LST5CCL Company and Commercial Law 2 - Free Samples to Students

In the given case study, James had told the manager of Lloyd Right Pty Ltd to arrange for 100 seating options in the restaurant along with the responsibility to get the permit of the place from the Local Council. The manager ordered for furniture bigger in size than the usual ones which would only accommodate 80 seating option. Moreover, James wanted to include some seating option outside, on the sidewalk of the restaurant to add an aesthetic value to the restaurant. However, failure on the part of the manager to verify the fact whether such arrangement would be feasible, amounted a severe loss to James when he was intimated by the council that the table installed on the sideway need to be removed. In such situation, the manager is liable to pay damages to James who would be losing $30 for every customer.ve to compensate James for the non-performance of the contract, which required the manager to arranger for 100 seating even though it was not expressed in the contract, but orally agreed upon by the parties. Moreover, by the manager’s failure to comply with the rules of the council, James would incur heavy loss in the business. Therefore, for such omission of duty, the manager would again be liable to pay damages to James on such terms.

Part 2

Negligent misrepresentation giving rise the issue, which speaks for financial compensation or assistance to the plaintiff.

Rule

Negligent representation refers to the opinion or advice given by a professional in the course of an agreement and the other party relied upon such opinion, which turns out to be false and misleading. It is a tort, which is committed by a person who has professional liability to another to show a duty of care. In Rogers v Whitaker, it was held that it is the duty of the professionals to discuss the probable risks that can be encountered in the course of the performance of the agreement. While discussing the professional and dutiful capacity of the tort-feasor, it is to be understood that there are various other capacities of a person to commit negligent misrepresentation. Section 59 of Wrongs Act 1958 states that the skill of the person hired must be appropriate as per the requirement. Any suppression of fact would amount to misrepresentation.

In Perre v Apand, foreseeability of the risk of the non-performance of the contract was discussed. If the defendant fails to foresee such probable risk, it might lead to severe consequence, which would affect the plaintiff. Failure to foresee the risks would amount to negligence of the party relied on, under the Law of Tort. The professional is expected to foresee such risks, which has the capacity to cause injury to the client. The professional would be directed to pay compensation to the aggrieved part by the court on enforcement of the contract. Nonetheless, it has been observed that when a risk is too remote to be foreseen, the defendant would not be held liable for the damage incurred by the plaintiff (The Wagon Mound No. 2).

Section 18 of the Australian Consumer Law (ACL) lays down that it is unlawful to deceive someone by way of entering into a contract to which such innocent person might have hold a trust and reliance. Thus, to claim damages, it is necessary for the plaintiff to establish the fact that the defendant has deceived him and such an act has caused him injury.

Application

In the given case study, the aggrieved party had relied upon the manager to accommodate 100 seating in the restaurant and to get the permit of the place from the local council. The manager showed negligence on his part on both the tasks, which have caused an injury to James, the aggrieved party to the contract. Such negligent representation would make the manager liable to compensate James.

James would receive compensation for the negligent representation and non-performance of standard duty of care on the manager’s part, which has caused him severe financial injury.

Part 3

James has quite a few legal risks ahead of him to tackle. The first and foremost would be the large sized furniture that needs to be fitted in the restaurant, which would occupy more space and would leave room for lesser number of seating. Lesser number of seating would amount to the accommodation of lesser number of customers, which means the business would not make the amount of profit that it had estimated to earn. In addition to, failure to remove of the installed tables on the sidewalk would attract legal risk and eventual penalty from the local council. Later, James might incur heavy losses due to the scanty accommodation of customers due to the ill-fitted furniture as well.

A suggestive opinion to avoid the risk of scanty seating arrangement would lie on the owner of the premise. The owner of the premise must choose and order the preferred furniture that would fit in the restaurant without losing on the number of seating. Additionally, the parties must incorporate expressed term on such significant matters without fail.

Reference list:

Breen v Williams (1996) 186 CLR 71

Hopkins v Tanqueray (1854)

Oscar Chess v Williams (1957)

Perre v Apand (1999) 198 CLR 180

Pym v Campbell (1856)

Rogers v Whitaker (1992) 175 CLR 479

The Wagon Mound No. 2 [1967] 2 All ER 709