Contract Law and Tort Law of Negligenceâ€Free Samples for Students

Question: Discuss About the Contract Law and Tort Law of Negligence? Answer: Introducation In order to form such a contract which can be deemed as legal and binding upon the parties, it needs to contain a promise, where one of the parties to such an agreement, promises to do a thing and the other party to such an agreement, promises to pay the amount or value of consideration that has been fixed between them (Ayres Klass, 2012). A contract, in general, is drawn in two forms, i.e., written or oral. In the written form of contract, the terms on which the contract is formed is stated clearly and in detail on a document, which the promise making parties sign. In an oral contract, the terms of contract, are exchanged between the promise making parties in an oral or verbal manner. Even though the modes of creating the contracts are different, these continue to have a legal standing in the eyes of law (Clarke Clarke, 2016). For creating any kind of contract, there is a need for it to have certain elements, i.e., the need for an offer being made, which is then accepted by the party to which it was made, the need for it to contain a valid consideration, the requirement of contractual capacity, clarity with regards to the terms on which the contract is being formed, and lastly, the intent of creating lawful associations (Andrews, 2015). The initial step in contract formation begins from an offer being made. There has to be clarity with regards to an offer being made or an invitation to treat being put forward. An invitation to treat highlights the intention of the parties or their willingness in initiating negotiations regarding a particular topic. An offer is far different from an invitation to treat and it shows that the parties want to initiate the legal association and are willing to form a contract. The advertisements which are presented in magazines or in newspapers are deemed to be invitation to treat, instead of being an offer. If instead of an offer, an invitation to treat is established, the party which gave the advertisement is not required to finish the sale (Abbott, Pendlebury Wardman, 2007). In Partridge v Crittenden [1968] 1 WLR 1204, the advertising person as not required to go through with the sale as it was deemed as an invitation to treat. Though, in case, such an advertisement contains a unilateral offer, which can be accepted by anyone, through undertaking the performance of the advertisement, the same is deemed as an offer and not an invitation to treat, as was famously held in Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256 (Latimer, 2012). An offer has to be followed by the element of an acceptance. When an acceptance is given on a particular offer, the same has to be given to the offer in the form and in the exact wordings in which the offer was made. If any of the terms of the offer are changed while communicating the acceptance, the same is not an acceptance, and is instead a counter offer. Hyde v. Wrench (1840) 3 Beav 334 acts as an example of the modified acceptance being deemed as a counter offer (Marson Ferris, 2015). The next element in line is the consideration. In absence of a consideration, a contract cannot be held as being valid. There is also a need for the consideration to be both sufficient and adequate. A consideration made before the promise is made, i.e., past consideration, is not sufficient (Mulcahy, 2008). It is crucial that the consideration has an economic value. In Chappell and Co Ltd v Nestle Co Ltd [1960] AC 87, due to the condition being precedent, the three wrappers were held to be valid consideration. The next element relates to the parties having an intention of creating lawful relationship. In Balfour v Balfour [1919] 2 KB 571, it was held that an assumption cannot be made regarding the intention of the parties, till the time there is a presence of clear evidence to establish the contrary (Latimer, 2012). The parties also need to have the contracting capacity, as per which they need to have attained the legal age and be of sane mind. The next requirement deals with the necessity of the terms of the particular contract being clear to the promise making parties. The parties need to give a free and clear consent to the contract, which is free from duress or undue influence. Only when a contract contains all such terms, can a binding contract be established. When one of the parties of the contract, fails to keep their promise, a breach of contract takes place. In such a case, an individual, who is party to the contract, can apply for damages or equitable remedies (Lambiris Griffin, 2016). Misrepresentation is such a situation under the contract law, whereby a false assertion is made by the individual, so as to induce the other party into entering the contract. This false statement relates to a statement of fact, and cannot relate to an intention or an opinion. In case it is established that misrepresentation was incorporated as a term of the contract, it can form as