Concepts and Understanding of the Business Laws - Essay Example

Business of Law Introduction: Legal knowledge of business generally varies with different companies. Knowledge of the legal laws help in performing without any interference from external bodies associated with business. Accountants and attorneys in this regard are capable of providing with the information of the important laws that are needed to be known by the employees and organizational members (Gass, 2012). The present study focuses on the company, Electra Direct Ltd., which manufactures electrical products where the Chief Executive of the company is concerned about the lack of knowledge of legal policies by the managers. Hence the study tries to prepare some training in the areas of law required for the management of the company. Task 1: Contract and Tort: As far as the case is concerned it can be understood that Alice and Cyril had been to Purple Pumpkin for their lunch where after having their food, both suffer from food poisoning. The fact that needs to be considered in this case is that Purple Pumpkin is actually responsible for the food that they serve to their customers since they are the customers to Purple Pumpkin and not the companies that supply the food. It was supposed to be the potential liability of Purple Pumpkin to test the food that is supplied to them before providing them to the customers. Hence Purple Pumpkin can be sued by Alice and Cyril in this case. Considering the tort of negligence in this case, in the first step of the law that states about the duty of care, it can be said that neither the act of the defendant or Purple Pumpkin or the consequences were not foreseeable nor there existed any legal or physical closeness among the two parties. However from the losses or the suffering of the customers, there taking legal actions against Purple Pumpkin can be considered to be fair and just. Considering the breach of duty, it can be said that the liability of Purple Pumpkin primarily lay with the understanding of taking precautions since with food not fit for consumption lies the greater risks of food poisoning and danger, which seem to have been neglected by the employees and managers of the company (Tufal, n.d., p.2). The legal action against the company is relevant in this case since the claimants would be able to prove that had the employees taken enough care of their services, the damage could be prevented. This includes the third stage of the law of tort of negligence that considers the issue of the damage caused by the defendant. As the law states in terms of the remoteness of damage and as suitable in this particular case, “The defendant will be responsible for the harm caused to a claimant with a weakness or predisposition to a particular injury or illness” (Tufal, n.d., p.3). Hence it can be concluded on this case that Alice and Cyril being the suffered customers of Purple Pumpkin can sue the organization for providing them with foods that caused food poisoning to them. However they would require proving that it was the food supplied by that organization that caused them the poisoning. Moreover, on the part of the company, Purple Pumpkin may sue Mactavish Sea Foods Ltd that had supplied the lobsters to the organization proving the same. Liability at Contract and Liability at Tort: A Contrast: The primary difference in the liability at contract and liability at tort is in the fact that the responsibilities assumed in contracts are completely voluntary. Thus there arises no force on any individual for the liabilities to be maintained. On the other hand, in case of tort, the potential liabilities are enforced on the individuals without letting them know or be aware of such potential liabilities. “The law sometimes requires compulsory insurance to protect against claims of liability in negligence or other torts, but it may be prudent for businesses to carry insurance for their property and possessions in the event of claims against them” (Negligence and Nuisance, n.d., p.257). Thus it can be said that in case of contracts, the law of contract would enable individuals the right to take steps against a particular person or organization when a wrong is done as in the case of Purple Pumpkin that provided Alice and Cyril with unhealthy food. But the primary problem with the tort case is that the responsibilities been taken voluntary, individuals cannot be forced for compensating any damages that is in the case of contracts possible. However in case of any loss or damage the claimants need to claim for the loss themselves. Task 2: Liability at Negligence: Negligence as a separate tort had materialized after the judgment of the case of Brown v. Kendall, where the fundamental nature of the tort was that an individual is supposed to be subject to liability for being negligent and causing damage to another. It has also been considered essential to have a “causal connection between the defendant’s breach of duty and the plaintiff’s damage that was natural, probable, proximate, and not too remote” (Owen, 2007, p.1671). The nature of the negligence can be understood using the five elements of negligence that are required for a claimant to succeed in a claim for negligence. Duty of care refers to the responsibilities that individuals need to have for each other considering the harms that might happen to them if they are not responsible. In other words, one should not attempt doing any such act that might cause harm to others (Hinds, n.d., p.1). These five elements are as follows: 1) Duty: This refers to the obligation that one individual has for another in terms of the social conventions, values, and faith. The law of negligence considers the harmful conducts of human beings as chosen by an individual himself and hence needs to be judged as proper or improper. The duty element involved the negligence settlement in any case and hence proves to be essential for claimants (Owen, 2007, pp.1674-1675). 