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LAW1054 Business Law

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LAW1054 Business Law

1 Download7 Pages / 1,701 Words

Course Code: LAW1054
University: Newcastle University

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Country: United Kingdom

Questions:

The law requires that those who are deemed to owe others a duty of care act responsibility and take necessary precautions to avoid injury and loss to other. The remedy primarily provided by the law is a damages payment to put the injured party back in the position they were before the tort had taken place-this can prove very expensive for businesses. Fundamentally to those in business, knowledge of the law and of responsibilities enables positive steps be made to minimize the risk of negligence claims. Critically discuss these issues by focusing on the following aspects:
1-Three factors should be met to be successful in a claim of negligence. Discuss this statements in the light of Donoghue v Stevenson, (1932, HL) & Barnett v Packer (1940) cases.
2- The lack of quality in the goods does not in itself give rise to negligence liability. Discuss this issue with reference to Muirhead v Industrial Tank Specialities Ltd (1986) & Junior Books v Veitchi (1982, HL) cases.
3- In the event of a claim of negligence being made against a business, the business may wish to mount a defence. What are the available ways of protecting the business against the claim of negligence? And, do you think the defence of consent is/is not available simply? Why? Discuss this issue in the light of Smith v Baker & Sons (1891) case.

Answers:

Introduction
The negligence law is a tortious law which aims at imposing duty upon a person to act in a responsible manner and to take precautions so that no injury is caused by him to others. The three factors which are needed for a successful claim of negligence includes the duty of care upon the defendant, the non compliance of the duty by the defendant and the resultant damages that are suffered by the plaintiff because of such breach on the part of the defendant. However, the damages imposed upon the businesses can be at times proving to be very expensive. This requires that the businesses must have knowledge of the law so that they can minimize their risk associated with the negligence. 
The above statement is analyzed in the light of series of cases.
The three elements of the law of negligence
It is submitted that any plaintiff who intends to bring an act of negligence upon the defendant, then in order to have a successful claim, there is a need to prove three factors against the defendant. The same are evaluated with the help of two cases, Donoghue v Stevenson and Barnett v Packer.
In Donoghue v Stevenson, Mrs Donoghue’s friend purchased a ginger beer from a café. The friend consumed the container which as of opaque glass. When remains of the beer were poured in the glass, the rotten leftovers of the snail floated out. This resulted causing injuries. Mrs Donoghue brought proceedings under the law of tort against Stevenson, the manufacturer of the beer.
The main issue that is dealt by the House of Lords was whether the manufacturer of the beer was held to be negligent and if yes, then, what are the main elements that are required to prove any person negligence as per the tort law.
In few earlier cases it was held that if there is no contract, then, there is no duty of care that can be imposed upon the manufacturer unless the manufacturer is aware that the product provided by him to the consumer is defective and the same is concealed deliberately by the manufacturer from the consumer or when the consumer is inherently dangerous and the manufacturer did not communicate the same to the consumer.
The main ratio of the case establishes that in order to prove negligence the main components that are required includes
Duty of care
Every defendant owns duty of care provided
Neighborhood principle
This is the primary outcome of the decisions of the Donoghue case and it was stated by Lord Atkin that any person who can be affected by the acts of the defendant is the neighbor of the defendant and he owns a duty of care against those persons. In Barnett v Packer, an assistant was putting chocolates for display and he was injured because of a wire, the court held that the manufacturer owns a duty towards the assistant and also to the persons who intent to ate the chocolates and suffers injuries from any foreign bodies. Thus, the said case is the extension of the Donoghue case and submits that a bystander who is not having any relationship with the person who is part of the prime transaction can be held to be the neighbor of the manufacturer.
Reasonable forseeability
The duty is against those neighbors who are reasonably foreseeable by the defendant.  
Breach of the duty
The duty which is imposed on the defendant must be breached by the defendant by not complying with the echelon of heed that is anticipated from the defendant in the akin to situation.
Damages 
The plaintiff must be affected by the breach of duty on the part of the defendant and must face some kind of harm. The harm which is caused to the plaintiff is because of the acts of the defendant. Thus, there must be but for test applied before holding the defendant negligent. Also the loss should be anticipated by the defendant reasonably and should not be remote in nature.  
Now, t is stated that the main aim of holding any defendant negligent is that damages must be paid to the injured party so that he must be placed at the position considering he has suffered no loss. But, this compensation of loss by the defendant business can be hold to be very expensive.
