Law Of Contract And Negligence: Essentials And Elements

Essentials of Law of Contract

A law of contract is a legal document which has the approval of law and which has forcibility of law. When two or more persons or the entities desire to enter into private affairs and intends to bind by the same then they can formulate a legal document and the parties are liable to comply with the contractual terms that are decided by them. (Latimer 2016)

Any contract that is established amid the parties can be formulated when all the essential components are complied with. The main essentials that are needed to form a contract are:

Offer – An offer is the statement or the proposal which is made by the offeror and communicated to the offeree wherein the offeror expresses his desires which he intends to be comply with by the offeree. An offer can be made either orally or in written form or by conduct. It is only when the offer so made reaches the offeree that a valid offer is made and is held in Carlill v Carbolic Smoke Ball Co(1893)

1. Acceptance – The offeree when after receiving the offer gives his approval without bringing any variations to the terms of the offer, then, it is an act of acceptance. An acceptance can be made orally, in written form or by conduct. It is necessary that the acceptance should reach the offeror to make it binding on the parties and is held in Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd(1988) 

• Legal intention – The parties who makes the contract must have the legal intonation, that is, they are willing to comply with the terms of the contract legally and enforce the contract in the court of law and is held in Balfour v Balfour[1919]

1. Consideration- When the promises are made amid the parties, then, it is necessary that the same must be combined with some form of benefit or gain which brings enforceability to the contract and is called consideration and is held in Dunton v Dunton(1892)
2. Capacity – The parties that are making promises must be capable, that is, they are not barred by any law and must be of sound mind.

Thus, these are the main contract essentials that are needed to establish a contract.

Now, whenever a contract is made amid the parties, then the contract can be verbal or written in nature: (Suff 1997)

1. Verbal contracts – The contract that are made by the offeror and the offeree orally are called verbal contracts. These contracts are also valid and enforceable provided all contractual elements are complying with.
2. Written contract – the contract which are in documentation or deed form are written contract. All the terms are made part of the document in textual form. The terms are easy to interpret as the same are not verbal and are in text form.

Whatever may be the form of the contract, the parties are liable to comply with the terms of the contract. Now, the terms of the contract are bifurcated depending upon the importance they hold in a contract.  That is: (Latimer 2016)

1. Condition – The terms which are the heart and soul of the contract are called conditions. These are the terms which are so relevant in the contract that if any party makes a default in complying with conditions, then, the soul and essence of the contract is loss and the contract stands no relevance.

If any condition is violated, then, the aggrieved party can cancel the contract and sue the defaulting party for damages and is held in Poussard v Spiers and Pond (1876).

1. Warranties – Those terms which are not the heart and soul of the contract and are only needed to provide assistant to the main terms of the contract. These terms are only needed for the proper functioning of the contract. If any party does not comply with these terms, then, the aggrieved party can only ask for damages and cannot cancel the contract and is held in Bettiniv Gye (1876).

• In-nominate terms – These are the terms which are not considered as a condition or a warranty but are considered as one deepening upon the importance it holds in a given situation. The consequences depends upon how a term is treated in any given situation and is held in Hong Kong FirShipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1961]. 

Now, a contract can be a standard form of contract. It is a kind of contract wherein the terms and conditions of the contract are not decided by the parties mutually, but it is one party to the contract that decides all the terms of the contract and gave an option to the other party to either confirm t the contract or just leave the same. There is no room for any kind of negotiations amid the parties. (Latimer 2016)

Now, whatever may be the form of contract, it is a settled law that once a contract is made it comes to an end. But, there is no one single manner in which a contract to an end. There are several methods that is: (Latimer 2016)

1. By performance – When the parties to the contract are able to achieve the purpose for which the contract is established amid the parties, then, the parties have performed their parts of the obligations and there is nothing left to do. Thus, a contract comes to an end by performance of the contract.
2. By agreement – At times before the contract purpose is achieved by the parties, the parties decide to cancel the contract. Then, in such situation the parties by entering into an agreement can decide to bring the contract to an end.

• By frustration – When the contract made amid the parties is valid and enforceable but because of some supervening event the compliance of the contract becomes impossible, then, the contract is considered to be ended on account of frustration. The parties are willing to perform the contract but are not able to perform because of impossibility.

1. Breach of contract – When one of the party to the contract does not comply with his contractual obligations, then, the non defaulting party has the power to terminate the contract on account of breach of contract.

Types of Contract

Thus, the formation of contract requires compliance of all contractual term but there are various other elements which must also be comply with so that the purpose of formulating the contract can be achieved.

The law of tort is a very prominent law that prevails in very country. One of the most promising laws that exist is the law of negligence. Negligence in simple words signifies failure to exercise appropriate care in certain circumstances.

