Contract Law and Tort Law of the UK - Case Study Example

Potter a master at a fee-paying school for boys up to the age of 13 took his to the local adventure playground "Thrills and Spells". The group included Peter, a German boy who learning English at this school. Potter paid an entrance fee at the booking office. There was a notice which said "All activities undertaken at your own risk." The boys, accompanied by Potter went to a cafe, owned by "Thrills and Spells", for lunch. The floor was unfinished and several rolls of linoleum were lying around. Edmund, one of the pupils, tripped over a roll of linoleum, hurt his head and became unconscious. In the meantime, Peter wandered over to the duck pond, where a notice which said "Take Care! The edge of this pond is slippery", was displayed. Peter deciding to feed the ducks went right to the edge of the pond and fell in. Nicholas, who saw this, jumped in and pulled Peter out. Both were hospitalized and Peter was only bruised but Nicholas having swallowed the pond water developed a serious stomach ailment. Meanwhile, Martin an 18 year old detainee who had just been released from the Young Offenders' Institution fell into a trench and broke his leg, while trying to steal the parked cars. In order to advise the parties with regard to their rights and liabilities recourse will be taken to liability for breach of contract under the Contracts Act, other liabilities arising through torts, Unfair Consumer Terms Act 1977 or UCTA, Unfair Terms in Consumer Contracts Regulations 1999, etc. Rights. Edmund, one of the pupils of the school, ran into the caf for lunch and tripped over the material being used for flooring purposes, hurt his head and consequently, became unconscious. In this regard it has to be considered whether the premises owner can evade his liability by relying on exclusion clauses. A contract is an agreement giving rise to obligations which are enforced or recognised by law. The factor which distinguishes contractual from other legal rights is that they are based on the agreement of the contracting parties. It is important to bear in mind that every breach of a contract allows the plaintiff a remedy at law. It is the bounden duty of the owner of the adventure playground "Thrills and Spells" to keep the premises safe and secure. The Statute sets out that no contract term can exclude or limit liability in any way for negligently causing death or injury1. Furthermore, if there is other loss or damage, liability for negligence cannot be excluded or restricted if the term of notice is unreasonable. In addition, if a contract term or notice efforts to exclude or restrict liability for negligence, agreement to or awareness of this is not of itself to be taken as indicative of the voluntary acceptance of any risk2. In Olley v Marlborough Court, The plaintiff booked in for a week's stay at the defendants' hotel. A stranger gained access to her room and stole her mink coat. There was a notice on the back of the bedroom door which stated that "the proprietors will not hold themselves responsible for articles lost or stolen unless handed over to the manageress for safe custody." The Court of Appeal held that the notice was not incorporated in the contract between the proprietors and the guest. The contract was made in the hall of the hotel before the plaintiff entered her bedroom and before she had an opportunity to see the notice3. Accordingly, damages were suitably awarded to the plaintiff. In our present case also, the notice was noticed by Potter only after he had received the tickets for entering the adventure playground. Hence, it cannot be construed that the exclusion clause was incorporated into the contract. In Thornton & Shoe Lane Parking Ltd, it was held that if the car is damaged by the negligence of the parking company, it will be liable despite the exclusion clause. Further it was stated by Lord Denning J in his observations in this case that Thornton was not aware of the conditions printed on the reverse of the ticket. He further opined that an exclusion clause to be valid has to be brought to the notice of the other party in an explicit manner and not just of terms in general4. The validity of the exclusion clauses, are to be tested under the Unfair Contract Terms Act 1977 (UCTA), and Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR). The Director General of Fair Trading is duty bound to investigate the complaints in respect of unfair terms in contracts5. The main objective or purpose of UCTA 1977 is to place a restriction on the extent to which liability in a contract can be excluded for breach of contract and negligence. This is achieved mainly either by reference to a reasonableness requirement or by specific prohibition. In our case the notice was so situated that it could be observed only after the purchase of entry tickets was made, hence it does not form part of the contract. Therefore, Edmund, being a minor child has to be safeguarded by the school authorities. Potter did not exercise sufficient care in respect of protecting his pupils, who were vulnerable to accidents, due to their tender age and moreover, Edmund cannot be expected to observe and follow the writings on notice boards. Hence, the premises owner has been negligent in ensuring the safety of the premises. Accordingly, he cannot evade responsibility by relying on the exclusion clauses. Further, the flooring contractor is also liable for his negligence in leaving the work unfinished, especially, when there is awareness of the fact that most of the visitors are children. The UCTA sets out that no contract term can exclude or limit liability in any way for negligently causing death or injury. It further states that, liability for death or personal injury cannot be restricted by reference to any contractual term or by means of a notice. Also, if there is other loss or damage, liability for negligence cannot be excluded or restricted if the term of notice is