Introduction to Business Law - Case Studies and Analysis

This article provides case studies and analysis on the application of Tort Law and Common Law in business scenarios. It covers topics such as duty of care, negligence, liability under statute and common law, and defenses against liability.

2018
Introduction to Business
Law
Student’s Name

Introduction To Business Law 1
Contents
Question 1........................................................................................................................................2
Issue.............................................................................................................................................2
Rules.............................................................................................................................................2
Application...................................................................................................................................2
Conclusion...................................................................................................................................3
Question 2........................................................................................................................................3
Issue.............................................................................................................................................3
Rules.............................................................................................................................................3
Application...................................................................................................................................4
Conclusion...................................................................................................................................4
References........................................................................................................................................5

Introduction To Business Law 2
Question 1
Issue
Whether Molly has any right in against of Phillip Island eco-resorts. Further, this is to check that
that whether Phillip Island eco resorts can use any defense in against of Molly.
Rules
Under Tort Law, some people owe a duty of care with respect to others. The duty of care is a
burden, where the person who owes the same is required to act reasonably and in a responsible
manner with respect to others. Negligence is another aspect of Tort Law. This refers to a
situation where a person fails to perform the duty of care (Laws, 2018). To held a person liable
under Tort Law, the breach of the duty of care is not enough but certain other conditions also
need to be satisfied. According to the decision given under the case of Donoghue v Stevenson
[1932] UKHL 100 , it has been concluded that following elements must be there in the cases of
negligence under Tort law:-
1. The defendant must owe a duty of care towards the claimant.
2. The duty of care must be breached.
3. The claimant must suffer from a loss.
4. Defendant’s action must be the reason for claimant’s loss (lawgovpol, 2018).
Defense:- The excuses which a defendant can use against the claimant in order to ignore or
reduce his/her liability. Contributory Negligence is one of the defense provides under Tort Law
that refers to a situation where in addition to the defendant, the claimant also fails to take proper

Introduction To Business Law 3
care of himself/herself. In the cases of contributory negligence, the liability of the defendant
reduced up to the level of claimant’s fault (E- Law Resources, 2018).
Application
In the given case, the person named Molly was a guest of Phillip Island eco-resort. In the resort,
a beach was also there and according to the brochure of the report the same perfect place for a
sunbath. When Molly went that side, she saw a deep rock pool there. In addition to this, she also
noticed that by climbing up some rocks, she could reach up to the deep rock pool. Molly was not
the single person there as many of others were already swing into a deep rock pool. Molly saw a
rock at the edge of the pool and found the same perfectly suitable for diving. As soon as she tried
doing so, she hits her head with a submerged rock. She did not notice this rock earlier. Cause of
hitting with submerged rock; she suffered from several spines and head injury.
Now, moving towards the requirements of Tort Law, the resort owed a duty of care in this case.
It was the duty of resort to act in a reasonable manner towards Molly. It was the duty of resort
owner to place some sign board stating about danger included with the swimming in a deep rock
pool. As the evidence proved it that resort staff was trained to advise and informed the guest
about the danger of deep rock pool, this is to state that by not informing any such thing to Molly,
the resort has breached the duty of care. First two conditions of the Donoghue v Stevenson case
are already satisfied. Now, moving towards the third and fourth condition, this is to state that
Molly has suffered from physical injury and reason of the same was negligence of resort staff.
However, resort owner can take the help of contributory negligence as Molly was also required
to ask about safety measure but she did not ask anyone and moved for the swimming.

