Discuss About The Business Law Legal Environment Australia?
The law of tort requires people to be responsible while dealing with others. Also, the law expects occupiers to make sure that their promises are safe from endangering the lives or the properties of those who come to their premises. Similarly, businesses should ensure that their products or services are safe and reliable to the customers who purchase them. In a deeper discussion, this paper will be illustrating different applications of the law of tort.
As the common torts, negligence, and misrepresentations are some of the torts that people face on a regular basis. Starting with the tort of negligence, these are circumstances where one person’s misconduct causes injuries to the other person (Kubasek, Browne, Dhooge, Herron & Barkacs, 2016). On the part of misrepresentation, this one happens when a party’s conduct or utterances present conditions that are untrue and convinces the other party to rely on those conditions (Beatty, Samuelson & Bredeson, 2013). While misrepresentation can happen in both the law of contract and the law of tort, this paper will focus on the law of tort where the law punishes it by awarding compensation and even punitive damages (Kubasek, Browne, Dhooge, Herron & Barkacs, 2016).
There are essentially three elements of negligence, but the same elements can be broken down to sub-elements. The first element is the duty of care (Miller & Cross, 2010). When a case of negligence comes to the court, courts start by determining whether there was a duty to care that the defendant owed to the claimant(Mann, Roberts & Smith, 2012). The case of (Donoghue v Stevenson, 1932) was the first instance to determine a duty to care when it established the concept of the ‘neighbor principle.’
The case involved a claimant who found a decomposed snail in a bottle of beer when she poured the remaining content into her glass. The judgment in this case established that the defendant who was the manufacturer had breached his duty of care. With that, he was liable for the claimant’s damages of £500 as claimed by the claimant. For fear of the misuse of this case, the decision of (Lords in Caparo v Dickman, 1990) set out a three-stage test for the determination of the duty to care.
After establishing a duty of care in the defendant, the court moves forward to find the second element of negligence. This element seeks to find whether the defendant breached that duty (Varuhas, 2014). Since the law requires each person who owes a duty of care to act reasonably in executing that duty, the law seeks to find whether the actions of the defendant were unreasonable. By reasonable, the law expects that a person should act in the same way a reasonable person would have acted in such circumstances. Take for example the case of (Nettleship v Weston, 1971). The driver was a third lesson student who caused an accident injuring the claimant who was his instructor. When the court examined this case, they found that the defendant had acted unreasonably hence liable for the damages.
The court’s third step or third element is to connect the claimant’s damages with the defendant’s reckless actions. The working mechanism for this step is the ‘but for test’ which tests for the direct relationship between the breached duty and the loss (Steele, 2017). The ‘but for test’ goes hand in hand with establishing whether the claimed damages are reasonably foreseeable (Twomey, Jennings, Fox & Anderson, 2011). That is to say; the damages should not be too remote. Take for instance the case of (Barnett v Chelsea & Kensington Hospital Management Committee, 1969) Though the law found the lack failure to examine a patient as a neglect of duty, it court did not find a connection between the death of the Barnett husband and the breach of duty by the hospital. No one could survive the arsenic poison meaning that in either way, the husband would have died. In brief, the widow claimed that the death of the husband was caused by the failure of the doctors to examine him. Despite that, the husband conditions resulted from the deadly arsenic poison.
The law of tort defines misrepresentation as an untrue statement or conducts that lures another party into the contract or agreement (Clarkson, Miller, Cross & Clarkson, 2015). Gergen (2013) states that when a case of misrepresentation comes to court, the court starts examining whether there was an oral, written or conduct statement. After finding this first element, the court then considers the falsity of the statement. A change of facts does not count what matters is whether the person who had given a statement updates the other party on the changes. Take for instance the case of (With v O’Flanagan, 1936). The doctor had true figures in January while making the statement, but by May, the facts had changed. The statement turned to be false, and the defendant sued for damages.
The second element is finding whether the statement was a fact as opposed to opinions. In the tort of misrepresentation, what counts is the untrue facts but not untrue opinions. In (Bissett v Wilkinson, 1927), Mr. Wilkinson told the Mr. Bisset that he thought the land would accommodate 2,000 sheep. Mr.Wikinson knew for sure that the land had not been used for rearing sheep. When the statement turned to be untrue, the judge said that the seller’s statement was just an opinion but not a fact. In reality, the statement became untrue and the Mr.Wikinson claim for damages. However, the claimed failed because the court did not find the statement from Mr. Bisset as a fact but rather an opinion.
The third element deals with induction. The question is whether the statement intended to induce one party to accept the agreement and whether the statement indeed induced the party (Mann, Roberts & Smith, 2012). The fourth element links the damages to the misrepresentation. If there is a direct connection, the claim succeeds. If the damages are too remote, the court may neglect to award the compensation.
Both torts happen regularly in business. More often, they may happen in situations of product liabilities and premises liabilities.
Businesses are liable for dangers caused by their defective products or services. (Mann, Roberts & Smith, 2012). When a defective product causes some damages, customers may elect a cause of action through customers’ protection act. A good example is the illustrated case above (Donoghue v Stevenson, 1932). Similarly, misrepresentation in products can happen through a deceptive product where the business claims that a product would offer benefits which in reality the traders knows that it is untrue. However, the law allows sales puff.
