LAW105 Introduction To Business Law

1 Section (A)

Issue:

Whether Rupali owed a duty of care to the guests, and was the duty breached?  

Law:

Under the tort of negligence, a person in business owes others a duty of care to ensure that their actions do not cause harm to others. A claim of negligence establishes that the defendant owned a reasonably foreseeable duty of care. The court in Bourhill v Young stated that a claimant must show the proximity between him/her and the defendant. However, in cases where proximity is not clear, the court in Chapman v Hears stated that what matters is the claimant to show that the defendant failed to act in a manner in which a person in that position could have acted. Again, the court in Sullivan v Moody stated that salient features of the case can show whether the defendant owned any duty of care. Once a duty has been proven, the court in Paris v Stepney said that a claimant needs to prove that the defendant breached the duty as he failed to take reasonable care that a person in that position could have taken.

Application

On analysis, Rupali owed a duty to ensure that the fruits would not cause harm to guestspplication, the rules set in Bourhill v Young requires looking for proximity between the claimant due to lack of proximity.  In the case of Rupali, there was proximity as there is a relationship between guests in the hotel and the chefs. Also, by applying the rules in Chapman v Hearse, Rupali’s duty of care can be to the guests is reasonably foreseeable since he should have expected that Chefs can be harmed by a negligence of his conducts as a chef. Applying the rules in Sullivan v Moody the facts of the case demonstrate that Rupali owed a duty of ensuring that the fruits were safe. In terms, of breach, Rupali breached his duty since it was reasonably foreseeable that unpeeled fruits would harm guests.

Conclusion

Rupali owed a duty of care, and he breached the duty by leaving some fruits unpeeled.

Part (B) 

Issue

Whether an inexperienced chef is required to provide a lower duty of care?

Law

As a general rule, a person is always expected to use skills and exercise the degree of care that is reasonable to persons of his/her position. The law does not consider it a defense when the defendant states that they lacked experience or was unskilled as set in Imbree v McNeilly.[5] This ruling overturned the law set in Cook v Cook that inexperienced persons owe a lesser duty of care.[6]

Application

No, Rupali did not owe a lower duty, as stated in Imbree v McNeilly, trainees owe the same duty of care as the experience persons serving the same position.

Conclusion

Rupali had a legal duty of providing a standard care to the guests.

Part (C) 

Issue

Can employers be vicariously liable of the torts committed by their employees?

Law

Vicarious liability is the liability that flows from the torts committed by other people who someone has a special relationship with. This liability mostly arises in cases of employment where employees commit torts while working on the authorized work of the employer. In the case of Century Insurance v NI Road Transport Board, the court Firstly, the Court held that employers control the conducts of their employee, so the employers are liable for conducts of the employees when they commit tort in the course of the employment.

Application

Yes, Johnny was vicariously liable for Rupali wrongs. Rupali was Johnny’s employee. As stated above in Century Insurance Co Ltd v Northern Ireland Road Transport Board as far as they employee commits the tort while undertaking the employer’s work, the court will hold the employer liable.  The court found the employer liable for the worker’s careless actions of lighting a cigarette next to a petrol tanker.

Conclusion

Johnny was vicariously liable of Rupali careless mistakes of leaving some fruits unpeeled. 

2: Part A

Issue

Does Li have a contract with Lame Duck Restaurant?

Law

In contract law, the main elements for an enforceable contract are an agreement made between the offeror and the offeree. The rules of the offer are that it should be communicated to the offeree in clear language. The rules of acceptance are that the acceptance should be communicated back to the offeror. For instance, in Powell v Lee, the court found no acceptance since the board did not communicate to Powell.

 Consideration was defined in given Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd as a price or that one party to a contract parts with so that the other party can act or refrain from the act. In addition, the ruling of Thomas v Thomas consideration can be anything, and the law will never look at its adequacy. The third rule requires that the agreement be made with the intention to be legally bound. It is an established rule that agreement made in commercial setting are thought to be made within the intention to make them binding while those made in friendly, family, or domestic settings carry no intention where exceptions to these rules are not provided.  

