Commercial Law Issues - Assignment

Running Head: COMMERCIAL LAW
COMMERCIAL LAW
Name of the Student:
Name of the University:
Author Note

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Answer 1
Issue:
In the given circumstances, the issue that has been identified is whether the Thermomix can be
held liable for negligence.
Rule:
The common law provisions related to negligence had been first established in the case of
Donoghue v Stevenson [1932] A.C. 562. In this case it had been held by the court that a person
must not commit or omit to do any act which causes an injury or loss to the neighbor of such
person. The judgment of this case opened the doors to claimants a wide range of actions that can
be taken against for negligence of the plaintiffs. In this case it had been held that a person has a
duty of care to take reasonable steps to prevent any injury or loss likely to be sustained by
anyone who is affected by the actions of such individuals. In this case the essential elements
which are required to be present for claiming damages due to negligence of the defendant had
been laid down:
 Duty of care on the part of the defendant to prevent any damage or injury likely to be
sustained by the claimant
 Breach of duty of care by the defendant
 Causation of damage sustained by the claimant
 Remoteness of damage
Duty of care- The duty of care on the part of the defendant is the first important essential in
establishing a claim of negligence. For the purpose of assessing whether a defendant owed a duty

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of care to the plaintiff the courts generally apply the Caparo test as established in the case of
Caparo Industries pIc v Dickman [1990] 2 AC 605. Apart from the common law provisions the
law of negligence, is also governed by the statute Wrongs Act 1958 .
Breach of Duty of Care: It can be stated that the breach of duty of care on the part of the
defendant is the next important essential element which has to be proved by the claimant for
establishing a successful claim of negligence. To assess whether the defendant had breached his
duty of care the courts generally apply the objective test as established in the case of Vaughan v
Menlove (1837) 3 Bing. N.C. 467. This test assesses whether any reasonable person acting in
the same circumstances of the defendant would have taken additional steps to prevent any
damage likely to be sustained by the plaintiff. However, in certain circumstances it is not
necessary to prove that the defendant had been negligent in his actions or omissions due to which
injuries are sustained by the plaintiff. Examples of such a principle in which the facts of the case
speak for itself is res ipsa loquitor (Luntz et al. , 2017).
Causation: For a plaintiff to bring any claims of negligence against the defendant, the claimant
must establish that he sustained the damages or injuries due to the negligent actions of the
defendant. The courts generally apply the ‘but for’ test as established in the Barnett v Chelsea
& Kensington Hospital [1969] 1 QB 428. The ‘but for’ test assess whether the plaintiff would
have sustained the injuries of damages had it not been for the negligent actions or omissions of
the defendant. It has been further provided in section 51 of the Wrongs Act 1958 that for
establishing any successful claims of negligence against the defendant, it is required for the
plaintiff to prove every fact that attributed to the causation of the injury.

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Remoteness of damage: For establishing claims of Negligence against the defendant, it is
essential for the plaintiff to prove that the damage sustained by him was not too remote. The
Courts generally apply the Wagon Mound test as established in the The Wagon Mound no 1
[1961] AC 388. In this case it had been held that that the defendant is only liable for any damage
sustained by the plaintiff if the damage was of a foreseeable kind. A plaintiff cannot claim not
any damages from the defendant if the loss or damage sustained by the plaintiff resulted from an
inherent risk. However, it has been provided in the Wrongs Act that in case of physical injuries, a
person can only claim monetary damages if the burn injuries sustained is more than 5% as
provided in the Medical Association Guidelines.
Application
Thus by analyzing the facts of the case it is evident, that the owners of the Kitchen model
sustained burn injuries due to the defect existing in the kitchen appliance which had been sold by
Thermonix appliance. By the application of the decision of the Donoghue v Stevenson, it can be
stated that manufacturers have a duty of care to the customers. It can be stated that by the
application of the Caparo test it can be stated that Thermonix Appliances had a duty of care to
the customers. By the application of the Vaughan v Menlove case it can be stated they breached
their duty of care by not taking adequate precautions to ensure the safety of the customers. Any
reasonable person in this scenario would have taken adequate steps to ensure the safety of the
customers. Further by the application of the ‘but for’ test as established in the Barnett v Chelsea
& Kensington Hospital, it can be stated that the plaintiff had sustained by the negligent actions or
omissions of the defendant. The damage sustained by the customers was not also too remote too
the defendant. This can be substantiated by the application of the test as established in the
Wagon mound case. Thus in this case it is clearly evident that the manufacturer is liable to pay

