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LAW105 Introduction To Business Law

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  • Course Code: LAW105
  • University: Charles Darwin University
  • Country: Australia

Questions:

Johnny has been training a new chef, Rupali, in the kitchen of his restaurant. Johnny thinks Rupali is almost ready to prepare food for customers. Johnny and Rupali arrange for a small group of CDU students and their friends to come to the restaurant one evening, when the restaurant is ordinarily closed, to try Rupali’s food. Johnny explains to the guests that Rupali is being left alone in the kitchen to prepare the meal by himself, without supervision. Rupali prepares a delicious three-course meal for the guests, including a daring and innovative durian pie. Unfortunately, Rupali does not peel the durian fruit before putting it in the pie, and the sharp thorns cause three of his guests moderate injury before everybody else realises that the durian pie should be avoided.

(a) Has Rupali breached any legal duty of care?

(b) Did Rupali owe a lower duty of care to the guests due to inexperience?

(c) Is Johnny vicariously liable for anything that occurred?

The Lame Duck Restaurant owned by Johnny appoints a sales and marketing representative (Summer) to design and launch a new website for the restaurant. Summer is very bright and her design looks amazing. As the website is exceptional, Johnny decides to revamp the pricing system and put a 15% mark-up on all food. Summer develops a beautiful design for the new pricing system and posts it online.

Two weeks later after the prices are changed, Li books the wedding using the menu he found on one of the tables. Summer mistakenly accepts the booking, asking Abu from accounts to accept the deposit and finalise the invoice. Li calls, accepts the quoted price, pays the deposit and books the date for the wedding. The same day, Li sends out invitations to all her friends studying at CDU. The day before the banquet, the error in the quotation is discovered. Johnny gets involved, calls the customer and says that the Lame Duck Restaurant cannot host the wedding because the quotation was made in error. However, Li insists that ‘we have a contract’ and says that under the law the Lame Duck Restaurant must host the wedding banquet.

(d) Advise Johnny, whether the contract exists.

(e) Was there a mistake? If there was, what kind of mistake?

(f) Explain possible legal consequences if the Lame Duck Restaurant is obliged to provide the premises for the wedding, but refuses to do so.

 

Answers:

Question 1

Issue

The issue is to check that whether the Rupali breached any standard of care in the case or not?

Rules

Under Tort Law, a duty of care is a legal obligation in those situations where a person can foresee some kinds of risk and danger and has reason to believe that the same can be dangerous for others. In such a situation, it becomes the liability of a person to act as a reasonable person and perform the duty of care.  A Tort is a civil wrong and the same can be intentional or unintentional (Zetler and Bonello, 2011). Negligence is a type of unintentional tort, where a person fails to perform the duty of care without any wrong intention. A person who breaches the duty of care and cause of this the other person get to suffer from some loss then the first person will be held liable to pay the damages (Findlaw, 2018).

Application

Being the cook, Rupali owned a duty of care towards the guest. As she was cooking food, it was her responsibility to be cautious about the quality and ingredients of the food. She did not peal the durian fruits and put the same into a pie, this was the only reason that results of injury to three of the guest. This is a case of negligence because Rupali did not put the durian fruit without peel off intentionally.

Although, Rupali did not act intentionally, yet she breached the duty of care due to her negligence.

Question 2 

Issue

The lead issue of the case is to check that whether Rupali owns a less/lower duty of care because of her non-experience in the area of cooking.

Rules

Under Tort Law, a person is responsible in respect of other in all those circumstances where he/she can assume the risk and can also prevent the same but fails to do so. One cannot take the defense of his/her inexperience. Some defenses are there under Tort Law. Defenses are the situation where the defendant can held him/her less liable and the court reduces the amount of damages asked by the claimant. These defenses are named as Contributory negligence, Voluntary non fit injuria, Ex turpi causa, and exclusion of liability (Lunney and Oliphant, 2013). Any of these defenses do not cover a factor such as non-experience of a person

Application

In the given case, Rupali being a chef was liable to act in a reasonable and responsible manner. She was working in a restaurant it was expected her to be as careful as any other chef. Guests are not required to see or know that which chef is preparing the food; they will always be under the safe zone of duty of care owed by another person in respect to them, which has provided them under the Tort Law. The fact that she was not experienced cannot reduce her liability or the standard of care that she owned towards guest as inexperience does not count under any defense identified in Tort Law.

Rupali owned a complete duty of care in respect to all guest to whom she served the food, similar to an experienced person.

Question 3

Issues

Is Johnny is liable for the negligence, that has done on the part of Rupali in his restaurant?

Rules

Under the Tort Law, there is a well-known concept of vicarious liability. According to this rule, a person will be responsible for the torts committed by another person, even if he/she was not involved directly or indirectly in that act. This rule further states that in relation to a workplace, an employer will be held liable for the acts of his/her employees. However, the employer will be held liable for only those acts that an employee do within the given authority. In conjunction with this, an employer will also be responsible in that situation where employee act within the given authority but in an unauthorized manner. It was held in the case of Mr. AM Mohamud v WM Morrison Supermarkets plc [2016] UKSC 11 that if it is proved that employee was not acting in personal capacity then the employer will be held liable for the tort committed by such employee.

