Advice Anna and Julian - Essay Example

Intrоduсtiоn to BL A Legal Essay Submitted By: NAME: INSTITUTION: COURSE: INSTRUCTOR: DATE: © 2015 Julian and Anna recently celebrated their 20th wedding anniversary. To properly celebrate this milestone, they decided to go on a holiday together to Bliss Island, a small exclusive, tropical island in the Whitsundays in Queensland. The brochure for Bliss Island shows white, sandy beaches, beautiful tropical vegetation and an amazing five start resort. The brochure also states “Bliss Island offers some of the best reef diving anywhere in the world, available all year round.” It also states that “visitors will enjoy some of the finest foods, prepared by some of the best chefs in Australia.” Pictured alongside this statement about food are several delicious looking cakes. Given that Anna and Julian are both keen divers and that Julian enjoys eating cake, the choice of venue for the holiday is easily made. When Julian phones to book the holiday, he speaks to Sandra who runs the resort. Julian asks Sandra “so how’s the diving?” and Sandra replies “It’s always brilliant here.” Julian also mentions that he enjoys cake and comments that he is really looking forward to eating lots of them when he gets there. Sandra says “the food here is really exceptional, I am sure you will love it.” As it turns out, the diving isn’t really that good. Tropical storms and an algae bloom have meant that there is very low visibility and the easily accessible parts of the reef have been damaged. Sandra also failed to mention that the chef who had prepared all the cakes used in the promotional pictures had left the Island and had been replaced by a Two-Hat Pakistani chef, who specialises in Indian food. When Julian and Anna arrive at the Island the next week, they check in and are shown to their room. There is a large sign on the back of the door in their room which states that “Visitors are advised that Bliss Island takes no responsibility whatsoever for any items left in rooms – including actions in contract law or tort. All items left in the room are done so at the visitor’s own risk. “ The next morning, the housemaid forgot to lock the door to Anna and Julian’s room. Unfortunately, this was noticed by Pete, who entered the room and stole all of Anna’s jewellery and Julian’s wallet. Shortly afterwards, Julian and Anna become aware of the poor diving conditions and the lack of cakes (although there is plenty of curry available) When they get back from their holiday, Anna and Julian call you, very upset, and ask for your advice. Advice Anna and Julian INTRODUCTION This essay advices Julian and Anna who booked in Bliss Island resort with hope of enjoying their 20th wedding anniversary to the fullest, only to go back home very upset and seeking advice on what to do. In doing so, the essay will first discuss the indispensable elements required to establish legal grounds for compensation to a party in a mutual contract, before giving the requisite legal advice based on their scenario. A contract is a legally enforceable agreement entered into by persons and/or organizations where litigation involves disputes between the parties with the essence of compensation and not punishment (Elliott and Quinn, 2013). A contract falls in the branch of private law in the area of business law and is supported by numerous precedent cases which clearly establish all the factors needed to lodge a successful argument for compensation for damages. In particular, this essay argues, referring to appropriate precedent cases that under the prevailing circumstances, it is sufficiently evident that: the brochure for Bliss Island evidently persuaded both Julian and Anna to celebrate their anniversary at Bliss Island resort where their tastes would be satiated; Sandra, who runs the resort, has special knowledge and expertise about this resort for which he offered advice; Sandra’s advice was offered in a sober context; and that Sandra should have clearly realised that Julian and Anna would take the advice as truthful and factual in order to draw on the advice in making their decision. From these findings, it is conclusively clear that Julian and Anna could lodge claims in pursuant of compensation for damages against Sandra on the basis of negligent misstatement. A negligent misstatement is a false statement of facts that is made carelessly albeit in honesty (Trindade et al, 2007). A person’s statement of opinion can be treated as a factual statement if it has the implication that the maker of the statement has good grounds for the opinion. In law, a negligent misstatement