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Assignment On Commercial Law (IRAC Method)

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Question - Use the IRAC (Issue, Rule, Application & Conclusion) method to answer below given question?


Mark, Peter and Mary were out on a Saturday night celebrating the successful formation of a new business venture. They went to a special restaurant up in the hills, Hilltop Point, to mark this occasion. After a great night of eating and drinking, they decided to continue their party at Watchout Point, a scenic hilltop spot with a spectacular view of the city. On their way, they stopped at a bottle shop to buy 2 bottles of premium French champagne.  

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When they reached Watchout Point, they parked the car at the car park which was located at the top of the cliff. There was a 2 meter fence to prevent people from going beyond that point as it was not far away from the cliff edge. There were no warning signs but the cliff was very visible. Anyone can very clearly see the cliffs. In fact, the cliff was part of this beautiful scenery which attracted visitors. At first, the trio sat in the car and chatted and drank champagne. As the night progressed Peter, who had too much to drink, got out of the car and dared the others to climb over the fence and walk to the edge of the cliff. While the others were reluctant, Peter climbed over the fence and walked to the edge of the cliff. He lost his balance and fell off the cliff and broke his leg. Peter wishes to sue the Willow Council who is responsible for Watchout Point.  
What must Peter do to establish a breach of duty by Willow Council? Is Peter likely to succeed in establishing such a breach? Give reasons for your answer.   
The champagne bottle that the trio purchased had a very special kind of cap. Instead of the usual cork held in place by wire, it had a metal cap and a cork stopper. Mark opened the cap and tried to pour the champagne into a glass. When nothing came out he shook the bottle a little. The cork stopper suddenly ejected and hit Mark’s nose. He sustained a blood nose and was in pain for 3 weeks. There wasn’t any warning anywhere in the bottle about this kind of cap. This sort of cap is very common in France and used by most French wineries.   
Mark wishes to sue the wine company. Will he succeed? What must he establish?



Answer -

There are two issues in the present case which need to be decided. The first issue is if the Willow Council can be held liable for the injuries suffered by Peter. Peter has broken his leg when he fell off from the cliff from the Watch out Point when he was celebrating the success of their business ventures with Mark and Mary. Therefore the question arises if it can be established that Willow Council is liable under the law of negligence for the injuries suffered by Peter. For this purpose, it needs to be seen if Willow Council had taken all reasonable steps due to which the people may be prevented from falling off from that point. Briefly speaking, the issue is related with the duty of care and if Willow Council owes such a duty towards Peter. There is another issue in the present case that is related with champagne manufacturer’s liability towards Mark. Mark was hit by the cork stopper of the bottle and his nose started to bleed when Mark was opening the bottle. In this case, the bottle had an unusual cap and no warning was present on the bottle to warn the persons opening the bottle.

Rule: in order to decide the liability of Willow Council towards Peter, first of all, it has to be seen if the council owes a duty of care towards Peter and at the same time, it also needs to be established that such duty has been breached by the Council (Greatlakes Shire Council v. Dederer, 2006). In this regard, the law also requires that the injuries suffered by the claimant should be directly caused by the breach of duty and in this way, the injuries can be said to be a reasonable result of the acts of the defendant. Usually in such cases, the parties take recourse to the duty of care for claiming compensation (Wyong Shire Council V. Shirt, 1980). The doctrine related with the duty of care provides that a party can be liable towards the other party in some cases under the law of negligence. The leading case in this regard is that of Donoghue v Stevenson (1932) where Lord Atkins discussed the neighborhood principle. In this regard, Lord Atkins mentioned in this case that a party has to take reasonable care to avoid the acts or omissions that may cause an injury to the neighbor of such party.



The court tries to see in this type of cases if the parties were in a reasonably approximate relationship. At the same time, the court also sees if the loss of the damage suffered by the claimant was caused by the act or omission of the other party and such loss or damage was reasonably foreseeable. Another requirement in this regard is that the risks should be of such a nature that under similar circumstances, such a risk could have been reasonably foreseen by any other reasonable person (Greatlakes Shire Council v. Dederer, 2006). Another requirement for establishing the duty of care is to see if it would be reasonable under the circumstances that a duty of care is imposed by the court on the defendant in a given case.

The concept of duty of care was discussed by the court in Blyth v Birmingham Waterworks Co. (1856) where it was mentioned that the negligence of the defendant needs to be decided with the help of standard of reasonable person. In this way, it cannot be said that the defendant was negligent if the defendant had taken all the reasonable precautions and therefore it can be said that the conduct of the defendant was according to the standard of care of any of the reasonable person. Another significant case in this regard is that of Caparo Industries v Dickman (1990). In this case, the test for deciding the duty of care was provided by the court. According to this test, in order to establish the duty of care of the defendant, it has to be considered if the injury or the loss of the claimant was caused by the conduct of the defendant and such injury or loss was reasonably foreseeable. Another requirement is that there should be sufficiently proximate relationship. This means that under the circumstances of the case, they are considered as neighbors. It is also required in such cases if imposing liability on the defendant would be just and fair (Keenan, 2007).

