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Unit 2 Business Law P1

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Task 1 P1.1 explain the importance of the essential elements required for the formation of a valid contract A contract is a legal document that states and clarifies a formal agreement between two different people or groups. This implies that an agreement between parties must have a strong backing by law. The following are therefore required for a contract to be mandatory for all participants involved. These elements in a contract prove whether the contract is regarded credible or not credible: The objective is to build a legal relationship, offer and acceptance, consideration, capacity to contract and legality. Objective to build legal relationship: Not all agreements end up in binding contracts that are backed by the court of law. This is due to the fact that not all agreements are made under strict or formal …show more content…

Once it has been established that the defendant owed the claimant a duty of care, the claimant must also demonstrate that the defendant was in violation of duty. Legal causation: When the cause for offense is known, then a review is observed and it is whether the law is involved in the action or not. P3.3 Explain how a business can be vicariously liable Vicarious liability occurs when the injured person is able to get reimbursement for the harm done. In a business setting, if an employee injures a colleague, the employer may be subject to vicarious liability. So the injured person has the right to demand from his employer for compensation (Michaels 2006). For instance, if a factory worker carrying out operations in a car manufacturing company gets injured on the job, the employee is liable. However if this worker decides to utilize the machine for personal purposes which are not official business purposes, then he would be regarded as acting outside the course of his employment. In this instance, the business will not be vicariously liable when any injury

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