Introduction To Business Law 4
Conclusion
To conclude the issue, this is to mention that yes, Molly can sue to Phillip Island eco-resort for
the negligence. Further, the resort owner can take the defense of contributory negligence against
Molly.
Question 2
Issue
What rights, obligation restaurant owner, do have in respect to Larry and other customers?
Rules
Liability under Statue:-
Section 14B of the Wrongs Act 1958 (Vic) says that a person is responsible to check that any
visitor of his/her premises must not get injured for any reason related to the state of premises
(Austlii, 2018). Some of the factors such as seriousness, the likelihood of harm, level of
intoxication decide that whether the duty of care by an occupier (licensee) has been breached or
not. Liquor Control Reform Act 1998 (Vic) is an act of the state that provides the rights and
obligation of a licensee who takes license to serve alcohol to the public in his/her premises.
According to the provisions of section 108 of this act, a licensee needs to ensure that he/she does
not serve the alcohol to any of the guests more than the level of intoxication
(legislation.vic.gov.au, 2018).
Liability under Common Law:-

Introduction To Business Law 5
Further, under common law, it becomes the liability of an occupier of the property to act
reasonably in respect of the visitors. Tort is a branch of common law that put this responsibility.
Every occupier of a property owes a duty of care in respect to the visitors for his/act and for the
act of other visitors. According to the decision given in the case of Chordas v Bryant (1988) 92
FLR 413, a licensee is held responsible if the cause of a visitor (Guest), the other person suffers
from an injury in the premises of licensee. However, it was also given in the decision that the
licensee will only be held liable if the licensee could foresee the act of guilty visitor.
Application
In the provided case, the restaurant owner had a license to serve the liquor to the customers and
hence the provisions of the Liquor Control Reform Act were applicable to the restaurant. Larry,
One of the clients of the restaurant was habitual of high drinking. He was used to getting drunk
so quickly. After the drink, he often enters into the argument with restaurant staff and other
customers of the restaurant.
Liability under statue
Applying the provisions of the Liquor Control Reform Act, the licensee was required to serve the
alcohol to the customers of the restaurant. Further, under section 108 of the act, it was the right
and obligation of the licensee to stop serving alcohol to the person after the danger state of
intoxication. Here in the case, the licensee was required to stop serving any more liquor to Larry
as he was losing his control and falling in the argument with office staffs and other customers.
As the licensee failed to take reasonable steps to prevent the risk and due to which one of the
customers has suffered from injury hence the same will be held liable to pay the damages to
victim party.

Introduction To Business Law 6
Liability under Common Law
Being the licensee of the restaurant and occupier of the premises, the restaurant owner owed the
duty of care in respect to Larry and other customers of the restaurant. Applying the provisions of
the case of Chordas v Bryant, the restaurant owner will be held liable because the risk was
foreseeable. Larry did not lose his control for the first time and licensee had reason to believe
that one day, he can prove more injurious to either restaurant staff or to any other customer.
Conclusion
The licensee was required to take reasonable care in respect to Larry and other customers and as
the same failed to act responsibly, will be held liable to pay the damages to another customer.
The licensee would have no rights with respect to the other customer, as the other customer was
not on guilty. The licensee can further ask for the reimbursement of damages from Larry.

Introduction To Business Law 7
References
Austlii. (2018). Wrongs Act 1958 - Sect 14b. [online] Available from:
http://classic.austlii.edu.au/au/legis/vic/consol_act/wa1958111/s14b.html [Accessed on
12/10/18]
Chordas v Bryant (1988) 92 FLR 413
Donoghue v Stevenson [1932] UKHL 100
E- Law Resources. (2018) Defences. [online] Available from:
http://e-lawresources.co.uk/Defences-in-tort-law.php [Accessed on 12/10/18]
lawgovpol, (2018). Case study: donoghue v. Stevenson (1932). [online] Available from:
http://lawgovpol.com/case-study-donoghue-v-stevenson-1932/ [Accessed on 12/10/18]
Laws. (2018). Negligence tort at a glance. [online] Available from:
https://tort.laws.com/negligence-standard-of-conduct/negligence-tort [Accessed on 12/10/18]
legislation.vic.gov.au. (2018) Liquor Control Reform Act 1998. [online] Available from:
http://www.legislation.vic.gov.au/Domino/Web_Notes/LDMS/LTObject_Store/LTObjSt6.nsf/
DDE300B846EED9C7CA257616000A3571/6E1E5CD172B1057DCA2578DB001BA615/$FIL
E/98-94aa056%20authorised.pdf [Accessed on 12/10/18]
Liquor Control Reform Act 1998 (Vic)
Wrongs Act 1958 (Vic)