Analysis of Business Law Cases and Employer Negligence - Assignment Example

PART A Here the issue is at what point the acceptance of a contract is binding, and whether the revocation is sufficient to null the acceptance letter sent by Raj. It is generally held that a posted acceptance is binding from the moment the letter was posted in the box (Adams v. Lindsell [1818] 106 ER 250), thus Raj’s acceptance letter could be held to have completed the contract at 11am on March 3. The main issue is whether Mark’s cancellation fax was binding, and if so, at what point, for if it is binding when sent, there will be no contract found. Byrne & Co v Leon van Tienhoven & Co [1880] 5 CPD 344 holds that actual communication is essential for revocation, thus it applies when actually received (Entores Ltd v Miles Far East Corporation [1955] 2 QB 327). If this is the case, then Raj’s posting of his acceptance letter sent at 11am on 3 March completes the contract before Mark’s withdrawal of his offer at 4.30pm on the same day. The law does not appear to explicitly cover the problem with the fax machine here, although ‘it seems unlikely that an offeree could revoke a postal acceptance by …instant means of communication before it arrives’ (Elliott & Quinn 2007:99). In general the law is reluctant to state a specific set of rules in relation to instantaneous forms of communication – “No universal rule can cover all such cases; they must be resolved by reference to the intentions of the parties”( Brinkibon Ltd. v. Stahag Stahl, [1982] 1 All ER 293 HL at 296 per Lord Wilberforce). The fact that Mark request the acceptance be made by post could suggest that it is unfair for Mark to use fax as a form of communication. It is thus possible that Raj’s receiving of the fax later may be enough to revoke the offer, although this is unlikely. 2. Items on offer at an auction are classed as an invitation to treat, under British Car Auctions Ltd v Wright [1972] 1 WLR 1519 at 1524 DC per Lord Widgery CJ). This means that a bid must be made – otherwise called an offer, and the completion of the contract for sale ends upon the acceptance of the offer, namely the falling of the hammer (Payne v Cave [1789] 3 Term Rep 148). An offer can be revoked at any point before it is accepted, or before the particular auction ends by means of notifying the offeree – the auctioneer. Therefore, unless an active offer has been made on an item, there is no danger of being bound to buy it. If an offer has been made, then to revoke the offer, a statement of revocation to the offeree must be made before the hammer falls, which is stated in the Sale of Goods Act 1979, section 57(2). If a bid has been made on an item which has a reserve, then any offers below the reserve do not create a binding contract and the offeror is not obligated to pay for the item (Howard v Castle [1796] 6 Term Rep 642 at 645 per Grose J). If a higher bid is placed after the previous bid, then it lapses under this ‘terminating condition’, even if this higher bid is revoked, and essentially revokes automatically the lower bid made (Blackbeard v Lindigren [1786] 1 Cox Eq Cas 205). If Amy does not want to make a bid, she must be careful to not make gestures which could notify a bid – she must be sure that she wants to make a positive bid before gesturing so. Simply being present at the auction will not result in her having to commit to buy any item. PART B 1. EMPLOYER NEGLIGENCE – EMPLOYEE CLAIMS A duty of reasonable care is owed by employers to employees (Donoghue v Stevenson [1932] AC 562) based on a relationship of mutual trust and confidence (Malik & Mahmud v Bank of Credit and Commerce International [1997] UKHL 23). All employers must take reasonable care for the safety of their employees throughout the course and place of employment (Wilsons and Clyde Coal Co Ltd v English [1937] 3 All ER 628, [1938] AC 57). There must be reasonable foreseeability of injury or risk of injury (Caparo Industries Plc v. Dickman [1990] 1 All ER 568), and known exposure of employee to a substantial risk of injury (Bolton v. Stone [1951] AC 850). There must also be causation: the courts ask whether the injury would have occurred but for the breach of the duty; the injury to the employee must be a proximate cause – close in time and space to the incident. “Consequences directly flowing from employer’s negligence” (Frost v Chief Constable of South Yorkshire Police [1997] 3 WLR 1194, 1203, per Rose LJ ) is required, which expose the employee to a risk of physical or psychiatric injury. Liability is also applicable in the event of psychological stress (Petch v Comrs of Customs and Excise [1993] ICR 789 per Dillon J at 796-798); the indications of stress must be obvious enough for any reasonable employer to realise that action must be taken, and; the harm or risk of harm must be reasonably foreseeable (Dooley v Cammel Laird [1951] 1 Lloyd’s Rep 271). EMPLOYER NEGLIGENCE – VICARIOUS LIABILITY Employers can be liable for employee damage or injury caused by negligent acts. The employee’s negligent act must have been done during the course of employment, under the authority or instruction of the employee. If the employer has constant high levels of control over employee’s acts, then they are liable for employee damage caused (Performing Right Society Ltd v Mitchell & Booker Ltd [1924] 1 KB 762). Acts the employer is liable for are those wrongful acts or wrongful ways of acting authorised by the employer, done during the course of employment (Salmond & Heuston 1996:328). The damage caused must be an inherent risk of the employee’s employment (Lister v Hesley Hall Ltd. [2001] UKHL 22, [2002] 1 AC 215). Acts prohibited by the employer will remove vicarious liability, and takes them out of the sphere of employment (Rose v Plenty [1976] 1 WLR 141). 2. The staff member will be able to claim compensation for injury from Cheapskate, for the employer knew of the dangers, and this causes Cheapskate to be negligent. Thus, the employers owed the employee a duty of care, which they overlooked by the order to move the stock to unsafe shelving, and this caused the injury to the employee (Donoghue v Stevenson [1932] AC 562). The fact that Cheapskate knew of the unsafe shelving makes injury reasonably foreseeable, and satisfies the requirement for a successful claim on the part of both the employee and the customer (Caparo Industries Plc v. Dickman [1990] 1 All ER 568). Both the employee and the customer were put at a risk of immediate physical danger (Dulieu v White [1900] 2 KB 669). The customer may also claim compensation against the employee if it can be found that he was negligent to enough to break the chain of causation, for example he put the customer in immediate danger, knowing of the unsafe shelving (Peabody Donation Fund v Sir Lindsay Parkinson [1985] AC 210). However, claims against employers are generally more successful in such cases, as they have more money, and are responsible for instructing employees to move the items to the unsafe shelving. Cheapskate could argue the defence of consent (the employee did as asked, knowing of the danger), but it is generally required to be explicit, and in this case it does not seem so. Thus, Cheapskate has very little recourse in this case, and both the employee and the customer can claim for damages, and possibly even psychological stress if the accident was particularly horrific (Page v Smith [1995] 2 All ER 736). 3. It is primarily important to determine whether the labourer is classed in law as an employee or a self-employed contractor. If he is classed as the former, he can claim against his employer for damages due to injury, and if he is the latter, he will not be able to make such a claim, for he is considered responsible to organise insurance for injury. Indeed, there is no specific definition in law as to what classified a self-employed worker (Resolution Concerning the International Classification of Status in Employment (1993)). The fact that he does not have tax or insurance deductions from his wages is likely to class him as a self-employed worker. To determine whether he is an employee depends on the amount of control exercised over him, financially and behaviourally. Independent contractors usually have control over the hours they work, the jobs taken and such (Stephenson Jordan & Harrison Ltd v Macdonald and Evans [1952] 1 TLR 101). It is likely that the worker will not be classed as an employee, for there appears to not be enough control over the worker to establish