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damages for the injuries sustained by the customers. However as per the provisions of the
Wrongs Act 1958, it can be stated that the customers are not entitled to make monetary claims
unless the burn injuries are not more than 5%.
Conclusion
Thus to conclude, it can be stated that the customers can claim damages due to Negligence on the
part of Thermomix.
Answer 2
It can be stated that the Wrongs Act 1958 contains many limitations of compensation for non-
economic season which results from personal injury sustained by the claimant. Many caps have
been introduced by the Australian law reform commission which is applicable on non economic
damages so as to ensure equal importance is given to the status of aggrieved party and the
wrongdoer and the privacy of interest.
It can be stated that damages act as deterrent factors for the wrongdoers, as paying damages can
be considered to be a punishment for the wrongdoer, which prevents him from conducting any
further breach of duty of care (Stickley, 2017). Some of the thresholds have been provided in the
statute which aims to reduce the liability of the wrongdoer in case of negligence and law of torts
in the ways enumerated below:
 Eligibility of the wrongdoer to provide compensation to the aggrieved party
 The threshold reduces the incorporation of the risk management measures
 In case of certain negligent acts, the infringing party does not face any financial
consequences.

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It can be stated that many arguments have been given in favor of the establishment of such
thresholds which aim to compensate the aggrieved party for non economic damages or the losses
sustained by him. For awarding compensation to the aggrieved party, it is first essential for such
party to establish that he had satisfied the threshold for obtaining the monetary compensation. It
can be stated in relation to the provisions of the Wrongs Act 1958 that the aggrieved persons
who have sustained 30 percent burn injuries have the right to claim monetary compensation.
Another argument that can be given in favor of the imposition of the aforementioned thresholds
is that, it prevents false claims for irrelevant and unnecessary expenses related to the injuries of
the victims from being made and capitalized. Lastly, it can be stated that that claimants are
entitled to receive monetary benefits only if they sustain personal injuries based on the level of
harm they had been exposed to, which had been sustained by the claimant due to the negligence
on the part of the wrong doer.
The courts generally assess the evidence presented by the claimants, relating to the injuries
sustained by the same due to the negligent actions or omissions of the defendant and award
compensation to the aggrieved parties for the purpose of restoring them to the position they had
been prior to sustaining the losses due to the negligent actions or omissions of the wrongdoer(
Goldberg, Sebok & Zipursky, 2016).
Physical injuries sustained by the aggrieved parties due to the negligence of others can be
categorized as temporary or permanent injuries. It can be mentioned that non monetary damages
can be termed as general damages which may arise due to the physical injuries involving loss of
life, physical sufferings, loss of amenities of life, disfigurement and emotional trauma. It can be
stated that the sole reason behind compensating the claimant is to pay for the expenditure to

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sustain his livelihood and o provide an alternative source of satisfaction (Latimer, 2018). It can
be stated that many states in Australia have imposed caps on the non economic losses which
arise from medical injuries; however some states have even imposed caps on the non pecuniary
damages arising from personal injuries. It can be stated that the amount of caps varies in
different states and ranges from $350,000 to $750,000.
However, there are certain exceptions to the imposition of caps in relation to the death or severe
injuries of an aggrieved party. In case of death of a claimant or sustenance of severe injuries, a
higher damage cap is permitted or at times the damage cap is eliminated. In the state of Victoria,
the maximum damage cap is for non pecuniary loss is $527,610. In the state of Victoria an
aggrieved person can claim compensation only if he sustains 30% injuries and such injury is
severe.
Answer Three:
Issue:
In the given circumstances the issues exist are:
 Whether the injured customers have any rights under Part 3-5 of the ACL
 What defenses are available to the manufacturer against the claims of users
Rule:
The Australian Consumer Law governs the right to the consumers in relation to the goods and
services consumed by them which has been provided in section Schedule 2 of the Competition
and Consumer Act 2010. Part 3-5 of the ACL stipulates the liability of the manufacturers for

