Legal research
Introduction
Every business should abide by the business laws to remain competitive and relevant. Particularly, concepts surrounding the law of contracts, torts, and employment law guide most conflicts occurring in businesses today. However, businesses are faced with challenging situations that require precise understanding and interpretation of different commercial case laws and concepts. The lack of understanding of these basic concepts may cause businesses to suffer legal consequences arising from frequent litigations (Singh, 2007). The current paper analyses three events that happened at Wicked Theatres Group Ltd.’s theater. In doing so, the paper sheds light on the legal principles surrounding these activities to provide professional advice and the way forward in dealing with the issues. In examining these events, the paper considers the applicable case laws as well as other relevant statutes.
Contract Law Research
Offer and Invitation to Treat
Essentially, a court looks at specific elements when deciding whether a contract exists between any given parties. The elements of a contract include: an offer, acceptance, consideration, intention to create legally binding relations, and capacity (Romano, 2005). Differentiating between an offer and invitation to treat is very important in business undertakings like the one presented in the case of Wicked Theatres Group Ltd. Stipulating an offer is the first step in the traditional process of making a contract. An offer is defined as an expression of the willingness to form a contract on some given certain terms, which is made with the intention that it will soon become binding if it is accepted by the person whom it is being expressed by (Singh, 2007). An invitation to treat is any action whose intention is to invite others to make an offer. Making a distinction between an offer and invitation to treat is important since accepting an offer amounts to a binding contract while acceptance of an invitation to treat is, in essence, making an offer.
The case of offer and invitation to treat was clearly illustrated in Carlill v Carbolic Smokeball Company. In this particular case, the carbolic smoke Ball Company made a product named ‘smoke ball'. The company claimed that the smoke ball was able to cure influenza and a couple of other diseases. In its advertisement, the company claimed that it would pay one hundred pounds to any person who was infected with influenza after using the ‘smoke ball' according to the instructions specified in the advertisement. As a result of this advertisement, one thousand pounds were deposited with the Alliance Bank as a way of showing the sincerity of the company in the matter. Mrs. Carlill bought the product and used it just as described in the advertisement (Ferrari, 2006). However, she caught the flu and consequently claimed the reward. The company declined to pay the reward and as a result, Carlin sued for the reward. She argued that there was a valid contract between the parties, based on the advertisement made by the company. Particularly, she argued that the advertisement was an offer.
The court held that Mrs. Carlin was entitled to the specified reward. There was a unilateral contact, and which was comprised of the offer made by the advertisement of the company and the acceptance by the performance of the conditions stated in this offer. The court decided that the advertisement was an offer and not an invitation to treat due to the following reasons. First, it is possible to make an offer to the whole world. Secondly, the language used in the advertisement was not too vague too be enforced. Additionally, the advertisement could not be considered as just a mere sales puff (Romano, 2005). The company had already deposited one thousand pounds in a bank as a way of demonstrating its seriousness and sincerity in the matter. Communication of acceptance is required. However, in this particular case, the offeree did not need to make any form of explicit communication regarding her intention to accept the offer as the acceptance was implied through the performance of the acts requested by the company.
Condition and Warranty
Differentiating between a condition and warranty is very important when making contracts. A condition is a term, which can either be written or oral, and it goes ‘to the root of the contract.' If any party to the contract breaches a condition, the innocent party is allowed to treat the contracts as discharged, meaning that he or she will not be bound to perform anything further under the given contract. On the other hand, a warrant is a term that is considered as subsidiary or collateral to the main subject of the contract (Carter and Hodgekiss). As a result, a warrant is not so essential as to lead to discharging of the whole contact. Breaching of warranty only entitles the incent party to sue for damages. However, he or she cannot treat the contact as having been discharged.
Differentiating between a condition and warranty allows a court to determine situations under which an innocent party may treat a contract as discharged or not. As a general rule, a contract can only be treated as being discharged if its condition has been breached. In the case Poussard V Spiers and Pond, Mrs. Poussard agreed to sing in a given opera as she was an opera singer. However, at the specified date of performance, she was not able to sing as she became ill. The company was to hire another person who could sing during the planned date of the event. However, they could only get another singer if they agreed to hire the singer for all the performances of the opera event. As a result, they did this and declined to the services of Mrs. Poussard once she recovered. Consequently, Mrs. Poussard sued for compensation. The court held that Mrs. Poussard breached a condition of the contract since the performance on the given date was a basic term or a ‘root’ of the contract.
Tort Law Research
Test that Must be Used to Establish Vicarious Liability
Vicarious liability is governed by the law of tort. In the process of undertaking his employment, if an employee does a wrongful act against a third party, then the employer is said to be vicariously liable for the acts that have been committed by the employee (Dent, 2009). The employer will be treated as having committed the wrong act.
