Commercial law : Sample Assignment PDF

Running head: COMMERCIAL LAW
Commercial law
Name of the Student
Name of the University
Author Note

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Table of Contents
Answer 1..........................................................................................................................................2
Answer 2..........................................................................................................................................5
Answer 3..........................................................................................................................................7
References......................................................................................................................................11

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Answer 1
Under negligence law, a person is obligated to exercise duty of care towards another
person and is responsible for undertaking reasonable measures to avoid the risks that are likely to
arise from any act or omission of the person and result in causing injury to the aggrieved person.
The injury caused to the aggrieved party must be reasonably foreseeable and must be a direct
outcome of the act or omission of the party causing such injury (Abraham, 2017). Therefore, in
order to be successful in bringing negligence claims, the aggrieved party must establish the
following conditions:
a) a duty of care relationship exist between the plaintiff and the defendant;
b) there is a breach of such duty of care by the defendant;
c) the injury or damages sustained was a direct outcome of the breach of duty;
Duty of care- The Wrongs Act 1958 governs the law of negligence and entails the legal
principles of duty of care. The person who owes a duty of care is deemed to exercise reasonable
standard of care towards the plaintiff to the extent that any act or omission on part of the
defendant is likely to cause injury to the defendant. In Donoghue v Stevenson [1932] A.C. 562,
the ‘neighbor principle’ was introduced which stipulates that one must exercise care towards his
neighbor. ‘Neighbor’ is any person who is likely to be affected either directly or closely by the
act or omission of the defendant.
Breach of duty of care- To establish that a person has breached a duty of care, the court shall
determine whether the defendant has maintained a reasonable standard of care while conducting
or omitting to conduct any activity. The court shall further determine whether the reasonable care
exercised is similar to the standard of care that would be exercised by any prudent person in the

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same situation. If the court deems that the risk caused by the act or omission of the defendant is
high, it is expected that the defendant exercise additional measures to avoid the occurrence of the
risks.
Under certain exceptional circumstances, the facts of the case itself are evident that the
defendant had been negligent in his action or omission causing injury to the plaintiff. This is
known as the principle of res ipsa loquitor, which implies that the facts of a case itself speak for
themselves.
Breach of duty of care caused damages- the plaintiff must establish that the damages or injuries
caused to the plaintiff was a direct result of the breach of the duty of care caused by the
defendant. The plaintiff must further establish the ‘but for’ test that is, the plaintiff would not
have sustained such injuries or damages but for the breach of duty of care by the defendant the
plaintiff suffered loss or sustained injuries (Luntz et al., 2017).
Causation- Furthermore, the plaintiff must establish that the injuries caused is a direct outcome
of the action or omission on the part of the defendant and is an immediate outcome and not a
remote cause (Baker, 2016). As per section 51 of the Wrongs Act 1958, negligence is a factual
causation of harm and requires the plaintiff must establish every fact that have attributed to the
causation of issue. Further, the plaintiff must establish that the injury sustained or the damage
suffered was unexpected and that the plaintiff had no knowledge about it.
Nevertheless, the plaintiff cannot claim damages for any injury or loss that has resulted
from any inherent risk. An inherent risk cannot be avoided despite exercising a reasonable
standard of care. While determining the significance of an injury, the court shall consider the
extent of harm that is caused to the aggrieved person due to the injury resulting from the breach

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of duty of care. Subsequent to the assessment of the injury, the extent of harm caused must meet
the threshold level that is fixed in case of a significant injury.
In case of Thermomix appliance, the kitchen model has caused injuries to its owners who
suffered burn injuries due to defect in the kitchen appliance and lack of safety. In Donoghue’s
case, it was established that manufacturers have a duty of care towards their consumers or users
of the product. This principle has evolved into a legal principle that safeguards consumers
against injury or loss suffered due to contaminated or faulty commodities.
As per the negligence law, the Thermomix Appliances owed a duty of care towards the
customers and it is their responsibility to ensure that that the products are safe for its use.
However, in this case, the company has failed to exercise reasonable standard of care to ensure
that the products are safe. The reasonable standard of care expected to be maintained in this case
is that it is obvious that the manufacturer will provide goods without fault and that which is safe.
Any prudent person would have ensured the reasonable standard of care in the same situation.
The liability of the company may arise, as the burn injuries sustained by its consumers
are a direct result of the breach of the company to exercise care in ensuring that the products sold
are safe and free of defects. Further, the injuries suffered are immediate outcome of the breach of
duty of care and not remote. This establishes all the essential elements that are required to prove
negligence claims. The consumers are entitled to claim damages for the personal injury sustained
due to the negligence of the company.
Under the Wrongs Act 1958, an aggrieved person is not entitled to make non-monetary
claims, which implies that the consumers cannot make claims for the injuries sustained unless
the burn injury is above 5 percent as set out in the Medical Association Guidelines (AMA). The

