good consideration. However, any other consideration cannot be from the past. There are two types of consideration: executory consideration, which can be found within bilateral contracts, and executed consideration in a unilateral contract. Executory consideration is a promise for something that is yet to be done. For example, Haws contractors made an executory consideration as they ordered a ‘Haw Medway 2 sidelight pre hung UPVC door, right hand hung’ and ‘Haw Medway 1 sidelight pre-hung Upvc door, left hand hung’. Thus, BKS Supplies had not performed the act of providing the doors to Haws Contractors. Also, BKS Supplies was either bound by the contract or not. However, executed consideration is a ‘promise in exchange for an act by the other party when the act is completed’ (Field 2015, p.37).
Capacity
When entering a contractual agreement, both parties must be legally capable. For example, they should be mentally stable, not intoxicated, aged 18 and above, and not disqualified by law. A contract consists of obligations that the parties should perform, and hence they should have the capacity to understand them. Contracts entered with minors can only be enforced if the adult wishing to do can prove they are beneficial to the child. In De Francesco v Barnum (1989), the Court ruled the contract was void as it was not helpful to Barnum, a minor. The child aged 14 entered into a contract to train as a stage dancer. However, the agreement contained conditions that were not beneficial to the child, and she was not bound. The contract indicated she could not get other professional jobs without getting permission from De Francesco. She was not allowed to marry without permission. De Francesco had no obligation to keep the job, but it paid the child a low salary if it did. De Francesco also could end the contract without notifying the child (Godha, 2018, p.928). According to the scenario, the representatives of Haws Contractors and BKS Supplies have the capacity to enter into a contract as they are above eighteen years, mentally stable, and not under the influence of substances.
Consent and Intentions
An intention to enter a legally binding contract or agreement is a critical element of a contract. An intention to create a legal relationship involves the readiness of a party to accept the agreed legal arrangement. Intention to create legal relations is an action that every contracting party must have as ‘without this, there is no contract’ (Mason 2016).
The parties should have an understanding of the terms, conditions, and obligations contained in the agreement. They should accept the contract is legally binding. A contract is considered a mere promise if there is no intention to create a legal relation. The parties should consent or mutually agree to form the contract. They should not be forced to consent to the agreement. Based on case studies, the situation of mere promise is evidenced in Balfour v Balfour (1919). In the case, Mr. Balfour lived with Mrs. Balfour, and he orally promised to give her 30 pounds every month until she returned to Ceylon. However, they remained apart after Mr. Balfour decided so, and she sued to continue sending 30 pounds every month as payment. The Court of Appeal found that the two did not have an enforceable contract. Mr. and Mrs. Balfour had no intention of making a bargain that could be legally enforced. The husband showed his intention to pay the money, and he promised to do so, and he was bound to continue paying if he was able. The wife did not make a bargain (Saprai, 2017, p.7). Domestic and social agreements of intention to create legal relations may be broken down into three groups: Commercial or business relations, Social friend’s relations, and family or domestic relations. The objective test is put into place to distinguish whether a social and domestic agreement intention is disputed or a business and commercial intention is disputed. Overall, it is essential that parties clearly express otherwise if they do not wish to create a legal relation. In the business scenario, Haws Contractors and BKS Supplies did not intend to enter into a legally binding contract. Haws Contractors ordered goods from BKS Supplies based on the catalog price, and the latter indicated it would supply the products later at an extra cost of 50 pounds for every item.
Acceptance
Acceptance proceeds an offer as the second requirement for a legally binding contract. It happens when the offeree chooses to be mutually bound by the contract terms by giving consideration. Acceptance is made based on the way it is stated in the offer. An acceptance is deemed valid if the offeree is aware of the offer and shows an intention to accept. The acceptance is a clear and unconditional agreement to the offer terms. A person rejects the offer made earlier, and the acceptance is made based on the counteroffer terms. Hyde v Wrench (1840) case focuses on counteroffers and their impact on initial offers. Lord Langdale found that a counteroffer canceled the initial offer. As a result, there is no binding contract between the persons as the initial offer was not accepted. Wrench had offered to sell the Luddenham farm to Hyde for 1200 pounds, but the latter refused the offer. Wrench offered to sell the farm at 1,000 pounds, but Hyde made a counteroffer of 950 pounds. Wrench declined to accept the offer and notified Hyde on 27 June. Hyde agreed to buy the farm at 1,000 pounds without negotiating with Wrench, and the latter refused. Then Hyde sued for the violation of the contract. The judge noted there was no contract as Hyde made a counteroffer, and Wrench refused it (Taylor and Taylor, 2019, p.31).
In the case given, Haws Contractors made an offer to buy goods according to the prices indicated in the catalog, but BKS Supplies made a counteroffer to supply them later, although they would cost 50 pounds more.