such a working relationship. Although they have some degree of control, this appears to not be above what is usually the case with self-employed independent contractors. It is worth noting however, that self employed workers do have the right under the Occupier’s Liability Act 1957 to expect guarding against work related risks (Section 3). In general, the overall situation will be assessed, and although the cases proceed on the specific circumstances it appears that the worker is self-employed and therefore is responsible for his own injury compensation and insurance. PART C In such cases where many conflicting, sequential events occur, it is relevant to state the set of events on a step by step basis and analyse the legal implications of each in relation to the other. Firstly, there is a simple, unproblematic offer which had been made by Mrs. Vickary (hereby ‘V’) to Mrs. Atkinson (hereby ‘A’) – the offer to provide sofas in return for £1000. It is worth noting that the fact that the offer was verbal does not operate to negate it; it is recognised in law as an offer to a contract, for it can be objectively stated that V had the intention of being bound to sell A the sofas (Carlill v Carbolic Smoke Ball co [1893] 1 QB 256). A accepted the offer, but in adding the term that the acceptance is dependent on whether the savings can be transferred could class this as a counter-offer, thus terminating the original offer and making a new one (Hyde v Wrench [1840] 49 ER 132). However, this is not such an issue, as V subsequently accepted the counter-offer, and it is likely that the existence of a contract will be found here. In general, the approach is whether what the parties agreed to can be objectively understood as an intention on both parts to enter into a contract (Scammell & Nephew v Ouston [1941] AC 251). V’s promise not to sell the sofas to another before 3pm on Saturday requires some clarity, as the law in this area does appear a little blurred and can proceed on a case by case basis, depending on the specific circumstances. It also has large implications for the outcome of the rights of each party, depending on whether it can be classed as a binding contractual promise. The law of estoppels generally enquires in this issue whether the promise not to sell has been made without consideration – thus, if V received any consideration – money – for this verbal promise, she would be bound to keep the sofas until 3pm Saturday, or stopped from selling them sooner than the stated date. However, in these circumstances, V did not receive any money, and thus it is highly likely that she will not be bound to keep the sofas until the specified date (Central London Property Trust Ltd v. High Trees House Ltd [1947] KB 130). However, the situation becomes a little more complicated by A’s hiring of the van – she effectively relied on the promise, most possibly to her detriment. In such circumstances, the courts will assess the ‘unconscionability’ of not upholding the promise made by V. This is assessed by, a) whether V intended, or could have reasonably thought that A would act upon the promise, b) whether the reliance on the promise was that which is reasonable in the situation and in relation to the promise and, c) whether A’s loss by not enforcing V’s promise would be unconscionable (Spence 1999: 60-66). It could be argued that V knew, or should have reasonably expected that A would hire some form of transport for the sofas, which is an arguably reasonable response to such a promise. Whether A’s loss could be classed as unconscionable depends on how much it cost to hire the transport in relation to the situation, and whether a refund would be possible. Here, the courts will assess the detriment incurred to A, and assess whether it was large enough to require that V’s promise be enforced (Jennings v Rice [2002] EWCA Civ 159). Because estoppel is an equitable remedy, it is entirely to the court’s discretion, and past cases may have little help here; rather a common sense approach to this specific situation may depend on the subsequent events, for it could be argued that V was still unaware of the transferral of the funds. It is important to assess whether A was required notify V of the bank transfer to make the contract