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amendment made in the Wrongs Act 1958 with respect to the non-monetary claims is only
applicable when the injuries sustained are severe. The aggrieved parties are entitled to make any
claims within 3 years from the date of injury sustained and the necessary documents must be
filed within 90 days prior to the expiry of the particular period (Foley & Christensen, 2016).
Answer 2
Role of caps in restricting the possibility of liability in Tort Law
The Wrongs Act 1958 has set out several limitations with respect to the compensation for
the economic and non-economic loss resulting from the personal injury sustained by the
aggrieved party. The Australian Law Reform Commission has introduced caps applicable on
non-economic damages to ensure equal importance to the privacy interest and status of both the
wrongdoer and aggrieved party.
The damages acts as a deterrent factor for the wrongdoer as it is a form of punishment for
the wrongdoer preventing him from conducting further breach of his duty of care (Gilbert &
Gilbert, 2017). Nevertheless, the thresholds that have been stipulated in the statute have reduced
the possibility of liability in law of torts in the following ways:
 the threshold reduces the incorporation of the risk management measures;
 the eligibility of the wrongdoer to compensate the injured party reduces;
 the threshold establishes that certain negligent acts excludes the infringing party from
facing any financial consequences;
Nevertheless, there are arguments made in favor of the thresholds that have been imposed to
compensate for the non-economic damages or losses sustained and suffered by the injured party.

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Firstly, such thresholds awarded to the injured party are made under circumstances where the
aggrieved party establishes that they have satisfied the threshold imposed for obtaining the
concerned compensation. For instance, the aggrieved parties who have suffered 30 percent
injuries are only entitled to monetary compensation.
Secondly, the imposition of thresholds have lessen the likeliness of making any false
claims like irrelevant and necessary expenses related to the injury suffered by the aggrieved party
(Goldberg, Sebok & Zipursky, 2016). Lastly, the aggrieved parties are only entitled to monetary
damages for personal injuries that have been sustained based on the level of harm that the
aggrieved person has sustained due to the act or omission of the wrongdoer.
The damages to which any aggrieved person is entitled under the negligence law, is made
to compensate the aggrieved person for all losses suffered and the injuries sustained due to the
act or omission of the wrongdoer. After perusing the evidences adduced, the court shall award
damages in the form of compensation with the objective to restore the plaintiff to the position he
or she was before the causing of injuries from the action or omission of the defendant (Stickley,
2016).
The harm or damage suffered by the aggrieved party includes temporary or permanent
physical injury or non-monetary loss. The non-monetary losses suffered by the claimant may
arise as physical injury that includes physical sufferings, loss of life, emotional trauma, loss of
amenities and disfigurement. The damages that the aggrieved party is entitled to for the non-
economic losses are known as general damages. Although the emotional trauma and physical
injuries cannot be compensated money but the sole reason behind compensating the claimant is

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to assist the aggrieved person to obtain any alternative source of satisfaction and pay for the
expenditures (Stickley, 2017).
The legal and statutory framework of several states has enforced number of limitations in
terms of the damages that are claimed for sustaining the personal injuries. Although several
states in Australia have stipulated caps on non-economic losses arising in medical arises, but less
states have introduced caps on non-pecuniary damages in terms of cases that are related to
personal injuries (Mendelson, 2014). The amount of caps or limitations is different in all the
states, which varies from $350,000 to $750,000.
Nevertheless, there are certain exceptions that are available to the laws related to death or
injuries where a higher damage cap is permitted or the damage cap is completely eliminated. In
Victoria, the aggrieved person may be entitled to compensation for sustaining non-pecuniary
injuries if the person establishes that almost 30 percent of the injury sustained is of serious
nature. The damage cap for non-pecuniary loss in the state of Victoria is $527,610.
Answer 3
Under Part 3-5 of the Australian Consumer Law, provisions have been stipulated that
deals with the liability of the manufacturer with respect to any safety defects associated with the
products. The liability of the manufacturer also rises with respect to the monetary loss or any
personal damage that is suffered by the customers while using the commodities supplied by such
manufacturer (Fries, Bergmeister & Spindler, 2018).
As per section [138] of the ACL, any individual consumer who has suffered any personal
injury or damage due to the defect in the products supplied by the manufacturer is entitled to
bring legal claims against the manufacturer for compensation. In case the aggrieved persons are

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unable to identify the actual manufacturer, they may request the suppliers to provide assistance
in identifying the manufacturer for initiating legal proceedings against the manufacturer of faulty
goods. In the event, the suppliers fail to provide necessary information regarding the
manufacturer; the aggrieved party may become entitled to obtain compensation from the
suppliers for failing to provide information about the manufacturer of the defective goods
(Latimer, 2018).
As per the facts of the Thermomix appliances, the aggrieved customers are entitled to
bring legal proceedings against the manufacturer for the lack of safety defects in its kitchen
appliance model that caused burning injuries to its consumers. The consumers are entitled to
compensation for such personal injuries.
However, the manufacturers are entitled to certain defenses as stipulated under sections
[142] and [148] of the ACL. The following defenses are available to the manufacturers under the
ACL.
 Firstly, the manufacturer may contend that the defect in the goods did not exist while the
goods were supplied to the consumers;
 Secondly, the manufacturer was not allowed by the scientific and technical department to
check the default in the goods;
 Thirdly, the loss suffered due to a damage caused to a land or a building;
 Lastly, the defect in the goods resulted due to a conformity with a compulsory standard
related to a product.
Further, if a commonwealth mandatory standard is associated with the alleged defective
products, the manufacturer shall not be responsible for the defective goods instead; the

