Business Law: The Claim for a Damage or Injury to Property - Essay Example

Business law: Introduction The claim for a damage or injury to property has been highly a problem due to the tort of negligence. Following the “Thalidomide tragedy”, the Law Commission has taken care of the liability regime relating to product liability whereby the Consumer Protection Act 1987 has protected the consumers. 4 different reform bodies of law have recommended a move to change the negligence of liability to a strict liability concern. The meaning of strict liability meant that the requirement to prove negligence was not needed. The manufacturer would be required to take all the liability on their side to someone who get injury from defective products whether they were negligence or not. The product liability directive rule was implemented on 30th July 1988. This implementation was done in the UK by the Consumer Protection Act 1987 Part 1 and was made into force on 1st 1988. Part One. Assignment 1 A tort consists of a duty breach in the civil wrong imposed by law. This tort law provides a remedy which legal for a certain forms of harmful conduct to a victim. However, as stated above, tort has neglected consumers’ damage to properties or physical injury caused by manufactures’ defective products. The following case created the law negligence. Mrs. Donoghue and her friend went into a café and the friend bought Mrs. Donoghue a bottle of ginger beer. As Mrs., Domoghue was refilling he glass, a decomposing snail popped out of the bottle. This caused her a severe gastro-enteritis suffering. Since her friend had bought the beer for her. She could not have sued the café owner for such complications just because there was no contractual relationship between the café and her. She therefore claimed the negligence of the ginger beer manufacturer against his actions. The plaintiff would have succeeded in proving the claim negligence only if she was able to prove that the defendant owned the duty care of the plaintiff, or this duty was because of the breach of the defendant or the breach cased suffered injuries or loss. Fail to prove this; the negligence claim was no more. The judgment laid down in this case determines who owes the duty of care to the other. The so called ‘neighbor principle’ is created by Lord Atkins. This meant that one owes a duty of care to a neighbor. The neighbor referred to the person in the questioned circumstances whose welfare may have shown a matter of concern to the defendant. Therefore, this means that one should owe a duty of care to those who may be affected by his or her actions. In this case, the manufacturer was supposed to owe duty of care to those who meet his goods and products. Lord Aitkin stated that “A product manufacturer who sells his products in such a form as to show that he intends them to reach the ultimate consumer in the form in which they left him with no reasonable possibility of intermediate examination and with the knowledge that the absence of reasonable care in the preparation or putting up of the products will result in an injury to the consumers life or property, owes a duty to the consumer to take that reasonable care.” Limits for covering these type goods should not exist. It covers both the items like the hot water bottles and underpants. The law also extends to cover anyone who does some work on the manufacturers goods. The breach of the duty is very difficult for the plaintiff to prove. The proof has to be made that in the circumstances the manufacturer has not acted responsibly. The courts engage in this case through cost/benefit analysis in which some factors are considered e.g. the seriousness and likelihood of harm or injury, the ease and cost of providing precautions to reduce or eliminate the social need and the risk for the product. According to the Walton v British Leyland Ltd 1978, the injured claimants were caused by collision with a wheel, which flied off the Austin Allegro in which they were travelling on. The accident took place back in1976, but as far as in 1973 the manufacturer was aware of the defect of the wheel. A product bulletin was issued to service managers of their dealers’ accreditation to adjust the rear hub bearings instead of recalling the all Allegros since it was too expensive. For the consumer to prove that the manufacturer was at fault was the most difficult tusk as the tort law doesn’t usually provide the means for the consumer to know what went wrong in the process of manufacturing. This is more particularly true in the law if the product involve is a complex one or a drug or a chemical. However, sometimes for the defect to be reasonably explained then one has to prove someone e.g. breaking a tooth in an ice ban on a stone has acted that negligence. In this circumstance, the consumer may plead for facts to speak for themselves. There is an effect of this plea to reverse the normal proof burden. The consumer must have a proof that that he suffered damage or a loss because of the breach of duty by the manufacturer. If it happens that other factors may have caused the damage then the manufacturer will not be liable to the breach of duty. Part I of the Consumer Protection Act 1987 The section 2(1) of the CPA stated that following to the subject provision of this part, where damage is caused partly or wholly by any defect in a product, the person responsible to the subsection (2) shall carry the damage liability. Therefore, the Pat 1 of the CPA emphasizes the strict liability regime for personal damage or injury to property by the defective products causes. This means that the harm caused by the producer’s products will remain his liability unless he establishes a defense provided by the CPA. It is no longer necessary to provide prove by the claimant that the supplier or the manufacturer was negligent. However, the basis in the CPA of directive states clearly that for the claimant to bring an action he must prove the damage suffered, defectiveness of the product and that defective product caused the damage. Let us look at these in turn. 1) Damage In the section 5 of the CPA, this has been covered where it clearly states that compensation for the damage is recoverable in 3 types: personal injury, death and damage to property. However, there are restrictions as to property damage covered in section 5 and states that property is excluded if damage’s or loss’ time is not: of property description intended ordinarily for occupation, private use or consumption; and intended by the person suffering the damage or loss mainly for his own private use, consumption or occupation. “Property” in this case therefore, means private property and not business property. Another restriction is found in Sc 5(4) – the CPA will only apply if the total damages awarded, interest excluded; in respect of property are in excess of £275. This helps to avoid small claims. 