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Case Study On Commercial Law

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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. 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?





The issue that is present in this can be described as being related with the reliability of Willow Council towards John as he suffered injuries after falling off from the edge of the Watchout Point, where they were celebrating their new business venture. As a result, it needs to be decided if Willow Council can be held liable under the law of negligence. Similarly, it also needs to be considered if reasonable steps have not been taken by the Willow Council which could have prevented the people from filing off. Therefore the question is if there is a duty of care on part of the Willow Council towards John. At the same time, another issue is also present in this case which deals with the liability of champagne manufacturer. In this case, the cork stopper hit Mark as he was trying to open the bottle because the bottle had somewhat different type of a cap.


Duty of Care: According to the rule of law that can be applied in the present case, for the purpose of deciding the issue related with Willow Council's liability towards John, it needs to be seen if a duty of care is owed by the Council and if such duty has been breached. At the same time, the law requires that the injuries suffered by John should be the result of such breach of duty and at the same time, the injuries should be the reasonable result of the action or inaction on part of the Council. Generally in this type of cases, the doctrine of duty of care is used to claim compensation. According to the doctrine of duty of care, a party is considered as being liable towards the other party for tort of negligence. In this regard, Lord Atkins provided the neighborhood principle in the famous case of Donoghue v Stevenson. In this case, it was stated by the court that reasonable care needs to be taken by a party and avoid the acts or omissions if it is likely that the neighbor of the party may suffer injury as a result of such acts or omissions (Keenan, 2007).

In such cases, an effort is made by the court to consider if reasonable proximity is present between the parties. In the same way, the court is also required to consider it the damage that has been suffered by the other party as a result of the act or omission could have been reasonably foreseen. At the same time, the court also has to consider if such a risk was foreseeable by any other reasonable person under similar circumstances. In the same way, it also needs to be seen if it would be reasonable for the court to impose a duty of care on the defendant in a particular case. The duty of care is a concept that has been discussed in detail by the court in Blyth v Birmingham Waterworks Co.In this case, the court stated that it is required that negligence on the part of the defendant should be decided by using the standard of reasonable person. Therefore it means that the defendant cannot be considered as negligent if all reasonable precautions have been taken by the defendant and as a result, the conduct of the defendant is in accordance with the standard of care that would have been followed under similar circumstances by any reasonable person.

Test Used to Decide Duty of Care

Caparo Industries v Dickman is also a significant case in which the court has provided the tests that can be used to decide the duty of care of the defendant. This test provides that in order to see if the defendant owes a duty of care or not, it needs to be seen if the loss or the injury suffered by the claimant could have been the result of defendant's conduct which was reasonably foreseeable. In the same way, it also needs to be considered if there is a relationship of sufficient proximity present between the parties or in other words, the parties can be considered as neighbors. Another requirement that was mentioned by the court in this case is to see if it will be just and fair to impose liability on the defendant, keeping in mind the circumstances of a particular case.


In this regard, the law provides that generally it can be said that a party does not owe a duty of care towards the other party if it had taken reasonable steps with a view to prevent or reduce the harm that the other party may suffer by such conduct. On the other hand, even if a dangerous situation has been created by a person blamelessly, according to the duty of care, such person should take steps be reviewed to ensure that loss or injury is not caused to other persons. An example in this regard can be given of a person who has left his car on the road and has also put the lights of the car off. According to the duty of care present on part of such person, even if there was light on the road, the person owes a duty towards the other persons and drivers present on the road. As a result, if in this case, a car collides with the stationary car, it is possible that the person who has left the car on the road can also be held liable jointly. In this regard, the law also provides that in case of certain circumstances, it is also possible that a person can be liable for the breach of duty of care in case of pure omissions also (Sappideen et al., 2009).

In this regard, the law provides that in case there is a previous relationship present between the parties, a person can be considered as liable for the breach of duty of care. In the same way, such a relationship may also be imposed by a statute.

Liability of Manufacturer

Regarding the second issue that is present in this case, in Donoghue v Stevenson the Court has stated that tort of negligence has to be considered as an individual tort. The law provides that the plaintiff can take civil action if he or she has suffered loss or injury as a result of the negligence on part of the defendant. However before the decision given by the court in Donoghue v Stevenson, the plaintiff had to establish the presence of a contractual agreement for the purpose of establishing negligence. However in this case, the plaintiff had not purchased the drink and as a result, the contractual relationship was not present between the plaintiff and the defendant. However the court held that the manufacturer of the drink was liable under the thought of negligence. In this way, the law provides that the manufacturers have a duty of care towards the ultimate consumers also.


The neighborhood principle that has been provided by Lord Atkins in this case requires that a neighbor can be a person who can be affected directly by the act or omission of the other party. As a result, the other party has to take reasonable care with a view to avoid the acts and omissions that can reasonably be considered as likely to cause injury to the neighbor.


In the present case, two bottles of champagne were consumed by Peter, Mark and Mary in order to celebrate their new business venture. However, after drinking champagne, Peter got out of the car and also asked others to go towards the edge of the cliff. However, Mark and Mary did not follow him but Peter lost balance and fell from the edge. As a result, he broke his leg.

In this case, a two meter high fence has been erected by the Willow Council so that the people can be prevented from going near the edge. But in this regard, it also needs to be noted that the council has not raised any warning signs at this point despite the fact that a large number of people came to the place in order to see its scenic beauty and this fact was well within the knowledge of the Council.

On the other hand, so far as the liability of champagne manufacturer is concerned, the law requires that the duty to warn the consumers should be reasonably discharged by the manufacturers. In the present case, the ultimate consumers should have been informed that the bottle contains a special type of a cap and injury may be suffered by a person if the cap is not properly opened. In this regard it needs to be noted that in the present case, there was no warning on the champagne bottle regarding the cap. As a result, while trying to open the bottle, Mark suffered an injury when he was hit by the cork stopper.


Therefore in the present case it can be said that Willow Council has discharged its duty of care towards Peter and as a result, the Council cannot be considered as liable. The reason is that all the reasonable precautions have been taken by the Council as the Council was well aware that the place was visited by a large number of people due to its scenic beauty. Regarding the second issue that is present in this case, dealing with the liability of champagne manufacturer, it can be said that the manufacturer has breached its duty of care because there was no warning on the bottle regarding the fact that it contained a special type of a cap and if it is not handled properly, a person may suffer injuries. Therefore, Mark can succeed in his 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


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

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


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