Torts Law Problem - Case Study Example

His actions could therefore be interpreted as being binding upon MoreeRE Company, and thus establishing liability on the company under the doctrine vicarious liability. In order to file suit under the tort of negligence successfully, Cathy has to prove that there was duty of care owed to her by MooreRE Company and because of a breach of this duty of care, she suffered loss and damage. In the English case of Donoghue vs. Stevenson,2 the duty of care was established as a fundamental requirement in any action for a tort of negligence.

The court defined this duty as the fundamental duty of not undertaking an action where it is reasonably foreseeable that an act or omission would injure or bring about loss or damage to those whom it is reasonably foreseeable that an act or omission would injure or bring about loss and damage to those whom it is reasonably foreseeable that they would be affected by such an act or omission. Section 52 of the Australian Trade Practices Act 1974 provides that, “A company shall not, in trade or commerce, participate in conduct that is misrepresentative or deceptive, or is likely to mislead or deceive.

” From this provision, it is arguable that MoreeRE owed Cathy a duty of care not to engage in any conduct or making of statements that could be deemed as misleading or deceptive with the aim of procuring advantage thereof. The representation made by John to Cathy was misleading and it is in the reliance of this representation that Cathy secured the sale of her house for $100,000 less than the actual market value. This can be interpreted as a direct violation of the duty of care owed to Cathy by MooreRE Corporation, and because of this, she suffered loss.

It is thus arguable that MooreRE breached this duty of care once their agent made those false representations. Reliance on the representation resulting from the breach of the duty of care the corporation owed to Cathy led her to suffer loss and damage, hence completing the requirements needed for a successful claim under the tort of negligence. It is thus obvious that Cathy’s loss can be attributed directly to the breach of this duty of care that was owed to her by MooreRE Corporation. Cathy could also succeed in a claim of the tort of negligence under the tort of misrepresentation.

The cause of action could arise from either fraudulent misrepresentation or innocent misrepresentation. A misrepresentation occurs when person makes a statement, on whose reliance makes another person to act upon this statement, and as result of this reliance, the party suffers loss and damage. A misrepresentation could thus be either an innocent misrepresentation or a fraudulent misrepresentation. A representation is fraudulent if the party making such a representation makes it with the intention that a party will rely on it, and such reliance will be beneficial to him.

A representation, on the other hand, amounts to an innocent misrepresentation where the party making the statement is unaware of the consequences of such a representation, and the party relying on such a representation suffers loss and damage from such representation. In the scenario, John’s representation cannot be termed as a fraudulent misrepresentation as he did not have the fraudulent intention to defraud Cathy through the transaction. This is because he thought he was carrying out business for his company with the