the base for breach of a contract and the available contractual remedies can be claimed upon (Latimer, 2012). In Bisset v Wilkinson [1927] AC 177, a piece of farm was purchased by the claimant. He had questioned the seller on the number of sheep that could be held in that piece of land. Even though the seller had not used it as a sheep farm ever but he made an estimate that the same would contain two thousand sheep. Relying upon the statement of the seller, the land was purchased by the claimant. This estimate was proved as being wrong and action for misrepresentation was initiated. It was held that since the statement was just an opinion and it was not a factual statement. Hence, the action of claimant failed (E-Law Resources, 2017a). However, an entirely different ruling was given in the case of Esso Petroleum v Mardon [1976] QB 801 Court of Appeal. In this case, the expert of Esso estimated that the petrol station would sell 200,000 gallons of petrol. However, when Mardon tried to sell the petrol station, the same could sell only 78,000 gallon, resulting in a loss of 5,800. Even though an action could not be held for misrepresentation, due to estimate being of future, hence not a statement of fact, a claim was allowed on the basis of negligent misstatement and the clamant could apply for damages (E-Law Resources, 2017b). The given case study highlights that upon negotiations being carried on, an offer was made and acceptance was attained, which led to the formation of contract. However, in this case, Paul was the expert, who gave an advice to invest $100,000 in Sustainable Mining Pty Ltd. This advice was not based upon a statement of fact, but an opinion that this investment would not go wrong. So, a case of representation cannot be made, for the statement of opinion given by Paul. Hence, it is advised to Muriel to refrain from making a claim for misrepresentation against Paul. Moreover, as Max was not party to the contract which was formed between Paul and Muriel, she would not be able to bring claims against him. The most Muriel can do is make a claim against Paul for the negligent misstatement. Negligence can be stated a breach of duty of care, which results in harm to the party to which the duty was owed. A claim for negligence can be made only when the same has a direct causation between the injury and the breach of duty, and such an injury has to be foreseeable in nature (Harvey Marston, 2009). In order to create a valid claim for negligence, there has to be a presence of duty of care, which consequently has to be breached, and such breach has to result in loss or injury to the other party. Once, a successful claim is made for negligence, damages can be claimed upon by the aggrieved party (Gibson Fraser, 2014). In Donoghue v Stevenson [1932] UKHL 100, the manufacturer was held to have owed a duty of care towards the consumer and hence was held to be negligent (Latimer, 2012). In Caparo Industries plc v Dickman [1990] 2 AC 605, 618, foreseeability, proximity and fairness of liability were held to be a threefold test for establishing duty of care (Lunney Oliphant, 2013). Due to lack of foreseeability in Bolton v. Stone [1951] AC 850, [1951] 1 All ER 1078, damages were not awarded to the plaintiff (Swarb, 2016). In Paris v Stepney Borough Council [1951] AC 367, due to the Council being negligent in failing to provide protective gear to Paris, the Council had to compensate Paris for his loss of eye (Martin Lancer, 2013). There are certain defenses which can be made for safeguarding oneself against a claim of negligence and one of such defenses is contributory negligence. Under this defense, if an individual contributes to the injuries which have been received by him, the individual would be held as having being contributed towards his own injuries. And in such cases, the amount of damages awarded to him, would be reduced by the magnitude of his contributory negligence (Dongen, 2014). In Davies v Swan Motor Co [1949] 2 KB 291, the same was done and the damages of Davies were diminished (E-Law Resources, 2017c). In Raad v KTP Holdings Pty Ltd as Trustee for VM KTP Nguyen Family Trust [2016] NSW 2016 888, the damages were reduced by 10% (Devitt, 2016). A negligent misstatement is a claim which is initiated against an individual who makes such a statement which is not true or is false in nature and reliance has been made by the claimant on such statement, which results in a loss for the claimant. Reliance is a crucial clause for establishing a claim of negligent misstatement as was held in Hedley Byrne Co Ltd v Heller Partners Ltd [1964] AC 465 (Ward, 2010). Another tort in negligence is tort of battery, where an individual, knowingly hurts another person through an un-consented offensive or harmful contact. It is also known as tort of intentionally. To establish this, a degree of intention has to be present. However, the defense of consent or self defense can be used if a claim for tort of battery is made (Statsky, 2011). In the given case study, Reg was pestering the teenagers and