binding, or whether it is classed as an ’acting’ upon the offer, and thus a form of acceptance by action. Indeed, A’s counter-offer did include the term ‘if the funds can be transferred’, thus it could be reasonably decided that V should have been informed, for at the time, the funds had not been transferred and there was risk of them not being transferred within a reasonable time, or at all. A’s telephone call to confirm the transfer causes further difficulties, in respect of at which point the message is classed as delivered. It is generally the case that with instantaneous forms of communication, the message is passed as soon as spoken to the receiver on the line. The case of Brinkibon Ltd. v. Stahag Stahl [1983] 2 AC 34 states that an instantaneous message is delivered when communicated by the offeree to the offeror. The fact that A gave the message to V’s husband will probably not negate the message, for under the case of Carmichael v. Bank of Montreal [1972] 3 WWR 175, 25 DLR (3d) 570 Man QB (although this common law case was not decided in the UK, it is an enlightening approach to what the situation may convey, or at least should logically convey in the UK courts). a message left to a responsible person in charge at the defendants bank was, sufficient acceptance of the offer. As far as A knew, the message had reached V, and it could not be reasonably expected of her to call again and re state the message. The fact that V did not get the message thus appears to have no relevance, although again this will remain the discretion of the court. To this point, if it is decided that there is a contract between A and V for the sale of the sofas, then V should not have sold them to her sister (M). This depends again on whether V’s promise not to sell the sofas until Saturday is enforceable. If it is not, and it is decided that A’s loss upon acting on this promise is not sufficient, then the act of selling the sofa to M effectively negates the offer put to A (Dickinson v Dodds [1876] 2 Ch D 463). How the courts will decide this situation is not easily predictable, for it is a complicated situation, and the courts do proceed on a somewhat case by case basis, based on common sense principles and observations. However, if A’s counter offer is classed as being accepted by V’s promise not to sell the sofas before 3pm Saturday to another, then a contract exists and V is liable for A’s loss in hiring the removal van. This outcome is strengthened by the small amount of time that had lapsed between the initial agreement and the time at which V sold the sofas to M. Just two days had passed before V sold the sofas, and this may be classed as an unreasonable time in which to revoke the offer. Indeed, the reasonable amount of time which will apply does depend on the circumstances (Ramsgate Victoria Hotel v Montefiore [1866] LR 1 Ex 109), although it is strongly expected that the two days passed will not be enough to allow the offer of V to be revoked. This is also strengthened by the pre-mentioned fact that A had acted upon the promise and transferred funds and hiring a removal van, for ‘once the offerree has embarked on performance, it is too late for the offeror to revoke his offer’ (Daulia v Four Millbank Nominees [1978] Ch 231 per Goff LJ). V’s subsequent posting of a revocation letter through M could be classed as a successful revocation, thus terminating the agreement. However, this depends on which point it is considered to become communicated. Generally posted letters become communicated as soon as put in the postal box (Adams v Lindsell [1818] 106 ER 250), although they must be correctly addressed. When sent through a non official messenger, the responsibility is likely to be on V to ensure that the letter arrived; furthermore, letters of revocation become valid only when the letter has actually arrived (Stevenson v McLean [1880] 5 QBD 346). The letter never arrived at A’s house, thus it is likely to be classed as invalid. However, the law in this area is unclear, and ‘there is very little textual authority on the question, at what time a contract of sake is to be deemed to be irrevocably concluded, when the communications between the parties are carried on by messenger’ (Moyle 1892:45). Thus, if A’s acceptance by