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goods which have safety defects. It has been specifically provided in section 138 of the ACL that
a manufacturer of goods will be liable to compensate any consumer, if:
 Such manufacturer supplies the goods in trade and commerce
 The goods supplied by the manufacturer have safety defects
 An individual sustains injuries because of the safety defect in the gods.
It has been provided in subsection 138(2) of the ACL that an individual who sustains damages
due to the existence of safety defects in the goods has the right to bring an action against the
manufacturer to recover the loss or damage sustained by such consumer. It can be stated in
accordance with section 147 of the ACL that if the consumer fails to identify the manufacturer,
they are entitled to request the supplier to provide assistance to such aggrieved person in order to
help him identify the manufacturer and start legal proceedings against the manufacturer.
However, if the supplier fails to provide relevant information about the manufacturer of the
product to the aggrieved party, such aggrieved party will be entitled to claim compensation from
the supplier for supplying such defective goods.
Defenses of manufactures in relation to supply of defective goods have been provided in section
142 of the ACL. In case of action for defective goods it will be considered to be valid ground of
defense if it is established that:
(a) The safety defect in the goods which allegedly has caused the loss of the aggrieved party
did not exist at the time when electricity was being generated, which indicates a time
before it was transmitted. The safety defect in the goods did not exist at the time when the
goods had been supplied by the manufacturer.

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(b) The safety defect in the goods existed because of complying with the required standard of
such goods
(c) It was not possible for the manufacturer to about the existence of the safety defects in the
goods by the scientific or technical knowledge available to the manufacturer at the time
of supplying such goods.
(d) If the safety defects existing in the goods were compromised in other goods, such safety
defects will be attributable to the design of the goods, markings on the accompanying
goods, warnings and instructions of the accompanying goods given by the manufacturer.
It can be stated that no remedies and penalties are provided in relation to supply of defective
goods by manufacturers under part 3 of the ACL. In part 4 of the ACL offences related to the
unfair practices are provided. It can be stated that violation of the legal provisions as provided in
Part 4 of the ACL often result in injuries sustained by the aggrieved party and are considered to
be criminal offenses subjected to penalty.
Part 5 of the ACL contains the monetary penalties that are to be imposed upon the wrongdoer for
violating the liabilities of the manufacturers. Further it can be stated in accordance with section
224 that pecuniary penalties can be imposed by the courts, if the courts believe that a person has
contravened the provision of section 106(1) of the ACL. It has clearly been provided in section
106(1) that any person who engages in trade and commerce must not supply consumer goods:
 If a safety standard for consumer goods of a particular kind is existing
 the goods supplied by the supplier do not comply such standard.
It has been provided in section 131 of the ACL that if a supplier of consumer goods becomes
aware of the death caused by the use of the consumer goods, he must notify the minister of the

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Commonwealth by a written notice within two days of becoming aware of such death of the
consumer. A pecuniary penalty may be imposed on the supplier if he fails to comply with this
provision. It has been provided in section 271 that an aggrieved party has the right to bring action
against the manufacturer and recover damages from a manufacturer for breach his consumer
guarantee.
Application
Thus by analyzing the facts of the case it can be stated that the consumers who sustained burn
injuries due to the safety defect in the product are entitled to bring legal proceeding against the
company Thermomix for the safety defects existing in the kitchen appliance model as per the
provisions of section 138 of the ACL. The courts may impose a pecuniary penalty on the
company Thermomix as per the provisions of section 224 for breaching section 161. Further in
accordance with section 271, the consumers can recover damages from the manufacturer for
breaching the consumer guarantees. The company Thermomix can take the defense under section
142 of the ACL. They can claim that the defects in the goods did not exist when they were
delivered by Thermomix. They can also claim that it was not possible for them to detect the
defect in the goods by the scientific and technical knowledge available to them.
Conclusion
Thus, to conclude it can be stated that the consumers can bring legal proceedings against
Thermomix for delivering goods with safety defect.

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Bibliography:
Barnett v Chelsea & Kensington Hospital [1969] 1 QB 428
Competition and Consumer Act 2010
Donoghue v Stevenson [1932] A.C. 562
Goldberg, J. C., Sebok, A. J., & Zipursky, B. C. (2016). Tort Law: Responsibilities and Redress.
Wolters Kluwer law & business
Latimer, P. (2018). Australian Business Law, (35), ¶4-010 to ¶4-220; and ¶7-215.
Luntz, H., Hambly, D., Burns, K., Dietrich, J., Foster, N., Grant, G., & Harder, S. (2017). Torts:
cases and commentary. LexisNexis Butterworths.
The Wagon Mound no 1 [1961] AC 388
Vaughan v Menlove (1837) 3 Bing. N.C. 467
Wrongs Act 1958

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