2) Product defective In section 1(2), product is defined as any goods or electricity. This covers not only the finished goods but also components of raw material. The Consumer Protection Act did 1987 (Product Liability) (Modification) Order 2000 the implementation of adopting an amending directive extending the product liability scope to primary agriculture and game in the UK. The Damage Caused by the Defective Product The problem here arrives actually in proving the defective product caused the damage. Even though it’s not necessary for the producer part to prove fault, the problematic issue of causation remains. The burden of who to bear the prove remains silent in the CPA although law case such as (Foster v Biovil 2001), suggests that the consumer who bears the obligation of proving the defect of the product partly or wholly caused the damage. Section 2(1) of the CPA states that ‘producer’ of a defective product is the one who is liable under the Act. Sc 1(2) defines who is the ‘producer’ as; the manufacturer of the product; In the case of a substance which has not been manufactured but has been won or abstracted, the person who won or abstracted it (e.g. mining for iron ore); In the case of a product neither manufactured nor won or abstracted, but the essential characteristics of which are attributable to an industrial or other process having been carried out, the person who carried out that process e.g. producer of canned vegetables. In Section 2(2)(c) states that “a ‘producer’ can include who imported the goods into a member state of the EC from a place outside the member states in order, in the course of a business, to supply it to another”. Again in Section 2(2)(b) states that “a ‘producer’ is also any person who by putting his name on the product or using a trade mark or other distinguishing mark in relation to the product – this would cover ‘own branders’ who market goods under their own label, even though it has been manufactured by someone else”. In conclusion, it is clearly seen that the Consumer Protection Act 1987 has improvised the consumers’ rights in respect of faulty goods to greater extent. This has improved the protection of the consumers despite the negligence of the tort. Part two. Assignment 1 David’s case. According to the Trading Standards, it is a criminal offence to apply a false description by those acting in the course of business to the goods they sell. This is a common complaint of consumers where goods bought from a particular business do not march with their description. An example is when someone buys a second hand car and later he or she discovers that it is older than the car dealer convinced him. This is just the same case, which applied to David who after getting convinced that the tablet he purchased was new and without any defects he later came to discover that the tablet was even older than the dealer told him and at the same time it crushed due to some defects it had. New regulations that protect the consumer from aggressive, unfair or misleading practices of selling were enforced on 26th may 2008. The Protection of Consumer from Unfair Trading Regulations 2008 (the CPRs) implemented the EU’s Unfair Commercial Practices Directive 2005/29/EC. The directive had the objective of strengthening the protection of the consumer by a general prohibition introductory on traders against unfair consumer treatment and to harmonize laws of trading that protect consumers in all EU states, which are unfair. There is repealing by the CPRs on the Trade Descriptions Act 1968 and Part 3 of the Consumer Protection Act 1987, which concerned misleading indications of prices to consumers. The act also repeals the Mock Auctions Act 1961, the Fair Trading Act 1973, the Weights and Measures Act 1985, Sc 47 of the Consumer Credit Act 1974, the Fraudulent Mediums Act 1951, and many statutory and regulations instruments such as the Control of Misleading Advertisements Regulations. In these ‘Acts’ they clearly describes who is supposed to be affected by the regulations. They apply to the transactions between the business and the customer to conduct before, during and after the making of a contract. There contain a general prohibition in Regulation 3 (1) which simply states “unfair commercial practices are prohibited”. The wording is deliberately wide for catching any practices that is unfair and that may be developed in the future. An unfair practice is referred so if it does not meet the standard of “professional diligence” (i.e. the standard of care and skill that would be expected reasonably of a trader in its own activity field) and it distorts materially an “average consumer’s” ability in making an informed decision which leads him to making a decision that he would otherwise not have made -Regulation 3(3). According to Regulation 5 “a producer may not place onto the market a product unless it is a ‘safe product’. Failure to comply with Regulation 5 is a criminal offence. It is also a criminal offence under Regulation 20 for a producer or a distributor to offer or agree to place or supply a dangerous product or expose or possess such a product for placing on the market or for supply.” In regulation 5 & 6, it provides misleading acts and omissions, which are unfair commercial practices. In each case, omission or the action must likely cause or cause the average consumer to take a decision, which is different from the one he, would have otherwise made. According to Regulation 5 actions that are misleading contain false information or deceive in some way. For example, providing information which is misleading about the false information about the trader himself or the main characteristics, origin or the availability of a product (e.g. awards or qualifications); marketing a product in a way that is not clear with a competitors products (e.g. by using a similar name of a brand or logo). In short there is clear evidence to show that David was being misled with false information of concerning the tablet. The misleading information of the tablet not have stayed for long led him in making a decision of purchasing it of which he would not have made the same decision if otherwise. The false information and brand name would act as an evidence for David to be compensated for the same act. Therefore, following these acts and regulations, David should be compensated.  