Aspects of the Law of Contract Assignment

Qualification - BTEC Higher National Diploma in Business (Marketing)

Unit Number and Title - Unit 22 Aspects of Contract and Negligence for Business

QCF Level - Level 4

Unit Code: F/601/1271

Task 1

In this task you will be required to demonstrate knowledge and understanding about essential elements of a valid contract, discuss different types of contract and be able to analyse the impact and effect of various terms used in contracts.

Peter Abraham is looking to set up as a self-employed building contractor. He is aware that he could be sued for damages for breach of contract but has very little knowledge and unsure about formation of contracts or the effect of terms used in contracts. As a friend he has approached you to get further clarity as he knows you are studying Aspects of Contract.

LO1 (AC1.1 AC and AC 1.3)
You are required to

1.1 Explain to peter Abraham how a contract is formed and the importance of the various elements Present to form a contract.

1.2 Discuss the Impect of forming contracts (as it may apply to peter Abraham) by means of Conclusions and recommendations. This assists in the assessment of the learner's ability to apply to the real world the tools and techniques of analysis which they have learnt. The case serves as a supplement to the theoretical knowledge imparted through the course work.

LO2 (AC2.1, AC2.2 and AC2.3)

2.1 Apply the elements of contract in the given business scenarios below (Cases 1 and 2);

Case 1 - Agreement

Carol's student apartment was unfurnished. She perused Gumtree, an online classified ad and saw this advertisement: "Moving. For sale: a very nice brown leather couch, almost new, £600." There was an accompanying photo and contact information. Carol e-mailed the contact, saying she wanted to buy the couch. Does Carol have a contract with the seller? Explain using cases and for statutes to support your answer

Case 2 - Consideration

Preston's son, Devi, was seeking -a cyl3er-securit3r positio% with George, Smith & Fogarty, Inc., a large IT firm. Devi was independent and wished no interference by his well-known father. The firm, after several weeks' deliberation, decided to hire Devi. They made him an offer on April 12, 2015, and Devi accepted. Preston, unaware that his son had been hired and concerned that he might not be, mailed a letter to George on April 13 in which he promised to give the IT firm £150,000 contract if the firm would hire his son. The letter was received by George, and the firm wishes to enforce it against Preston. Can George enforce the promise? Why? Explain using cases and for statutes to support your answer

2.2 Apply the business law on terms in the following contracts (Class 3 and 4)

Case 3 - Exclusion clause
A couple booked a table at a popular London restaurant. At the entrance to the restaurant the man handed over his over coat which contained his wallet with £500 inside. The porter gave the man a receipt which has on the back an exclusion clause that states "all valuables must be removed from the jacket pockets as the restaurant will not be held responsible for items missing or stolen". As the man was about to make payment for the meal he realises his wallet was left in the over coat and went to collect it. He then realised the money has been taken from the wallet which he sought to recover from the restaurant. The restaurant is refusing to refund the man stating that there was a clear notice on the back of the receipt which excludes them from any liability. Can the restaurant rely on the exclusion clause contained on the receipt? Explain using cases and /or statutes to support your answer

Case 4 - Implied term

Aaron rented a warehouse from Zehphra which had not been occupied for a long period and had fallen into disrepair. Aaron made significant improvement to the warehouse. Zehphra promised Aaron that he will not increase the rent for the next 5 years. After a year Zehphra died by then the value of the property have increased in value partly due to the repairs carried out by Aaron. Yeti inherited the property and immediately increased the rent. Aaron refused to accept the increase claiming that Zehphra promised the rent will not increase for a 5 year period. Yeti terminated the tenancy and Aaron has now submitted a bill claiming compensation for his expenses. Yeti is refusing to pay stating there was nothing in the tenancy agreement stating that such compensation was payable. Is Aaron entitled to a compensation? Explain using cases and for statutes to support your answer

2.3 Evaluate the effect of different terms in the given contracts (Class 5 and 6)

Case 5

The policyholder applied for motor insurance. The proposal form asked: "Have you or anyone who will drive been involved in any motor accidents or made a claim (fault or non fault including thefts) during the last five years-" His answer was "No."

When the policyholder's car was stolen, the insurer learnt that he had made a theft claim under his previous motor policy within the five year period. The insurer voided the policy from its start date and rejected the policyholder's claim. The policyholder argued that he did not have to disclose his previous theft claim because the insurer concerned had decided not to meet it. Is the insurance right to void the policy?

Case 6
The policyholder applied for motor insurance, answering "no" to the following two questions on the proposal form: "Has the car been altered/modified from the maker's specification (including the addition of optional fit accessories such as spoilers, skirts, alloy wheels etc.)"

"Have YOU or ANY PERSON who will drive during the past five years been involved in any accident or loss (irrespective of blame and of whether a claim resulted)-"

When the insurer investigated a new claim, it came to light that the car had been fitted with oversized alloy wheels, spoilers, and chrome wheel arches, and that the policyholder's husband, a named driver on the policy, had made two significant claims in the previous five years. The insurer refused to meet the claim and cancelled the policy from its start date.

The policyholder stated that she had bought the car with the all the modifications already fitted, and she assumed they were all part of the car's original specification. She further explained that she did not realise her husband had made one of the two earlier claims, and that his other claim had been rejected because he had only third party cover at the time. Is the insurance right to void the policy from the start date?

TASK 3- Vocational scenario
LO3 (AC3.1, AC3.2 and AC3.3)

You are required to:

3.1 Explain the similarities and differences (contrast) of liability in tort with contractual liability using an Example.

3.2 Explain using suitable example how liability for negligence can arise and the conditions needed to be met for a claimant to successfully prove negligence.

3.3 Explain what vicarious liability means and how a business such as your organisation can become vicariously liable giving example.

TASK 4- Case studies

LO4 (AC4.1 and AC4.2)
You are required to:
4.1 Apply the elements of the tort of negligence and defences in the given business scenario below;
4.2 Apply the elements of vicarious liability in given business situations below (Cases 8 and 9);

Case 8
A driver working for an executive chauffeur company was sent to pick up a client at the airport. While waiting for the flight to arrive the driver decides to have few glasses of alcohol. On his way from the airport to the client's hotel he crashed into a lamp post and the client suffered serious injury. The investigation concluded that the driver was over the drink driving limit.

The client is now suing the chauffeur company. Is the chauffeur company liable for the driver's negligence?
Explain using cases and /or statutes to support your answer

Case 9
Mr Jones, of Billericay in Essex, was works as delivery driver for a supermarket. One morning while loading pallets into his truck he slipped on the tail gate and the pallet fell over and injured another colleague. The injury was so severe that the colleague was left with a torn rotator cuff which required surgery and months of rehabilitation with a physiotherapist. The colleague is now suing the supermarket for damages. The supermarket is arguing that, at the time of the accident, responsibility for health and safety had been delegated to another company.

Explain using cases and /or statutes to support your answer whether the supermarket is or is not responsible Specific terms: contents of standard form business contracts; analysis of express terms, implied terms and exclusion clauses in a given contract

Effect of terms: breach of condition, warranty and innominate terms; legality of exemption clauses; outline of remedies; damages.







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QCF Level - Level 4

Unit Code: F/601/1271


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