Legal Issues in Business: Liability, Contracts, and Professional Negligence

Lucas runs an accountancy firm and he has had a good year taking on some large new clients. He decides to treat himself to a new silver Audi A8.

He always parks at the local pay and display car park operated by Prang Ltd. There is a large clear sign at the entrance to the car park just in front of the payment machine stating “These premises are not staffed by our employees and may be dangerous. Clients use these premises strictly at their own risk and Prang Ltd accepts no liability whatsoever for any damage or injury sustained by those using this facility or their vehicles or property no matter how caused”.

He returns to his new car one day only to find that it had been badly damaged by a service vehicle being driven by one of Prang’s employees.

While he was on his way to the car park office to complain he is hit by the same service vehicle, which is clearly being driven dangerously by the same employee. As a result, his car is further damaged and he suffers a broken arm and has to stay off work for 8 weeks. Prang Ltd has accepted that its employee was negligent on both counts but denies any liability, relying on the exclusion clause.

Advise Lucas whether there is any action he can take against Prang Ltd. Use legal sources and case law to support your answer.

Amazon sellers hit by nightmare before Christmas as glitch cuts prices to 1p

Small businesses count cost of error in Repricer Express software that resulted in thousands of items going for a song.

There were Christmas shopping bargains galore on Amazon’s website over the weekend … for about an hour. Because of a technical glitch, the prices of thousands of items crashed to 1p – giving eagle-eyed customers a pre-Christmas treat while leaving scores of small family-owned businesses nursing heavy losses, with some warning they could enter the new year facing closure.

From 7-8pm on Friday, software used by third-party sellers to ensure their products are the cheapest on the market went haywire and reduced prices to as little as 1p. “Amazon is all kinds of broken,” one observer tweeted. “Mattress 1p. Headphones 1p. Batteries, clothing, games all 1p. Someone messed up big time.”

Martin Le Corre, who sells toys and games via his MB Housewares store on Amazon, told the Guardian that the glitch in software developed by RepricerExpress could have cost him more than £100,000.

“We got a call from a competitor to say ‘do you realise all your listings at a penny?’ By the end of the hour, we had 1,600 orders,” he said. “People were buying 10, 50, 100 copies of everything. It is £50,000, £60,000, £100,000 of stock; we can’t even work it out.”

Le Corre immediately took his store offline, but more than £30,000 worth of orders had already been marked as dispatched by Amazon, meaning they could not be cancelled and shoppers would be able to keep the goods.

Amazon is working to cancel orders that have not been dispatched, but sellers complained that the cancellations were ruining their seller ratings on the site.

Le Corre, who spent the weekend stock-checking in the company’s warehouse, said one buyer bought 95 board games that should have cost £12.99 each for 99p each.

“I’m kind of wishing I was on the other side of this,” he said.

1. What is the legal position regarding both Amazon, the suppliers, and the customers who have ordered goods at the really low prices?

2. Include details of all the elements needed to form a contract.

3. Does it make any difference whether the goods have been delivered or not?

Do some research on the case “Stone & Rolls Ltd v Moore Stephens” (House of Lords, 2009).

1. What is the current legal position regarding negligence by professionals in the UK and how has this developed over the years?

2. Were Moore Stephens negligent in this case in light of your answer to 1. above, and why were they able to avoid damages in this case?

3. Could these principles be applied to the situation in the recent demise of Pattiserie Valerie and its auditors Grant Thornton?