David’s Contract with Fititright Company. A contract is an agreement that legally abides two parties. Therefore, a contract is a promise, which can be enforced by the court. All contracts can be agreements but there are many agreements, which are not contracts. For example, someone may promise to give his friend some money towards a lift in return, and then later that friend refuses to pay. It is unlikely that the friend will go to court to sue his fellow friend. In order for the courts to approve an agreement as a contract three elements must be present i.e. offer and acceptance, considerations and an intention to create a legal relationship. Contracts are enforced by the courts in order to regulate relationships. This instills a perception that if you make legally binding agreements then courts can be involved in enforcing it. Agreements which are made between 2 or more parties create legitimate expectations that their undertakings (parts of the agreement) will be carried out. Promises ought to be kept and the law should enforce these promises. If one party has accomplished their part of the agreement, it is unfair that the other party should be able to escape from accomplishing their part of the agreement without some compensation being payable to the party who has suffered a detriment. A promise made by a person may risk the expenditure of another. In the contract that David offerd to the Fititright Company, there was no involvement of the court as well as the conditions and terms that both would be following. In any case, the contract ought to come out clearly for both to have contractual agreement and understand each other well with each ones’ expectations. A contractual agreement exists when the other party has unconditionally accepted a valid definite offer by one party. An offer is a suggestion put to one person by another, while an acceptance is an agreement to this suggestion. In simple contracts, one person offers to sell something to another, who accepts the price and agrees to buy. However, in complex commercial transactions it may be difficult to determine the offer and acceptance. That is why judges would want to examine closely the evidence in order to determine contractual status instead of breaking it down into its components. Acceptance is a valid, unconditional agreement to the terms of the offer. In many instances, the acceptance will be rather obvious. If the person offering a promise requests an answer of yes or no then whether or not there has been an acceptance will be easy to determine. There seem to be a breakdown of information in the agreement made between David and the construction company of Fititright. In the first place, there was no acceptance. David never explained from his side what entails the construction of the kitchen. Therefore, the company went and made the installation in their own way and no in the way that David would have wanted. This is because David failed to explain himself further about the kitchen installation. On the other hand, Fititright Company did not explained their terms and conditions. This would have included may be the payment and so forth. However, with unilateral contracts acceptance is not complete unless the act of acceptance has been completely performed. So if the offer is a reward for swimming the English Channel, the offer is accepted when someone swims the English Channel. The offered cannot enforce the contract and claim the reward until he or she has swum the Channel. In spite of all these, the law describes the terms and condition for such a contract. The part two of the contract act explains the supply of services such as repair and maintenance. There are three conditions involved with any contract of service delivery acting in the source of a business; 1. The Supplier will carry out the service with reasonable care and skill. Sc 13 states, “Where the supplier is acting in the course of a business there is an implied term that the supplier will carry out the service with reasonable care and skill.” 2. Consideration. Sc 15 states, “Where the consideration (price) cannot be determined from the contract or by a course of dealing between the parties, there is an implied terms that the customer will pay a reasonable price for their service.” 3. Time for Performance. According to Sc 14 “where the supplier is acting in the course of a business and the time for performance cannot be determined from the contract or ascertained by a course of dealing between the parties, there is an implied term that the supplier will carry out the service within a reasonable time. But what is a reasonable time? This will be a matter of fact in each case.” However, an important point about Section’s 13-15 is that they imply terms into contracts for services. Therefore, the remedy available depends on how serious the breach is. If the breach is serious then it will be treated as a breach of a condition and the customer may repudiate the contract and claim damages. If the breach is slight it will be treated as a warranty and the customer can recover damages only. Therefore, in conclusion, both parties involved in service delivery contracts should play their roles on each ones’ part to accomplish what is best of their role. Contracts are a matter of faithfulness and each party should accomplish their roles in a way that does not leave guilt in them. It’s obvious that Fititright did not do the installation to their best. Since their roles as contractors is to remedy the situation to the best position that can be seen. Therefore, they ought to have been done their part better and more that what they had done. References Barendrecht, M., Jansen, Ch., Loos, M., Pinna, A., Cascao, R., & van Gulijk, S. (2007). Service Contracts (PEL SC). European Commission. (2001). Communication from the Commission on European Contract Law. COM (2001) 398 final. European Commission. (2011). Communication from the Commission on a Common European Sales Law to Facilitate Cross-Border Transactions in a Single Market. COM(2011) 636 final. Hondius, E. (1995). The reception of the directive on unfair terms in consumer contracts by member states. European Review of Private Law, 3, 241–255. Hondius, E. (2004). 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EC consumer law compendium: the consumer acquis and its transposition in the member states. Munich: Sellier. Read More