Business Law Case Study Analysis

This Business Law case study analysis discusses the legal issues involved in the case and relevant laws of tort of negligence, vicarious liability, and contract law. It covers the duty of care owed by Rupali to the guests, the vicarious liability of Johnny, the existence of a contract between Johnny and Li, and the consequences of refusing to provide premises for a wedding.

Running head: BUSINESS LAW
Business Law
Name of the Student
Name of the University
Author Note

1BUSINESS LAW
Answer to Question No 1
a) Issues
The issue which is involved in this case is whether Rupali has breached any duty of
care.
Relevant rules
This issue can be solved by discussing the relevant laws of tort of negligence, which
means a careless injury that leads to damage (Kelly, Schwartz and Partlett 2015). The
essential element of negligence is causing breach of duty. To make a party liable for
negligence, it must be shown that the plaintiff had a duty of care towards the defendant. It
needs to be proved that there was a standard of care that that a reasonable man would have
followed if he was placed in the position of the defendant. The breach of duty by the
defendant should result in a harm to the plaintiff. The test of identifying duty of care was
formulated in the famous case of Donoghue v Stevenson [1932] All ER 1, which signifies
that, it is dependent on the activity of a reasonable person holding the same position of that of
the defendant, if the injury was foreseeable.
Application
In this scenario, Rupali owed a duty of care to the guest. The injury which can be
resulted to a guest from eating a durian pie if the durian fruit is not properly peeled, can be
foreseeable by any reasonable man. Rupali should have exercised due care while making the
pie and ensure that the sharp thorns of the fruit were duly peeled, so that it does not cause an
injury to anyone. In the case of Perre v Apand [1999] 198 CLR 180, it was decided that
whether the injury received by the plaintiff was reasonably foreseeable in regard to
relationship of the defendant and plaintiff should be considered in every case (Luntz et al.

2BUSINESS LAW
2017). Here, the harm which the guests faced was treasonably predictable by Rupali. Hence,
it can be said that he has breached his duty of care.
Conclusion
It can be concluded from the above discussion that Rupali had breached a legal duty
of care which he owed to the CDU students and their guests.
b) Issue
The issue is to determine whether the duty of care that Rupali owed to the guests, was
lower, as he was inexperienced.
Relevant laws
The relevant law of negligence with respect to duty of care, provides that if the
damage caused to the plaintiff was foreseeable by the supervisor of a person who owe a duty
of care to someone, he can be held liable as decided in the case of NSW v Godfrey. In
Trustees of the Roman Catholic Church for the Diocese of Canberra & Goulburn v Hadba
[2005] HCA 31, it was decided that, damages can be recovered from the supervisor if it is
proved that he owed a duty of care towards the plaintiff and the injury would have been
prevented by constant supervision (Levine et al. 2016).
Application
In the present scenario, it can be assumed that Rupali owed a lower duty of care, as he
was inexperienced. Rupali was a trainee under Johnny, and Johnny was supposed to
supervise Rupali over her while he prepares a meal. In this context, Johnny also owed a duty
of care to the plaintiffs, which he failed to perform. Johnny had a duty to supervise Rupali to
prepare the pie. The injury would have been avoided if Johnny had supervised Rupali to peel
the durian fruit and prepare the pie. Rupali was just a trainee, and it can be assumed from this

3BUSINESS LAW
fact that she was inexperienced and needed proper guidance. Hence, Rupali owes a lower
duty of care due to his inexperience.
Conclusion
It can be concluded that Rupali was inexperienced in making durian pie and needed
supervision in preparing it. Hence, he owed a lower duty of care.
c) Issue
The issue is to determine in this ace is whether Johnny was vicariously liable for the
incident that happened.
Rules
Vicarious liability means the imposition of liability upon one person for the negligent
act of another person for performing some act on their behalf. An employer can be held
vicariously liable for the negligence of his employee during the course of employment.
Vicarious liability of the employer is in addition to the primary liability of the negligence of
the employee. They are both liable jointly and severally. In the case Prince Alfred College
Incorporated v ADC [2016], the High Court held that vicarious liability can be imposed on an
employer even if he is not at fault. A test was also provided in the case as to determine
whether act of the employee was authorised or not.
Application
As decided by the High Court in New South Wales v Lepore & Anor, vicarious
liability can be established in a case where the wrongful act by the employee was committed
within his scope of employment. Here, Johnny had invited the guest to try the food made by
Rupali. Rupali was a trainee who needed supervision under Johnny. Though the restaurant
was closed at that time, yet Rupali was engaged in making the pie during her course of