telephone is classed as valid upon communication to V’s husband, then V’s subsequent letter of revocation will not be valid. All of the circumstances of this case are likely to point to the existence of contract to sell the sofas to A. There are many aspects in favour of A’s case; namely V’s promise to not sell the sofas before Saturday, A’s satisfactory acceptance communication and notification of the bank transfer, the little time which lapsed between the initial offer and V’s selling of the sofas to M, A’s loss and acts in reciprocation to the offer, V’s failure to ensure the letter of revocation brought to A’s attention. Therefore, it is highly likely that the situation will be decided in favour of A, and she may be able to claim compensatory damages for any losses suffered due to the breaking of the contract, both consequential and direct. This will allow A to claim for the amount spent on the hiring of the van, and possibly any losses suffered or charges incurred by the bank transfer. Such damages aim to put A in the position she was had the contract gone ahead, so that she is not at a loss. References PART A Elliott, C. & Quinn, F. (2007) Contract Law. 6th ed. London: Pearson Education Adams v. Lindsell [1818] 106 ER 250 Byrne & Co v Leon van Tienhoven & Co [1880] 5 CPD 344 Entores Ltd v Miles Far East Corporation [1955] 2 QB 327 Brinkibon Ltd. v. Stahag Stahl, [1982] 1 All ER 293 HL at 296 per Lord Wilberforce British Car Auctions Ltd v Wright [1972] 1 WLR 1519 at 1524 DC per Lord Widgery CJ Payne v Cave [1789] 3 Term Rep 148 Sale of Goods Act 1979 Howard v Castle [1796] 6 Term Rep 642 at 645 per Grose J Blackbeard v Lindigren [1786] 1 Cox Eq Cas 205 PART B Donoghue v Stevenson [1932] AC 562 Malik & Mahmud v Bank of Credit and Commerce International [1997] UKHL 23 Wilsons and Clyde Coal Co Ltd v English [1937] 3 All ER 628, [1938] AC 57 Caparo Industries Plc v. Dickman [1990] 1 All ER 568 Bolton v. Stone [1951] AC 850 Frost v Chief Constable of South Yorkshire Police [1997] 3 WLR 1194, 1203, per Rose LJ Petch v Comrs of Customs and Excise [1993] ICR 789 per Dillon J at 796-798 Dooley v Cammel Laird [1951] 1 Lloyd’s Rep 271 Performing Right Society Ltd v Mitchell & Booker Ltd [1924] 1 KB 762 Salmond & Heuston (1996) The Law of Torts. London: Sweet & Maxwell Lister v Hesley Hall Ltd. [2001] UKHL 22, [2002] 1 AC 215 Rose v Plenty [1976] 1 WLR 141 Donoghue v Stevenson [1932] AC 562 Caparo Industries Plc v. Dickman [1990] 1 All ER 568 Dulieu v White [1900] 2 KB 669 Peabody Donation Fund v Sir Lindsay Parkinson [1985] AC 210 Page v Smith [1995] 2 All ER 736 Resolution Concerning the International Classification of Status in Employment (1993) - Fifteenth International Conference of Labour Statisticians. Available at: http://www.ilo.org/global/What_we_do/Statistics/standards/resolutions/lang--en/docName--WCMS_087562/index.htm Stephenson Jordan & Harrison Ltd v Macdonald and Evans [1952] 1 TLR 101 Occupier’s Liability Act 1957 PART C Carlill v Carbolic Smoke Ball co [1893] 1 QB 256 Hyde v Wrench [1840] 49 ER 132 Scammell & Nephew v Ouston [1941] AC 251 Central London Property Trust Ltd v. High Trees House Ltd [1947] KB 130 Spence, M. (1999) Protecting Reliance: The Emergent Doctrine of Equitable Estoppel. Oxford: Clarendon Press Jennings v Rice [2002] EWCA Civ 159 Brinkibon Ltd. v. Stahag Stahl [1983] 2 AC 34 Carmichael v. Bank of Montreal [1972] 3 WWR 175, 25 DLR (3d) 570 Man QB Dickinson v Dodds [1876] 2 Ch D 463 Ramsgate Victoria Hotel v Montefiore [1866] LR 1 Ex 109 Daulia v Four Millbank Nominees [1978] Ch 231 per Goff LJ Adams v Lindsell [1818] 106 ER 250 Stevenson v McLean [1880] 5 QBD 346 Moyle, J.B. (1892) The Contract of Sale in the Civil Law. Oxford: Clarendon Press Bibliography Banakas, S. (2009) Voluntary Assumption of Tort Liability in English Law: A Paradox? In Dret 4/2009 http://www.raco.cat/index.php/InDret/article/viewFile/141377/192888 Barker, K. (1993) Unreliable Assumptions in the Modern Law of Negligence. 109 LQR 461 Beatson, J. (1998) Anson’s Law of Contract. New York: Oxford University Press Boyle, C. & Percy, D.R. (1999) Contracts: Cases and Commentaries. Scarborough: Carswell Brazier, M & Murphy, J. (2000) Street on Torts. 10th ed. 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