Legal Aspects of Business: Rights of Victims under Tort Law and Australian Consumer Law
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This article discusses the rights of victims under Tort Law and Australian Consumer Law. It also advises an employee of a factory about her rights to sue the factory. The article covers the rules of Tort Law, negligence, contributory negligence, Australian Consumer Law, and vicarious liability.
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Business Legal Aspects1 Question 1 (a) Issue To check what right the victim of the case, Ann has under Tort Law as well as under Australian Consumer Law. Rules Tort Law Negligence is an important aspect of Tort. This is a situation where one person who owes a duty of care in respect to other, breaches the same and the other person suffers from a loss of such breach of care. It was held in the case ofDonoghue v Stevenson[1932] AC 562House of Lords that the manufacturer of a good owes duty of care towards the consumer and consumer suffer from any kind of loss because of the negligence of manufacturer then such manufacturer will be held liable to pay off the damages to the consumer. Further, contributory negligence is one of the defenses of Tort law that is available with the defendant. It was held in the case of Revill v Newbery[1996] 2 WLR 239 that if a claimant also fails to take care of him/her and do a supportive task that leads to loss in a case then, he/she can ask for the damages to defendant but the volume of damage will reduce up to a level. Australian Consumer Law Australian Consumer Law (ACL) is a part of Competition and Consumer Act 2010 No.51, 197. The lead purpose of the legislation is to provide a security and safeguard to the consumers from defective goods and services. A different section of the legislation provides rules regarding
Business Legal Aspects2 different aspects. Section 54 says that a consumer has a guarantee in respect of goods that the same is safe, free from any kind of defect, durable and in a condition in which that is expected to be (Austlii, 2018). This is a kind of right that a consumer under Australian Consumer Law has in respect of those goods that he/she consumes. Further, the act provides that a consumer can bring an action in against of manufacturer in some of the circumstances. Section 138 of the act states that a consumer can initiate an action against the manufacture of the goods where the manufacturer provides defective goods to the consumer and because of consumption of such goods, consumer suffer from a loss of personal injury or death (Latimer, 2011). In such situations, a manufacturer will be required to pay the actual loss that a consumer suffered with. Section 142 provides that a manufacturer can ignore the penalty by setting out defenses mentioned in this section. These defenses say that a manufacturer will not be held liable, even after provided defective goods if 1.The defect was not there at the time of supply. 2.The defect occurred in order to meet out with the required standards (Australian Government, 2018). 3.Because of scientific and technical knowledge, the defect could not be uncovered at the prior stage. 4.The defect is related to marketing instructions of final good (Legal Vision, 2016) Application Tort Law Applying the provision of the case,Donoghue v Stevenson, a manufacturer of Salami i.e. Smallgoods Pty. Ltd. owed a duty of care in respect to consumers of goods. It was the duty of the
Business Legal Aspects3 manufacturer to provide defect-free goods to customers and consumers. However by skipping an important step in the manufacturing process the manufacturer has breached the duty of care. The process was important because the same was related to the killing of bacteria. Because of the skip of this process, bacteria remained there in Salami and by consumption of the same, Ann one of the consumer fallen ill. Hence, the manufacturer is liable to pay damages to Ann. As Ann consumed goods after the expiry period, contributory negligence was there on her part. The damages that she is entitled to receive will reduce to the level of contributory negligence. Australian Consumer Law Under Section 54 of the act, Ann had the right to receive defect free and safe goods. Nevertheless, she has not received the same. She has purchased a packet of Salami that had bacteria. In addition to this, on the packet, it was mentioned that the salami inside the packet needs to be used on or before 31stJuly. Ann did not look after the instruction and consumed the salami as on 07 August 2018. Cause of consumption of Salami, Ann became very ill. She had to move hospital and to pay heavy medical expenses. In addition to this, she became unable to work for the coming 2 months. Manufacture is liable here. Ann can initiate an action against the manufacturer of Salami i.e. Smallgoods Pty. Ltd. under section 138 of the act, Ann can bring an action against of manufacturer of the goods. Now to move towards the section 142 of the act, the manufacturer cannot take any defense because no conditions existed there in the case in relation to defenses. Although Ann has consumed the goods after the expiry date that was not the reason for injury. The lead reason for her injury was consumption of Salami, which consisted of bacteria.
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Business Legal Aspects4 Conclusion Under Tort law and Australian Consumer Law, Ann will be entitled to receive damages from the manufacturer. Although in the case of Tort Law, the amount of damages will reduce up to the level of contributory negligence. Under Australian Consumer Law, she can ask for the actual cost of injury because no defense existed.