is actionable in tort only if a breach of duty has occurred so that the statement causes certain damage to a claimant (Blay et al, 2005). Although when making statements no general-duty-of-care is required, especially in financial transactions, responsibility for negligent misstatement is legally imposed if and only if the statement was made under circumstances that make it reasonable to draw on it in making a decision(s) as noted by Adams (2012). Furthermore, if such a negligent misstatement persuades a person receiving the statement to enter into a particular contract with the person making the statement, then the resulting statement is a negligent misrepresentation and is actionable (McKendrick, 2012). By use of an orbiter, it was established by the landmark case Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] that a negligent misstatement which causes economic or financial loss gave rise to a legal action due to negligent misrepresentation, even though there was no contract hitherto entered into by the parties (Law and Elizabeth, 2012). In the circumstances of the case, the claimant relied on and actually acted upon the advice given by the respondent to enter into a financial transaction, which culminated in an economic loss to the claimant. This precedent case of Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] lays the critical foundation for torts occurring due to negligent misstatement (Finch and Fafinski, 2015). Herein under are further precedent cases that provide clarification about the elements that are needed in establishing the argument(s) necessary to award damages or compensation on the basis of negligent misstatement. Mutual Life & Citizens’ Assurance Co Ltd v Evatt [1971] shows that the party who did provide the advice had -or purported to have - some special knowledge or skill (Tillson, 2011), while L. Shaddock & Associates Pty Ltd v Parramatta City Council proves that the advice needed not be given by an expert advisor (Gibson and Douglas, 2012). Sandra, who runs the Bliss Island resort, answers affirmatively to the questions asked by Julian about diving and cakes – two of his tastes. Furthermore, the brochure about Bliss Island contained what Julian and Anna required in making a decision to holiday at the Island. The brochure displays a brilliant beach and states that the Island offers the best reef in the world available all year round. The brochure adds that the clients will enjoy finest foods prepared by best Australian chefs. All these wonderful compliments about Bliss Island are confirmed by Sandra when telephoned by Julian so that Julian and Anna faithfully relied on this advice to select Bliss Island resort as their holiday destination. However, Julian and Anna, as a matter of fact, found that diving is not good due to tropical storms and low visibility occasioned by algae bloom while the easily accessible parts of the reef had been damaged. Sandra, carelessly or negligently, failed to advice Julian and Anna that the present chef is a Two-Hat Pakistani who specialises in Indian foods. For these reasons, the advice given by Sandra to Julian and Anna is clearly a negligent misstatement (Foster, 2013). Secondly, it is clear that the advice given by Sandra to Julian and Anna was provided in a serious business in which case the existence of a contractual relationship may not be required. It was established in Mutual Life & Citizens’ Assurance Co Ltd v Evatt (1968) that if a person gives advice or information in a serious circumstance(s), such a person comes under the requirement of a claim, namely, duty of care - a duty of exercising reasonable care when giving advice or information (Jones, 2011). It is stated that Sandra runs Bliss Island resort, a serious business entity with a serious business mission, as indicated by the brochure. Since there is no indication of any other relationship between Sandra and Julian and Anna, then it can be construed that Sandra provided advice to Julian and Anna in a business and serious context where the latter two intended to make a financial commitment. It is therefore clear that Sandra committed a tortuous act either intentionally or negligently. In Mutual Life and Citizens’ Assurance Co Ltd v Evatt [1971] case, the court showed that for a person claiming damage, the plaintiff has the onus to prove that he suffered actual damage or loss on acting upon the advice received (Nairns, 2011). Thus, it should have been reasonably foreseeable to Sandra that Julian and Anna would rely on his advice to make a decision to holiday at Bliss Island. As already mentioned, Julian