A contract between BKS Supplies and Haws Contractors
There was no contract formed between Haws construction and BKS Supplies as the parties did not meet the agreement’s requirements. BKS Supplies made an invitation to treat or offer and not an offer to Haw Construction. Haws Construction made an offer to buy five pieces of ‘Haw Medway 2 sidelight pre-hung Upvc door, right hand hung’ at 650 pounds each. It also decided to buy three parts of “Haw Medway 1 sidelight pre-hung Upvc door, left hand hung’ at 500 pounds each. However, BKS Supplies declined to accept the offer, and after one week, it returned the cheque to Haws. It included a letter indicating the products were not available and could supply the following month at an extra cost of 50 pounds each. Thus, BKS Supplies made a counteroffer that canceled the original offer made by Haws Construction. Haws Construction refused the new offer and opted to sue BKS Supplies. The counteroffer and Haws Construction failure to accept it hindered the formation of a contract. BKS Supplies only showed the intention to form a contract with Haws Construction after making the counteroffer. On the other hand, Haws Construction showed an intent to agree with BKS Supplies when it decided to buy the items at the catalog price and send the cheque as a consideration. Hence, like in Hyde v Wrench (1840) case above, Haws construction cannot sue BKS Supplies as there is no contract between them, and it was not legally bound to supply the items at the original cost (Taylor and Taylor, 2019, p.31).
Privity of Contract
The privity of contract is a principle in common law that assumes that a contract cannot give rights to another individual who is not a party to it. Also, the contract cannot give him obligations to perform if he or she is not a party to the agreement. Only people or parties to the contract are slowed to sue for the breach to enforce their rights and claim damages. For example, A enters into an agreement to sublease a house from her colleagues, B. B leases it from the owner, C, and gets written permission from the landlord before agreeing with A. Still, it does not absolve her from her duties as the landlord’s tenants due to the privity. In this case, A causes damage to the house, and the landlord, C, sends B the cost for the damages. B demands A to pay for them. However, B is supposed to pay the damages because she must perform the contract as indicated in the lease with the landlord. In this case, A has no privity with the landlord, but with B.
Several causes have examined the issue of privity of contract. Beswick v Beswick (1968) was a landmark ruling on the privity of contract. According to the case, Old Peter Beswick sold coal in Eccles, and he had no business. He had a lorry which he took to the National Coal Board field and put coal and took to his clients in the locality. John Joseph Beswick, a nephew, assisted him in doing the business. However, his nephew decided to get the company before Beswick, who was in poor health after his leg was amputated, died. Therefore, Mr. Ashcroft, a solicitor, developed an agreement that required Peter to give the business to John.
John was supposed to pay an annuity to Mrs. Beswick every week. The nephew failed to perform the last part of the contract as it benefited another person who was not a party to the agreement. Thus, he paid Mrs. Beswick 5 pounds every week as he believed she was not a party to the agreement. He claimed she could not enforce the contract because of the privity of contract doctrine. However, the Court of Appeal through Lord Denning noted that Mrs. Beswick was entitled to claim as a third party who was supposed to benefit from the agreement. The lord argued that a third party has the right to enforce a contract on behalf of the person contracting or together if it is made to benefit the third individual who is interested in implementing it. Thus, the third party had the right result from the contract. Nonetheless, the House of Lords differed with Lord Denning’s ruling that permitted third parties to take legal action to enforce benefits stated in a contract. The House of Lord argued that Mrs. Beswick had no right to sue John as she was not a party to the agreement. However, she had the right to sue John as an administrator for the specific performance of the promise he made in the contract (Andrews, 2011, p.199).
Number 2
Vicarious liability is an essential element in tort law. It is a kind of strict secondary liability imposed on other people based on duty standards, including negligence. Vicarious liability imposes strict liability on employers for the misconduct of their workers. In this case, an employer is held liable for the negligence committed when an employee is performing duties.
The tort of negligence deals with the breach of duty. The respondeat superior is used to hold principals liable for failure by their agents. The principal is together with the agent responsible for the torts committed within the employment scope by workers whose behavior he has a legal right to control. The principal is also individually liable for the mistakes made by employees within the employment scope whose conduct he has a lawful right to control (Faure, 2009, p.134). The Various Claimants v Catholic Child Welfare Society and Others (2012) and Mohammed v Wm Morrison Supermarkets Plc identified a test that should be used to determine vicarious liability. There should be a relationship between the people that leads to vicarious liability, including employment. There should be a connection between the action or omission of a party and the relationship between the individuals. In Morrison Supermarkets Plc v Various Claimants, the court found that the sexual assault happened away from the school and outside the working hours was not relevant. The court admitted the sexual acts committed had a different tort, but each was due to the abuse of trust created in the learning institution. There was enough connection between the school and the acts outside the institution as the local authority was vicariously liable for incidents inside the school and outside (Giliker, 2016, p.159). In Barclays Bank Plc v Vicarious Claimants (2020), the Supreme Court found that Barclays was not liable for Dr. Bates’ misconduct. The High Court and the Appeal Court found that Barclays was vicariously liable for the assault of the workers. However, the Supreme Court noted Barclays was not vicariously responsible for the assault by Dr. Bates (The City Law School, 2020, p. 23).