Business Legal Aspects5 Question 1 (b) Issue To check the right of Ann in respect of supermarket and to identify the liability of supermarket in the whole case. Rule Australian Consumer Law mainly puts the obligation to manufacture goods but not on the seller of the same. The reason behind it is that a manufacturer is a person who makes and develops a product. Although it is the seller of a product the provides goods to the consumer ultimately. In comparison to the seller, suppliers have wider liability. However, a seller is only liable to the extent of sale of the product but not the manufacturing of the same. If being a seller, the same provides certain guarantees or confirmation to customers and consumers then it becomes the liability of the seller to fulfill the same. Further, for the liability of injuries or any other incident, a seller cannot be held liable. Consumer guarantees provided under section 51 to 59 of Australian consumer law cannot be limited by a contract by introducing a relief of refund and exchange of goods merely by the supplier (Australian Consumer Law, 2018). In general, the consumer does not know that who is the manufacturer of a particular good that he/she has purchased from a store or supermarket. In such a scenario the consumer, initiate action against of seller rather than the manufacturer. Where a seller has to pay damages to consumer cause of fault of manufacturer then he/she can ask the manufacturer for reimbursement of such damages (ACCC, 2018). The reason behind this that seller has no obligation in respect of quality of packing product that only makes the sale of
Business Legal Aspects6 the same. However, it is the responsibility of seller that being a reasonable person the same should check the expiry date and other aspects of packing goods that can be known by a seller. Application In the given case, the issue is related to salami that is packing goods. The manufacturer of the good has skipped one of the important manufacturing processes. Because of this, bacteria remained there in the product. One of the consumers of the supermarket, Ann has purchased the salami, consumed the same and fallen ill. Ann has consumed the product after the expiration of 7 days. As mentioned aforesaid that a seller of good cannot be held liable for the quality of packing good, Supermarkets Pty. Ltd (Seller) is not a liable party of the case. The seller has acted reasonably in the case. The expiry date of the product was 31stJuly and Ann purchased the same on 20thJuly. Therefore, it is proven that Supermarket has not placed any expired goods in the store. Further, the seller has already mentioned that the same will only be held liable for replacement of a product in cases of loss or damage by consumption of any product. According to the provision of the act, a supplier cannot limit the provision and right of a consumer by stating such clauses, but Supermarkets Pty. Ltd is a seller not the supplier in the case. The same could display such a clause. Being the seller, the same could do only this because the same could not take any guarantee in respect of a default in manufacturing. The only manufacturer will be held liable. If Ann initiates an action against Supermarkets Pty. Ltd and the same has to pay off damages to her, then the Supermarkets Pty. Ltd can ask the manufacturer to reimbursement of these expenses.
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Business Legal Aspects7 Conclusion In general, Supermarket Pty. Ltd. is only a vendor/seller but not the supplier, therefore provisions and liabilities related to the supplier will not be applicable to the same. Ann can only ask for replacement of the product as being the seller, Supermarket Pty. Ltd. had this liability only which was not against of the provision of Australian consumer law.
Business Legal Aspects8 Question 2 Issue oTadvise the employee of the factory, Shanti about her rights, as she wants to sue the factory in which she was working. Rules Tort is a civil wrong. Under the subject of tort, some relations are there, where one party is liable towards the other party and owes a duty of care. Some relations are defined whereas, in other relations, court review the circumstances and held that whether a duty of care existed at the end of the defendant or not. In those cases where one person is not liable to perform any standard of care in respect to another person, such other person cannot initiate any action in against of the first one even when he/she suffered from a loss cause of the first person. As per the decision was given in the case ofParis v Stepney[1951] AC 367 House of Lordsan employer owes a duty of care towards it is an employee. It is the responsibility of the employer to act similar to a reasonable person in respect to employees. Negligence is a situation where one person fails to perform the duty of care. A person who suffers cause of such failure can initiate an action against of guilty person. However, in the case ofDonoghue v Stevenson[1932] AC 562 some pre-requisites have set down, that must be there in case of negligence. These pre-requisites/factors are as follow:- 1.There must be a duty of care. 2.The defendant must be liable to breach such duty (E-Law Resources, 2018) 3.The claimant must suffer from a loss 4.Such loss must be a direct result of a negligent act of the defendant (Findlaw, 2018).
