Contractual Aspects and Business Negligence: Application in Business

Contractual Aspects and Business Negligence: Application in Business Context

LO1 Understand the essential elements of a valid contract in a business context

Assessment criteria for pass
The learner can: 1.1 explain the importance of the essential elements required for the formation of a valid contract 1.2 discuss the impact of different types of contract 1.3 analyse terms in contracts with reference to their meaning and effect 2.1 apply the elements of contract in given business scenarios 2.2 apply the law on terms in different contracts 2.3 evaluate the effect of different terms in given contracts 3.1 contrast liability in tort with contractual liability 3.2 explain the nature of liability in negligence 3.3 explain how a business can be vicariously liable 4.1 apply the elements of the tort of negligence and defences in different business situations 4.2 apply the elements of vicarious liability in given business situations.

LO2 Be able to apply the elements of a contract in business situations LO3 Understand principles of liability in negligence in business activities LO4 Be able to apply principles of liability in negligence in business situations

Learner declaration I certify that the work submitted for this assignment is my own and research sources are fully acknowledged. Student signature: Date:

Contractual Aspects and Business Negligence: Application in Business Context
You have recently assumed the position of a management trainee at Green Pharma Plc, one of the major British pharmaceutical companies. The company is committed to its customers worldwide to deliver the safest products at the most competitive prices. Green Pharma has got numerous contracts with its vendors, suppliers, employees, banks and other external parties. You are given the responsibility to handle the legal department to make sure Green Pharma is doing everything according to the codes of law. Accordingly, the case presents a number of scenarios/tasks designed to ensure that you have met all the learning outcome targets.

Task 1: Elements of Valid Business Contracts
Q1.1: What are the essential elements of forming a valid contract? Explain the importance of each element by providing relevant legal principles derived from decided cases. 275 words

Q1.2: Describe different types of contract usually undergone in business context. Critically analyze the legal impact of distance selling contract. 125 words

Q1.3: Analyse the contrasting aspects of different kind of terms generally used in a commercial contract. ‘Implied terms are more sensitive to deal with than express terms in a business contract’ – how far would you agree with this comment? 200 words

Task 2: Application of Contracts in Business Situations
Q2.1: (a) Green Pharma put an advertisement in a trade journal stating: ‘for the wholesale buyers only, our ‘new moisturizing creams’ are now at a special low price of £10 per dozen.’ Mr Khan, one of Green Pharma’s trusted vendors, rushed to one of your show room and wanted to place a large order. Meanwhile the company made a new decision not to sell the creams any more. Mr Khan became cross and he wished to pursue a legal action against the company. Advice Green Pharma about the possible legal consequence. Justify your comments with reference to similar case precedents. 125 words (b) You work into the night to complete ‘an important report’ for your immediate boss, Tania. Tania is very pleased with the report and says ‘I know you have worked very hard on this, I will make sure there’s an extra £200 in your pay at the end of the month. Can you enforce this promise?

100 words

(c) Joe works in the purchase department of Green Pharma. He lives near to you. By an agreement he provides you with a lift to work in return for a contribution towards the petrol. Would this contract be legally enforceable? Justify your answer with legal arguments. 75 words


Alban is the business development manager of Green Pharma. Four months ago he bought a

‘Landmaster’ car from Brenda’s Garage Ltd for use in his business activities. He paid £12,500 for the car and was given a written guarantee in the following terms. ‘Brenda’s Garage Ltd guarantees that, for three months from the date of purchase, it will put right free of charge any defects in the vehicle which cannot be discovered on proper examination at the time of purchase. Thereafter all work and materials will be charged to the customer.’ The sales manager recommended to Alban that he should take out the ‘special extended warranty’ under which, for payment of £350, the car would have been guaranteed in respect of all defects for a further two years, but Alban declined.

Last week the engine and gearbox seized up. The repairs will cost £2,000. Advise Alban. Would your answer differ if he bought the car only for his personal use? 200 words

Q2.3: Explain the effects of the following in the running of a Pharmaceutical company such as Green Pharma: a) breach of conditions, warranty and innominate terms, b) Legality of exemption clauses. Please include relevant examples to explain different aspects of the terms. 200 words

Task 3: Principles of Liability in Business Negligence
Q3.1: In what aspects, liabilities in tort are different from contractual liabilities? Give examples of ‘duty of care’ in the context of some day- to- day situations. Explain the concept of ‘causation’ and ‘remoteness’ in the tort of negligence. 220 words

Q3.2: Explain the nature of liability in negligence by giving reference to different scenarios. 125 words

Q3.3: Explain the legal requirements to hold employers vicariously liable for the torts committed by their employees. 175 words

Task 4: Application of Principles of Liability in Business Situations

Q4.1: By applying the relevant legal principles answer the following: (a) What is the level of duty of care to be shown by (1) a learner driver (2) a Chinese herbal doctor working in England and (3) Junior doctor in a hospital? 125 words

(b) Green Pharma engages Mr Ken, a local electrician, to rewire its office. Two weeks later Leo, a visitor, is electrocuted. Discuss Green Pharma’s liability in tort. Would your answer differ if Green Pharma put the following notice at the entrance: ‘Persons entering these premises do so at their own risk’? 125 words

Q4.2: (a) John is a van driver employed by Green pharma. While on his rounds, he stops to collect his own television from a repair shop. He parks his van carelessly and it moves off, injuring Kelly, a pedestrian. Is Green Pharma vicariously liable? 100 words (b) Robert, who is a security guard in Green Pharma’s head office, has been encouraged by the company to keep order by force – if necessary. One night he grabbed one Mr Mattis on suspicion and stabbed him in the back. Discuss the potential vicarious liability of Green Pharma. 100 words —End of assignment—