Based on the literature reviewed and the cases above. According to vicarious liability, Mr. Willis can sue GCC jointly with Lily or separately as it is liable for the negligence. GCC has an employment relationship with Lily as she works for the company, and hence it has a legal right to control her behavior. According to the scenario, Lily was negligent was conducting surveys and writing up. However, the work did not meet the standard set, and it damaged Mr. Willis’ property.
Mr. Willis should prove the existence of the four elements of negligence. Duty is considered the first component of a negligence claim. The plaintiff is required to prove the defendant owed him or her duty and failed to perform it. A duty results because of a relationship and a legal obligation. The duty should be foreseeable for the plaintiff to be the individual to be injured by the defendant’s conduct. A duty can be due to doctrines established by the court (Bevans, 2009, p. 100). In this case, Mr. Willis should demonstrate that the defendants (GCC and Lily) owed him a duty that they did not perform. The duty was established when GCC agreed to provide the services after the formation of the contract. In this case, GCC mandated Lily to complete the surveys and write.
Apart from duty, Mr. Willis should prove that a breach occurred. The plaintiff should show that the defendant breached the duty. In this case, the defendant violates the standard of care by acting carelessly (Bevans, 2009, p. 99). According to the contract terms, Mr. Willis should demonstrate to the court that GCC and Lily violated the duty by failing to deliver quality surveys and write-ups. The plaintiff should show a factual link between the defendants’ actions and the omissions and the injuries caused. The connection is known as proximate causation (Bevans, 2009, p. 100). Mr. Willis will be required to prove a connection between Lily’s actions and the damages caused to his property. For instance, he will show Lily’s failure to produce quality surveys, and the write up negatively affected his property.
The plaintiff should show he suffered damages after proving duty, breach, and causation. The injuries can be physical or the loss of money. A negligence case fails if the plaintiff does not prove damages. The court awards damages to the plaintiff to restore him to the condition he or she was before suffering the injury. There are different kinds of damages awarded by the court. The plaintiff is awarded damages for suffering and pain inflicted. Also, he is given damages after losing wages and medical expenses (Bevans, 2009, p. 100). For that reason, Mr. Willis should show that GCC’s and Lily’s breach of duty caused him damages to ensure the suit is successful. According to the scenario, Mr. Willis claimed the substandard work caused damages to his property worth 30,000 pounds. Hence, he should claim damages for the destruction of his property.
Conclusion
In conclusion, Haws Construction and BKS Supplies do not have a contract as they did not meet a contractual agreement’s requirements. A contract should have an offer, acceptance, consideration, intention, and capacity. It is considered void if one of the elements is missing. Haws Construction made an offer in the scenario, but BKS Supplies rejected it and made a counteroffer, and hence there was no contract. The privity of contract principle ensures third parties or people who are not a party to agreements are not granted rights or forced to perform obligations. Besides, Mr. Willis can sue GCC and Lily jointly or separately based on the vicarious liability principle. However, he should demonstrate they owed him a duty, and he breached. He should also show their negligence caused injuries and destruction to win the case and be awarded damages.
Bibliography
Bevans, N.R. 2009. Tort law for paralegals. New York, NY: Aspen Publishers Online.
Faure, M. 2009. Tort law and economics. Cheltenham, UK: Edward Elgar Publishing
Andrews, N. 2011. Contract law. Cambridge, UK: Cambridge University Press.
Taylor, R, and Taylor, D. 2019. Contract law directions. Oxford, UK: Oxford University Press
Saprai, P. 2017. ‘Balfour v Balfour and the separation of contract and promise,’ Legal Studies, 37(3), pp. 468-92
Barnes, P, and Davies, M. 2009. Subcontracting under the JCT 2005 forms. Hoboken, NJ: John Wiley and Sons
Godha, A. 2018. ‘Impact of contractual capacity of minor,’ International journal of Trend in Scientific Research and Development, 2(5), pp. 926- 930.
Giliker, P. 2016. Vicarious liability in the UK Supreme Court. In UK Supreme Court Yearbook. London, UK: Appellate Press Ltd.
The City Law School. 2020. Remedies. Oxford, UK: Oxford University Press