Lack of quality in the goods does not in itself give rise to negligence liability.
The lack of quality in the goods does not in itself give rise to negligence liability.
In Junior Books Ltd v Veitchi Co Ltd, the defendants were the experts in the flooring and were the sub contractors in a factory to lay the floor. The factory is to be used by the plaintiff. The plaintiff argued that the defendant has lay the floor which was faulty and thus must be considered as negligent considering the fact that they are specialist in the tasks. The plaintiff held that the floor cracked and thus the same was faulty so, the defendant must be held to be negligent. The plaintiff suffers loss and thus sought the cost that is incurred for laying the floor, loss of profits and the cost of the replacement of the floor.  
It is important to submit that because of the faulty floor there was no injury that was caused to any person including plaintiff. At this stage is it right to submit that the lack in the quality of the product results in bringing a claim by the plaintiff under the law of negligence.
The court held that the relationship that is shared by the parties is such that it inflicts duty of care upon the defendant to be catered with towards the faulty floor. The court enlarged its scope and the area of the law of negligence and held that the duty of care that is imposed on the defendant is not only towards the reasonable foreseeable persons or property but the duty is extended to avoid any kind of pure economic loss that can be suffered by the plaintiffs because of the breach of duty on the part of the defendant.
Thus, the lack of quality in the goods does not in itself give rise to negligence liability rather there must be duty on the defendant to avoid pure economic loss that can be suffered by the plaintiff.
Later in Muirhead v Industrial Tank Specialities Ltd, the plaintiffs were the merchants of the fish and they employed defendants (manufacturers of the tank) so that they can supply the tanks of the fish to the store lobsters. The defendants sub contracted the manufacturers of the motors which are needed in the tank to Leroy Somer Electric Motors Ltd. however; the pumps failed to operate and resulted in the deaths of the lobsters. The plaintiff sue the motor manufacturers ad the defendants were insolvent.
The court by applying the law held in Junior Books v. Veitchi decided the case in favor of the plaintiffs and granted them pure economic loss that is suffered by them because of the defective motors. Later the court of appeal submitted that the plaintiff is not permitted to seek claim on the basis of pure economic loss rather the claim is succeeded the physical loss that is suffered by it because of the physical damage. The decision of Junior Books v. Veitchi  was held to be unique and of its own. 
Defenses
 Now, it is found that whenever any because of duty is undertaken by any business because of which loss is suffered by the plaintiff, then, it is the duty of the defendant to compensate the plaintiff, however, at times it is very expensive for the business. Thus, it is necessary that the business must have knowledge of the law and the responsibilities so that they can minimize their risk that lies in the claim of negligence.
Business has defenses which can be raised by them in order to mitigate the liability that is imposed upon them under the law of negligence.
In Smith v Baker & Sons, the plaintiff was assigned the take by the railway company to drill hole in rock.  The crane was placed near the rock which is operated by the men of the company. The carne lifted the stones and swung over the head of the plaintiff and was danger involved and the plaintiff was aware of the same. The plaintiff was injured. The court held that the plaintiff did not take the risk voluntary and thus the defense of volenti non fit injuria cannot be raised.
Conclusion 
Thus, the law of negligence is an important piece of law which could hold a person liable for the breach of duties that is legally imposed upon him. However, he can protect his interest by relying on the defense available in law.
Bibliography
Books/Articles/Journals
Kelly, David  & Hammer, Ruby  & Hendy, John (2017), Business law, third edition, Routledge.
Finch, Emily and Fafinski, Stefan. Legal Skills. (OUP Oxford, 30-May-2013)
Chapman, Matthew. ‘The Snail and the Ginger Beer: The Singular Case of Donoghue v Stevenson ‘(Law Report Annual Lecture, 07 July 2010).
Kelly, D & Hammer, R & Hendy, J.  Business law. (2017, third edition, Routledge).
Lee, Rouch. Business law. (2017, Fourth edition, Oxford university press).
Jones, Lucy. Introduction to Business Law. (2017, Fourth edition, Oxford University press).
Marson, James  and Ferris, Katy. Concentrate business law. (2016, third edition, Oxford University press.
Case laws
Barnett v Packer (1940).
Donoghue v Stevenson (1932, HL).
Frederick Longmeid and Eliza his Wife v Holliday 155 E.R. 752, (1851) 6 Ex. 761.
Heaven v Pender (t/a West India Graving Dock Co) (1882-83) L.R. 11 Q.B.D. 503, CA.
Junior Books Ltd v Veitchi Co Ltd [1983] 1 AC 520.
Muirhead v Industrial Tank Specialities Ltd (1986) .
Mullen v AG Barr & Co Ltd 1929 S.C. 461, 1929 S.L.T. 341.
Levy v Langridge 150 E.R. 1458, (1838) 4 M. & W. 337.
Smith v Baker & Sons (1891).
Stennett v Hancock (1940).
Online material
The law Teacher. The doctrine of negligence.  2018. <2018. https://www.lawteacher.net/cases/donoghue-v-stevenson.php>.

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