BTEC HIGHER NATIONAL IN BUSINESS

Unit: 5 Aspects of Contract and Negligence for Business

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East end Computing & Business

College

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Centre No:

10562

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Assessment
(AC)

Criteria Merit: To achieve a Distinction : To achieve

merit
grade
the a distinction grade
evidence must show the evidence must show

Achieve
d

Com
ment

Pass : To achieve a pass that, in addition to the

grade the evidence must pass criteria, the learner
show that the learner is is able to:
able to:

AC1.1 Explain the

importance of the
essential elements
required for the formation
of a valid contract

M1

AC1.2 Discuss the

impact of different types
of contract

M2

AC1.3 Analyse terms in

contracts with reference
to their meaning and
effect

M3

AC2.1 Apply the

elements of contract in a
given business scenario
AC2.2 Apply the law on
terms in different
contracts
AC2.3 Evaluate the effect
of different terms in given
contracts

Explain the importance

of the essential
elements required for
the formation of a valid
contract giving a case
example on each
element and make
effective judgements

Explain the impact of

different types of
contract with case
examples and evidence
the sources of
information

Evaluate terms in
contracts with reference
to their meaning and
effect and present the
answer to familiar and
unfamiliar audience

that,
Y/N
in addition to the pass
and
merit criteria, the learner
is
able to:

AC3.1 Contrast liability in

tort with contractual
liability

D1

AC3.2 Explain the nature

of liability in negligence

D2

AC3.3 Explain how a

business can be
vicariously liable

D3 Critically evaluate
how a business can be
vicariously liable
support your answer
with a case law

AC4.1 Apply the

elements of the tort of
negligence and defences
in different business
situations
AC4.2 Apply the
elements of vicarious
liability in given business
situations

Contrast liability in tort

with contractual liability
Self Reflect your answer
with a case law

Explain the nature of

liability in negligence
support your answer
with a chosen case law

M1
Effective judgements have
been made
M2
A range of sources of
information has been used
M3
The appropriate structure
and approach has been
used
D1
Realistic improvements
have been proposed
against defined
characteristics for success
D2
The unforeseen has been
accommodated
D3
Problems have been
solved
General comments

Overall Grade

Pass/Merit/Distinction/Referral

Assessors
Signature

Date

Candidate
Signature

Date

Aim of the Unit:

The unit introduces the law of contract, with a particular emphasis on the formation
and operation of business contracts. Learners are encouraged to explore the content
of these agreements and then develop skills relating to the practical application of
business contracts, including offer, acceptance, intention, consideration and capacity.
Relevant case law examples will be covered. Learners will consider when liability in
contract arises, the nature of the obligations on both sides of the contract, and the
availability of remedies when a contract is not fulfilled in accordance with its terms.
Additionally, the unit will enable learners to understand how the law of tort differs from
the law of contract and examine issues of liability in negligence relating to business
and how to avoid it.
Learning outcomes:
On successful completion of this unit a learner will:
1. Understand the essential elements of a valid contract in a business context
2. Be able to apply the elements of a contract in business situations
3. Understand principles of liability in negligence in business activities
4. Be able to apply the principles of liability in negligence in business situations.
Assignment tasks:
LO1

Understand the essential elements of a valid contract in a business

context.
Q1.1 Explain the importance of the essential elements required for the
formation of a valid contract by answering the short questions in the context of
the following case.
Case scenario:
James had a Television that he wished to sell. After discussing with friends of his
intention, John showed interest and asked James if he would actually sell the
Television to him. James said yes and told John that he would like to sell it at 200.
John agrees and pays James the 200 for the Television.
Questions:
(a)

When does the Television become Johns?

(b)

Show the following concepts in the case scenario?

(i)

Offer

(ii)

Acceptance

(iii)

Consideration

(c)

Do you think the contract in the above scenario is a valid contract?

