Business Law: Aunty Ems Catering School Ltd - Case Study Example

Business Law, Aunty Em’s Catering School Ltd Table of Contents Background 3 A.Overview: First letter 3 Review of Rules In Relation To Incorporationof Exclusion Clauses and Determining Whether this Clause Excludes Aunty Em’s Catering School Ltd In Respect Of This Loss 4 2. Assessing Whether the Company Can Be Constructed To Exclude Liability 6 B. Overview: Second Letter 6 1. Define Negligence and Evaluate the Factors 7 2. Assessing the Impact on the Lecturers Claim 8 C. Overview: Third Letter 9 Examining the Law In Relation To Occupiers Liability and Assessing the Potential Liability 9 References 11 Background Aunty Em’s Catering School Ltd was established in the year 1963 and since its inception, the school is able to provide its services successfully. Emilia, the founder of the school is duly serving as the company’s Managing Director. The catering school is generally a renovated farmhouse and is bordered by an apple orchard. According to the scenario provided, Emilia, in the preceding month, received three letters instituting legal actions against the company that have been elaborated in detail with the incorporation of varied lawful guidelines or frameworks. A. Overview: First letter With reference to the first letter received by Emilia, a former student of the college has claimed compensation arising from the theft of her purse and bag from her assigned locker, while attending a one-day course at the college. However, the company’s managing director has straightforwardly denied that the Aunty Em’s Catering School Ltd is liable for this loss and thus defend her statement by pinpointing the exclusion clause “Aunty Em’s Catering School Ltd is not liable for any loss, theft or damage to valuables left in storage lockers.” Correspondingly, the subsequent discussion aims at investigating the rules relative to formulation of exclusion clauses to determine whether this clause excludes the company in respect of this loss. Besides, the discussion will assess whether it can be constructed to exclude liability in this situation assuming that exclusion clause is incorporated into the student’s contract. 1. Review of Rules In Relation To Incorporation of Exclusion Clauses and Determining Whether this Clause Excludes Aunty Em’s Catering School Ltd In Respect Of This Loss “Unfair Contract Terms Act 1977” can be apparently observed to have radical influence on the application of exclusion clause. According to this Act, exclusion clause is defined as a clause, which governs to exclude or limit liability for breach of contract and violation of implied terms or misrepresentation (Crown, 2014). On further note, it is determined that a contracting party who desires to include exclusion clause in a contract and resort upon it is ought to understand the following three requirements: it must be incorporated in the contract as a matter of construction, it must apply to cover the events that have arisen it must be valid under the Unfair Contract Terms Act 1977 Besides, a contracting party can incorporate exclusion clause through the following three basic ways: By signature to a written contractual document By notice By course of dealing Source: (Insite Law, 2014; Clarke, 2004) Notably, the case law of Olley v Marlborough Court Hotel (1949) can be taken into concern for discussion in order to examine and acquire substantial understanding regarding the liability of the company. In this case, a hotel room was booked by the claimant Mrs Olley. A contract was made at the reception desk where an exclusion clause was not mentioned. At the back of the door, a notice displaying exclusion clause excluding hotel owners for any lost, theft or damaged property was illustrated. It was observed that a fur coat of the claimant was stolen from the hotel room. The claimant held that the notice displayed at the back of the door was ineffective, as it was displayed at the back of the door of the room. According to the judgment, it was proclaimed that the hotel has failed to reveal reasonable care, as it obliged to do contractually. Then, it was decided that the disclaimer was not the part of the contract and the hotel could not resort upon it. At the same time, the contract for the storage of the coat was formed at the reception. Apparently, there were no means based on which Mrs. Olay could know about the disclaimer at that instance and thus, it could not be part of the contract. Therefore, the exclusion clause was not allowed to stand (Insite Law, 2014; Clarke, 2004). Based on the above provided evidences, it can be ascertained that in order to ensure the disclaimer to be legal, two basic requirements are essential to get adhered. In this regard, one of the requirements is that it is essential for the other party to sign exclusion clause containing in the contract. On the other hand, the other requirement seems to be providing notice during or before the time of concluding the contract. With respect to the given case scenario, it has been apparently observed that no signature of the student was sought, nevertheless, huge notice containing exclusion clause was displayed. Thus, it can be affirmed that the Aunty Em’s Catering School Ltd is not excluded from the loss or the damage incurred by the student. 