Tort Law and Misrepresentation in Business

Running Head: Law 1
Law

Law 2
Introduction:
Tort is considered as civil wrong under which innocent party gets right to claim damages. The
Word tort is an old French word, and the meaning of this word is wrong. Legal system of
Australia is derived from English common law, and it is necessary to consider the history of
English common law for understanding this subject. Tort is considered as that situation under
which one person caused harm to another person because of the negligence of the former person.
Misrepresentation is happened when false information was provided by one party to the other
party for inducing the other party to enter into the contract. It must be noted that
misrepresentation must be made before entering into the contract. If party enter into the contract
because of the misrepresentation and suffer loss, then such party has right to claim damages or
terminate the contract (Law Vision, 2008).
This paper discuss tort of negligence and misrepresentation in detail, and also state different
terms related to both the concepts in Australia. Subsequently this paper is concluded with brief
conclusion.
Legal components of Tort of negligence and
misrepresentation:

Law 3
Tort of negligence- it is a legal action which is conducted by the person towards whom
defendant owned duty of care against the defendant. Liability under tort of negligence arises
when defendant owned duty of care towards the plaintiff, and plaintiff suffers loss or injury
because of the breach of duty. Three legal components of the tort must be proved by the person
for filing claim under tort of negligence:
 Duty of care- defendant must owned duty of care towards the plaintiff at the time when
act of negligence was committed.
 Breach of duty of care- defendant fail to fulfill the required standards of care.
 Damages- plaintiff must suffered loss because of the breach of duty of care by the
defendant. It must be noted that damages must not be too remote.
However, negligence is considered similar to the carelessness, but not every act of carelessness is
considered as negligence. For filing claim under tort of negligence it is necessary to establish
above three elements (Law Service Commission, n.d.).
Misrepresentation- for the purpose of establishing misrepresentation, court considered the
meaning of representation by using objective approach. Following are some legal components
which must be established by the parties to the contract for filing claim under misrepresentation:
 Statement must be related to some past or existing fact.
 Representation must be positive in nature, which means it must be said or proved to be
false.
 Plaintiff must prove that he/she rely on the fact which is misrepresented by the defendant.

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Therefore, for filing claim under misrepresentation plaintiff needs to prove that above three
elements are present in the case (Law Service Commission, n.d.).
Applicability of Tort of negligence and misrepresentation:
Tort of negligence- applicability of tort under business situation is considered through case law
Donoghue v Stevenson 1932 AC 562. In this case, friend of Mrs. Donoghue purchased bottle of
ginger beer for Mrs. Donoghue, and bottle of beer was consumed by Mrs. Donoghue. Bottle was
sealed at the time of purchase, and it was not possible to inspect the contents of the bottle. Mrs.
Donoghue consumed one glass of beer and when she poured another glass, she found dead snail
in the beer. As a result of the decomposed snail, Mrs. Donoghue suffered from gastroenteritis
and nervous shock.
Mrs. Donoghue file claim against the manufacturer of ginger beer that was Mr. Stevenson for
negligence. This case was decided by the House of Lords in London, and the main issue
involved in this case was whether Mrs. Donoghue can file claim against Mr. Stevenson for
negligence.
In this case, court held that manufacturer of the product produces the products for the ultimate
consumer. Therefore, manufacturer owes duty of care towards ultimate consumer. In this case,
all three elements of tort were present, which made Mr. Stevenson liable towards Mrs.
Donoghue.
Misrepresentation- applicability of misrepresentation under business situation can be
understood through case law Derry v Peek (1889) 14 App Cas 337. In this case, prospectus was