1a.) The four main components of a contract are: offer, acceptance, consideration and intention of legal consequences. The offer is considered complete if it states in definite terms of the agreement and it must be communicated to the offeree. The offer should not only include any estimation, manifestations of interest, requests for proposals or letters of intent. The offer is different from an invitation to treat such as advertisements and shop displays where the invitation to treat is inviting an offer to be made (Richards, 2009). In this given case, the offer was made through an advertisement in several newspapers which informs the public that there is reward of $100,000 being offered by the government for information that will be provided to the Customs and Excise department to prevent illegal import of ivory products by convicting persons without license to import ivory products in the country. Hence, the fact that Dave sees the advertisement and reported Ellen to be a suspect for smuggling ivory products from South East Asia only three months after the advertisement in the newspaper means that the offer no longer exists. He informs the Customs and Excise department immediately. After giving the information to the department, the Customs officer thanks him but tells him that the government will no longer pay any reward since last month. The advertisement that Dave sees is from a magazine published 3 months ago. In effect, the advertisement in the newspaper is merely inviting an offer to be made (Richards, 2009). The offer will lapse after the period to make an acceptance has expired or when the offer is withdrawn before the offeree makes an acceptance; and after the lapse of a reasonable amount of time depending on the circumstances. The offer and acceptance must correspond to each other which refer to the fact that the acceptance must be unconditional and unqualified.
The contract should have a consideration or price which in order to enforce the promise made by the parties. Consideration is defined as the price that was agreed upon by the parties to fulfill to promise to each other that is usually payment of money or anything of value. Consideration includes the promise not to perform a certain act, or the prohibition to exercise a particular right (Walston-Dunham, 2011). In this particular case, although the reward of $100,000 was clearly stated in the advertisement, in effect, the government was only making an invitation to make an offer to any informant of suspected smugglers of ivory products.
1.b.) To make the contract valid, the law shall require the parties to enter a binding agreement where the parties have intended to establish legal relations with the understanding that such agreement is enforceable under the law. In this given case, the government has the intention to establish legal relations after it made an offer of $100,000 as a reward to the informant of any suspect who may be smuggling ivory products through an advertisement in the newspaper. However, it was also shown that at the time Dave reported that Ellen was a suspected smuggler of ivory or three months after seeing the advertisement, the offer of the government had already lapsed one month ago. Hence, it can be clearly shown that the government had no longer intended to establish legal relations to any party. It bears stressing that the act of the government in posting the advertisement in the newspaper signifies that its intention to make an offer. Since the newspaper advertisement already expired, the offer no longer exists.
2a.) The exclusion clause is the term of the contract which attempts to exclude or restrict one party’s liability which he will owe to the other party (Chandler and Brown, 2007). The exclusion clause serves as a pre-contractual notice to the other party before a contract is entered into. The exclusion clause must be drawn to the attention of the other party before or at the time the agreement is entered by the parties. The court shall preserve the maximum discretion in determining the moment of completion of the contract by the parties. The document which contains the exclusion clause must be one which a reasonable man expects to be included in the terms of the agreement (Chandler and Brown, 2007). In this given scenario, the coupon is an example of an exclusion clause. The effect a valid exclusion clause generally limits and negates the liability of one of the parties as long as it has been expressly provided in the terms of the contract. The exclusion clause will eliminate the possibility of any incident that will otherwise constitute a breach. The exclusion clause will define the obligation of the parties and will guide the parties in the assessment of the obligations and to determine whether an actionable breach has taken place. Under normal circumstances, the exclusion clause will limit the amount of compensation that is due by that party who committed the breach or for related liabilities, such as negligence (Elliot and Quinn, 2009). The exclusion clause acts will also serve as a defence to a cause of action that had already accrued between the parties to a contract. In this given scenario, Alvin experience vomiting and diarrhea after going to the Sea Restaurant after he purchased the dinner coupon which has an exclusion clause that stated that Sea Restaurant will not be liable for for any injury, loss or damage caused to any person in relation to the use of the coupon that may have occurred while dining at restaurant. Hence, it the exclusion clause was already made known to Alvin before he bought the coupon and was aware of the limited liability of the restaurant in case an injury, loss or damage would have occurred to third parties.