2) Breach: This constitutes the misconduct or the incorrect act of the defendant himself. This considers that a standard of behavior had been existent that has been violated and the claimant can thus claim for the losses or damages occurred as a result of the misconduct. A hand formula was derived in the case of United States v. Carroll Towing Co., that explains the law of negligence (Owen, 2007, pp.1675-1679). 3) Cause in Fact: It is necessary for a claimant to prove a cause and effect relationship between the negligence that has occurred and the damages that have been suffered in order to claim for the losses against the negligent. This creates a direct connection between the misconduct of the negligent and the harm to the plaintiff that has been considered as an essential element of such cases (Owen, 2007, p.1680). 4) Proximate Cause: A proximate cause needs to be established since this presupposes a close relationship and hence a connection between the defendant’s breach of duty and the damage to the plaintiff (Owen, 2007, p.1681). “As with proximate cause more generally, foreseeability provides little real guidance in most cases, even when enriched a bit as reasonably foreseeable, or scope of (foreseeable) risk” (Owen, 2007, p.1685). 5) Harm: This constitutes the damage that a plaintiff has suffered as a consequence of any negligence on the part of any individual. Whether the negligence law would protect the plaintiff or not would depend on the nature of the loss or damage that he suffers and hence needs to be established for claimant (Owen, 2007, pp.1685-1686). Mattis v. Pollock Case: The case reveals that a club owner had been personally held negligent for misconduct by a doorman employee towards a customer. Mr. Mattis was the claimant in the case and the owner of the club was Mr. Pollock. Studies reveal that Mr. Pollock had encouraged violence even after considering the nature of the doorman (MATTIS v POLLOCK, n.d.). Thus Mr. Pollock, the defendant, could be held negligent since being the owner of the club, it was his duty to take concern of the natures of the employees working under him and take actions accordingly against misbehaviors. This reflects his violence of the duty of care since he was not supposed to support any act that could cause harm to others. Moreover by encouraging the wrongdoings, he underwent breach or violation of the law, affecting the standard of behavior and leading to severe misconduct and caused damage to the customer. Hence he was held personally negligent in this case. As far as the occupier’s liability is concerned, it can be stated that the owner of the club was responsible for taking care of circumstances that occur within the premises of the club. This primarily includes taking care of the club premises and any incidents that might cause damages to the premises and the individuals that enter the club (Occupier’s Liability Definition, n.d.). Task 3: Vicarious Liability: The legal doctrine of vicarious liability explains that liability arises to a person who has a legal relationship with another individual and causes an act of negligence to him. An employer of a company in this regard is considered responsible for the acts of negligence by his employees as described through the law. This is primarily because the employees are considered as the agents of the employer thus working for him. If a negligent act is performed by an employee the employer will be held liable for the damages that are caused. “For example, if the driver of a gasoline delivery truck runs a red light on the way to a gas station and strikes another car, causing injury, the gasoline delivery company will be responsible for the damages if the driver is found to be negligent. Because the company will automatically be found liable if the driver is negligent” (Vicarious Liability, 2012). The Bazley v Curry case of the year 1999 can be considered for this law. This would also enable an understanding as to how businesses may be vicariously liable. The facts of this case reveal that a nonprofit organization, that was the defendant in the case, delivered treatment of emotionally affected children in two children’s homes. An individual was hired in this regard whose background was not checked and the employee was later dismissed based on complaints on his conduct. However, later there arose several cases of sexual abuses on the dismissed employee, two of which were taken up by the claimant in the case (Bazley v Curry 1999, 1999). As far as the judgment of this case was concerned, the company was held responsible for the liability negligence since the employee had been hired without checking its background. “An employee’s wrongful conduct was said to fall within the course and scope of his or her employment where it consisted of either (1) acts authorized by the employer or (2) unauthorized acts that were so connected with acts that the employer had authorized that they might rightly be regarded as modes – although improper modes of doing what had been authorized” (Bazley v Curry 1999, 1999). Thus in this case the employer which in this case is the company can be found to have been held for the acts of the employees since the employee has been the primary responsibility of the employer. Thus in this way a business may prove to be vicariously liable. The Case of Mattis v Pollock: In the case of Mattis v Pollock also as already observed, the owner of the club is held responsible for the act of his employee. The rules of vicarious liability apply in this case since the owner has been found to have knowingly encouraged the presence and misconduct of Cranston who created the misconduct with the customer. In spite of repeated warnings from other employees regarding the danger with Cranston, Mr. Pollock who was the owner allowed him in the club as an employee and never took the matter of his misbehavior seriously. Thus the vicarious liability of this incident or the employee lay with the owner of the club or the employer who encouraged the wrongdoer employee. Task 4: Model Solutions: 1. Considering the elements of the negligence and vicarious liability, it can be said that the company had a responsibility and potential liability towards having supervision on the work of the employees thus trying to keep a check on whether the employees are following the