unreasonable. Further, if a contract term or notice endeavours to exclude or restrict liability for negligence, agreement to or awareness of this is not of itself to be taken as indicative of the voluntary acceptance of any risk6. Therefore the premises owner cannot evade his liability for the injury caused to Edmund due to his negligence, merely by stating that a notice was displayed in this regard. Further, the firm which had undertaken the flooring contract in the caf is also liable for the injury caused to Edmund under tort law. In Miller v. Jackson, a cricket club was held to be guilty of negligence and nuisance due to their cricket balls striking passer byes7 and similarly in Castle v. St Augustine's Links, a golf club was held to be liable for the golf balls, which had been hit out of the club and causing injury8. In our present case, the proprietor of "Thrills and Spells" cannot take recourse to the provisions of the exclusion clauses in order to escape the liability for harm caused to Edmund. Negligence involves four elements these are duty, breach of duty, causation and damages. Duty is a legal obligation that a person must maintain a standard of conduct, which protects others from unreasonable risk or harm. For proving negligence, breach of duty has to be established by the aggrieved party. The proprietor had not provided sufficient safety measures to prevent accidents, especially when the majority of his clientele were children. In order to hold him liable for premises liability, it has to be proved that he should have known about the danger to children from flooring material lying about unattended and this is obvious because any reasonable person would have assessed the potential harm and thereby would have taken steps to prevent such an accident. This illustrates the negligence on the part of the owner. A business will always be liable for maintaining the premises, even if it delegates that task to an independent contractor. The company can, however, seek indemnity from a contractor or other person who is negligent. Not every action by a third party on the premises creates liability. It has been held, for instance, that a bank is not liable when an angry customer throws a chair out of a window, injuring a passer by on the pavement9. As per doctrine of privity of contract, the courts have held that a person who is not a party to the contract or in other words a third party was not protected by an exclusion clause in that contract, even if the clause purported to extend to him. The four main goals of tort law are to obtain compensation for victims of personal injury, to legally obligate the person who harmed the victim to pay punitive damages, to prevent the recurrence of similar reckless or negligent action in the future and to defend the victims' legal rights. A tort of negligence claims that the defendant is to blame for the victim's personal injury because he failed to prevent it. Edmund had hurt his head and lost consciousness, due to the carelessly laid out flooring material. He can therefore claim damages for his injury and suffering from the premises owner and the company entrusted with the task of completing the flooring work under the contract act. UCTA 1977, which deals with a limited set of highly specialized types of exclusion strikes out any attempt to disclaim liability for death or injury, therefore his claim can be based on this act also. Further, under tort law the principal remedy available to him is compensation for the injury sustained by him. As such damages are the predominant remedy available under Tort law. The fundamental principle applied to the assessment of an award of damages is that the claimant should be fully compensated for his loss. He is entitled to be restored to the position that he would have been in, had the tort not been committed, insofar as this can be done by the payment of money, this is as per the ruling in Livingstone v Rawyards Coal Co 10. In respect of Peter, there was a notice by the pond stating that the pond's edge was slippery. However, Peter was a German boy who had very little knowledge of English. In addition, Peter being very young was not mature enough to assess the danger inherent in going very near to the pond's edge. In this incident also, validity of the inclusion of the exclusion clause in the contract arises because the contract was entered only at the time of buying the entry tickets, whereas the notice was visible only at a much later stage. Hence, the premises owner cannot evade his responsibility by relying on exclusion clauses since he is solely responsible for the safety measures to be adopted. Peter who fell into the pond can claim damages for breach of contract under the contract act and he can also claim damages for having fallen into the pond and thereby ruining his clothes. These damages are to be claimed from the premises owner. Further, he can also claim damages from the school authorities for neglecting his duties resulting in his falling into the pond. Peter can claim damages for any injuries sustained under Tort law. From the above, the premises owner has to recompense Nicholas, who contracted severe stomach infection, while rescuing Peter to the full extent of the damages suffered by him. Nicholas is not a trespasser on the premises but a genuine customer. Moreover, his actions were exemplary and akin to what any reasonable person would have done under similar circumstances. It has to be borne in mind that he under took considerable risk in order to save a child's life. The relevant case law supporting third party claims is discussed in the sequel. It is a much-professed rule of the law of contract that a plaintiff can only recover its own losses as damages for breach of contract. Exceptions to this general rule are limited. However, the House of Lords allowed an employer under a building contract to recover damages for the losses suffered by a third party11. Nicholas who developed a stomach infection