2b.) A “standard form contract” is also known as a contract of adhesion or boilerplate contract (Elliot and Quinn, 2009).) The standard form contract is an agreement entered between two parties, wherein the terms and conditions of such agreement has been prepared by only one of the parties, and the other party does not have the capability to negotiate for more beneficial terms in his or her favor, and is left in a “take it or leave it” standing (Adams, 2009). Some of the common forms of standard form agreement include insurance policies and contracts entered with government agencies. In insurance policies, it will be the insurer who shall determine what will constitute the insurable interest based on the language of the contract. In contracts that are entered between government agencies, there are specific clauses in the agreement which must be governed by a law, statute and regulation. These types of contracts cannot be considered as unlawful for the reason that unconscionability may arise. However, in order to remove any ambiguity and vagueness in the contract, the issue will be resolved against the offeror or the party who drafted the terms of the agreement (Richards, 2009).
The standard form contracts should be regulated by laws and statutes in order to avoid abuse of parties and to protect the interest of the innocent parties. This will avoid any unjust enrichment on the part of the offeror, wherein the offeree is left in a “take it or leave it” position. This is applicable in the case of the seller who has the tendency to avoid any liability or alter the terms or terminate the agreement unilaterally, without justifiable cause in his or her favor, causing loss, damage and injury to the buyer. Hence, standard form contracts should be regulated.
2c.) The courts and the statutes will guarantee that exclusion clauses are fair and reasonable by making sure that the parties shall abide by Section 11(1) of the Unfair Contract Terms of 1977, which states that a clause will be considered as unreasonable unless the term or condition has been reasonable that had been intended by the parties and that has been reasonably known to them at the time the contract was executed. The contracts had considered several factors to determine whether an exclusion clause is reasonable such as: the respective bargaining power of the parties; the extent to which the clause was freely negotiated; the access and use of the parties to a free legal advice; the extent to which the effect of the exclusion clause has been explained to the parties (Hanson, 2008).
Chandler and Brown (2007) stated that the Unfair Contract Terms Act of 1977 has three broad areas of control but does not interfere with the common law that deals with the exclusion clause in the contract. This can be illustrated first by the exclusion of liability for negligence; Secondly, the general control of exclusion clauses seeks to restrict the liability or accountability of one party for breaching the contract; and lastly, the control over specific terms contained in a statute such as the sale of goods and the supply of products (Chandler and Brown, 2007).
2d.) Sea Restaurant will be able to rely on this exclusion clause provided that it will be able to establish that it has taken reasonable efforts to avoid the loss, damage or injury to the clients. If it was proven that the restaurant was negligent in preparation of the food based on the unsanitary condition of its kitchen, which caused the contamination of the food that led to the diarrhea of Alvin, it cannot rely on the exclusion clause.
3a.) Tort of negligence is an actionable wrong that is filed by the plaintiff against the defendant for a breach of legal duty to take care resulting to damage. In order to be able to successfully file a claim, there are four elements that must be proven by the plaintiff. First is by presenting proof that defendant owed a duty of care to the plaintiff; Second, the plaintiff must establish by evidence that the defendant breached the duty of care; and Third, the plaintiff has burden to show that he or she has suffered damage for failure of the defendant to observe the breach of duty of care that constitutes as a breach; and Fourth, the damage is both direct and foreseeable (Elliot and Quinn, 2009).) Under the English law, the law of tort of negligence or the concept of “restitution” is to provide compensation to the plaintiff for the injuries he or she suffered on the account of the failure of the defendant to fulfill the standard of care required by law (Richards, 2009).
The duty of care on the part of the defendant is based on the concept of “tort” which means that every person has the obligation to treat his neighbors with love and respect to avoid causing them any injury or damage. Negligence refers to the lack of concern for the probable consequences of an act or the failure to act as a person of ordinary prudence would have in conducting its affairs. It has been well-established since 1932 that the tort of negligence contains an ethical junction which supports the principle “Take care not to injure your neighbor”. This neighbor principle means that one must take reasonable care to avoid acts omissions which are reasonably foreseen to injure another person. This can be illustrated in the case where negligent manufacturers of dangerously defective products causing damage or personal injury to the consumers shall be held liable for such damage or injury.
The duty of care can be established by using the two tests; First is test of reasonableness; and Second is proximity. This is based on the “neighbor principle” on the basis of reasonable foresight on the part of the defendant. In order to successfully file a claim for negligence, the claimant must be able to establish the following essential elements which include: 1.) The duty of care that the is owed to that person by the defendant; 2.) The defendant breached that duty; and 3.) There must be a causative link between the breach of the duty and the injury or harm brought to the claimant (Cooke, 2009).
