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Contractual and Non Contractual Liability
A contract is an agreement having a lawful object entered into voluntarily by two or more parties, each of whom intends to create one or more legal obligations between them. The elements of a contract are “offer” and “acceptance” by “competent persons” having legal capacity who exchange “consideration” to create “mutuality of obligation. ” Contracts may be bilateral or unilateral. A bilateral contract is an agreement in which each of the parties to the contract makes a promise or set of promises to each other.
For example, in a contract for the sale of a home, the buyer promises to pay the seller $200,000 in exchange for the seller’s promise to deliver title to the property. These common contracts take place in the daily flow of commerce transactions, and in cases with sophisticated or expensive promises may involve extensive negotiation and various condition precedent requirements, which are requirements that must be met for the contract to be fulfilled. Less common are unilateral contracts in which one party makes a promise, but the other side does not promise anything.
Elements At common law, the elements of a contract are offer, acceptance, intention to create legal relations, and consideration.
Offer and acceptance In order for a contract to be formed, the parties must reach mutual assent. This is typically reached through offer and an acceptance which does not vary the offer’s terms, which is known as the “mirror image rule”. If a purported acceptance does vary the terms of an offer, it is not an acceptance but a counteroffer and, therefore, simultaneously a rejection of the original offer. Intention to be legally bound In commercial agreements it is presumed that parties intend to be legally bound unless the parties expressly state the opposite as in a heads of agreement document.
For example, an agreement between two business parties was not enforced because it contained an ‘honor clause’ which stated the parties wish that the agreement not be reviewed or enforced by a court. In contrast, domestic and social agreements such as those between children and parents are typically unenforceable on the basis of public policy. For example, a husband agreed to give his wife $100 a month while he was away from home, but the court refused to enforce the agreement when the husband stopped paying.
Consideration is something of value given by a promissor to a promisee in exchange for something of value given by a promisee to a promissor. Typically, the thing of value is a payment, although it may be an act, or forbearance to act, when one is privileged to do so, such as an adult refraining from smoking. This thing of value or forbearance from some legal right is considered to be a legal detriment. In the exchange of legal detriments, a bargain is created.
Contractual liability, is exactly as it sounds. A contract is a legal binding agreement between two or more persons. When you sign, or agree to the terms of a contract, then you have accepted the contractual liabilities set forth in the document. Liabilities are things that you can be held accountable for, and may have to repay or replace, in the event that they occur. For example, a renter’s agreement may state that, “”If upon moving out of the premises stated in the contract, any part of the premises is destroyed, you may be accountable for and have to pay to repair, or replace the damage””. Contractual liability (or liability because of a contract) has a very broad meaning—a promise that may be enforced by a court.
Consider the following simple example. I agree to paint your house for $1,000 and collect $500 prior to the job. After I accept the $500, I obtain a more lucrative offer and never show up to paint your house. You can go to court and claim the $500 you paid me, as I have breached the contract. Your claim is a contractual liability claim. Contractual liability can take many forms, but is basically holds you accountable for damages that are stated in the contract. Another example can be a publishing contract. If you are found guilty of plagiarism, the publisher is not accountable for the act.
It is your contractual liability, to release the publisher from fault, and take it yourself. In a nutshell, contractual liability, is anything that you agree to in the terms set forth in a contract. Before entering in to any contract, if you do not understand the terms, consult with an attorney.
The term non-contractual liability can be defined as tort liability. Tort liability is legal obligation of one party to a victim as a results of a civil wrong or injury. This action requires some form of remedy from a court system. A tort liability arises because of a combination of directly violating a person’s rights and the transgression of a public obligation causing damage or a private wrongdoing. Evidence must be evaluated in a court hearing to identify who the tortfeasor/liable party is in the case. Some torts are also crimes punishable with imprisonment, the primary aim of tort law is to provide relief for the damages incurred and deter others from committing the same harms. The injured person may sue for an injunction to prevent the continuation of the tortious conduct or for monetary damages.
For example, a factory was built in A village. Then this factory releases so much smoke and waste which can harm to human health and environment. Therefore, this factory has to take responsible for her releasing. Among the types of damages the injured party may recover are: loss of earnings capacity, pain and suffering, and reasonable medical expenses. They include both present and future expected losses. Torts fall into three general categories: intentional torts (e. g. , intentionally hitting a person); negligent torts (e. g. causing an accident by failing to obey traffic rules); and strict liability torts (e. g. , liability for making and selling defective products). Intentional torts are any intentional acts that are reasonably foreseeable to cause harm to an individual, and that do so. Negligence is a tort which depends on the existence of a breaking of the duty of care owed by one person to another from the perspective of a reasonable person, it is just carelessness not intention. Strict liability wrongs do not depend on the degree of carefulness by the defendant, but are established when a particular action causes damage.Date: Oct 13,2021