Business Legal Aspects9 According to the decision given in the case ofRe Polemis & Furness Withy& Company ltd.[1921] 3 KB 560 there must be a direct relationship with the negligent act of the defendant and loss obtained by the claimant. Vicarious Liability This is another important aspect of Tort. This is a situation where one party held liable for the tort committed by another person. Under vicarious liability rule, an employer will be held liable for the tort of his/her employee's committee with a third party. According to this concept, an employee works as an agent of the employer. This is the reason that an agency relationship exists in between an employee and employer. The employer in such circumstances becomes principal and therefore bind with every act of employee including his/her tort (ACAS, 2018). If a person in the capacity of an employee commits a tort then the victim party can held the employer liable under the purview of Vicarious Liability in addition to the employee i.e. guilty party (Legal Dictionary, 2018). This is necessary to inform that employer will only be liable for that tort, that an employee conducts while performing his/her given authority. Application In the given case, Shanti was employed as a cutting machine operator in U-Best Shoes Factory. Her shift timing was 3 pm to 11 pm at the night. The car parking of the factory was dark and often remains blank. One day when she was leaving for home, no one was there in the parking area and it was the dark cause of night and no light. She felt the presence of someone in bushes that was surrounded parking area but she was not able to check that who was there because of no light. In addition to this incident. Shanti has reported the incident to the manager and requested thereof to place proper lighting in the car park area. The manager did not paid attention towards her concern and assured her about the safety in car area by saying that there is
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Business Legal Aspects10 nothing to worried about as the car park was safe. Further, Shanti added some more facts about insecurity in the car park but Mr. Collins did not listen to anything and conclude the issue raised by Shanti by saying that the car park is saved. The issue has started when one day, Shanti was leaving for home and saw someone in the car park. As soon as she became able to see everything clearly, she saw a man over there who was broking down her car. By seeing this incident, Shanti shouted that attract the concern of suspected person. He ran towards Shanti and kicked her. In conjunction with this, he also grabbed her handbag and rushed out. Here in the case, all the necessary condition of a negligence case has established. Mr. Collins owed a duty of care and the same has breached the same. He acted negligently by not erecting lights in the car park. Because of such negligence, Shanti has suffered from a personal injury and also with an economic loss because the man in the car park also snatched her handbag. She also becomes unable to work for several months. At last, applying the provision ofRe Polemis & Furness Withy& Company ltd.this is to be stated that the only reason of loss was negligence ofMr. Collins. Further, applying rules of vicarious liability, U-Bewt Shoes Factory is also a defendant of the case as Mr. Collins was acting on behalf of the same. Conclusion In conclusion, in the case, this can be stated that Mr. Collins was acting on behalf of U- Best Shoes Factory. The same owed a duty of care towards Shanti. Shanti made a report about the concern related to the car park, yet Mr. Collins has not acted as a reasonable and responsible person. Because of his negligence, Shanti has suffered from a physical injury and also become
Business Legal Aspects11 unable to work further for several months that was an indirect economic loss to her. Applying the provisions of vicarious liability, U-Bewt Shoes Factory is liable for a tort committed by Mr. Collins and liable to pay damages to Shanti. Shanti seems to be held success in this case as she was not on the mistake and also reported the issue on time.
Business Legal Aspects12 References ACAS. (2018).Understanding what vicarious liability means for employers.Retrieved from: http://www.acas.org.uk/index.aspx?articleid=3715 ACCC.(2018).Consumers'rights&obligations.Retrievedfrom: https://www.accc.gov.au/business/treating-customers-fairly/consumers-rights- obligations#what-are-consumer-guarantees- Austlii.(2018).CompetitionAndConsumerAct2010-Schedule2.Retrievedfrom: http://classic.austlii.edu.au/au/legis/cth/consol_act/caca2010265/sch2.html AustralianGovernment.(2018).CompetitionandConsumerAct2010.Retrievedfrom: https://www.legislation.gov.au/Details/C2013C00620/Html/Volume_3 AustrlianConsumerLaw.(2018).ConsumerGuarantees.Retrievedfrom: http://consumerlaw.gov.au/files/2015/09/consumer_guarantees_guide.pdf Competition and Consumer Act 2010No.51, 1974 Donoghue v Stevenson[1932] AC 562 E-LawResources.(2018).Negligence.Retrievedfrom: http://e-lawresources.co.uk/Negligence.php Findlaw.(2018).ElementsofaNegligenceCase.Retrievedfrom: https://injury.findlaw.com/accident-injury-law/elements-of-a-negligence-case.html
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Business Legal Aspects13 Latimer, P. (2011).Australian Business Law 2012 (31sted.) Australia :CCH Australia Limited. LegalDictionary.(2018).VicariousLiability.Retrievedfrom: https://legaldictionary.net/vicarious-liability/ LegalVision.(2016).WhatisaDefectiveGoodsAction?Retrievedfrom: https://legalvision.com.au/what-is-a-defective-goods-action/ Paris v Stepney[1951] AC 367 Re Polemis & Furness Withy& Company Ltd.[1921] 3 KB 560 Revill v Newbery[1996] 2 WLR 239