Application 

In the studied case, Rupali is an employee of Johnny. Preparing food was the core part of her job. When she prepared food for the guest, he was acting within the given authority. Although she has acted negligently and did not perform the duty of care as she was expected to do, yet, Johnny being the employer will be held liable for her act, as rule of vicarious liability will be applicable.

Johnny is responsible for the act of Rupali as she acted in an unauthorized manner but within the area of provided authority.

Question 4 

Issue

The issue is to check the presence of a valid contract in the transaction.

Rules

A contract is a transaction that has nature to bind the parties thereof legally. For a contract, there must be some essential elements in a transaction. These elements include an offer, acceptance, communication of offer and acceptance, the intention of the parties and consideration (US Legal, 2018). In a situation, where parties do have the intention to enter into a legal contract and consideration also exist, then as soon as an offer will be accepted, the same will turns into a valid agreement and thereafter in a contract when the acceptance will be communicated to the offeror. It was held in the case of Chappell v Nestle [1960] AC 87 that consideration needs not to be adequate (E-law Resources, 2018).

Application

In this case, Li has found a menu of the lame duck restaurant on the table and based on that made an offer to arrange a wedding party over there on the prices that were mentioned in the oriented menu card. This was the offer of the case. Further, the person named Summer (marketing and Sales representative of the restaurant) accepted the offer on behalf of the restaurant. This was the acceptance in this case. Both of the parties such as Li and summer had the intention to develop a legal contract. Applying the case Chappell v Nestle a legal consideration was also there. Therefore, the cause of the presence of all the essential elements, there was a legal and valid contract.  A valid contract existed in the studied transaction.

 

Question 5 

Issue

The issue is to confirm that was there any mistake in the transaction. Moreover, if yes then kind of mistake it was.

Rules

Sometimes, in a transaction, parties of the transaction commits mistake about some factors. Such mistakes can be on part of a single party or both of the parties to the transaction. Unilateral mistakes are those mistakes where only one party remains at the mistake and such mistakes can be related to terms of the transaction or can be related to the identity of the subject matter (legalmatch, 2018). It was held in the case of Hartog v Colin & Shields [1939] 3 All ER 566 that when one party remain on the mistake but claimant could realize the mistake then the action of the claimant will fail.

Application

Li has offered to arrange a party based on the prices showing in the menu that was placed on the table of a restaurant. Here, the restaurant representatives were on mistake who understand that Li has offered the prices according to the rates showing on the website and accepted the offer. Only one party of the transaction i.e. restaurant representatives were on a mistake as they misunderstand the prices for which Li has made an offer.

To conclude the issue, this is to state that yes, there was a mistake in the transaction and the same was a unilateral mistake related to terms of the contract on part of the restaurant representatives.  

Question 6 

Issues 

To check the legal consequence in the case where the restaurant is obliged to entertain the contract but refuses to do the same.

Rules

Under Contract Law, a contract can come to an end in various modes such as performance, agreement, frustration, and breach (Kummer, 2017). According to the manner in which a contract is discharged, various liabilities occur in a case. For instance, if a person breaches the contract then he/she can be held liable for the damages. It was held in ten cases of Hochster v De la Tour (1853) 2 E & B 678 that if a party shows the intention to not to perform his/her obligation to second party, then in such a situation, that second party can bring an action against the first one.

Application

In the given case, if the restaurant is obliged to give space for the party and later in denies to do so then such a situation will be a breach of contract. As mentioned in the rules section then in the cases of breach of contract, another party can ask for the damages, therefore Li will have the right to sue the restaurant owner for breach of contract. The court can held liable the restaurant to perform the obligation of the contract, however, if the restaurant would not do so, then the same will has to pay the damages.

Liability to pay the damages by the restaurant to Li will be the consequence, which will occur in the case of breach of contract.

 

References

Chappell v Nestle [1960] AC 87

E-law Resources. (2018)  Chappel v Nestle [1960] AC 87 House of Lords. [online] Available from:  https://e-lawresources.co.uk/Chappel-v-Nestle.php[Accessed on 23/08/18]

Findlaw. (2018). Elements of a Negligence Case. [online] Available from:  https://injury.findlaw.com/accident-injury-law/elements-of-a-negligence-case.html [Accessed on 23/08/18]

Hartog v Colin & Shields [1939] 3 All ER 566

Hochster v De la Tour (1853) 2 E & B 678

Kummer, S. (2017) The Language of Company and Contract: an integrated course in legal English. 3rd ed. BoD: Books on Demand. P. 153.

Legalmatch. (2018) Unilateral Mistakes in a Contract. [online] Available from:  https://www.legalmatch.com/law-library/article/unilateral-mistakes-in-a-contract.html [Accessed on 23/08/18]

Lunney, M., and Oliphant, K. (2013). Tort Law: Text and Materials. United Kingdom :: OUP Oxford.

Mr. AM Mohamud v WM Morrison Supermarkets plc [2016] UKSC 11

US Legal. (2018) Elements of A Contract. [online] Available from:  https://contracts.uslegal.com/elements-of-a-contract/ [Accessed on 23/08/18]

Zetler, J., and Bonello, R. (2011) Essentials of Law, Ethics, and Professional Issues in CAM - E-Book. London : Elsevier Health Sciences. p. 23.

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