Contracts and Negligence Assignment

Topics: Contract, Tort, Negligence Pages: 27 (8965 words) Published: December 3, 2014

Submission Front Sheet
Assignment Code:AB168B5
Programme:BTEC Higher National Diploma in Business (Marketing) Unit Title and Number:Aspects of Contract and Negligence for Business (Unit 5) QFC Level and Credit value:4; 15 credits; Unit code: ; Unit code: Y/601/0563 Module Tutor:Tabassum Ferdous
Date Set:16th September 2014
Name:Adeyinka Adedoyin
Registration No.:21834

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Q. 1.1
A Contract is an agreement that is obligatory when imposed or acknowledged by law. (Peel, 2010). An agreement is a contract when forged with the willing approval of those involved in the contract, for a legal consideration and with a legitimate object, and not hereby expressly declared to be void (Malaysian Contracts Act, 1950). Contracts can either be Bilateral or Unilateral. Bilateral Contract is an agreement where a promise is exchanged for a promise. For instance, contract for the sale of goods is a bilateral contract. The purchaser promised to purchase the goods, in return for the seller’s promise to supply the goods.

Figure 1
Source: The above shows both sides promise to do something
Unilateral Contract occurs where just one person makes a promise open and available to anyone who performs the required action. For example: “collecting the reward such as £100 for a lost document or pet” is unilateral contract.

Figure 2 Source: The above shows only one side promises
Contract can also be oral or written. Furthermore in order for a contract to be valid the offer and acceptance criteria must be met. The lawfully acceptable method for a contract to be binding is illustrated in the diagram below. This is known as Formation of Contract.  Figure 3 Source: (

A Contract comprises of six important elements before it becomes valid and these are; Offer, Acceptance, Consideration, Intention to create Legal relation, Certainty and Capacity. If a single one of elements mentioned above is missing, the agreed contract will become illegal. The main elements are explained below:

This is the first element in a valid contract. According to Peel (2010) an offer is “an expression of willingness to contract on specified terms, made with the intention that it becomes binding once it is accepted by the person to whom it is addressed”. An offer must be communicated and should be explicit. The person putting up the offer is referred to as offeror whilst the individual who receives the bid (offer) is referred to as the offeree. However, an offer must be distinguished from invitation to treat. There are two cases to be considered here. One case is Gibson v Manchester City Council (1979) Mr Gibson was sent a letter that informed him the council ‘may be prepared to sell the property to him for £2,180 freehold”. The City Treasurer stated in his letter that “This letter should not be regarded as firm offer of a mortgage”. Included in the letter was the instruction on how to complete and return the enclosed application form to make a formal request to purchase the property. Mr Gibson did as he was requested but because of unanticipated change in political leadership of the council, the proposed action to sell houses to tenants was changed and Mr Gibson was notified accordingly that it would no longer be possible for him to buy the house. Initially the Court of Appeal affirmed there was a binding contract between the the council and Mr Gibson but the verdict got over ruled on appeal to the House of Lords. The outcome of the judgement states that the first note forwarded by the Council was not an offer to sell...

Bibliography: Contract of Formation (Bordahandy, Dr P-J, Contracts A Lecture 2, 2009, slide 32).
Chartered Institute of Taxation (2013) Essential Law for Tax Practitioners 3rd ed BPP Learning Media
Cracknell, D. G. (2001) Contract, Tort and Remedies 2nd ed Old Bailey Press
The Times, London, January 16, 1947, Law Report, January 15, 1947, High Court of Justice
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