Bo1Blaw204 | Business Law | Assessment Answers

1: Legal Framework Essay Style

Essay on Doctrine of precedent, common law and legislation and problem solving on contract law.

Discuss and include examples to illustrate your argument.

2. Contract Law Scenario

Discuss ALL the contract law issues raised, identify relevant case law or legislation and give reasons for the likely outcome of these disputes.

Mia is setting up a new restaurant. She contacts Danny who sells Australian “truffles”. They agree that Danny will supply Mia with 5kg of quality Australian truffles each week at $44.00 per kilo. They sign a contract. Mia advertises in the local newspaper “Australian truffle night”. Her restaurant is booked out for the night. That week Danny rings her and advises he can only supply second rate Norwegian truffles for the three weeks. Upset, Mia says “you have to it says you will in the contract”, Danny reminds her of clause four which states “the supplier has the right to substitute truffles of a similar quality with two weeks notice”.

1. What issues of contract law arise in this scenario?
2. Use examples from case law, identify which are precedent or which can be distinguished from the facts in this case.
3. What do you consider the likely outcome of any legal action?

3 Civil Liability Scenario

Discuss ALL the civil liability issues raised, identify relevant case law or legislation and give reasons for the likely outcome of these disputes.

Mia wants to set up a new restaurant. She decides to consult a professional restaurant consultant for advice regarding the “fit out” for the restaurant. Fred has a business called “Restaurant Advisory Services”, his website promises professional and artistic advice on “fit out” of restaurants. Mia engages Fred to fit out her restaurant. He recommends a new floor treatment surface on the restaurant floor which is extremely shiny (unfortunately it is also very slippery).

Mabel goes to the restaurant with friends to celebrate her 40th birthday. She is wearing her brand new stiletto heels. She has a few glasses of wine and, on getting up to pay the bill slips and breaks her leg.

1. What issues of civil liability arise in this scenario?
2. Use examples from case law, identify which are precedent or which can be distinguished from the facts in this case.
3. What do you consider the likely outcome of any legal outcome?

1. To understand the doctrine of precedent, one needs to know the meaning of the same first. In order to define legal precedents, this is to mention that precedents are the decision of the previously held case that courts use as a reference in subsequent cases (Gurnani,2015). Precedents generally use in those cases where no law is prescribed and available on the subjective topic. This works on the basis of a principal “What happened in past, Let the same continue in future”. This is necessary to know that the decision of every case cannot be used as precedent. Only those decisions, that provides a set of rule or principles have the ability to develop into a precedent.

Precedents are closely connected to the common law. No statues or act has been developed in the area of common law. What is a common law? To answer this query, it will be correct to state that, this is a part of English law that came out from customs and precedents (Surbhi, 2017). Contract Law and Tort Law are the significant kinds of Common law. As mentioned earlier that no statues or law are prescribed for common Law, this is to state that Contract and Tort Law also has developed on the basis of customs and decisions given in the previous cases i.e. precedents.

Legislations are always an important part of the Law and jurisdiction. Legislations are the law, that parliament made. This also knows as Statues. There is a very clear difference between Legislations and Common Law. Where legislation is the defined acts, common law is not defined anywhere. Legislations are the set of rules that has gets approval and becomes law, whereas on the other part common law finds it is recognition and rules from the customs and decisions of past cases. Both legislation and common law are the kinds of Law. Both provide a set of rules and principals but they have different sources.

Cases under the statutory law are easy to solve as they have well-defined rules on a particular situation but the problem is with the cases related to common law. As mentioned earlier that common law is not written anywhere, it becomes difficult for the judges to provide the decision of such cases. Problems in contract law get resolve with the help of precedents and rules of customs. It means, whenever a case related to contract law comes to a court, then look at the principals that have set out in the area of Contract Law and provide the decisions accordingly. In addition to this, judges also take references of legal precedents in the course of providing proper justice to the victim party of the case. For instance, while providing decision of the case of Entores Ltd v Miles Far East Corporation [1955] EWCA Civ 3, the case Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1 has cited as a reference. There are so many cases in contract law where the decision has given on the basis of legal precedents.

2. Issues

Whether the supplier is legally eligible to supply out another kind of truffles to Mia?

Rules

Contract can be verbal or written. Both verbal and written contract has the same legally binding impacts on the parties to the case (HG.Org, 2018). It means all the parties will be liable to follow the terms and conditions of the contract. The exclusion clause is a very significant topic in the contract law. This clause consists of some conditions where one party of the contact excludes his/her liability. However, such clause must not be outside of the purview of the provisions of contract law. It means one party can exclude a certain level of liability but such liability must not be of the nature that diminishes the sole purpose of the contract. It was held in the case of Olley v Marlborough Court [1949] 1 KB 532 that an exclusion clause must be introduced to the contract at the very initial level. Any exclusion clause that party of the contract inserts at a later stage will not be effective and another party will not be liable to act according to that clause. Further, it was held in the case of L'Estrange v Graucob [1934] 2 KB 394 that whenever an exclusion clause is mentioned in the contract, the plaintiff cannot take a plea of the fact that he/she did not look after such clause and the same will be liable towards the subjective exclusion clause.