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Commonwealth shall be liable for the loss suffered by the aggrieved person due to such defect in
the good. However, under Part 3-5 of the ACL does not stipulate any remedies and penalties for
the breach of the safety of the products as these provisions are used to assist the court to
determine breach of products and liabilities of the manufacturers or suppliers (Howells &
Weatherill, 2017). Nevertheless, under Part 4 of the Australian Consumer Law states that
violation of particular legal provisions often lead to severe injuries and are deemed as criminal
offenses which is subjected to penalty.
As per the reports, complaints with respect to the damages and personal injuries that are
caused to the consumers of the products, which implies that the Thermomix Company have
failed to act in accordance to the provisions set out regarding the recall of the goods supplied to
the consumers which make it liable to pay fine of $1.1 million.
Furthermore, the consumers that have suffered serious injuries with respect to the
defected goods supplied by the company, becomes entitled to make monetary compensation up
to $16,650 from the Thermomix appliances company. According to Part 4-6 of the ACL,
defenses are set out that may be argued by the Thermomix company to exempt from the
liabilities.
 Firstly, the injuries sustained by the consumers have resulted from act of third parties and
that the company had undertaken reasonable measures to avert such injury.
 Secondly, the defendant may state that the causation of the injury resulted from rational
factual mistakes.
Moreover, under Part 5 of the ACL deals with the civil monetary penalties that is
imposed upon the wrongdoer by the court. Such civil monetary penalties are only applicable to

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the wrongdoer provided such infringer, be it individual or a corporate body, has contravened the
legal provisions related to civil standard of the manufactured goods. The Thermomix Company
failed to act in accordance to the legal provisions with respect to the safety standard of the
kitchen appliances under section [106(1)] of the ACL and was entitled to pay $1.1 million. In
case the aggrieved consumers have sustained serious injuries, the company shall be entitled to
pay $16,500 under section [131] or section [132] of the ACL as compensation to the aggrieved
persons.
The other remedy that is available to the aggrieved consumers is set out under section
[232] of the ACL. In the case of Thermomix Company, as per the legal provision, the aggrieved
consumers may obtain injunction orders from the court against the company for infringing the
safety standard provision and causing severe injuries to the consumers. This remedy is an
additional remedy apart from the compensation that they are entitled to under section [271] of
the ACL for all the injuries and damages suffered. Moreover, if a manufacturer or supplier has
contravened any consumer guarantee, the aggrieved consumer may bring a legal action against
such manufacturer within a period of three years from the date of violation of the consumer
guarantee (Riefa, 2016).

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References
Abraham, K. (2017). The forms and functions of tort law. West Academic.
Ahmed, R. (2014). " Contributory intent" as a defence limiting delictual liability. PER:
Potchefstroomse Elektroniese Regsblad, 17(4), 1517-1570.
Australian Consumer law, schedule 2 of the Competition and Consumer Act 2010 (Cth)
Baker, J. (2016). Causation laws should recognise loss of chance. Precedent (Sydney, NSW),
(133), 58.
Donoghue v Stevenson [1932] A.C. 562
Ferrara, S. D., Baccino, E., Boscolo-Berto, R., Comandè, G., Domenici, R., Hernandez-Cueto,
C., ... & Pinchi, V. (2016). Padova Charter on personal injury and damage under civil-tort
law. International journal of legal medicine, 130(1), 1-12.
Foley, M., & Christensen, M. (2016). Negligence and the Duty of Care: A Case Study
Discussion. Singapore Nursing Journal, 43(1).
Fries, A., Bergmeister, A. W., & Spindler, M. (2018). Thermomix by Vorwerk–A New Way of
Cooking. In Fallstudienkompendium Hidden Champions (pp. 73-90). Springer Gabler,
Wiesbaden.
Gilbert, R. J., & Gilbert, P. T. (2017). Maryland Tort Law Handbook. LexisNexis.
Goldberg, J. C., Sebok, A. J., & Zipursky, B. C. (2016). Tort Law: Responsibilities and Redress.
Wolters Kluwer law & business.

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Howells, G., & Weatherill, S. (2017). Consumer protection law. Routledge.
https://www.choice.com.au/home-andliving/kitchen/all-in-one-kitchen-machines/articles/accc-
takes-thermomix-to-federal-court160617
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.
Mendelson, D. (2014). The new law of Torts. Oxford University Press.
Riefa, C. (2016). Consumer protection and online auction platforms: Towards a safer legal
framework. Routledge.
Stickley, A. P. (2016). Australian torts law. LexisNexis Butterworths.
Stickley, A. P. (2017). Illegality as a defence to negligence. Australian Civil Liability, 14(5), 73-
75.
Wrongs Act 1958 (Vic)

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