due to swallowing the pond water, while rescuing Peter, can claim damages for injury and illness from the premises owner. He can claim under Torts for negligence of the premises owner. This is possible even though he is a third party because of the relevant and abundant case law, which has been discussed above. In respect of Martin, a juvenile delinquent, his entry into the premises is trespass and his intent is criminal. The premises owner is not liable for any injury caused to Martin. In Letang v. Cooper, Lord Denning M. R. that actions for trespass should be confined to cases where intentional injury has been caused to the trespasser12. Therefore, Martin who suffered an accidental injury cannot claim any compensation. This is borne out by the cases discussed below. In Robert Addie & Sons v. Dumbreck, although a four year old trespasser was killed, it was held that the colliery was not duty bound to safeguard him13. In our case Martin is 18 years old and his injury is nothing more than a broken leg. Hence it will be well nigh impossible for him to get any compensation, whatsoever, for his injury. In Latham v. R. Johnson & Nephew Ltd, it was held that, "the owner of the property is under a duty not to injure the trespasser willfully; 'not to do a wilful act in reckless disregard of ordinary humanity towards him;' but otherwise a man trespasses at his own risk.'"14 In Videan v. British Transport Commission, Pearson L.J., while deciding whether any duty was owed by a premises owner to a trespasser, held that: "Such persons [occupiers] are entitled to farm lands, operate quarries and factories, run express trains at full speed through stations, fell trees and fire shots without regard to the mere general possibility that there might happen to be in the vicinity a trespasser who might be injured. Such persons do not have to cease or restrict their activities in view of that possibility, which is too remote to be taken into account and could not fairly be allowed to curtail their freedom of action."15 In respect of Martin, no such violence was done to him and he just happened to fall into a drainage ditch, while attempting auto theft. Liabilities. The liability of the school authorities is that they have to compensate the injured students for breach of contract as they had failed in their promise to the parents to take proper and diligent care of the pupils. In this matter they had failed, because children require special care and attention when they are taken to a new and unfamiliar place. The liability of the premises owner lies in the fact that he had not taken reasonable care to ensure the safety of visitors to the premises. He cannot rely on exclusion clauses to escape his liability for all the bad incidents that took place on that particular day. Further, he is liable under Tort law, UCTA and UTCCR also. Under the Unfair Contact and terms Regulations 1977 section 1(3), clauses and terms that seek to limit or exclude liability of things being done by a person in a course of business are scrutinized and the test applied is that the exclusion clause must be reasonable under section 11, this stating that the term shall have been a fair and reasonable one to have been included in the circumstances which were, or ought to, have been known to the parties when the contract was made. Further, under the Unfair Terms and Contracts Act 1977 section 2(1) liability for death or personal injury resulting from negligence cannot be excluded or restricted by any contract term or notice. Hence, he has to recompense the injured students and Nicholas also. The occupier's liability for premises states that under the Occupiers Liability act 1957, a common duty of care is owed to all lawful visitors and the duty is to take such care under all circumstances for which the visitor is present on these premises. The Occupiers Liability Act 1984 imposes a similar duty of care in respect of trespassers and imposes a limited duty of care on occupiers to take reasonable steps to offer protection to trespassers from dangers which should be known to exist on the property. In torts the basic concept involved is that negligence leads to loss or damages. The court will attempt to make good such loss or damages. Such negligence attracts joint and several liability and each of the parties involved will have to compensate the injured party and if one of these parties cannot pay his share then the others will have to increase their share of the compensation. Accordingly, in our present case the premises owner, the school authorities and the flooring contractor are liable to recompense the injured parties. Bibliography. 1. Atiyah, PS, 'An Introduction to the Law of Contract', 1995, Clarendon 2. Beale, HG, Bishop, WD and Furmston, MP, 'Contract - Cases and Materials', 1995, Butterworths' 3. Beatson , Jack E. and Friedmann, Daniel E. (eds). Good Faith and Fault in Contract Law. Clarendon Press. Oxford. 1997. 4. Brisby, Liliana and Jacobs, F.G (eds). Yearbook of European Law. Volume: 7. Clarendon Press, Oxford, England. 1982. 5. Cheffins, Brian R. Company Law: Theory, Structure, and Operation. Clarendon Press. Oxford. 1997. 6. Collins, H, 'The Law of Contract', 1993, Butterworths. 7. Deakin, S.F and Markesinis. B.S. Tort Law. Clarendon Press. Oxford. 1999. 8. Downes, TA, 'Textbook on Contract', 5th edition, 1997, Blackstone. 9. Huntley, JAK, 'Casebook on Contract', 1995, Green & Son. 10. Koffman, L, and Macdonald, E, 'The Law of Contract', 1995, Tolley. 11. Lawson, R, 'Exclusion Clauses', 4th edition, 1995, Longman. 12. McKendrick, E, 'Contract Law', 1994, Macmillan. 13. Poole, J, 'Casebook on Contract', 1995, Blackstone. 14. Simpson , A.W.B. A History of the Common Law of Contract: The Rise of the Action of Assumpsit. Oxford University Press. Oxford, England. 1987. 15. Smith, JC, 'Smith & Thomas: A Casebook on Contract', 10th edition, 1996, Sweet & Maxwell. 16. Treitel, GH, 'The Law of Contract', 1995, Sweet & Maxwell. Read More