Application

In the given case, Mia and Danny have entered into a contract, according to that Danny is required to supply 5 kg Australian truffle to Mia every week. This was a written contract, terms and condition related thereto were mentioned in the same, and both the parties have become agreed by signing the contract. Based on this contract, Mia has organized a Truffle Night program at her restaurant and received the advance booking of the said function.  Later on, Danny has denied to supply the truffles to Mia and said that he can only supply similar quality truffles but not the Australian truffles for the next three weeks. Danny has highlighted the clause four of the contract in that it was mentioned that supplier has right to provide substitute truffles of similar quality. This Clause four was the exclusion clause of the contract. Applying L'Estrange v Graucob, no matter whether Mia has read out the clause 4 or not, she will bind with the same.

Conclusion

In conclusion, this is to mention that nothing was stipulated under clause 4 that is out of the area of contract law and as the clause was mentioned in the contract itself, the same is expected to be read out by both of the parties. Further, Danny has introduced this clause at the very starting of the contract, therefore the clause is valid, and Mia cannot breach the contract based on this exclusion clause.

3. Issue

The issue is to check that whether Mia is responsible to pay the damages to Mabel for the injury accrued to her or not?

Rules

Tort is a civil wrong. This is a concept of Common Law. In a social nature, a person consists duty of care to the other person in some relationships. Negligence is an important aspect of Tort Law. It occurs in a situation where due to the failure of duty of care by one party, other gets suffer from the loss. It is necessary to mention here that such harm or loss must have a direct connection with negligence. According to the decision provided in the case of Donoghue v Stevenson [1932] UKHL 100 that whenever a person fails to perform his duty of care that he/she owns to other, then he/she needs to pay the damages to the suffered party.

In cases of negligence, one defense is available with the defendant that is contributory negligence. In the case of Davies v Swan Motor Co [1949] 2 KB 291, it was held that if the plaintiff also does not take safety measures on his/her part then this will be treated as contributory negligence and damages will be reduced up to a level. Further in the matter of Raad v KTP Holdings Pty Ltd as Trustee for VM & KTP Nguyen Family Trust [2016] NSW 2016 888, when plaintiff get injured after slipping on the sleepy tiles, and defendant failed to prove that he has taken required measures to keep the dry and non-slippery floor then he was held liable for actions of negligence.    

Application

In the given case, Mabel went to Mia’s restaurant to celebrate her birthday. Due to the slippery floor, she slipped and broke her leg. The reason of this accident was the extra slippery floor of the restaurant. Being the restaurant owner, Mia owned a duty of care towards Mabel. As mentioned in the rules section that in order to prove negligence, there must be a direct connection between the cause of loss and claim of the party. In this scenario, the slippery floor was the reason for the accident. Hence, negligence is proved. Further, according to the case, Donoghue v Stevenson, Mia will be liable to pay the damages to Mable as she failed to perform her duty of care in favor of Mabel. In conjunction with this, as Mabel was drunk, so this was also an additional reason for the accident. Therefore, the rule of contributory negligence will also be applicable. Applying Raad v KTP Holdings Pty Ltd as Trustee for VM & KTP Nguyen Family Trust, Mia did not take any action to keep the floor less slippery hence she cannot ask for the reduction in damages, although she can be held Mabel liable for contributory Negligence.

Conclusion

In conclusion, this can be stated that in the studied case, Mia has breached her civil liability in respect to Mabel and for this reason, the same is liable to pay the damages to the suffered party to the case i.e. Mabel. Further, as Mabel was drunk and this was also a reason for that she lost her control and slipped. Therefore, the cause of contributory negligence, damages will be reduced marginally.

References

Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1

Davies v Swan Motor Co [1949] 2 KB 291

Donoghue v Stevenson [1932] UKHL 100

Entores Ltd v Miles Far East Corporation [1955] EWCA Civ 3

Gurnani, N. (2015) Precedents as a source of law. [online] Available from: https://www.lawctopus.com/academike/precedents-as-a-source-of-law/ [Accessed on 01/08/18]

HG.Org (2018) Are Verbal Agreements Binding? [online] Available from: https://www.hg.org/legal-articles/are-verbal-agreements-binding-35794 [Accessed on 01/08/18]

L'Estrange v Graucob [1934] 2 KB 394

Olley v Marlborough Court [1949] 1 KB 532

Raad v KTP Holdings Pty Ltd as Trustee for VM & KTP Nguyen Family Trust [2016] NSW 2016 888

Surbhi, S. (2017) Difference Between Common Law and Statutory Law. [online] Available from: https://keydifferences.com/difference-between-common-law-and-statutory-law.html [Accessed on 01/08/18]