Business Law: Breach of Civil Liability and Contractual Obligations

This article discusses the legal provisions related to breach of civil liability and contractual obligations in Australia. It covers scenarios related to negligence, dangerous recreational activities, revocation of contract, and guarantee agreements. The article also cites relevant case laws and journals.

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

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Question 1:
Scenario A:
Issue:
The issues in this case are that-
 Whether Maria can claim damages for breach of civil liability against Amelia.
 Whether Nathaniel can sue Dan for negligence.
Law:
According to Section 9 of the Civil Liability Act 2003, a breach of duty to take
precautions is not ignored by an individual if the nature of the risk can be foreseeable by any
reasonable person. In this regard, Section 9 states that if the person had knowledge regarding the
nature of the harm then he would have taken proper care and precautions on his part. It was
observed in Dick Bentley Productions v Harold Smith Motors [1965] 1 WLR 623 that during
the pre-contract stage, one of the parties to the contract was aware of the consequences however;
it was not informed to the other party. Section 11 of the Civil Liability Act 2003 deals the
decisions regarding contravention of duties. According to Section 11, if a breach of duty is
caused on the part of an individual as a result of injury or factual causation then such individual
is liable for the harm caused to the other person which was held in Waverley Municipal Council
with Swain (2003) NSW CA61. According to the provisions of Section 12, the onus of proof lies
with the plaintiff. Therefore, the plaintiff is at the obligation to identify the nature of the harm
and verify it with the existing reality of that causation. The provisions of Section 14 deals with
individuals suffering harm who are presumed to have knowledge regarding the nature of the risk.

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In this regard, it is worth noting that in case if there is an action violating the duty of injury, then
it is important on the part of the defendant to prevent the harm from causing. In some cases, the
plaintiff may not have knowledge regarding the nature of the risk however; it is important that he
must prove it. It was held Asiansky Television plc and another v Bayer-Rosin (A Firm) [2001]
EWCA Civ 1792 that the plaintiff was not aware of the nature of the risk however; he took
measurable grounds to prove that the nature of the risk was such to cause harm. The provisions
of Section 15 of the Civil Liability Act 2003 states there is no proactive duty to inform about the
nature of the obvious risk. The provisions of Section 15 states that if an individual do not warn
the other party about the obvious risk and the nature of the harm then it can cause serious injury
to the victim. It was held by the Court in Jaenke v Hinton (1995) QCA 484 that if the nature of
the accident was caused as a result of an obvious risk, then the claim for damages shall fail
because the nature of the risk proved to be so obvious that it no longer can be treated as a threat.
However, it shall not apply to cases if the personal injury is caused on the part of a professional
and that the petitioner is an expert which was held in Woolworths Ltd v Lawlor [2004] NSWCA
209. Section 17 of the Act is applicable in cases related to liabilities in negligence causing
serious harm to persons caused as a result of dangerous recreational activities. However, it is
important on the part of the plaintiff to be engaged in such recreational activities. Section 18
defines the meaning of the dangerous recreational activity. According to the provisions of
Section 18, dangerous recreational activity can be defined as an activity in which the individuals
engage for the purpose of enjoyment and relaxation however; such activity causes serious risk or
considerable physical harm to the person involved. Section 19 states that an individual is not
liable for negligence in cases which involves harm suffered by a person resulting from obvious
risk of a dangerous recreational activity engaged in by the sufferer. In Campbell v Hay (2014)

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129 it was held by the Court that if the injury was caused as a result of participating in a
recreational activity which any reasonable person would consider being dangerous, then the
person suffered as a result of harm cannot claim for damages.
Application:
Section 9 can be referred in case of Maria as she was aware of the consequences of the
harm that could cause if she did not pay the borrowed amount on time. However, the nature of
the risk in Maria’s case was such as it could be foreseeable by any prudent man and therefore in
spite of all these she relied upon the advice given by Amelia. Section 11 can be applied in the
case of Amelia as she was aware of the fact that any negligence on her part can lead Maria in
huge loss. Section 15 can be referred in this case as Amelia has not warned Maria about the
injury related to the recommendation. Therefore, in this regard, Amelia cannot escape liability as
the personal injury caused to Maria was as a result of an advice from a professional expert.
Section 12 can be applied in the case of Maria as the onus of proof lies with her.
Section 17 and 18 can be referred in the case of Nathaniel as the provisions deals with the
subject of dangerous recreational activities. It is evident that Nathaniel was aware of the fact that
riding along the freeway is not safe and can cause serious injury. In spite of knowing the
consequences he decided to ignore Dan’s advice and even the messages on the notices and
therefore, opted for the freeway ride. Section 19 can be referred in case of Dan as he had
previously warned Nathaniel about the consequences of the activity. Therefore, Dan cannot be
held liable for the injury caused to Nathaniel.
Conclusion:

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In the conclusion it can be stated that Maria can sue Amelia for breach of civil liability.
Nathaniel cannot sue Dan for negligence.
Question 2:
Scenario B:
Issue:
The issues related with this case are that-
 Whether Jay can sue Rosita for breach of contract.
 Whether Jay has any liability against Jeff for failing to keep his promise.
 Whether Jay can take any action against Nacho for revoking the lease agreement.
 Whether Jay’s parents is bound to any contractual liability.
Law:
According to the Australian law of contract in order to form a valid contract between two
or more parties it is important that there must be valid offer and acceptance (Horrigan, 2017).
However, in some cases, the offer can be terminated by the other party before the expiration of
the period. An offer can be terminated by revocation, failure to accept the offer on time, death,
failure of condition and rejection. An offer can be terminated by way of revocation before the
acceptance even if there has been a promise on the part of the individual offering the deal which
was observed in Financings Ltd v Stimson [1962] 3 All ER 386. It is important for the person
offering the deal to make it available until a particular period unless there has been an
involvement of consideration in such promise. The parties intending to revoke the contract
should convey the information within the stipulated time which was held in Ramsgate Victoria