explained to Sandra that he would eat ‘lots of cake’. It was well known to Sandra that, unlike what the brochure says and according to his informed reconnaissance, the beach suffered tropical storms and low visibility due to algae bloom while the easily accessible parts of the reef had been damaged. On the issue of liability, Sandra and or Bliss Island resort were found to be liable for the loss of property for the two, Julian and Anna. Sandra and or Bliss Island resort had the legal duty to protect a guests and their property, even though they had posted a notice warning about personal liability for all the guests. As a duty, it is reasonably prudent for everyone to do what is mandated and allowed by law. When this is not done, then it becomes negligence on the part of the concerned party (Finch and Stefan, 2013). For this reason, Sandra and or Bliss Island resort can be accused of being negligent in failing to protect the property of Julian and Anna against theft while in their hotel room. In the same vein, a proximate cause (Strong, 2006) of Julian and Anna’s loss of property can be contributed to negligence on the part of housemaid who forgot to lock the door to their room, an omission which was noticed by the thief who stole their valuables. The fact that an employee of Bliss Island resort could access the guests’ hotel rooms so easily and make away with valuables without anything being done about it is a big failure on the part of Bliss Island resort. Considered in the context of duty, Sandra and or Bliss Island resort breached the duty of care by not preventing the entry of Mr. Pete into the hotel room of Julian and Anna and perpetuating a theft of their property (Foster, 2013). This breach of duty implies that Sandra and or Bliss Island resort failed to satisfy the standard of care (Pears and Shields, 2010) vested upon them and they can therefore be held liable for what befell the guests. In this case, the claimant can for compensation from Sandra and or Bliss Island resort without fear of contradiction. CONCLUSION With reference to the relevant precedent cases, and based on the legal facts as enumerated under the circumstances, it has been established in this essay that, the essential elements and factors required to argue a ‘negligent misstatement’ case, are sufficient for Julian and Anna to lodge a claim for damages against Sandra and/or Bliss Island resort. It is clear that: Sandra had expertise in running Bliss Island resort on which behalf he provided advice; that Sandra provided his advice in a serious context; and that it was reasonably foreseeable to Sandra that Julian and Anna would act upon the advice. For this argument, Julian and Anna could seek remedy by pursuing compensation for damages against Sandra (and/or Bliss Island resort) for incurring pure economic loss. BIBLIOGRAPHY Articles and Books Adams, Alix (2012) Law for business students. Harlow: Longman. Blay, Sam., Andrew, Gibson and Bernadette, Richards (2005) Torts Law in principle Lawbook Co. Elliott, C and Quinn, F (2013) Contract law. Harlow: Pearson Education. Finch, E and Fafinski S (2015) Tort law. Harlow, England: Pearson Finch, Emily and Stefan Fafinski (2013) English legal system. Harlow: Pearson Foster, Steve (2013) How to write better law essays: tools and techniques for success in exams and assignments. Harlow, Essex: Pearson Education Ltd. Gibson, Andy and Douglas, Fraser (2012) Business Law, Pearson. Jones, Lucy (2011) Introduction to business law. New York: Oxford University Press. Keenan, Denis and Riches Sarah (2005) Business law. Harlow: Pearson/Longman. Lambiris, Michael (2008) First Principles of Business Law Source Materials, CCH Australia. Law, Jonathan and Elizabeth, Martin (2012) A Dictionary of Law, Oxford University Press. McKendrick, Ewan (2012) Contract law: text, cases, and materials. Oxford, U.K.: Oxford University Press. Nairns, Janice (2011) Employment law for business students. Harlow: Longman. Pears, R and Shields, G. J (2010) Cite them right: the essential referencing guide. Basingstoke: Palgrave Macmillan. Strong, Stacie (2006) How to write law essays and exams. New York: Oxford University Press. Tillson, J (2011) Consumer and commercial law. Harlow, England: Pearson Longman. Trindade, Francis., Peter Cane and Mark Lunney (2007) The Law of Torts in Australia, Oxford University Press. Cases Chaudhry v Prabhakar [1989] 1 WLR 29 Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 L. Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) (1981) 150 CLR 225 Mutual Life & Citizens’ Assurance Co Ltd v Evatt (1968) 122 CLR 556 at 571 Read More