Application

On analysis, there is already a contract between Li and Lame Duck Restaurant. For instance, while examining the rules of an agreement, an offer was made by the Restaurant when it sent a price quote based on the deposited amount to Li. This part certifies the rules that an offer has to be made by the offer, and communicated to the offeree. On the part of acceptance, the offer Li accepted the quoted price, paid the deposit required, and entered a date. This part also certifies that acceptance was made, and communicated to the offeror as per the rules in Powell v Lee. On the part of consideration, the rules are that the law set in Thomas v Thomas states that the law is not interested in the adequacy of the consideration. Therefore, as far as the Restaurant asked for the quoted price and Li accepted it, this was sufficient consideration. Again, all this was happening in a commercial setting so there was already the intention to be bound.

Conclusion

There was a valid enforceable contract between Li and the Lame Duck Restaurant.

Part B

Issue

Mistake in a contract where only one party makes the mistake.

Rule

In contract, a mistake that is only made by one party is called a unilateral mistake. The mistake can be made on terms, party’s identity or the fundamental component of the contract. A contract is only void where the mistake goes to main component of the contract or where one party realizes the mistake and wish to take an advantage over it. For instance, in Taylor v Johnson, the court refused to enforce the contract where Johnson indicated that he was selling 10 acres at $15000 instead of $15000 per acre. A mistake to the quality cannot lender the contract voidable. 

Application

On analysis, the mistake was made by the restaurant but not Li. This was then a unilateral mistake and Li was not aware of it. The general rules are that a contract is still valid despite the unilateral mistake. It can only be void if the mistake was for the identity of the parties, subject matter, or where one party wanted to take advantage of the other’s mistake. In this case, Li did not know of the mistake so she was not intending to take advantage. The mistake was not about the parties since the contract was between Li and Lame Duck Restaurant, and the mistake was not to the subject matter since it was about hosting the wedding. In addition, the mistake was known by the restaurant one day before the banquet which is hard to find an alternative.

Conclusion

There was a unilateral mistake, but it was not that serious to make the contract voidable.

Part C

Issue

Breach of the contract. Lame Duck obliged to provide premises but instead refuses.

Rule

In contract law, a party is in breach if it fails to do as per the agreed terms, provide performance that differs with what was agreed, or prior to the agreed date, the breaching party calls the other demonstrating an intention for not to perform (anticipatory breach). Where there is actual breach, the innocent party can terminate its obligations and sue for the damages. For instance, in Koufos v C Czarnikow ltd, the court awarded the claimant all the damages that directly resulted from defendants’ breach. Where there is anticipatory breach, the innocent party can still quit its performance and sue for damages, or wait for the actual breach to happen.  For instance, the court allowed Gold Coast oil Co Pty Ltd to recover damages since there was an anticipatory breach.

Application

If Lame Duck Restaurant, fails to honor its obligations. They would be in breach of contract, and this entails, providing less performance than the agreed, complete failure to perform, or an intention to not perform. Complete failure or less performance will allow Li to sue for damages as found in the case of Koufos v C Czarnikow ltd. Where they call intending not to perform, Li can rescind the contract, and sue for the damages as ruled in the case of Gold Coast oil Co Pty Ltd.

However, since the Lame Duck’s has happened one day before the wedding, the court will consider this as an exceptional case where monetary damages would not be adequate to Li. Therefore, Li would seek “exemplary damages” through specific performance. An award of specific performance will compel Lame Duck to provide premises for the wedding.

Conclusion

Lame duck will be in breach, and Li would be entitled to damages to recover her loss. More preferably, Li would be entitled to specific performance so that she can have the premise on the following day.

Bibliography

Bourhill v Young [1943] AC 92

Century Insurance v NI Road Transport Board [1942] AC 509

Chapman v Hearse [1961] 106 CLR 112

Cook v Cook [1986] 162 CLR 376

Dunlop Pneumatic Tyre Co Ltd v Selfridge Ltd [1915] ‎UKHL 1; AC 847

Gold Coast oil Co Pty Ltd v Lee Properties Pty Ltd 1 Qd R 416

Imbree v McNeilly [2008] HCA 40

Koufos v C Czarnikow ltd; The Heron II (1969) 1 AC 530

Paris v Stepney [1951] AC 367 House of Lords

Powell v Lee [1908] 24 TLR 606

Sullivan v Moody [2001] HCA 59

Thomas v Thomas [1842] 2 QB 851; 114 ER 330