LAW105 Introduction To Business Law

IRAC model is used and references to cases are given in AGLC, APA or Harvard style

Relevant law and rules are identified with skillful use of credible, relevant sources

Analysis demonstrates excellent ability to appraise evidence, evaluate arguments and to formulate and express sound conclusions.

Under Tort Law, some of the relationships are there where a person owes duty if acre. In addition to these defined relationships, this duty also exists in some other relationships. It was held in the case of Caparo Industries PLC v Dickman [1990] UKHL 2 that a duty of care exists in the following situations:

1. Where a person can foresee the risk.
2. Where there is a relationship of proximity between the claimant and the defendant.
3. It is reasonable to held the defendant liable in the case (Batt Law Resources, 2018)

Negligence is a kind of unintentional tort. The duty of care refers to a circumstance where a person is required to act similar to a reasonable and responsible person and if a person does not do so then he/she will be held liable for breach of the duty of care under Tort.

In the given case, Rupali was preparing food for the guest of restaurants. In this case, she owed a duty of care. As applying to the provisions of Caparo Industries PLC v Dickman, Rupali could foresee the risk and also had a proximate relationship with subjective guests. By putting durian fruits without peeling the same into a pie, she did not act as a reasonable person.

Being a chef Rupali owed a duty of care towards guests of the restaurant and by not keeping their safety in mind; she breached her duty of care.

To check that whether Rupali owed a duty of care in relation to the guest of restaurants as she was not experienced.

Under Tort Law, every person owes a duty of care that can foresee a risk in a situation and has a relationship of proximity with others and the same held responsible in case of breach of duty. Defenses are there under Tort Law. These defenses are those excuses, which provide a safeguard to the defendant in a case. Four defenses are there under Tort Law namely Voluntarynon fit injuria, Contributory negligence, exclusion of liability and Ex turpicausa (Goudkamp, 2013). None of these defenses covers the non-experienced of a person and provides a safeguard to a person who is inexperienced and breached his/her duty of care.

Rupali owed a duty of care in this case. She was preparing food and might be careful in doing so. The guest was not responsible to check the experience or inexperience of a chef who was preparing food. Further applying the provisions of the defenses available under Tort Law, Rupali cannot take the defense of her inexperience. Under Tort law, the court does not consider the inexperience of defendant as defense and the reason behind the same is to provide justice to an innocent third party.

Regardless of the less experience of Rupali, she owed a duty of care.

Issue

The issue is to check liability of Johnny for the negligence of Rupali?

In general, a person is a responsible one for his/her deeds and tasks, but there are some circumstances where a person held liable for the acts of others. This concept has incorporated in Tort Law as the rule of vicarious liability. According to this rule, an employer held liable for the torts committed by his/her employees (Legal Dictionary, 2018). The reason behind this is agency relationship of an employer and employee. As in Contract Law, a principal held liable for the act of agent (Miller and Jentz, 2010). Similarly, in an employment relationship, an employer is liable for the act of his/her employee. However, the employer can be held responsible for those acts that an employee does within the limit of given authority.

In the given case, Johnny employed Rupali. An agency relationship was there between Johnny and Rupali hence, Johnny was liable for the deeds of Rupali. Rupali was acting within the area of given authority because the lead role of her was making food for the customers of Johnny’s Restaurant. She committed an unintentional tort while performing her duty and therefore the rule of vicarious liability will be applicable here.

Rule of vicarious liability will be applicable and Johnny will be liable for the negligence of Rupali.

Whether a valid contract was there between Li and lame duck restaurant.

A valid contract develops in transactions where all the essentials of a contract exist there. To develop a valid contract, there must be some elements such as offer, acceptance, the intention of the parties to develop a legal relationship and consideration (The Law Handbook, 2018). When a person makes an offer to another person and such another person accepts the same, an agreement comes into existence. When an agreement gets rest of the essentials, which are required for the development of a contract, then the same becomes a valid contract. Further, according to the decision given in the case of Chappell & Co Ltd v Nestle Co Ltd [1959] UKHL 1 a consideration in a contract is required to be sufficient but not adequate.

In the given case, Li saw a menu card on the table of the lame duck restaurant. On believing upon the prices stated in that menu card, he offered to arrange a party in the restaurant. As soon as the sales and marketing representative of the restaurant, Ms. Summer accepted the offer, an agreement has developed in both the parties i.e. Li and Lame Duck Restaurant. Further, in the case consideration could not be an issue as applying the decision of the case of Chappell & Co Ltd v Nestle Co Ltd. consideration does not require to be as similar to the value of subject matter. The same only needs to be sufficient. As all the necessary elements of a contract were there, hence it was a valid contract.

