Contract Law and the Law of Negligence - Case Study Example

First Question In our problem, Alec caused damage to Kelly’s shop by driving through the walkway of the shopping mall. The law The applicable law isthat of negligence in torts. The paradigm test relates to an act or omission by the defendant, which causes damage to the claimant. Such damage should be due to a fault on the part of the defendant, and should belong to the category of harm that attracts legal liability (Cooke, 2011, p. 4). Whether a duty exists A tort can transpire, if a person who owes another a duty of care under the law, does not fulfil the duty. As such, every individual is under a duty of care towards others to employ reasonable care, in order to circumvent causing injury to them or their possessions (Judicial Education Center, 2013). Alec has a duty towards Kelly, just like that towards any other person on the walkway. In some instances, the act or omission of the defendant could cause damage to the claimant. However, the claimant may not have any action, because the affected interest may not be provided with the protection of the law. This situation is termed as harm without legal wrong or damnum sine injuria (Cooke, 2011, p. 5). Alec’s rash driving resulting in damage to Kelly’s shop attracts the provisions of the law of negligence. A defendant could be made liable for committing a tort, if the act had been intentional. This usually takes place in crime. Liability is also attached to the defendant, if the act was negligent, although unintentional. This is because the defendant had failed to fulfil his duty of care towards the petitioner (Judicial Education Center, 2013). In our case, Alec has failed to perform his duty towards Kelly, although it was unintentional. In Page v Smith, Lord Hope described primary victims as individuals who had undergone psychiatric injury. Such injury should have been the outcome of the fear or distress resulting from the accident that had taken place due to the negligence of the defendant or its immediate aftermath (Turton, 2008, p. 1014). Kelly suffered mental distress, the next day after the incident. She cannot take recourse under the category of primary victim for psychiatric injury. Whether there was a breach of duty From the legal perspective, negligence is the breach of a duty to ensure care, while committing an act. It is also the failure to act in the manner that a prudent or reasonable individual would have acted under circumstances that were similar. Such action or failure must be the proximate cause for the injury caused, if the plaintiff is to recover damages from the defendant. Some of the defences to a negligence action are, the assumption of risk or injury by the plaintiff, or the injury was due to the plaintiff’s negligence (Columbia Electronic Encyclopedia, 2011).A contractual relationship can generate an obligation to act with care. An instance of this is the duty of care assumed by a carrier to protect passengers and goods from injury or damage. In addition, the law presupposes that every person, in the ordinary course of conduct, is under a duty of care to abstain from injuring others. This duty, in every non – contractual situation, requires every individual to act as a reasonable person. If an injury occurs, despite such care being exercised, or due to circumstances that are beyond human control, then no compensation can be claimed. The doctrine of strict liability renders entities engaged in certain services and trades liable, even if the conduct is not negligent (Columbia Electronic Encyclopedia, 2011). While deciding whether a breach of duty had taken place, the courts would evaluate the conduct of the defendant, with reference to what a reasonable person would have done under similar circumstances (Tingle, 2002, p. 1129) In Blyth v Birmingham Waterworks Co, it was opined that negligence was failure to do a thing, which a reasonable man would have done, in accordance with the considerations that normally regulate human conduct (Tingle, 2002, p. 1129). In our case, Alec, due to coming late, attempted to quickly cross through the wet walkway. Causation The causality between the tort and the damage is termed the causation. It is incumbent upon the claimant to prove the existence of a continuous association between the wrongful act of the defendant and the damage suffered by him. Difficult issues are frequently resolved by policy. The ‘but for’ test is in general, employed in determining the causative relationship between the tort and the damage. In this test, the query whether the claimant would have suffered the damage but for the tort of the defendant, is