4BUSINESS LAW
employment. It can be assumed that Johnny should have exercised his power of supervision,
by which the injury caused to the guests could have been prevented.
Conclusion
Therefore, it this case, Johnny can be held vicariously liable for the injury that
happened to the guests.
Answer to Question No 2
d) Issue
In this present context, the issue is to determine, whether a contract exist between
Johnny and Li.
Relevant rules
A contract is assumed to be made in good faith of the parties. A misrepresentation or
mistake in the essential terms of a contract could make the contract void or voidable (Sen,
2015). The subject matter or the terms of a contract should be stated to the parties. The Court
in such situation, shall consider that the contract is not existing based on the mistake. In the
case of Boulton v Jones [1857] 2 H. & N. 564; 157 E.R. 232, it was decided that a contract
shall be held to be void where a mistake as to a term or subject matter of a contract was
known to the other party or have been negligently induced by a party. \
Application
The rules of mistake in terms of the contract can be applied in the case to resolve the
issue. Johnny had appointed Summer to be the sales and marketing representative for his
restaurant. In the general sense. It can be assumed that, Summer had the knowledge of the
prices and he is aware of the consequences if he makes a misrepresentation or mistake as to
the price to a party. While entering into a contract with a party, Li was expected to exercise

5BUSINESS LAW
due care and state the price to the party. If Summer made a mistake as to the price of contract
and accepted the quoted price given by Li, the contract will be void and not existing in the
eye of law.
Conclusion
Hence, no contract exists between Li and Johnny.
e) Issue
It has to be determined in this case that whether there was a mistake in this case while
making the contract.
Relevant law
When both the parties in a contract have an error in comprehending the facts of a
contract, which may cause the parties to enter into a contract not having the proper
understanding of the result or obligation (Stone and Devenney 2017). If there is a contract
where both parties are confused regarding the price of the subject matter, the contract may
cease to exist. In this regard the case of Webster v Dessil can be discussed where the Court
had decided that a contract can be avoided where there is a mistake as to the subject matter of
the contract. When in a situation, only one party to the contract is under the erroneous belief
of the fact, it shall be known as unilateral mistake.
Application
In this there was a mistake as to the quotation of price of the foods. In this case,
Summer was only under mistake as he accepted the booking and the deposit for booking at
the quoted price mentioned in the menu of the tables, so the mistake was unilateral. Where
the mistake has been resulted from a negligent or fraudulent misrepresentation, the contract
can be rendered voidable and may be rescinded at a suit by the aggrieved party.

6BUSINESS LAW
Conclusion
Therefore, there was a unilateral mistake by Summer in this case.
f) Issue
The issue in this case is to determine any action that Lame Duck Restaurant may face
if they refuse to provide the premises for wedding.
Rules
The general principle of contract is that parties are bound by their obligation. Without
reasonable excuse, they cannot refuse to perform their part of the contract. If they refuse to
perform their part of the contract, they shall commit a breach of the contract. Legal remedies
may be available including damages for breach of contract.
Application
In this case, Li booked the restaurant paying an amount to Summer, who was the
representative of the Restaurant. So, the Restaurant was obliged to provide the premise to Li.
If they refuse to give the premises to Li, they shall commit a breach of contract. The court
may order specific performance by the Restaurant or Li can claim for damages.
Conclusion
Lame Duck Restaurant shall be liable to damage or specific performance if they
refuse to provide the premises for the wedding to Li.

7BUSINESS LAW
Reference
Boulton v Jones [1857] 2 H. & N. 564; 157 E.R. 232
Donoghue v Stevenson [1932] All ER 1
Kelly, K., Schwartz, V.E. and Partlett, D.F., 2015. Prosser, Wade, Schwartz, Kelly, and
Partlett's Torts, Cases and Materials. Foundation Press.
Levine, L.C., Vetri, D., Vogel, J. and Gassama, I.J., 2016. Tort law and practice. Carolina
Academic Press.
Luntz, H., Hambly, D., Burns, K., Dietrich, J., Foster, N., Grant, G. and Harder, S.,
2017. Torts: cases and commentary. LexisNexis Butterworths.
New South Wales v Lepore & Anor
NSW v Godfrey
Perre v Apand [1999] 198 CLR 180
Prince Alfred College Incorporated v ADC [2016]
Sen, G.M., 2015. Law of Contract.
Stone, R. and Devenney, J., 2017. The modern law of contract. Routledge.
Trustees of the Roman Catholic Church for the Diocese of Canberra & Goulburn v Hadba
[2005] HCA 31
Webster v Dessil