Foundations of Business Law, Duty of Care and Negligence - Essay Example

Running Head: Foundations of Business Law Name: University: Course: Tutor: Date of Submission: According to law, any business or individual contract lacking any of above mentioned elements is considered not valid. In law, a contract is described as an agreement between two parties, where one party agrees to perform a particular obligation to another party such as a contract to deliver or sell particular goods in return for a certain price agreed upon by the parties involved. A legally binding agreement therefore can be described as a voluntarily agreement between two or more parties, which places an obligation on individual party or parties in the contract do something for one or more parties. The obligation in a legally binding contract gives both parties involved in the contract a right to demand performance of whatever is promised to them by the other parties involved in the contract or agreement (Goldman & Sigismond, 2010.,pp.26-52). Incase of contract breach, by any of the parties or party involved in a legally binding contract without a valid reasons, the other parties in the contract are legal liable for compensation. To be valid a legally binding contract whether for business purposes or other purposes should be involve only parties legally competent to enter into a contract(Gillies, 2004, pp.78). Additionally, for a legally binding contract to be termed as valid in the society, the objectives as well as the performances of the contract should involve legal activities and not illegal ones. The other parties or party in the contract have a right in court to compensation resulting from the effects of contract breach. In a legally binding contract, if one party fails to fulfil the agreed upon obligations and the other party suffers damages as a result of contract failure, the court has a right to demand compensation to be paid to other party depending on the nature of damage encountered (Gillies, 2004, pp.78). Relating the discussed concepts above with the case, a legally binding contract is voluntarily agreement between two parties to perform an obligation. Relating the case to this fact, there is a voluntarily contractual agreement between Sportswear World Ltd and Hi Q Manufacturer Ltd. In the case Sportswear World Ltd needs to buy 100 cartons of swimwear from Hi Q Manufacturer Ltd. Hi Q Manufacturer Ltd agrees to sell the goods on the basis of the provision. Since the two parties have voluntarily entered into an agreement it implies that the contract is legally binding as it involves performance of an obligation by both parties thus for Hi Q Manufacturer Ltd to sell 100 cartoons of swimwear in return for a price from Sportswear World Ltd Additionally, the contract can be termed as legally binding because it involves an agreement between two parties who legally are viable to enter into a legally binding contract. Thirdly, the contract between the two can be termed as legally binding because it has clearly defined obligations for each party which is stated in the provision statement implying that failure of one party to perform its obligation as agreed upon without valid reasons, the party which is aggrieved is liable to sue the other party for contract breach and compensation for damages resulting from the contract failure. Fourthly, the contract between Sportswear World Ltd and Hi Q Manufacturer Ltd can be termed as legally binding because it contains all the six elements which a legally binding contract contains. According to a legally binding contract should contain the following six elements; offer and acceptance, an intention between the parties to create binding relations, consideration to be paid for the promise made, legal capacity of the parties to act, genuine consent of the parties and legality of the agreement. Without any these six elements, then the contract can be termed as legally binding as well as valid (Gillies, 2004, pp.78). Duty of Care and Negligence In tort law, negligence is a term which describes failure to act reasonably. Negligence therefore, refers to the breach of duty of care to others by one party in a contract. In tort law, the term duty refers to an obligation one or an individual has for his or her neighbour as well as the duty one owes to others in the community or society. Duty of care therefore is an obligation which gives the courts, the right to order a party in a contract or individual to pay damages he or she caused to another. Therefore in a society or a community each and everyone owes a duty of care to another hence breaching a duty of care to another person is legally punishable in the civil courts as well as criminal courts depending on the nature of damage. Though, breaching a duty of care is punishable in the civil as well as criminal courts, not all duties give rise to a cause of action. (Gillies, 2004, pp.78). For example, if Billy promises Molly that they will go to movies only if Molly washed his clothes, but after washing the clothes, Billy backs out. This is not punishable because duty of care gives rise to an obligation to another person which was not the case in the scenario. For any court, therefore to enforce punishment on one party for breaching duty of care, the duty must be reasonable. In simple terms Negligence in a contract occurs when someone who owes a duty of care to another person fails to act according to a reasonable standard of care causing injury to that person. According to tort law, if it is reasonably foreseeable that an individual might suffer some sort of harm or loss as a result of someone else act or acts, then that person owes that particular individual a duty of care. The duty of care is a legal issue which is reasonably complex, though basically it means that someone must act with a reasonable standard of care towards another person. If in the event of negligence a duty of care is not exercised by someone who owes a duty of care to another one and that person suffers injury or loss, it is