The tests carried out in determining vicarious liability take two main directions; determination of whether there is an employer-employee relationship and whether there is a relationship between the employment and the alleged act (Finkin et al., 2009). Economic tests, integration tests, and control tests can be used to determine an employee-employer relationship. Once the employer-employee relationship has been established, the following tests can be done so as to establish vicarious liability
Direct and Close Connection Test: It is a newly established test that states that there must be sufficiently direct and close connection between the wrong act committed and what the employee was employed to do.
Whether Wicked Theatres Group Ltd would be held vicariously liable for Leo’s actions
Leo Lyons was employed as a doorman at the theatre. Additionally, the manager had instructed him to use force to enforce his actions if need be. As a result of this, Wicked Theatres Group Ltd was liable for the actions of Leo. Leo fulfilled all the conditions of being an employee of the organization. At the same time, there was a very close connection between the actions of Leo and what he was employed to do. Considering that he was employed as a doorman, escorting the goer could be seen as an activity sufficiently close to what he was employed to do. In the case Mohamud v WM Morrison Supermarkets Plc, CA [2014] EWCA Civ 116, the claimant was subjected to a serious assault that was unprovoked by Mr. Khan, who was an employee in the Respondent's kiosk at given petrol station. The claimant had gone to refill the air in his car tyre at the petrol station. Upon requesting to print some documents, Mr. Khan responded in a racist and abusive manner. The court held that there was no close connection between the claimant and Mr. Khan. It was not sufficient enough to warrant vicarious liability.
Employment Law Research
Employee Tests
An employee is a person who undertakes to work for another person. The relationship must be undertaken under a contract of service (Dent, 2009). In determining the employer-employee relationship, the following tests are undertaken.
Control Test: An employer-employee relationship is seen to exist if the employer has significant control over the actions of the employee.
Economic Reality Test: If the individual who committed the wrongful act does not assume any form of economic risk of incentive in committing the act, then that individual will be considered an employee (Ruhl, 2007).
Integration Test: If the work undertaken by the employee is considered as an integral activity in the basic operations of the business, then the person who committed the wrong act will be considered as an employee.
In the above situation, Ivor Tinman was an employee of Wicked Theater Group Limited. It can be supported by the fact that the company was deducting taxes from him. In the case, Vizcaino v. Microsoft, eight employees who were classified as independent contractors by Microsoft Corporation sued the company claiming that they were entitled to a saving benefits plan undertaken by the company. The court held that some workers that were originally hired as independent contractors were entitled to receive the benefits under the new Microsoft 401(k) plan. In the case Clark v. DuPont, Clark claimed for benefits under some DuPont welfare, pension, and retirement plans. The court held that because Clark was not a participant in DuPont's plans, he would fulfil the eligibility requirements and; hence, the court affirmed the dismissal of his claims for statutory requirements.
Preventing Uncertainty in Future
Conclusion
In making sound decisions, organizations need to understand the underlying legal principles surrounding business actions. The most important areas of consideration include contract law, employment law, and the law of torts. Failing to understand these basic areas may lead to frequent litigations, which may have a negative impact on the company. Making a distinction between an offer and invitation to treat is extremely important since accepting an offer amounts to a binding contract while acceptance of an invitation to treat is, in essence, making an offer. The tests carried out in determining vicarious liability usually takes two main directions; determination of whether there is an employer-employee relationship and whether there is a relationship between the employment and the alleged act.
References
Carter, J. W., and Hodgekiss, C. n.d. Conditions and warranties: Forebears and descendants. Sydney Law Review
Dent Jr, G.W., 2009. Business lawyers as enterprise architects. The Business Lawyer, pp.279-328.
Ferrari, F., 2006. What sources of law for contracts for the international sale of goods? Why one has to look beyond the CISG. Internationales Handelsrecht, 6(1), pp.1-20.
Finkin, M., VanderVelde, L.S., Corbett, W.R. and Befort, S.F., 2009. Working Group on Chapter 2 of the Proposed Restatement of Employment Law: Employment Contracts: Termination. Employee Rights and Employment Policy Journal, 13(1).
Hatzimihail, N.E., 2008. The many lives-and faces-of lex mercatoria: history as genealogy in international business law. Law and contemporary problems, 71(3), pp.169-190.
Romano, R., 2005. After the Revolution in Corporate Law. Yale Law & Economics Research Paper, (323).
Ruhl, G., 2007. Party Autonomy in the Private International Law of Contracts: Transatlantic Convergence and Economic Efficiency.
Singh, R., 2007. ‘Causation-consistent’liability, economic efficiency and the law of torts. International Review of Law and Economics, 27(2), pp.179-203.
Cases
Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256
Clark v. E.I. DuPont Nemours and Company [2011]- 1:2011cv00962
Mohamud v WM Morrison Supermarkets Plc, CA [2014] EWCA Civ 116
Poussard v Spiers and Pond (1876) 1 QBD 410
Vizcaino v. Microsoft Corp., 173 F.3d 713 (9th Cir. 1999)