2. Assessing Whether the Company Can Be Constructed To Exclude Liability In order to determine that whether Aunty Em’s Catering School Ltd can be constructed to exclude liability in this situation considering the assumption that the exclusion clause is incorporated into the student’s contract, it will be vital to reflect the case law of Chapelton v Barry UDC (1940). According to this case, it can be apparently observed that the claimant Mr Chapelton hired two deckchairs and paid for the same and was provided with two tickets. It was mentioned in the ticket, which purported to exclude liability for any loss, injury or damage emerging from the hire of the deckchair. Unfortunately, the chair tore, which resulted in causing severe injury to Mr Chapelton. Initially, the court ruled in favour of the council. However, later, it was claimed that the tickets provided to the claimant were just a money receipt and thus the exclusion clause did not formed the contract. At the same time, if the exclusion clause was explicitly demonstrated in the contract, the claimant would have not been liable for the compensation. Correspondingly, from the above discussion, it can be asserted that Aunty Em’s Catering School Ltd might get excluded from the loss or the damage incurred by the student, if the exclusion clause is incorporated into the student’s contract, provided it should be explicitly stated (Mulcahy, 2008) B. Overview: Second Letter It was observed from the given case scenario that the second letter was from the solicitor of a former lecturer hired by the company, suing for compensation due to injuries experienced because of negligence. Serious injuries then arose at the time when the lecturer was performing a food demonstration, presenting students how to caramelise the sugar on top of a crème brûlée. The flame from the blowtorch exploded, while using the torch, which resulted in serious burns. Upon investigation, it was determined that the explosion was due to loose wiring in the blowtorch. The Kitchen Manager was acquainted with this wiring issue, but the lecturer was asked to use the torch until a replacement was purchased. 1. Define Negligence and Evaluate the Factors Defining negligence is duly considered to be quite complex. It is often recognized to related with professional occupation, which possess a duty of care towards its users, where the individual has been neglectful in terms of his duties and the user has consequently experienced some form of loss, which may include physical, financial or both (Campbell, 2014). In order to evaluate the factors that the Court will take into concern in determining whether the instructions given by the Kitchen Manager to keep using the blowtorch are in breach of the required standard of care is of negligence action, it is essential that the conduct demonstrated by him satisfy certain specific requirements or elements of negligence. Accordingly, the court must initially examine whether the company is bound by the employment of the Kitchen manager. Then, it should consider whether there was an instance of ‘duty of care.’ Apart from these, the court should investigate whether there was a breach of this duty of care. Afterwards, it should consider whether the action of the kitchen manager caused any physical or financial loss or damage to the lecturer. Lastly, it should examine whether there exists a causal link between the breach of duty of care and the loss or damage suffered (Binchy, 2004; Hinds, n.d.). Specially mentioning, if the actions of the kitchen manager duly satisfy the above elements of negligence, the court can sue the Kitchen manager on behalf of the company i.e. Aunty Em’s Catering School Ltd against the charges of negligent actions. In such circumstances, the company can be made liable for providing financial compensation against the loss or damage incurred by the lecturer. These may include settlement amounts, medical costs, plaintiff legal costs and any other costs relative to the damage caused from the negligent actions (Hinds, n.d.). 