wanted to use his skateboard on the park. Peter starts chasing Reg and when Reg runs away, Paul throws a tennis ball at Reg. As a result of this, she was hit on the head and rammed into Beryl, which led to her falling off, along with her baby from the pram. The tort of battery, in this case of Paul was apparent in this case. He intentionally threw a tennis ball at Reg, which resulted in the injuries to Beryl and the infant. Another can be made by Beryl against Paul and Ref for their negligent behavior which led to her injuries. Hence, it is advised to Beryl to initiate claims for damages against Paul for recovering the damages for both negligence and battery on part of Paul. However, a claim cannot be initiated by Muriel against either of Reg or Peter, for the nervous shock she experienced when she saw Beryl and her infant being injured. This is because for a claim to be made for negligence there has to be a direct causation and foreseeability in the loss. No one could have predicted that Muriel would have watched the incident and received the nervous shock, and there was a lack of direct causation between her nervous shock and negligence of Peter. Reg is one of the parties to the negligence, who contributed to the injuries which he received. So, he can make a claim against Peter for tort of battery and negligence, as due to actions of Peter, he was hit. But by running around and pestering the Peter, he contributed to his injuries and hence, the damages awarded to him would be reduced proportionately. Apart from the claims which can be initiated for a breach of duty or a breach of contract in form of monetary compensation, a claim can also be made for the emotional distress which has been caused as a result of the failure in fulfilling the promise which has been made. In the case of Baltic Shipping v Dillon High Court of Australia (1993) 176 CLR 344, the plaintiff was awarded damages for the emotional distress which was caused as a result of the belongings which the plaintiff lost (Holmes, 2017). On the basis of this principle, Muriel is advised to initiate claims against Peter for the emotional distress caused to her in form of her suffering from post-traumatic stress due to loss of her investment. To conclude the entire discussion, Muriel can make a claim against Peter for damages and mental distress caused, but a claim cannot be made against Max as he was not a party to contract, and also cannot be made against Peter or Reg due to lack of direct causation. Beryl and Reg can sue Peter for negligence and battery, and she can also sue Reg for negligence. And lastly, the amount of damages which Reg recovers from Peter would be reduced by his contributory negligence. References Abbott, K., Pendlebury, N., Wardman, K. (2007). Business Law (8th ed.). London: Thomson. Andrews, N. (2015). Contract Law (2nd ed.). UK: Cambridge University Press Ayres, I., Klass, G. (2012). Studies in Contract Law (8th ed.). New York: Foundation Press Clarke, P., Clarke, J (2016). Contract Law: Commentaries, Cases and Perspectives (3rd ed.). South Melbourne: Oxford University Press. Devitt, S. (2016). A slip up - shopping centre liable for slip and fall on wet tiles. Retrieved from: https://www.lexology.com/library/detail.aspx?g=bdcef724-3c2e-482d-9d74-540bc1a44d6c Dongen, E.V. (2014). Contributory Negligence: A Historical and Comparative Study. Boston: Brill Nijhoff. E-Law Resources. (2017a). Bisset v Wilkinson [1927] AC 177 Privy Council. Retrieved from: https://www.e-lawresources.co.uk/Bisset-v-Wilkinson.php E-Law Resources. (2017b). Esso Petroleum v Mardon [1976] QB 801 Court of Appeal. Retrieved from: https://www.e-lawresources.co.uk/Esso-Petroleum-v-Mardon.php E-Law Resources. (2017c). Davies v Swan Motor Co [1949] 2 KB 291 Court of Appeal. Retrieved from: https://www.e-lawresources.co.uk/Davies-v-Swan-Motor-Co.php Gibson, A., Fraser, D. (2014). Business Law 2014 (8th ed.). Melbourne: Pearson Education Australia. Harvey, B., Marston, J. (2009). Cases and Commentary on Tort (6th ed.). New York: Oxford University Press. Holmes, R. (2017). Mental Distress Damages For Breach Of Contract. Retrieved from: https://www.victoria.ac.nz/law/research/publications/vuwlr/prev-issues/pdf/vol-35-2004/issue-3/holmes.pdf Lambiris, M., Griffin, L. (2016). First Principles of Business Law 2016. Sydney: CCH. Latimer, P. (2012). Australian Business Law 2012 (31st ed.). Sydney, NSW: CCH Australia Limited. Lunney, M., Oliphant, K. (2013). Tort Law: Text and Materials (5th ed.). Oxford: Oxford University Press. Marson, J., Ferris, K. (2015). Business Law (4th ed.). Oxford: Oxford University Press. Martin, J., Lancer, D. (2013). AQA Law for AS Fifth Edition (5th ed.). Oxon: Hachette UK. Mulcahy, L. (2008). Contract Law in Perspective (5th ed.). Oxon: Routledge. Statsky, W.P. (2011). Essentials of Torts (3rd ed.). New York: Cengage Learning. Swarb. (2016). Bolton v Stone: HL 10 May 1951. Retrieved from: https://swarb.co.uk/bolton-v-stone-hl-10-may-1951/ Ward, P. (2010). Tort Law in Ireland. The Netherlands: Kluwer Law International.