Unit 48:            Law of Contract and Tort

Unit code         M/617/0738

Unit level         5

Credit value     15

Pre-requisite    Unit 7

Introduction

The aim of this unit is to provide students with the knowledge and understanding of the essential elements of a valid contract and the principles of the tort of negligence. The unit identifies essential elements of an enforceable contract and the situations wherein the law requires the contract to be in a particular form. It discusses how the law determines whether negotiating parties reached an agreement and further, when the parties will be regarded as intending the agreement to be legally binding. Students will be able to identify the key terms and conditions to be found in a business contract. The unit investigates the importance of classification of terms and how they are established.

Student experiences in this unit will help them to better understand the duty of care in general and especially for businesses. They will be able to illustrate the impact of tort on normal business operations and the role of modern law of negligence such as, professional negligence in providing services to clients.

On completion of this unit, students will gain an understanding of appropriate remedies to contracts which have been discharged by breach and how the law attempts to compensate for harm done by awarding damages to given situations in tort. Students will then explore the appropriate remedies to contract and tort in the business scenario using examples of decided cases.

Learning Outcomes and Assessment Criteria

Learning Outcomes

By the end of this unit students will be able to:

1.    Examine the essential elements of a valid contract.

2.    Discuss how the contents and the terms of contract are established.

3.    Illustrate the impact of contractual breakdown and suggest remedies available for breach.

4.    Evaluate the elements of tort of negligence and remedies available.

Essential content

LO1 Examine the essential elements of a valid contract

Contracts and Agreements:

·         Definition of a contract.

·         The defining aspects of law of contract e.g. relationships, obligations, measure of damage and remoteness of damages.

·         Contractual relationships e.g. third party contracts.

The elements of a valid contract:

·         The offer: revocation of offer, counter offer, lapse of offer, meeting of minds.

·         Acceptance: acceptance, subject to contract, intention that the agreement should be legally binding.

·         Consideration: Meaning and requirement in English law, types of consideration, past consideration, a promise to perform an existing obligation and public duty, and consideration in deeds.

Capacity and legality:

·         General rule, corporate capacity to contract, ultra-vires rule, void, voidable and illegal contracts.

LO2 Discuss how the contents and the terms of contract are established

Incorporation of terms:

·         By actual notice, signature, reasonable notice, cause of previous dealings.

Express and implied terms:

·         The differences between expressed and implied terms.

·         Express terms are agreed by parties. Implied terms by courts, by law.

·         Example of application e.g. Consumer Rights Act (2015), seller has the right to sell, description, bulk and sample, satisfactory quality.

The status of contractual terms:

·         Conditions, warranty, how to determine the status of contractual terms, exemption clauses and unfair contract terms.

·         LO3 Illustrate the impact of contractual breakdown and suggest remedies available for breach

Performance of contract:

·         Definition of performance contract.

·         Different types of performance e.g. actual partial performance, substantial Exceptions, divisible contract, valid reasons for non-performance.

Breach and types of breach:

·         Meaning of breach, serious breach and the different types of breaches necessary to cause contractual breakdown.

Remedies for breach of contract:

·         Different types of remedies e.g. discharge for breach, consumer cases, non- monetary remedies, payment of the price, damages for breach, remoteness and causation, measure, mitigation by claimant and contributory negligence.

LO4 Evaluate the elements of tort of negligence and remedies available

Tort as a civil wrong and negligence:

·         Definition of tort and tort of negligence, essential elements such as duty to take care, circumstances required to establish negligence, breach, causation and remoteness, defences in tort.

·         From Donoghue vs. Stevenson, to Carpro case – history of the duty of care with decided cases.

·         The influence of tort in similar areas e.g. Consumer Protection and Occupiers Liability.

Breach of duty and damages caused by negligence:

·         The standard of duty to take care, reasonable care, higher duties such as towards vulnerable victims and children. Damages, personal injury, damage to property, financial loss connected to personal injury.

·         Liability for defective products: consumer protection measures and statutory protection under sale of goods.

Professional negligence:

·         Breach of duty of care between professionals and clients.

·         Hedley Byrne Principle and awarding economics loss to the client