raised. If the answer to this query is in the negative, then there is every likelihood that the wrong of the defendant had factually resulted in the damage to the claimant. No liability is determined, if the damage would have been sustained, regardless of the wrong done by the defendant (Hodgson & Lewthwaite, 2007, p. 50). Hence, Alec is liable for any losses caused to Kelly due to his negligence. Whether the type of injury was reasonably foreseeable In Wagon Mound no 1 case, their Lordships held that the direct consequence test was more apt than the remoteness of damage test, in this particular case. This test determines if the damage caused was foreseeable. If the damage can be classified as foreseeable, then the defendant is rendered liable to the full extent of the damage Issues relating to remoteness are now resolved by referring to the foreseeability of the damage caused (Harlow, 2005, p. 66). Losses caused to Kelly’s shop was foreseeable, by any reasonable person. Liability In Wagon Mound no 1 the damage to the property consisted to the fouling of the wharf and the destruction caused by the fire. The foreseeability of one of these would not lead to liability for the other. It was held that foreseeability of damage due to fire constituted the test of liability for fire (Rowe, 1977, p. 385). The test for vicarious liability In Lister v Hesley Hall Ltd the House of Lords held the school board vicariously liable for the tort by its employee in the course of employment. In this case, the school board undertook the management of a residential school for vulnerable children. To this end it employed a warden to manage the school. This warden indulged in the sexual abuse of these children. The House of Lords held the school board vicariously liable for the tort by its employee in the course of employment (Pennings & Konijn, 2008, p. 208). As per the above case, the Pizza Company is vicariously liable for the losses caused by Alec, while discharging his duties. Conclusion Kelly can claim damages for the material losses, suffered by her, due to Alec’s negligence. She cannot claim damages for mental distress, since she is not a primary victim. Shopping – mall owners are also vicariously liable, since their security guard had allowed, Alec to drive through the walkway, on several occasions. Second Question The law A contract, via a website, is completed when the seller acknowledges acceptance of the purchaser’s offer. Such acceptance has to be indicated either by a direct response on the website or by electronic mail (Stone, 2011, p. 65). If an individual relies on an advertisement and complies with its requirements, then such advertisement can be deemed to be an offer. This decision was arrived at by the court in Carlill v Carbolic Smoke Ball Company. Harry entered in to an agreement with the seller, via a website to purchase a car. The contract was formed with the acceptance, by electronic mail, of Harry’s offer to purchase the car for £1500. Misrepresentation is a false statement of fact, during the formation of a contract, by one of the parties to the contract. Section 2(1) of the he Misrepresentation Act 1967, renders the representor liable for fraudulent misrepresentation, even if that person had not made such statement with fraudulent intent. Whether contract exists There was a contract between Harry and the seller Under certain circumstances, the courts set aside a validly formed contract, due to the presence of some defect. Such circumstances are termed as vitiating factors. One of these is a false statement or misrepresentation by one of the parties to the contract, which induces the other party to form the contract. A contract can be set aside, even for an innocently made misrepresentation. In case the misrepresentation had been made negligently or fraudulently, then compensation may be awarded by the court (Stone, 2009, p. 5). The seller made false statements regarding the car. Since, Harry was induced by the seller’s statement to form the contract, it can be deemed as misrepresentation under the provisions of the Misrepresentation Act. Whether misrepresentation was fraudulent In Redgrave v Hurd an elderly solicitor made a misrepresentation to his junior partner, which the latter did not verify. The Court of Appeal held that the contract could be annulled on grounds of misrepresentation. This decision has to be applied after taking into consideration the developing law relating to negligent misrepresentation and contributory negligence. This principle was applied to Peekay Inter mark Ltd v Australian and New Zealand Banking Group Ltd, by the Court of Appeal. The court ruled that the defendant