Yes, a valid contract was there between Li and Lame Duck restaurant.

Issue

The issue is to check that whether any mistake was there in the whole transaction. If yes, that which type of mistake it was.

Rules

Mistakes in a contract are the circumstances where either or both the parties to the contract has some misunderstanding about an important fact of the transaction Mistakes can be unilateral or bilateral (Miller and Hollowell, 2010). A unilateral mistake is that where one of the parties remains in confusion about the subject matter or other important facts of a contract. In cases of unilateral mistake, this is the rule that an innocent party can not claim to rescind to contract if the same could have the knowledge of the true situation (Legal Match, 2018). Further, unilateral mistakes can be of two types. One is a mistake of identity and another one is mistakes related to any term of the contract.

Application 

In the given situation, the restaurant owner was on a mistake. The updated prices were displayed on the website of the restaurant but on the table, the menu card with outdated prices was placed. Relying upon these prices Li has entered into a contract with the restaurant. The restaurant representative thought it was the new price for the Li made an offer and therefore a unilateral mistake was there on the part of the restaurant.

Conclusion

Yes, a mistake was there in the contract and the same was a unilateral mistake. Restaurant representative and owner, both were on a mistake.

Issue 

What possible consequences can occur in the contract in the situation where the restaurant is obliged to provide the space to Li but still refuses to do so?

Rules

For all the parties to the contract, it is necessary to perform their obligations. When a party fulfills it is promises made under a contract in the favor of another party then such contract is known as contract discharged by way of performance (Find Law, 2018). In general, parties are advised to fulfill their obligations in a contract in order to escape all the possible future proceedings. Further, the breach is another way to discharge a contract. It is a situation where one of the parties refuses to perform his/her obligation. The second party can initiate an action in against of the first party who breaches any term of the contract or refuses to act in a manner he/she was required to act (E-Law Resources, 2018).

Application

In the presented case, if the restaurant owner is required to give space to Li for his party, then it becomes the responsibility of restaurant owner to do so in order to discharge the contract by performance. However, if the restaurant owner would refuse to provide restaurant premises to Li for the party then it will be considered as a breach. According to the provisions of Contract Law, Li will be entitled to bring an action against of restaurant owner and can ask for the performance of the contract.

Conclusion

This is to conclude that if it is the responsibility of restaurant owner to provide space to Li and the same do not do so, then Li can sue the restaurant for the breach of contract. Restaurant owner will require to perform the promise made out under contract or to pay damages to Li.

References 

Batt Law Resources. (2018) Caparo Test. [online] Available from: https://www.battlawresources.com/caparo-test [Accessed on 26/09/18]

Caparo Industries PLC v Dickman [1990] UKHL 2

Chappell & Co Ltd v Nestle Co Ltd [1959] UKHL 1

E-Law Resources. (2018) Discharge by Breach. [online] Available from: https://e-lawresources.co.uk/Discharge-by-breach.php [Accessed on 26/09/18]

Find Law. (2018) How can contracts be discharged from further performance? [online] Available from: https://www.findlaw.com.au/articles/4551/how-can-contracts-be-discharged-from-further-perfo.aspx [Accessed on 26/09/18]

Goudkamp, J. (2013) Tort Law Defences. UK: Bloomsbury Publishing.

Legal Dictionary. (2018) Vicarious Liability. [online] Available from: https://legaldictionary.net/vicarious-liability/ [Accessed on 26/09/18]

Legal Match. (2018) What Is a Unilateral Mistake in a Contract? [online] Available from: https://www.legalmatch.com/law-library/article/unilateral-mistakes-in-a-contract.html [Accessed on 26/09/18]

Miller, R., L., and Hollowell, W., E. (2010) Cengage Advantage Books: Business Law: Text and Exercises (6^th ed.). USA: Cengage Learning.

Miller, R., L., and Jentz, G., A. (2010) Cengage Advantage Books: Business Law Today: The Essentials (9^th ed.). USA: Cengage Learning.

The Law Handbook. (2018) Elements of a contract. [online] Available from: https://www.lawhandbook.org.au/2018_07_01_03_elements_of_a_contract/ [Accessed on 26/09/18]