rules and policies of the company. This can be considered under the element of duty and breach of duty in cases where the company fails to keep a check on the performance of the employees. Spiro could allow Charlie since he did not feel the fear of any legal act against him probably from the negligence from the managers on looking over his performance. Thus in this case the company can be held vicariously liable leading to harm of an individual who was not supposed to be involved in the work of the company, particularly when there was a legal responsibility. However, if the case had been such that the accident occurred due to the Spiro’s not wearing seat belt and crashing the van, then the responsibility would have been personally with Spiro and not with the company since it would be an independent act in this case. 2. Considering the situation the negligence on the part of the company and its employees and managers can be clearly reflected. The condition of the recession can be understood and that no one could be found to take charge of the rest of the property of the factory can also be understood. However till the property remains under the name of the company, the maintenance of the factory remain the liability of the company. Thus if damages have occurred to those parts of the factory and if children are able to enter the property, it means that the company is proving to be negligent. Moreover, in case of any damage caused to the children, the company may be held vicariously responsible since the property is under their name. Thus in order to avoid any legal actions the company needs to take immediate measures towards repair and maintenance of the factory and the part that has not yet been leased. 3. According to Volenti non fit injuria the one who takes the risks and gets harm is the one responsible for the act and others may not prove to be liable in such cases (Volenti non fit injuria, n.d.). As the case is concerned, although a social club is run by the company, the employees had entered the premises when the gate was locked, which means that they had violated the timings of allowance to the pool. It was at such a situation that the incident had occurred when one of the employees dived in the pool and died. It can be understood that the employees had taken the initiatives themselves to break the rules and take the risks. Hence the Volenti non fit injury is applicable in this case and the company would not be responsible for the acts of the employees. However it might also be considered in this regard that the pool remained completely vacant once the door was closed and there was no security on the part of the company. This could be taken as a liability of the company so as not to allow anyone after the closing of the doors. The case of Ratcliffe v McConnell: This case reflects the case of a young student getting injured after he dived in a pool while enjoying with his friends (Ratcliffe v McConnell and Others 1999, 1999). As far as the defendants or the owners of the pool are concerned, they denied their responsibility since the student had been a trespasser. In this regard, the concept of Volenti non fit injury may be applied. However on the other hand, the authority of the pool too might be held liable since there was no one to stop the students from trespassing and diving into the pool. Conclusion: The above study has taken into consideration several concepts and understanding of the business laws that are necessary for the managers and employees and the organizations to consider while performing their daily organizational activities. Certain incidents have been studied in this regard that clearly reflect that negligence and lack of obligation may lead to several harmful acts on the part of the employees where the employer may be held vicariously liable. The elements of negligence thus need to be clearly understood. With the importance of such understanding being realized companied like the Electra Direct needs to incorporate special training and development measures in their organizations for teaching and learning of these facts and sharing the knowledge of business laws with their employees and managers such that the businesses may run successfully avoiding any legal actions against them. References 1) Bazley v Curry 1999 (1999), mjsol, available at: http://www.mjsol.co.uk/library/cases/child-abuse/bazley-curry-6th-october-1999-canadian-supreme-court/ (accessed on June 25, 2012) 2) Gass, D. (2012), Importance of Business Law Knowledge, streetdirectory, available at: http://www.streetdirectory.com/travel_guide/154234/exercising_and_running/importance_of_business_law_knowledge.html (accessed on June 24, 2012) 3) Hinds, A.L. (n.d.), The Duty of Care in Irish Tort Law, cpaireland, available at: http://www.cpaireland.ie/UserFiles/File/students/Articles/2006LFmodified.pdf (accessed on August 6, 2012) 4) MATTIS v POLLOCK (n.d.), oldsquare, available at: http://www.oldsquare.co.uk/pdf_cases/1200267.pdf (accessed on June 25, 2012) 5) Negligence and Nuisance (n.d.), FDS, available at: http://fds.oup.com/www.oup.com/pdf/13/9780199608706.pdf (accessed on June 24, 2012) 6) Occupier’s Liability Definition (n.d.), duhaime, available at: http://www.duhaime.org/LegalDictionary/O/OccupiersLiability.aspx (accessed on August 7, 2012) 7) Owen, D.G. (2007), The Five Elements of Negligence, Hofstra Law Review, Vol.35, No.4, available at: http://lawarchive.hofstra.edu/pdf/Academics/Journals/LawReview/lrv_issues_v35n04_i01.pdf (accessed on June 24, 2012) 8) Ratcliffe v McConnell and Others 1999 (1999), oxcheps, available at: http://oxcheps.new.ox.ac.uk/casebook/Resources/RATCLI_1%20DOC.pdf (accessed on June 26, 2012) 9) Tufal, A. (n.d.), The Tort of Negligence, lawteacher, available at: http://www.lawteacher.net/PDF/Flowchart.pdf (accessed on June 24, 2012) 10) Vicarious Liability (2012), legal-dictionary, available at: http://legal-dictionary.thefreedictionary.com/Vicarious+Liability (accessed on June 25, 2012) 11) Volenti non fit injuria (n.d.), e-lawresources, available at: http://www.e-lawresources.co.uk/Volenti-non-fit-injuria.php (accessed on June 26, 2012) Read More