The breach on the part of the defendant can be established by the test applying five elements: First, the probability of harm; Second, the seriousness of possible injury; Third, the costs and opportunities of reducing or avoiding the risk; Fourth, the value of the defendant’s conduct; and Fifth is the conformity with established standards. In the first test, it is imperative that the defendant or manufacturer was able to foresee that greater the risk of harm or injury that could have been the result of the circumstances ; Second, the is a higher probability that some serious injury will arise in due to the circumstances that occurred; Third, the cost and difficulty of avoiding the risk is small and the actual risk is great, then it can be concluded that there is a higher chance that a breach if remedial action was not taken by the defendant ; Fourth, there is lesser social or economic value of the defendant's conduct the higher probability that the breach in the standard of care could have taken place; and Fifth, the conduct of defendant is in conformity with established standards in any trade or profession will justify that reasonable care was performed in the conduct of defendant (Elliot and Quinn, 2009).
This concept was discussed in the landmark case of Donoghue vs. Stevenson, which had established the general principle of liability for unintended harm, or later was called the duty of care. It was also referred to as the “neighbor principle” wherein one man owes a duty of care to another even there is no contractual obligation between them (Block and Hostettler, 2002). To be able to file a successful claim for negligence, the plaintiff has to prove that the defendant has breached the duty of care for which he or she suffered loss, damage or injury for the negligence committed by the defendant. Such as in the case of Donoghue, the manufacturer has the obligation to determine whether a reasonable foreseeable risk existed, by resolving whether harm or injury could be caused to the consumer. If the product is defective due to the negligent action of the manufacturer of the goods, liability of negligence may arise. The determining factor will be the act of manufacturer that shall be tested if has been tainted with carelessness resulting to negligence. In addition, there is a need to identify if the manufacturer has parted with his or her product by taking necessary steps to ensure that the product was safely sealed and packaged in the container, until the final point where the product shall reach the consumers and the container is opened by them.
In the case of Donoghue v. Stevenson, the court ruled that causation can be determined by the defendant’s act or omission to prevent or cause injury or loss to the plaintiff. Here, the key factor that shall determine the relation to causation is the act of the restaurant owner or the conduct of the defendant in giving the cause for the plaintiff to suffer the damage, injury or loss. It is evident that Alvin would not have suffered diarrhea if the restaurant was careful in the preparation of the food and the kitchen has complied with the standards of sanitation. The case of Donoghue has defined remoteness as the defendant’s conduct that will determine the liability of the defendant for the damage suffered by the plaintiff resulting from his negligent conduct. The issue of remoteness shall measure the amount of damages for which the defendant is answerable to the plaintiff connection to the injury sustained by Alvin.
The rationale of the decision of the court in the case of Donoghue is that the liability of negligence is not dependent on the contractual relationship between the plaintiff and the defendant. Thus in the case of Stevenson as the manufacturer of the goods, did not perform the duty of care he owed to Donoghue, being a client or consumer of the product. In effect, the failure of the manufacturer to prevent foreseeable injuries that may be caused to the consumers shall make such party liable for any the loss, injury and damage to another. In this particular case, the restaurant is required to practice the appropriate standard of care to clients or consumers. Hence, Alvin has the right to recover for the loss or damage his suffered from the negligent act of the restaurant in the manner of preparation of the food that was served to the customers.
3b.) Although tort and law are both enforceable agreements by the parties, they are different in the sense the purpose for which they were created are not the same. A tort is punitive in character, where in a party who suffered damage, loss or injury from the negligence of the defendant shall be entitled to compensation. On the other hand, contracts are entered by the parties to create positive circumstances such as application for a car loan, entering marriage or child adoption. Whereas torts are resorted to by the plaintiff in the event that such person will suffer injury from being injured by a bus due to negligent driving or falling down from the wet stairs in a restaurant, and become a victim of fraud (Walston-Dunham, 2001).