(d)

Explain fully your answer for question (c)

(e)

Do you think it was necessary for James and John to have signed a document
for the sale transaction? Motivate your answer

(The answers will be your evidence of AC: 1.1)

Q 1.2 Discuss the impact of different types of contract by answering the short
questions that follow the case scenario given below.
Case scenario:
Mariam offers to buy Rebecca s Law Textbook (Principle of Law) at 20. Rebecca
agrees and delivers the book to Mariam who promised to pay Rebecca the next day
at school. Mariam

failed to pay Rebecca the next day. On the third day when

Rebecca asked Mariam the 20, Mariam said that there was no contract between the
two of them because she did not sign any document in relation to the transaction
between them on the Economic Textbook.
Questions:
(a) Was there a valid contract between Mariam and Rebecca in relation to the
transaction between them on the Economics Textbook? Justify your answer giving
reasons for the validity or otherwise of the contract.
(b) What could be the case if the transaction were in relation to Rebecca selling her
house to Mariam?
(c) Do all contracts have to be in writing and signed by the parties involved?
(d) Give an example of a contract type that has to be in writing and signed by the
parties and witnessed and attested.
(e) Produce a sample contract that has to be, according to statutory regulation,
concluded in a written form.
(f) State two different types of contract and explain the differences between them
(The answers will be your evidence to AC 1.2)

Q 1.3 Analyse terms in contracts by answering the short questions (a - e) with

reference to their meaning and effect in the following case.
Case Scenario:
Mr. Peter booked for a hotel suite for a holiday treat for himself, wife and daughter.
He was promised that there would also be a piano in the hotel lobby for her daughter
to play. On arrival, the hotel suite was fine but they were disappointed when they
learnt that the piano was not in good condition for their daughter to play. Mr. Peter
was very unhappy and wanted to cancel the whole contract and sue for damages.
(a) What is meant by terms of a contract?
(b) Give four different types of terms of contract
(c) Define each of the four types in question (b) and explain their importance in a
valid contract.
(d) Can he cancel the whole booking contract? Give reasons for your answer and
refer to types of contractual terms and their impact in contractual relationships and
consequences.
(e) Explain the differences between a condition and a warranty and the implications
of a breach of each in a valid contract.
(The answers will be your evidence to AC 1.3)
LO2. Be able to apply elements of a contract in business scenarios
Q 2.1 Apply the elements of contract in the context of the following business
scenarios by the answering the short questions that follow the case scenario.
Case scenario:
Martha responded to an advert in a newspaper for a sale of a wrist watch which also
indicated the price. Martha found the watch very attractive and thought that she
would like to buy it. She therefore sent a payment of 40 being the advertised price
of the wrist watch to buy it on the 14 th of April 2013. On the 20 th of April, 2013 when
she went to collect the wrist watch at the shop, she was told that that wrist watch had
been sold to one Mrs. Hudson on the 19th of April (the day before Martha arrived at

the shop). She was very angry and disappointed claiming that she had bought the
watch when she sent the payment for the advertised price on the 14 th of April 2013.
(a) Do you think the shop was right in selling the watch to Mrs. Hudson on the 19 th
of April 2013?
(b) Was there a contract of sale between the shop and Martha on the 14 th of April
when she sent the 40 as payment for the wrist watch?
(c) Was contract of sale with Mrs. Hudson on the 19 th of April 2013 a valid
contract? (Explain your answer using law on the elements of a valid contract).
(d) Can Martha claim her 40 back?
(The answers will be your evidence to AC 2.1)
Q 2.2 Apply the law on terms in different contracts by answering the short
questions (a - b) in the context of the following case.
Case scenario:
Ali was employed by Jackson in a construction firm. In this contract of employment
he agreed to an exclusion clause that the company would not be liable in the event of
any injury caused to him in the course of his employment. Ali signed the document,
agreeing to the exclusion clause on any injuries at work. Three months later, Ali had
his finger cut off when he was busy operating a quarry machine at work.

This

needed surgery which was very expensive. On this matter, Jackson claimed that
since Ali had agreed to the terms of the contract, the company would not be liable for
the cost involved in the specialist surgery required.
(a) What are the statutory provisions in English law on exclusion clauses in
relation to this case?
(b) If Ali should bring an action in court to challenge Jacksons position, what
principles of law and legislation can be applied in order that Ali wins his case?
(The answers will be your evidence to AC 2.2)
Q 2.3.

Evaluate the effects of different terms in some of your selected

cases of contracts by answering the following short questions.

(a)

Define the following terms of a contract:

(i)

Fundamental term

(ii)

Condition

(iii)

Warranty

(iv)

In nominate terms

(b)

Explain the implications of a breach in the following terms of a contract:

(i)

Condition

(ii)

Warranty

Note: (You may use some decided cases for your answers)
(The answers will be your evidence to AC 2.3)
LO3. Understand principles of liability in Negligence in business situations
Q 3.1 Contrast liability in tort with contractual liability in the context of the
following case:
Scenario
Khalid works for Pizza Zone in London, UK.

