Task 1:

LO1: Understand the essential elements of a valid contract in a business context

1. What are the essential elements for the formation of a valid contract? Please refer to the scenario below to answer the question.

Facts: James advertised on an ecommerce website the sale of a high definition web camera for £55. Maria responded to the advertisement via e-mail stating that she was willing to buy the web camera for £45. James replied that he would only accept the original price. Maria did not respond. James did not have any other offers so he wrote again to Maria and stated that he was accepting her offer of £45. (covers AC 1.1)

2. Identify and explain the main types of contracts that may be entered in the UK by individuals and businesses. Provide examples. (covers AC 1.2)

3. Explain the different terms that can be included in a valid contract. Your answer should include an explanation of express terms, implied terms, innominate terms, conditions and warranties. (covers AC 1.3)

Task 2:

LO2: Be able to apply the elements of a contract in business situations

1. Please read the scenario below and draft a simple contact for the purchase of the product advertised by Bella UK. Your contract should include at least one express term, one implied term and one exclusion clause. (covers AC 2.1 & 2.2)

Facts: Bella UK is a fictitious company that produces various beauty products. Recently Bella UK produced a new shampoo called “Miracle Oil” that claims rapid hair growth. To promote the “Miracle Oil” shampoo Bella UK send out flyers advertising its product and offering it at a special price. The flyer stated:

“Miracle Oil, for a limited time only half price! Buy ten boxes for the price of 5. Guaranteed results*. To order see details on our website www.miracleoilinstantgrowth.net”

*The seller accepts no responsibility for any adverse results, the product has 20% success.“Hair 4 U” is a fictitious small local business that saw the advertisement and decided to take advantage of the offer. “Hair 4 U” placed an order for 10 boxes of “Miracle Oil”. 

2. Write a report to Mr. Michael Hair, the owner of “Hair UK” explaining the following: (covers AC 2.3)

a) breach of a condition and;

b) legality of the exemption clause

Task 3:

LO3: Understand principles of liability in negligence in business activities

1. Explain the differences between contract and tort liability (covers AC 3.1)

2. Discuss the development of the concept of “duty of care” and the neighbour principle in the Tort of Negligence with particular reference to the case of Donoghue v Stevenson (covers AC 3.2)

3. Facts: Alan a local milkman contrary to express prohibition from his employers Norfolk farms hired Matthew, a 13 year old boy to help him with the delivery of milk on Wednesdays. Alan told Mathew that he was not supposed to hire him and they should keep it between themselves. On Wednesday morning, as Mathew was helping Alan to deliver milk, Alan reversed the van and accidentally injured Mathew.

Please answer the following:

a) Can Mathew sue Alan?

b) Can Norfolk farms be held vicariously liable in this situation? 

In your answer you should include an explanation of how a business can be held vicariously liable for the wrongs committed by their employees. (covers AC 3.3)

Task 4:

LO4: Be able to apply the principles of liability in negligence in business situations

1. Facts: Albert has decided to rent a flat from Brad. He fills out an application form giving his accountant’s details Charles D Lois to be his referee. Brad requests from Charles information about Albert’s financial situation. Charles, the accountant confuses Albert with another client and does not bother to check the file properly. He replies to Brad that Albert is an excellent client with high income and savings andrecommends him as a tenant.

In fact, had he looked at the correct file, he would have seen that Albert was continuously in overdraft and has been in serious debt with various banks on and off for many years. Some months later, Albert disappears having taken the flat on and run up several thousand pounds’ worth of rent arrears.

Draft a short letter to advise Brad as to whether he can recover his losses from Charles. (covers AC4.1)

2. Read the following scenarios and answer the questions: (covers AC 4.2) a) Graham is employed as a doorman by Macho Men plc, a company that owns a chain of night clubs throughout the UK. Whilst working at one of the clubs he is alerted of a drunken customer who has been arguing with the barman and has been throwing items causing damage to the club’s property. Graham ejects the customer,but in doing so he breaks the customer’s arm.

Is Macho Men plc liable for the actions of Graham? Would your answer be different had Graham been expressly prohibited by the company from manhandling troublesome customers?

b) Carla works as a courier for Links Ltd. On her day off she uses the company van to take her friend Lucy to the railway station. On her way back she decided to deliver some parcels, even though it was not a working day for her. After making her first delivery, she negligently crashes into a car driven by George. Is Carla liable for the damage caused to George’s car? Can Links Ltd be held vicariously liable?