4a.) Vicarious liability shall refer to the wrongful acts of one person to result in the liability of another and does not require a particular act or omission on part of the defendant for the liability to arise. The Doctrine of Respondeat Superior refers to the relationship of principal and agent, wherein the principal or the employer shall be held responsible for any injury or harm that has been caused to a third party by the employee, who shall be acting within the scope of his employment. This doctrine enforces vicarious liability on the part of the employer, or imposes liability that does not require personal fault of the employer for the tortious acts of his employee who is acting within the scope of his employment. The injured third parties have the right to file a claim against the agent-employee or the principal-employer caused by the negligence of the agent or employee, provided that the negligence of the employee happened when the employee acted during the scope of employment (Adams, 2009). The phrase “course of employment” is a question of fact that is can be determined by the two tests which are: 1.) Such wrongful act was authorized by the employer; and 2.) Such wrongful act and unauthorized mode of doing an act which has been authorized by said employer (Cooke, 2009). It will be gleaned that after applying the law in the given facts of the case will conclude that Mike was acting within the scope of his employment when the accident occurred. The time when the Ada suffered severely burning of the hair and scalp took place after she received hair treatment inside the salon that was provided by Mike’s actions. Ada was rushed immediately to the hospital and advised by the doctor that she will need expensive scalp tissue replacement operation and subsequent treatment is necessary. Ada had suffered injuries caused by Mike, who is an employee of Milky Salon.
4b.) Milky Salon, Mike and Nathan Ltd shall be liable for Ada’s injuries on the basis of negligence and vicarious liability. The vicarious liability triangle has three parties, the employer, employee and the victim (Giliker, 2010). Pursuant to the vicarious liability triangle, it is the victim who deserved to receive the greatest protection because the tortfeasor has done a wrongful act against the victim. Whereas the employer is responsible for setting the wrongful act in motion by creating a risk of injury to an innocent party either by its own profit. There are three factors that can be used to determine the scope of the vicarious liability of the employer and they are the following: 1.) facts of the case; 2.) purpose of the employee in committing the wrongful act; and 3.) victim compensation (Giliker, 2010). The first objective of tort law is to impose punishment to the defendant who inflicted the damage or injury to another. The second purpose of the law is to allow the plaintiff the chance to be compensated for the damage or injury he or she suffered by providing a legal process in seeking justice against the defendant. The third purpose of the tort law is to deter negligent acts in the future. In this given case, Mike, who is an employee of Milky Salon who caused an injury to Ada arising from his negligent action shall make him liable to pay damages to the victim for the injuries she suffered.
Vicarious liability shall take place when one party shall be held accountable for the tort of another and which constitutes strict liability. Vicarious liability is a result of the relationship between the actual tortfeasor and the person who is made vicariously liable. The concept of tort or principle of “restitution” is to pay the plaintiff by way of compensation for the injuries sustained for defendant’s failure to comply with standard of care obligated by law (Cooke, 2009). There is a mutually beneficial relationship that exists between the plaintiff and the defendant, where the defendant has the obligation to recognize the duty of care owed to the plaintiff. The failure of the defendant to observe the required standard duty of care provided by law has caused harm or injury to plaintiff. The law recognizes the plaintiff the right to file an action on the basis of defendant’s negligence and grants the plaintiff the right to claim for loss, injuries or damages sustained. The principle of tort law was derived from the British concept that all tortuous acts are illegal nature, thus giving the party who suffered an injury to be recompensed for the damages suffered through the negligent acts of the tortfeasor. The goal of compensation is based on the three-fold theories pertaining to retribution, punishment and deterrence (Cooke, 2009). Therefore, the right of the plaintiff to institute an action is on the basis of tort of negligence.
In this given scenario, an employer-employee relationship is created which will require the application of the general rule of imposing vicarious liability in all circumstances. Thus, Milky Salon shall be liable for the acts of its hairstylist, Mike for the injuries suffered by its customer. The common law extensions of course of employment shall include the intentional acts wherein the employee has been given the task of protecting the interest of a vulnerable party under the overall protection of the employer. The employee shall be tasked to provide the necessary care and protection to the victim. The tort takes place when the employee causes injury or harm to the very person he or she is supposed to take care of. In this given scenario, Mike is the hair stylist who is supposed to take care of the customers. He shall be responsible for burning the hair and the scalp of Ada. Milky Salon, as the employer of Mike is liable under the doctrine of vicarious liability for the injury suffered by its client due to the negligence of its employee Mike. Nathan Ltd. will be liable for negligence if it has been proven that the products sold to the salon are defective. The law on products liability will make Nathan Ltd. liable if it has been established by Milky Salon that the goods sold by the manufacturer were defective.
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