In Australia, the law of negligence has its own place. The law of negligence simply submits that ‘a person should exercise reasonable care in their actions and take account of the potential harm that they might foreseeable cause to other people or property. In the leading case of Donoghue v Stevenson [1932] the law of negligence was developed. In Australia, the prevalence of the law of negligence was found in Grant v Australian Knitting Mills [1936] which was later retreated in Caparo Industries PLC v Dickman [1990]. (Latimer 2016)

The compilation of the results of all the leading cases has led to a conclusion that when any defendant carry out any action or omission, then, the law has imposed him with a duty that the defendant must make sure that no harm is caused to any plaintiff because of his actions and omission. The leading case has established that in order to consider that a defendant is negligent then  there are few basic elements which are needed to be comply with. The same are:

1. Duty of care – The duty of care signifies that when the defendant decides to take any action or omit any action then it is his duty that he must make sure that because of his acts no person should be harmed who is considered to be his neighbor. In the leading case Donoghue v Stevenson[1932] Lord Atkin has shed light on the concept of neighbor.

It is submitted that any person who is directly affected by the acts and omissions of the defendant is considered to be the neighbor of the defendant. Thus, any plaintiff is considered to be the neighbor of the defendant only when such plaintiff shares a relationship of proximity with the defendant. Thus, if the acts or omission affects the plaintiff directly then he can be the neighbor of the defendant otherwise not (Baar v Snowy Mountains Hydro-Electric Authority (1970).

Also, the defendant is not responsible to provide care to very neighbor of his, rather, it is held in MacPherson v. Buick Motor Co. (1916) that protection is only granted to such neighbors who can be reasonably foreseeable by the defendant.

1. Breach of the duty of care – It is also submitted that any defendant can be held to be negligent in his actions only when the duty of care that is imposed on the defendant is violated by him. The duty is said to be violated by the defendant only when the level of acre that is expected in the given situation is not met by the defendant. The level of care falls short when the care that taken by the defendant is not what a reasonable man will do in the similar situation, the level of care varies on the situation, that is if the plaintiff is old or a child then the degree of care is high; if the gravity of risk is high then the care is high and vice versa. Thus, if the defendant falls short of the care that is expected from him then there is breach on the part of the defendant (Bonnington Casting v Wardlaw(1956).

• Damages – Once a breach is incurred by the defendant, then, the defendant is held to be negligent only when there is some kind of damages that is caused to the plaintiff. It is not for every damage the defendant is held to be accountable. The defendant is accountable only for those kinds of damages that are reasonably foreseeable by the defendant. if the damages that are caused to the plaintiff are too remote and is of such a nature that no reasonable man can predict the incurrence of such kind of los, then, the loss I remote in nature and the defendant is jolt liable for such kinds of losses.

Also, the defendant can be held liable for the losses that are caused to the plaintiff because of the acts and omissions of the defendant. Thus, the cause because of which loss is caused to the plaintiff is because of defendant’s acts and omission. If the loss is caused is because of any other reasons, then, the defendant cannot be said to have inflicted damage upon the plaintiff.

It is the duty of the plaintiff that all the elements of the negligent must be proved against the defendant in order to hold him liable under the law of negligence.

However, the law of negligence has also granted protection to the defendants. If the defendant can prove that the loss that is caused to the plaintiff is not because of the negligence of the defendant alone, but the loss is caused because the plaintiff is also negligent, then, the defendant can rely on contributory negligence. Also, if the loss that is caused to the plaintiff voluntary, that is, the defendant has notified the plaintiff of the loss, then, the defendant ca protect himself under the defense of voleti non fit injuria.

So, the law of negligence is very important and proper care should be applied to make sure that all the elements are met to hold a defendant negligent in his actions.

Reference List

Books/Articles/Journals

 Latimer, P 2016, Australian Business Law 2016, Oxford University Press.

Suff, M 1997, Essential Contract Law, Cavendish Publishing. 

Case Laws

Balfour v Balfour [1919];

Baar v Snowy Mountains Hydro-Electric Authority (1970)

Bettini v Gye (1876) 1 QBD 183;

Bonnington Casting v Wardlaw (1956).

Carlill v Carbolic Smoke Ball Co (1893);

Caparo Industries PLC v Dickman [1990] UKHL 2

Donoghue v Stevenson [1932];

Dunton v Dunton (1892)

Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) ;

Grant v Australian Knitting Mills [1936]

Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1961] EWCA Civ 7;

MacPherson v. Buick Motor Co. (1916)

Poussard v Spiers and Pond (1876) 1 QBD 410