His contract is to deliver Pizza to

customers who place orders in and around East London. On the 17 th of May 2013,
Khalid went to deliver Pizza ordered by a customer in Bow in East London.
way back he decided to drive to Woolwich to see his friends.

On his

On his way back, in

Woolwich, Khalid had an accident and the car was seriously damaged. Pizza Zone
told Khalid that the company was not liable for any expenses incurred in repairing the
car.
Questions:
(a)

Explain the principles of law governing the case in the scenario above

(b)

Do you think the Pizza Zone firm could be held liable for the costs from the
accident? Motivate your answer.

(c)

What is Vicarious Liability and how can you use this principle in the law of tort
in Khalid s situation?

(The answers will be your evidence to AC 3.1)

Q 3.2.

Explain how a business can be vicariously liable by answering the

short questions that follow the case below.

Case Scenario
John works in a stone quarry where all employees were supplied with protective
goggles to protect them from eye injury because of occasional flying stone chippings
at the quarry.

One day, as John was cracking stones at work using a hammer, a

small stone chip flew into his eyes and he got injured in his left eye.

The company

argued that they were not liable because they had supplied all employees with
protective goggles. In fact at the time of Johns injury he had his protective goggles
beside him but was not wearing it.
Question:
(a) Discuss this case and decide whether the Company or John should be liable
using your understanding of vicarious liability and decided cases.
(The answers will be your evidence to AC 3.2)
LO4. Be able to apply principles of liability in negligence in business
situations
Q 4.1 Apply the elements of the tort of negligence and defences in the
following business situation.
Case scenario:
The Michel family booked into a hotel for a weekend. Mr. and Mrs. Michel and their
boy aged 4 years were having lunch one fine afternoon by the pool side. Their 4 year
old boy, without their noticing wandered away from where they were sitting and fell
into a pit dug by contractors the previous day and got injured.

There was a notice

which read DANGER! NO PERSONS ALLOWED BEYOND THIS POINT but there
was no perimeter barrier or fence surrounding this pit. The Michel family was angry
and demanded an explanation. The hotel management argued that there was an
unfinished work and a notice had been put clearly warning people not to go behind
that point of notice.
Questions:

(a)

Do you think the hotel had been negligent?

(b)

Do you think the hotel had done its work well in warning by notice that no one

should go beyond the point in question?

(The answers will be your evidence to AC 4.1)
Q 4.2. Apply the elements of vicarious liability in the context of the following
business situation.
Case Scenario:
Clark booked into hotel Vibrant on the 10 th of June 2012. On that night he went out
and came back the next mooring. On his arrival, he discovered that his gold watch
had been stolen from his hotel room. When he complained to management he was
told that it was against the hotel regulations for customers to leave valuables in their
rooms when going out and that the regulation was on the hotel form that Clark had
signed when he booked in the first night. Clark claimed that he was not aware of that
regulation and the management had not explained this to him when he was signing
the booking form on his arrival at the hotel.
Questions:
(a) Discuss this situation and point out whether the hotel would be held liable for the
loss of Clarks gold watch in his hotel room.
(b) Had the hotel done its work well by stating the regulation at the bottom of the
hotel form but not explaining to Clark when he was signing the form?
(The answers will be your evidence to AC 4.2)

Plagiarism/Collusion
Any act of plagiarism or collusion will be seriously dealt with according to the
regulations.
In this context the definition and scope of plagiarism are presented below:
Plagiarism is presenting somebody elses work as your own, It includes copying
information directly from the Web or books without referencing the material;
submitting joint coursework as an individual effort; copying another students
coursework; stealing coursework from another student and submitting it as your
own work.
Collusion is working collaboratively with another learner to produce work that is
submitted as the individual learners work.
Suspected acts of plagiarism or collusion will be investigated and if found to have
occurred will be dealt with according to the college procedure.
Guideline

Ensure that all work had been proof-read and checked prior to
submission.
Ensure that the layout of your documents is in a professional format.
Ensure that all references are quoted at the end of any
question/document submitted (preferred: Harvard referencing).
Ensure that you back-up your work regularly and apply version
control to your documents.

Ensure that there is an accompanying front cover sheet with your

details, the unit details and your lecturers name.
The college will retain your assessment copy so it is advisable for you
to keep a copy for your own record.