Aspect of Contract & Negligence in Business
Aspects of Contract and Negligence for Business
The aim of this brief article is to set out some key aspects of contract and the tort of negligence using the following headings:
• The relationship between the parties
• The nature of the obligation
• Causation and remoteness of damage
• The measure of damages.
Using the same headings should remind you of the key aspects of each of the two areas in such a way that you are less likely to confuse them. (The words ‘contract’ and ‘negligence’ are deliberately repeated in each heading so that you get into the habit of distinguishing between the rules for each area, rather than having a general set of notes on, say, remoteness of damage, which confuses material from both areas.)
KEY ASPECTS OF THE LAW OF CONTRACT
Contract – the relationship between the parties
A contract is a legally binding agreement formed by the mutual consent of the parties. The parties may be known to each other, as with a client and an accountant, or they may be strangers, as with a software company and a person who downloads and installs the software. In either case, there is a clear relationship between the parties and this relationship is both formed and governed by the contract. (The rules governing the formation and content of contracts are set out in syllabus areas B1 and B2 of Paper F4 (ENG) syllabus.)
Contract – the nature of the obligation
In a contractual relationship, the nature of the obligation is determined by the terms of the contract. By entering into the contract, the parties agree to accept the resulting obligations. That is not to say that there is complete freedom of contract, since certain contractual terms may be restricted by statute – for example, under the Unfair Contract Terms Act 1977. Nevertheless, in order for a contract to be binding, the parties must intend to create legal relations and their contractual obligations are based on mutual consent.
Contract – causation and remoteness of damage
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The aim of this brief article is to set out some key aspects of contract and the tort of negligence using the following headings:
• The relationship between the parties
• The nature of the obligation
• Causation and remoteness of damage
• The measure of damages.
Using the same headings should remind you of the key aspects of each of the two areas in such a way that you are less likely to confuse them. (The words ‘contract’ and ‘negligence’ are deliberately repeated in each heading so that you get into the habit of distinguishing between the rules for each area, rather than having a general set of notes on, say, remoteness of damage, which confuses material from both areas.)
KEY ASPECTS OF THE LAW OF CONTRACT
Contract – the relationship between the parties
A contract is a legally binding agreement formed by the mutual consent of the parties. The parties may be known to each other, as with a client and an accountant, or they may be strangers, as with a software company and a person who downloads and installs the software. In either case, there is a clear relationship between the parties and this relationship is both formed and governed by the contract. (The rules governing the formation and content of contracts are set out in syllabus areas B1 and B2 of Paper F4 (ENG) syllabus.)
Contract – the nature of the obligation
In a contractual relationship, the nature of the obligation is determined by the terms of the contract. By entering into the contract, the parties agree to accept the resulting obligations. That is not to say that there is complete freedom of contract, since certain contractual terms may be restricted by statute – for example, under the Unfair Contract Terms Act 1977. Nevertheless, in order for a contract to be binding, the parties must intend to create legal relations and their contractual obligations are based on mutual consent.
Contract – causation and remoteness of damage
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