bank was precluded from contending that claimant was bound, as he should have perused the final terms and conditions, prior to affixing his signature. The court held that constructive notice was insufficient to prevent inducement (Poole, 2012, p. 515). Hence, the knowledge regarding the true position has to be actual. Harry was induced by the false statements to make the contract. Hence, the statements by the seller can be considered as fraudulent misrepresentation, as per the discussion. Liability Section 2 of the Misrepresentation Act 1967 states that damages can be claimed by the plaintiff for the loss caused by the fraudulent misrepresentation of the defendant. However, the plaintiff has to establish that he had believed in the statement of the defendant and entered into the contract. In such cases, the injured party is entitled to rescind the contract and claim damages in tort for deceit (Speares, 2000, p. 6). The party that undergoes loss due to misrepresentation by the other party to the contract, can claim damages or revocation of the contract. In Derry v Peek, the House of Lords ruled that it was sufficient for the plaintiff to prove that the defendant believed or was aware that his statement was false or misleading, for establishing misrepresentation. In the present problem, Harry was induced by the seller, who described the car to be in very good condition. Subsequently, it came to light that the seller had made false assertions. Harry entered into the contract to purchase the car, on the basis of the false statements made by the seller, with regard to the car to be sold. To his chagrin, Harry discovered that the car was not of top quality, as claimed by the seller; and that tax had to be paid on it, the very next day. As such the seller made false statements to induce Harry to enter the contract for buying the Fiat car. Conclusion From the above discussion, it is apparent that the seller is liable for fraudulent misrepresentation and deceit as per the provisions of the contract law. In addition, the seller had made a false statement regarding the tax payments to be made on the car. Harry can claim damages from the seller for fraudulent misrepresentation. He also has the choice of rescinding the contract, as per the provisions of the Misrepresentation Act 1967. While Harry and the seller were arguing about their liability towards contract, another car crashed onto the back of the Fiat Panda, causing damage to its lights and other parts. Hence, the seller can claim for damages against the other car owner for the losses sustained by him, due to this car crash. Bibliography Statutes Compensation Act 2006 Misrepresentation Act 1967. Cases Blyth v Birmingham Waterworks Company (1856) 11 Ex Ch 781. Carlill v Carbolic Smoke Ball Company (1892) EWCA Civ 1. Derry v Peek (1889) LR 14 App Cas 337. Lister v Hesley Hall Ltd (2001) IRLR 472. Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co (The Wagon Mound (No 1)) (1961) AC 388. Page v Smith (1995) UKHL 7. Peekay Inter mark Ltd v Australian and New Zealand Banking Group Ltd (2006) 2 Lloyds Rep 511. Redgrave v Hurd (1881) 20 Ch D 1. Books/Journal Articles/Periodicals Cooke, J. 2011. Law of Tort. Pearson Education. Harlow, C. 2005. Understanding Tort Law. Sweet & Maxwell. Hodgson, J. and J. Lewthwaite. 2007. Tort Law Textbook. Oxford, UK: Oxford University Press. Pennings, F. and Y. Konijn. 2008. Social Responsibility in Labour Relations: European and Comparative Perspectives. Kluwer Law International. Poole, J. 2012. Textbook on Contract Law. Oxford University Press. Rowe, P. J. 1977. The Demise of the Thin Skull Rule?. The Modern Law Review, 40(4), pp. 377 – 388. Speares, S. 2000. Law: Contract: Mean what you say, say what you mean is key to prefixture. Lloyds List, 1 March, p. 1. Stone, R. 2009. The Modern Law of Contract. Routledge. Stone, R. 2011. The Modern Law of Contract. Taylor & Francis. Tingle, J. 2002. Establishing breach of the duty of care in the tort of negligence. British Journal of Nursing, 11(17), pp. 1128 – 1130. Turton, G. 2008. Defining Damage in the House of Lords. Modern Law Review, 71(6), pp. 1009 – 1014. Websites Columbia Electronic Encyclopedia, 2011. Negligence. [online]. [Accessed 16 February 2013]. Available from: http://web.ebscohost.com/ehost/detail?sid=65b2643b-b3fc-42ff-b366-ed86862fa949%40sessionmgr15&vid=2&hid=22&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=aph&AN=39023809 Judicial Education Center, 2013. Duty of Care/Intent or Negligence. [online]. [Accessed 16 February 2013]. Available from: http://jec.unm.edu/education/online-training/torts-tutorial/duty-of-care-intent-or-negligence Read More