Defective services may also result in an action in court. In (Andrews v Hopkinson, 1957) The claimant received a car with defective steering from the defendant. As a result, the claimant got involved in an accident and sued the defendant for his negligent service. The court did find the defendant liable and awarded the claimant a compensation for his loss.
Premise liability deals with issues where a person would get injured in another person’s premise. If the court finds that the defendant errored in providing reasonable care, the court is likely to award compensation to the injured party (Mann, Roberts & Smith, 2012). People injured could be occupier’s visitors or just trespassers, but the court takes each case differently. An example of this situation is the case of (B v JJB Sports,2006). The injured party was a boy of 10-years old. The defendant had cleaned the floor leaving the floor wet under which posed a risk to children let alone unlike adults who would have read the signs. The court awarded compensation to the boy as it found the defendant liable for his negligent conducts of leaving the floor wet.
Advisors also owe a duty of care to those people relying on their advice (Clarkson, Miller, Cross & Clarkson, 2015). The court did find the defendant liable for a wrong information in (Chaudhry v Prabhakar, 1988). The claimant had asked the defendant who was a skilled trader in cars to find her a solid secondhand car. However, the defendant brought a car that had been involved in accident which was against the instructions given by the claimant.
A claim brought could suffer frustrations if the defendant raises a defense. Even though the defense would not succeed in wavering the entire claim, it can help in reducing the burden of damages that the defendant would have paid (Clarkson, Miller, Cross & Clarkson, 2015). Some of the special defenses are an act of God and trespasser. An act of God means dangers caused by natural forces. Trespasser’s defense argues that the defendant cannot protect someone who he does not have knowledge as to whether the person is on the premises. Apart from these two there are other defenses such as contributory negligence.
This defense requires the defendant to prove that the claimant proceeded deliberately to the risk despite being warned by the defendant. For example, in (Froom v Butcher, 1976). The claimant sued the defendant after sustaining injuries in an accident. The claimant alleged that the negligent conduct of the defendant caused the accident though the court found that he was not wearing his seatbelt. The court only allowed him to recover 80% of the claimed damages.
Where the claimant consents to get into the risk, cannot turn back to claim for the damages. An example is a case of (Morris v Murray, 1990) In this case, the claimant knew his friend was drunk, but he proceeded to take a ride with him in the aircraft. The claim failed as the court found enough evidence that the claimant consented to the ride.
The court does not award damages where the claim involves injuries where both parties were executing an illegal action. Take for example the case of (Ashton v Turner, 1980). Since the claimant was injured in a getaway accident after committing a crime with the defendant, the court refused to award him damages suffered in the accident.
Breach of statutory duties. This is a tort that happens when where the defendant breaches the set standard for a workplace resulting in work injuries. Another tort in business is a conspiracy. This tort occurs when two or more parties collude to deprive a third party. Another tort in business is conversion (Clarkson, Miller, Cross & Clarkson, 2015). This one is a trespass to goods where the court finds that a defendant takes possession of another person’s goods without authority. Deceit is another tort in business. It may happen when one party provides untrue information with an intention to defraud the other party (Mann, Roberts & Smith, 2012).
There are various roles in statutory authorities in protecting the interests of the parties. An example is how aking tort law statutes help in shaping the law of tort. Some of the common ways in which statutes affect the interest of the parties is in limiting liabilities, expanding them or restating some areas of private law. For instance, consumer protection statute aims to regulate cases of misrepresentation, negligence, and fraud among others. A claim brought under consumer protection statutes helps the claimant where the statute punishes the defendant under strict liability for defective products. Even though, the statute does not act to replace common law. Other acts are like the occupies liability act which seeks to award damages when someone sustains injuries in a defective premise.
Conclusion
The Law of Torts encompasses various civil wrongs such as trespass, negligence, defamation and nuisance, among others. The law deals with each tort differently depending with its rules that guides on thee liabilities. However, almost all torts would require certain elements meaning that the court can only impose liabilities on circumstances where one party either negligently fails or does something that harms the other party.
References
Beatty, J., Samuelson, S., & Bredeson, D. (2013). Business law and the legal environment. Australia: South-Western Cengage Learning.
Clarkson, K., Miller, R., Cross, F., & Clarkson, K. (2015). Business law. Text and Cases (13th ed.). Cengage Learning.
Gergen, M. (2013). Negligent Misrepresentation as Contract. Califonia Law Review, 101(4). Retrieved from https://scholarship.law.berkeley.edu/californialawreview/vol101/iss4/2
Kubasek, N., Browne, M., Dhooge, L., Herron, D., & Barkacs, L. (2016). Dynamic business law (3rd ed.). New York. NY: McGraw-Hill Education.
Mann, R., Roberts, B., & Smith, L. (2012). Smith & Roberson’s business law (15th ed.). Mason, OH: South-Western Cengage Learning.
Miller, R., & Cross, F. (2010). The legal environment today. Mason, OH: South-Western Cengage Learning.
Steele, J. (2017). Tort law. OUP Oxford.
Twomey, D., Jennings, M., Fox, I., & Anderson, R. (2011). Anderson’s business law and the legal environment. Mason, Ohio: South-Western Cengage Learning.
Varuhas, J. (2014). The Concept of ‘Vindication’ in the Law of Torts: Rights, Interests and Damages. Oxford Journal Of Legal Studies, 34(2), 253-293. https://dx.doi.org/10.1093/ojls/gqt03
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