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Hotel v Montefiore (1866) LR 1 Ex 109. For a valid revocation and effective communication is
necessary which was held in Byrne v Van Tienhoven (1880) LR 5 CPD 344. In this regard, the
exceptions involved with the revocation of offer can be emphasized that are-
1) Option contract: It is the promise made by one of the party to keep the contract
available within a stipulated period of time. However, if the person making the offer
revokes the contract t before the specified time then he can be sued for breach of contract.
2) Reliance: Reliance is applicable in cases when the recipient was relying upon the offer
which was made available within a specified period. However, if the contract is revoked
before the stipulated period it shall be injustice for the other party.
Consideration can be defined as the price which is paid by the promisee to the promisor
in exchange of a promise Kraakman & Hansmann, 2017). It is important that the consideration
should come into force after the promise has been made which was held in Roscorla v Thomas
(1842) 3 QB 234. It is important that there must be an Existing Duty Rule which states that it
does not make a good consideration if one is bound by the original promise. It is necessary that
the other person should comply with the new promise if a new consideration is offered for the
same which was held in Stilk v Myrick [1809] EWHC KB J58.
According to the law of contract, negotiations in contract can result into binding
agreements. In this regard, it is worth stating that in some cases, pre-contractual negotiations
may end into binding agreements even though no contract has been duly signed on the part of the
parties (Passera, Haapio & Curtotti, 2014). In Vantage Systems Pty Ltd v Priolo Corporation
Pty Ltd [2015] WASCA 21 it was observed that both the parties agreed to the lease agreement by
communicating through email. It was held by the Court that they were immediately bound by an

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agreement of lease though no formal legal document was signed. In Stellard Pty Ltd v North
Queensland Fuel Pty Ltd [2015] QSC 119 the negotiations were made verbally and no formal
contract was signed for lease agreement.
A contract of guarantee can be defined as the promise or discharge of liability in case the
other person fails to perform his duties (Weber & Staiger, 2014). The person providing the
guarantee is the guarantor and the person to whom such guarantee is provided is the creditor. In
order to make the guarantor liable for the agreement, it is important on the part of the guarantor
to sign the relevant documents in order to make the guarantee enforceable. However, it is
important that the agreement must not be signed by the guarantor by way of fraud or
misrepresentation which was held in London General Omnibus Co v Holloway [1912] 2 KB
720. The Court is at the authority to refuse enforcement of guarantee if it appears before it that
the guarantor has signed the agreement without prior knowledge on the nature and the
consequences of it.
Application:
In case of Jay and Rosita, it can be stated that Rosita has revoked the contract before the
stipulated period. In this regard, the exceptions of open contract can be applied. It is evident that
Jay relied upon the offer made by Rosita which was made available within 24 hours. However,
Rosita revoked the offer much earlier before Jay could accept it.
In the agreement between Jay and Jeff contained a valid consideration which made them
legally binding. The case of Roscorla v Thomas (1842) 3 QB 234 can be refered which
comprises an Existing Duty Rule stating that an old consideration is not a valid consideration.

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Similarly the case of Stilk v Myrick [1809] EWHC KB J58 can be applied so that Jay could bind
himself with a new promise along with a new consideration.
It can be stated in the case of Jay and Nacho that though there was no signed lease
agreement between them. They were binding into the lease agreement as there existed pre
contractual negotiations between them and have verbally agreed to the contract.
In case of Jay’s parents, it can be stated that they were unaware of the nature of the
agreement and therefore Ricardo induced them to sign the agreement of guarantee fraudulently.
The case of London General Omnibus Co v Holloway [1912] 2 KB 720 can be applied in this
regard.
Conclusion:
It can be finally concluded that-
 Jay can sue Rosita for breach of contract.
 Jay is not liable to sue Jeff for failure to keep the promise.
 Jay can sue Nacho for terminating the lease agreement.
 Jay’s parents are not binding upon any contractual liability to the Com Bank.

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References:
Acts:
The Civil Liability Act 2003.
Cases:
Asiansky Television plc and another v Bayer-Rosin (A Firm) [2001] EWCA Civ 1792.
Byrne v Van Tienhoven (1880) LR 5 CPD 344.
Byrne v Van Tienhoven (1880) LR 5 CPD 344.
Dick Bentley Productions v Harold Smith Motors [1965] 1 WLR 623.
Financings Ltd v Stimson [1962] 3 All ER 386.
Jaenke v Hinton (1995) QCA 484.
London General Omnibus Co v Holloway [1912] 2 KB 720.
Ramsgate Victoria Hotel v Montefiore (1866) LR 1 Ex 109.
Stellard Pty Ltd v North Queensland Fuel Pty Ltd [2015] QSC 119
Stilk v Myrick [1809] EWHC KB J58.
Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd [2015] WASCA 21
Woolworths Ltd v Lawlor [2004] NSWCA 209.
Journals:
Horrigan, B. (2017). Governance, Liability and Immunity of Government Business Enterprises
and Their Boards. In From Bureaucracy to Business Enterprise (pp. 143-171).
Routledge.

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Kraakman, R., & Hansmann, H. (2017). The end of history for corporate law. In Corporate
Governance (pp. 49-78). Gower.
Passera, S., Haapio, H., & Curtotti, M. (2014). Making the meaning of contracts visible–
Automating contract visualization.
Weber, R. H., & Staiger, D. N. (2014). Cloud computing: a cluster of complex liability issues.
European Journal of Current Legal Issues, 20(1).