The legal position is that generally a duty of care is not owned by the defendant if all the reasonable steps have been taken that were required to prevent or reduce the harm that may be suffered by the other party due to such conduct. But if a potentially dangerous situation has been created even without any fault of a person, the duty of care provides that such a person should have taken all reasonable steps in order to make sure that any other person does not suffer a loss or injury. It also needs to be noted and in this regard that a person can be held responsible for breaching the duty of care for only an omission also. Similarly if there is a previous relationship between them, it can be said that the defendant has breached the duty of care. In this regard it also leads to be noted that in some cases, a statute may also impose such a relationship on the parties (Sappideen et al, 2009).



The second issue in this case is related with the liability of the champagne manufacturer as Mark was hit by the cork stopper of the bottle. In its decision in Donoghue v Stevenson, it was stated by the court that the tort of negligence is an individual tort in itself. Civil action can be taken by the plaintiff if the negligence of the defendant has resulted in a loss or injury to the plaintiff. But prior to the decision of the court in Donoghue v Stevenson, it was necessary for the plaintiff to prove that a contractual agreement was present between the parties for establishing negligence. But in this case, the drink was not purchased by the plaintiff and therefore the plaintiff and defendant were not in a contractual relationship. Despite this situation, the manufacturer was held to be liable for negligence. Therefore, it has been firmly established that a duty of care is owned by the manufacturers towards their ultimate consumers.

Application: Mark, Peter and Mary had consumed champagne while celebrating their business venture at Watchout Point. After drinking champagne, Peter walks towards the edge and asked others to do so but Martin may remain in the car. On reaching the edge of the cliff, Peter loses his balance and falls off. Due to the fall, Peter suffers injuries and also breaks his leg. But it needs to be noted in this case that the Willow Council had erected a 2 m high fence so that the visitors to the Watchout Point can be prevented from going near the edge. Although warning signs have not been installed by the Council at that point but declared was clearly visible to the visitors. The pledge was in fact a part of the enchanting scenery due to which a number of visitors were attracted to that place.

Therefore the question arises if it is possible for Willow Council to install warning signs at all the places where there could be a danger of falling off. At the same time, as a result of the limited resources of the Council, it needs to be seen what can be reasonably done by the Council to prevent people from falling off that place and had the Council taken all those steps in this case.

There is also the issue of champagne manufacturer's liability for the injury suffered by Mark by the cork stopper of the bottle. The legal position in this regard is that it is the duty of the manufacturers to warn the consumers and such duty should be reasonably discharged by them. In the present case, it was the duty of the champagne manufacturer to inform the ultimate consumers that the bottle has peculiar cap and therefore a person may be injured if it is not handled properly. But in the present case, the manufacturer of premium French champagne has not mentioned any warning on the bottle of champagne. Therefore, while opening the bottle, the cork stopper hit Mark and he had a bloody nose.



On the basis of the above mentioned law and its application to the facts of the present case, it can be said that the duty of care has been discharged by Willow Council towards Peter. Therefore, it cannot be said that the council is liable for the injuries suffered by Peter. The reason behind this conclusion is that the Council has taken all reasonable precautions in this case to prevent the people from falling off the cliff. On the other hand, the second issue in this case that deals with the champagne manufacturer's liability, it can be stated that the manufacturer of premium when champagne can be held liable for the breach of duty of care as the ultimate consumers of the champagne were not warned that the bottle contained a particular cap which could injure the consumers while opening it, if it is not handled properly. As a result, it can be said in this case that Mark can be successful if he decides to initiate action against the wine company.




Keenan (2007) Smith & Keenan's English Law (15th edn), Pearson Longman

Sappideen, Vines, Grant & Watson, 2009, Torts: Commentary and Materials, Lawbook Co, 10th ed, pp. 374-5

Case Law

Blyth v Birmingham Waterworks Co (1856) 11 Ex 781

Caparo Industries Plc v. Dickman (1990) 2 AC 605

Donoghue v Stevenson (1932) AC 562

Greatlakes Shire Council v. Dederer & Anor [2006] NSWCA 101

Overseas Tankship v. Morts Dock & Engineering Co., Ltd. [1961] AC 388 (Wagon Mound case)

Wyong Shire Council V. Shirt [1980] HCA 12; 146 CLR 40


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