2. Assessing the Impact on the Lecturers Claim In order to assess the impact on the lecturers’ claim, it would be vital to consider the case of Purtill v Athlone UDC [1968] I.R. 205. In this case, the court was required to deal with the damage or the injury of a young boy causing from an activity conducted at the location of a slaughterhouse. In this regard, it was identified that young boys were used to visit slaughterhouse frequently in order to observe the butchering of animals through a pistol-like device and detonator. The doors of the slaughterhouse were often left open and the gates were seldom locked during butchering. A young boy often took detonators from the slaughterhouse and detonated them at the back of his garden. In one such incident, explosives hit the eyes of the young boy, which caused blindness in his right eye. On this note, he sued the abattoir for negligence. The abattoir on defence stated that he was a trespasser and it did not owe any duty of care to him. On hearing the statements of both the parties, the court rejected the claim of the trespasser and thus focused on examining whether there exists a duty of care. In order to acquire more understanding about the judgement, the court investigated the issues of foreseeability and proximity. In this regard, the court asserted that there existed a proximate relationship, considering the regularity of young boys visit to slaughterhouse. Thus, it was claimed that employees of the slaughterhouse owed a duty of care towards the young boy. Most vitally, the court proclaimed that the claimant is held responsible for his own damages and injuries. However, the court ordered to apportion 15% liability to the young boy. Based on the above provided case law, it can be asserted that the lecturers in the given case scenario will not or partially held liable for their claims (Hinds, n.d.). C. Overview: Third Letter Given the case scenario, it has been ascertained that the Managing Director of Aunty Em’s Catering School Ltd received the third letter from the parent of a child. It was mentioned in the letter that a child while playing with a group of friends in the orchard of the catering school poisoned after eating an apple from a tree, which caused him to be hospitalized. The tree in question was ascertained to be treated for a fruit mite and had been spraying with a toxic pesticide. Besides, no notice was placed on the tree with respect to this effect. Examining the Law In Relation To Occupiers Liability and Assessing the Potential Liability The major legislation governing occupier’s liability is the “Occupiers Liability Act 1995.” According to this Act, a person holding a control over the state of the premises is likely to possess a duty of care towards an entrant that may be a visitor, recreational user or trespasser with regards to any particular danger faced by them. Nonetheless, it is also identified that in order to claim compensation under this Act, the plaintiff must prove that the particular person was negligent in some way (Dillon Eustace, 2012; Binchy, 2004). In order to assess the potential liability of Aunty Em’s Catering School Ltd in the given case scenario, it would be an ideal choice to consider the case of Patrick Corcoran .v. Aer Lingus Plc. and Dublin Airport Authority Plc. In this case, the claimant while delivering to the AL Cargo Terminal had lost his balance and fell into a hole/broken area of concrete in a compound outside the AL cargo terminal area, which caused him serious injuries. It was found that the premise at the façade of the AL terminal building was covered with bitumen macadam, which got fragmented and created a dent at the point wherein the claimant had fallen. After the investigation, the court identified that there was a breach of the occupier’s duty towards visitors and that the occupier was made liable to compensate the claimant for his injuries. According to the above provided case law and the Occupiers Liability Act 1995, it can be asserted that Aunty Em’s Catering School Ltd is liable for the compensation for the injury or the damage caused to the child. In this situation, the company can be made liable to compensate and pay settlement amounts, treatment costs and defence costs that may include fees payable to counsel. References Binchy, W., 2004. Recent Developments in the Law of Torts. Judicial Studies Institute Journal, Vol. 4, No. 1, pp. 8-78. Crown, 2014. Unfair Contract Terms Act 1977. Browse Legislation. [Online] Available at: http://www.legislation.gov.uk/ukpga/1977/50/contents [Accessed July 26, 2014]. Clarke, R., 2014. Contract Law in Ireland. Judicial Studies Institute Journal, Vol. 5, No. 1, pp. 302-307. Campbell, E. P., 2014. Professional Negligence in Ireland. When Can I Claim Compensation for Professional Negligence? [Online] Available at: http://www.injury-compensation.ie/professional-negligence/ [Accessed July 26, 2014]. Dillon Eustace, 2012. Occupier’s Liability And The Issue Of “Control” – An Analysis Of The Law In Light Of The High Court Decision In Patrick Corcoran .V. Aer Lingus Plc. And Dublin Airport Authority Plc. Facts. [Online] Available at: http://www.dilloneustace.ie/download/1/Patrick%20Corcoran%20Article.pdf [Accessed July 26, 2014]. Hinds, A. L., No Date. The Duty of Care In Irish Tort Law. Examiner – Legal Framework Formation 1. Insite Law, 2014. Exclusion Clauses. Intention to Create Legal Relations. [Online] Available at: http://www.insitelawmagazine.com/ch8exclusionclases.htm [Accessed July 26, 2014]. Mulcahy, L., 2008. Contract Law in Perspective. Butterworths Ltd. Read More