punishable in civil as well as criminal courts. The standard care of is the way in which an individual is supposed to act primarily as a way of ensuring that they do not breach their duty of care (Miller& Jentz, 2010, pp.89-100). In the case Hi Q Manufacturers have a reasonably standard duty of care to all of its customers. This therefore, implies that it is the duty of the company to ensure that all of its customers wearing the swimwear are cared for in a reasonably way. By selling swimwear which contains chemicals directly to the public without giving clear instructions that the swimwear should be washed before being worn due to the chemicals, implies a breach of duty of care to its customers. Since Hi Q manufacturers knows effectively well the effects of the chemical on the skin of person, as a way of exercising Atkins neighbours principles and exercising the reasonably duty of care to its customers, it is their responsibility to provide clear directions for their customer on swimwear’s thus to wash them before wearing. Hi Q Manufacturers failed to exercise a reasonably duty of care to ensure that the swimwear’s sold to the public have no chemicals as well as directions have been clearly provided. Due to their negligence, I contracted the skin disease as a result of wearing the swim wear that contained trace chemicals which had been left in the swimwear during the manufacturing process. In tort law, negligence is a term which describes failure to act reasonably. Negligence therefore, refers to the breach of duty of care to others by one party in a contract which was case with Hi Q Manufacturers. As in the cases of Carroll v Fearon (1999) and Donoghue v Stevenson (1932), I have a right to use Hi Q manufacturers for negligence and breach of duty of care. In a case of Carroll v Fearon (1999) CA, that involves the breach of reasonable standards of care by Fearon a motorway tyre manufacturer. In this case Carroll a buyer purchased a motor tyre from the company. On using the tyre it disintegrated injuring Carroll. Carroll suffered head injuries and other minor chest injuries, due to these injuries he went to the court to sue Fearon Motorway Company for compensation as a result of negligence and breach of duty of care(Miller& Jentz, 2010, pp.89-100). In the case Fearon the defendant negligently manufactured a disintegrated tyre which caused a serious accident after Carroll purchased it. In the ruling the judge ruled in favour of the plaintiff indicating that it was the duty of care for the manufacturer to check the tyres and its faults before releasing them to the market (Gillies, 2004, pp.78). In another case Donoghue v Stevenson (1932) involving the breach of reasonable duty of care on side of the manufacturers. In this case Mrs Donoghue her friend went one cafe in Scotland, in which her ultimate friend bought a bottle of ginger beer for Mrs. Donoghue. Mrs Donoghue drank part of the beer from the bottle but when it was poured into her glass, a decomposed snail fell out from the beer. Mrs. Donoghue was affected and according to her claims she suffered shock and sickness as s result of the event. In relation to this, Mrs. Donoghue sought compensation for damages. Since it was her friend who bought the beer for her, there was no contractual relationship between Mrs. Donoghue and the sellers of the beer. In this case, she could sue the sellers rather he sued the manufacturers of ginger bottled beer in negligence (Gillies, 2004, pp.78). In the case the majority of House of Lord’s recognised an existing duty of care relationship between the manufacturers and the ultimate consumers of manufactured products (a bottle of ginger beer) (Miller& Jentz, 2010, pp.89-100). Additionally, Lord Atkin identified a broad liability principle. According to Lord Atkin’s argument the manufacturer owned a duty of care to the consumers. In his argument, he argues that each and everyone owes a duty of care to another. He summarizes his argument in the neighbour’s principle. Through, the case of Donoghue v Stevenson (1932) Lord Atkin established a general rule for determining the duty care. The grounding rule established that manufacturers owe a duty of care in negligence to the final consumers of their individual products (Miller& Jentz, 2010, pp.89-100). In the ruling the House of Lord ruled in favour of the plaintiff thus Mrs. Donoghue. In the ruling the House of Lord held that though the plaintiff was a third party in the contract, the manufacturers of ginger beer owed a reasonable duty of care to all of its consumers. Relating the two cases and my case there is evidence that manufacturers owe a duty of care to its consumers as well as customers (Miller& Jentz, 2010, pp.89-100). This indicates that, Hi Q Manufactures owes me a duty of care as its customer which it failed to exercise in the case. Since negligence and breach of duty of care is punishable in the civil as well as criminal courts, I have a right to sue Hi Q manufacturers for negligence and claim compensation just as in two cases discussed above. Moreover, The Australian Consumer Law provides specific provisions which regulates as well as prohibits a number of unfair trading activities as well as practices. The consumer law prohibits organizations, companies and manufacturers from engaging in unconscionable acts in relation to the provision of goods and services according to ACL sections 21 and 22. Under this law a manufacturer has a duty of care. In relation to this law a consumer has a right to sue a manufacturer for negligence. Since this provision has been provided, I have a right to sue Hi Q Manufacturer for negligence and lack of duty of care for the customers of their final products. References Goldman, A., J. & W., D .Sigismond. 2010. Business Law: Principles and Practices.8th ed. New York: Cengage Learning,pp.26-52 Gillies, P.2004. Business Law. 12th ed. Publisher: Federation Press,pp.78 Miller, R.,L & G., A. Jentz. 2010. Business Law Today: The Essentials.9th ed. New York:Cengage Learning, pp.89-100 Read More