Legal Matters in Business Situations - Essay Example

? Section 4 Introduction Legal matters in business situations are very common nowadays. They tend to create a formal and commercial dealings between one another of which law is a major part. No business dealing can be made outside the scope of the law and the terms implied by law. In various business situations, negligence can occur because of which the business can be held vicariously liable. There are some principles of liability that are separately applied for the business situations (Harpwood, 2008, 201). Applying negligence and its defenses in different business situations: The elements of negligence are existence of a duty of care, the breach of that duty and reasonable damage caused. These damages can be physical injuries, damage to property, and pure economic loss. The pure economic loss does not necessarily have to be with the presence of physical loss and damage to property. Sometimes there are losses that are purely economic and are caused by the breach of a duty of care. The duties of care that result in pure economic loss are mostly related to the business scenarios where the loss may occur in the form of economic for the business or for any specific employee (Edwards, 2008, 357). In one scenario, because of the power cut the business had to stop their production and was forced to shut down their factory temporarily. In this scenario, the loss was purely economic as the business claimed for the loss of profit that they could have gained in the time period when the factory was shut down. The courts held that this loss was neither calculable nor recoverable. The heads of the factory had a duty of care towards the business to make sure that power supply is provided to the factory so that no damage to property or economic loss can occur. In another scenario, if the business has provided the employees with the damaged or defected equipment and during the working hours, they get injured due to the fault of the equipment, the business will be held liable for breaching their duty of care towards the employees to provide them safety at work, unless the work is risky or the risk is reasonably foreseeable. Under the principles of negligence, the business will have to compensate the physical injury of the employee. And the employees can also claim for economic loss by claiming for the absence at work because of which they couldn’t earn. The courts will also order the business to compensate to those losses (Okrent, 2009, 58). The defense that the business can use in the case when there is a physical injury is contributory negligence. This is a common law defense which stated that anyone who was partly responsible for the harm done to them could not recover in tort. In the business scenario where the equipment provided was damaged and moreover, the employee worked with it in an improper way which caused the injury, the employee will be considered contributory negligent and no liability will be imposed on the business. To make sure that contributory negligence has taken place, it is important to first find out whether the defendant was negligent or not. Thus, it was seen that in many cases the claimant’s behavior was negligent which contributed to the accident and the damages (Statsky, 2011, 131). Volenti non fit injuria is also a defense which can be used in the business scenarios. This Latin phrase means ‘no injury can be done to a willing person’. It describes a defense which applies where the claimant has in some way consented to what was done by the defendant, on the basis that in giving consent the claimant was voluntarily taking the risk of harm. This applies in many business scenarios where the jobs are mostly risky and may need technical expertise. For these jobs, the employees should voluntarily consent to the acceptance of the risk that will be throughout their job. Thus, this defense can be used by the businesses where consent can be proven (Barnes, Best, 2007, 151). Applying elements of vicarious liability to business scenarios: Vicarious liability occurs where one person, usually in businesses, is considered legally liable for the torts committed by the other person. The business can be held liable for any sort of physical damage, damage to property or economic loss which has been caused to the claimant due to the negligence. However the first element that the courts would look at is whether employment is present between the defendant and the claimant or not. An employer will only be responsible for torts committed by their employees if those torts are committed in the course of employment, rather than when he is on his own (Giliker, 2010, 5). Another element is express prohibition under which the business will not be held liable. This suggests that an employer who expressly prohibits an act will not be liable is an employee commits that act. However, the employer may be liable if the prohibition can be regarded as applying to the way in which the job is done, rather than to the scope of the job itself. In a business scenario, for example, the business owns many buses for which drivers are assigned. The drivers are strictly told that they are not allowed to race with other buses. In disobeying the rule, one of the drivers collides with the claimant’s bus who then, sues to retrieve the damages. The business will not be held vicariously liable as they prohibited the driver to do so (Jennings, 2010, 10). Another element is criminal acts. In the business scenario where the employees of a business commit acts such as punching the customer, or in severe situations, causing him severe injuries, the business will not be held vicariously liable. When it is about vicarious liability for criminal acts committed by employees, we do not mean that the employer is prosecuted for the crime instead of the employee. The cases referred to in this section concerns with situations where an employee has done something which is both a crime and a tort. He or she will have been prosecuted for the crime by the state but if their actions also fall within the definition of a particular tort, they can also be sued by the victim (Miller, 2007, 396). In business scenarios, vicarious liability will not be imposed when the employee of the business commits an act that causes harm to the claimant outside the business or job premises. Vicarious liability will be imposed only until the employee is performing under his job duties or till he wears the identification card of that business. After he goes home from his work or elsewhere, none of his actions will be encountered as vicarious liability for the business. Hence, those wrongs that are committed when he is alone do not hold any claim under vicarious liability in tort law. Vicarious liability defines a special relationship between the one liable and the defendant which only occurs in the course of business dealings (Ottley, 2006, 87). Conclusion: Thus, different principles of legal liability are used in different business situations. Some of the employees are held negligent for their own wrongs during the course of the business and in the other context as in the whole business facing problems due to some party’s negligence. Other cases include vicarious liability where the business is held responsible for the wrongs of their employees. In complicated cases, the courts decide whether the negligence had resulted in vicarious liability or the common liability under tort law. The defenses are also used respectively and can help the businesses in upholding the liability on them for the wrongs of others. Thus, it is observed that tort law has a wide scope in which many holdings within a case can take place (Bagley, 2011, 372). References Edwards F. 2008. The Legal Environment of Business. NY: Cengage Learning Giliker P. 2010. Vicarious Liability in Tort: A Comparative Perspective. UK: Cambridge University Press Okrent C. 2009. Torts and Personal Injury Law. NY: Cenagage Learning Statsky W. 2011. Essentials of Tort. NY: Cengage Learning Barnes D., Best A. 2007. Basic Tort Law: Cases, Statutes, and Problems. USA: Aspen Publishers Online Harpwood V. 2008. Modern Tort Law. NY: Taylor & Francis Jennings M. 2010. Business: Its Legal, Ethical, and Global Environment. NY: Cengage Learning Miller R. 2007. Business Law Today: The Essentials. NY: Cengage Learning Ottley M. 2006. Business Law. NY: Cengage Learning Bagley C. 2011. The Entrepreneur’s Guide to Business Law. NY: Cengage Learning Read More