Commercial law : Sample Assignment

Commercial Law

Contents
Case..................................................................................................................................................3
IRAC 1.............................................................................................................................................3
IRAC 2.............................................................................................................................................4
IRAC 3.............................................................................................................................................6
IRAC 4.............................................................................................................................................7
IRAC 5.............................................................................................................................................8
IRAC 6.............................................................................................................................................9
References......................................................................................................................................10

Case
Peter is a real estate developer and develops residential apartment complexes in the Wollongong
local region. He purchases a large block and plans to build a large apartment complex on the
block at a considerable profit. However, Wollongong Council denies his development
application on the basis of a road widening proposal that will significantly reduce the size of the
block and is supposed to reduce the value of his block as well. Despite reading the council
certificate obtained from Wollongong Council before the purchase of land, he purchased the
land. He is relaxed to find the council has made a mistake to include a disclosure in the
certificate that the block of land had been subject to a road widening proposal. After the purchase
of land, Peter now wants to sue Wollongong Council in negligence for economic loss. The claim
of Wollongong Council is that negligence only applies to physical actions, not written words,
and is only applicable to physical damage to the people or their property and not for economic
loss.
IRAC 1
Issue
Does Wollongong Council owe Peter a duty of care?
Rule
According to the Law of Torts, the tort of negligence protects the person, property, as well as
economic interests from damage caused due to the negligence or failure to exercise reasonable
care by another person. In order to establish negligence in actions conducted by an individual,
there are three essentials which are required to be fulfilled. In this context, duty of care is
considered as the duty owed by an individual towards another due to relationship between them

as it might cause injury to the other (Thomson Reuters, 2018). The breach of duty of care is
established when; actual damage is caused to the person to whom, the duty of care was owed to.
Reasonable reliance is also an important element of a duty of care in which, the person doing
negligent act has the knowledge that their acts or omissions might cause loss to another person.
In addition, if another person is not in a position to protect their own interests, the duty of care
arises of the individual responsible for such actions or omissions (Law Teacher, 2018).
Application
Peter has purchased the land and as claimed by Peter, there was no disclosure mentioned in the
certificate that the block of land he purchased was going to be the subject to the road widening
proposal. Considering the three essentials of negligent actions, it was the duty of care of
Wollongong Council to provide clear information to Peter being the relationship of council and
resident of that region between them.
Conclusion
Wollongong Council owe a duty of care towards Peter because of relationship of council of the
area with Peter. In addition, the council must have been aware of the fact their acts and
omissions might affect the other party particularly in the form of economic loss.
IRAC 2
Issue
Did Wollongong Council breach their duty of care by failing to meet the standard of care?
Rule
Standard of care demands reasonable precautions from a person with duty of care to prevent
their actions from causing injury to the others. However, the actions of an individual fail to meet

the standard of care and breach of duty of care towards the people if the risk of injury is
reasonably foreseeable, not insignificant, and one failed to take reasonable precautions. The
standard of care is considered to be as an objective standard and it is considered as the standard
of a reasonable person who might be in the position of the defendant would do (Singapore Law,
2017). The professionals owe a duty of reasonable competence as per the community standards
and negligence on their part in advising the client is considered to be sued for in tort in case the
advice is given by a person occupying a position requiring specific skills or knowledge as well as
the person the statement or advice has been given had acted upon it and suffered a loss (Tort
Laws, 2017).
Application
Wollongong Council breach their duty of care by failing to meet the standard of care and could
be held responsible for tort of negligence as they failed to exhibit reasonable care in sending
certificate and did not include any disclosure that the block of land might be the subject to the
road widening process (Washington University School of Law, 2018). However, it can be argued
upon by the Wollongong Council that they denied his development proposal on that basis only.
Despite, it is not the fault of Peter because even if they denied, they must have provided him with
the complete information and they showed negligence.
Conclusion
Wollongong Council failed to meet the standard of care and could be held responsible for breach
of duty of care towards Peter as they had not provided him with the complete information in the
form of disclosure.

IRAC 3
Issue
Were Peter’s losses caused by Wollongong Council’s actions and are those losses not too
remote?
Rule
Under the provision of Remoteness, the loss incurred can be recovered if it has been actually
caused due to the negligent act and is not too remote, means, along with negligence, it must also
be reasonably foreseeable.
Application
The economic loss caused to Peter by the actions of Wollongong Council are not too remote
because the road widening process was supposed to reduce the size of the block as well as going
to reduce the value of his block. Wollongong Council must have foreseen that negligence in
providing complete information to Peter might create confusions or he might not be able to take
appropriate decision which might result in economic loss to him.
Conclusion
The economic loss caused to Peter by the actions of Wollongong Council could not be
considered as too remote because the council must have foreseen it as well as the negligent
action by the council caused economic loss to Peter.

IRAC 4
Issue
Can Wollongong Council potentially rely on the defence of contributory negligence?
Rule
According to the Law of Torts, there should be a causal connection between the breaches of
duty of care as well as damage occurred to the plaintiff. However, under the provision of
“Contributory negligence”, law provides for the distribution of damage wherein, both the
parties have contributed to the damage (Thomson Reuters, 2018).
Application
Being owed to duty of care towards Peter, the Council must have taken reasonable precautions to
prevent their actions from causing injury to the related individual. However, it can be argued by
the council that the risk was foreseeable or predictable to Peter as the council denied his
development proposal but despite knowing everything, he purchased the land (Thomson Reuters,
2018). Furthermore, being in a profession of responsibility of land related matters, the council
owed a duty of reasonable competence in accordance with the community standards. The
negligence in actions in providing complete information to the client or Peter make them liable
to be sued for in tort by Peter. However, it can be argued upon by the Council that it was a matter
of contributory negligence and both the parties should distribute the compensation within
themselves.
Conclusion
Wollongong Council could potentially rely on the defence of contributory negligence because it
was also the responsibility of Peter to go through the letter comprehensively and put queries

before the council in case of any confusions regarding the denial for development by the council
because it was a matter of property. But, he knowingly did not take any action and purchased
land.
IRAC 5
Issue
Can Wollongong Council potentially rely on the defence of voluntary assumption risk?
Rule
Voluntary assumption of risk states that one cannot sue others for the injuries sustained in case,
he/she have understood and accepted the risks involved. It is considered as a complete defence to
the negligence in action. However, the provision of “negligent misstatement” create the
liability of the defendant party towards plaintiff.
Application
Wollongong council may use the provision of voluntary assumption risk in defence to the
negligence act done by them as they already denied further development and Peter was well
aware about the loss he might have to face in the situation if he purchase that land. However,
Peter has the protection under negligent misstatement provided by the Wollongong Council
being a responsible authority.
Conclusion
Wollongong Council could rely on the defence of voluntary assumption risk as Peter continued
the process of purchase and development on property despite being aware of the fact that road
widening process might affect his property. But he relied on the negligence by the council and
continued the process anyway.

IRAC 6
Issue
Can Peter sue Wollongong Council in negligence for economic loss?
Rule
In addition, if another person is not in a position to protect their own interests, the duty of care
arises of the individual responsible for such actions or omissions (Law Teacher, 2018).
Particularly, if the plaintiff might suffer economic loss, it creates the existence of duty of care.
Furthermore, if a person has the power to direct or control the actions or omissions by another
person knowing that there is existence of risk of harm, the person owes a duty to exercise the
power with reasonable care for the safety of another person (Lawteacher, 2018).
Application
Peter has purchased the land and as claimed by Peter, there was no disclosure mentioned in the
certificate that the block of land he purchased was going to be the subject to the road widening
proposal. Peter has the right to sue Wollongong Council for negligence in their actions due to
which he will have to suffer economic loss. In addition, the claim of Wollongong was not
appropriate because negligence applies to economic loss as well. Under the three essentials of
negligent actions Wollongong Council, it was their duty of care to provide clear information to
Peter being the relationship of council and resident of that region between them.
Conclusion

It is a matter of negligence on the part of Wollongong Council due to which, economic loss has
occurred to Peter. Therefore, Peter has the right to sue Wollongong Council for breach of duty of
care towards him.
References
Law Teacher. (2018). The tort of negligence. Retrieved from Lawteacher.net:
https://www.lawteacher.net/free-law-essays/tort-law/tort-of-negligence.php
Lawteacher. (2018). Negligence as a tort. Retrieved from Lawteacher.net:
https://www.lawteacher.net/free-law-essays/tort-law/negligence-as-a-tort.php
Singapore Law. (2017). Commercial Law. Retrieved from SingaporeLaw.sg:
http://www.singaporelaw.sg/sglaw/laws-of-singapore/commercial-law/chapter-20
Thomson Reuters. (2018). Elements of a Negligence Case. Retrieved from Findlaw.com:
https://injury.findlaw.com/accident-injury-law/elements-of-a-negligence-case.html
Thomson Reuters. (2018). Negligence. Retrieved from Findlaw.com:
https://injury.findlaw.com/accident-injury-law/negligence.html
Tort Laws. (2017). Negligence Tort at a Glance. Retrieved from Tort.laws.com:
https://tort.laws.com/negligence-standard-of-conduct/negligence-tort
Washington University School of Law. (2018). Negligience. Retrieved from Wustl.edu:
https://law.wustl.edu/sba/firstyearoutlines/torts/Unknown/TORTS_OUTLINE.pdf