Negligence and Negligent Misrepresentation in Commercial Law

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Commercial Law

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Question-1
Issue
The key issue, in this case, is whether Daniel can file a suit for negligence against
Jack and Bronco and what legal remedies available to them?
Rule
A person held liable for negligence in case he/she failed to exercise standard and
ethical care which is expected by him to exercise amongst specific circumstances
which cause damage to another person or property. In simple words, failure to
maintain a standard of care which is expected by a reasonable person in the
particular situation is referred as negligence. Section 5 of the Civil Liability Act, 20021
provides that a party can be held liable for negligence if he/she failed to exercise
required skills and care which cause harm to another party. Harm includes death,
personal injury, damage to property and economic loss. While filing a suit for
negligence, three elements are necessary to be fulfilled. The first element is duty of
care. Section 5B provides that a person cannot be held liable for negligence until it is
proven that the risk was significant and the person took no precautions2. It is
necessary that the parties must have a proximity relationship and the risk was
foreseeable. In case of sports, the duty of care exists between two competitors,
coach to competitors and others. In this context, Condon v Basi3 is a helpful case. In
this case, the claimant's leg was broken due to a tackle from the defendant while
playing in a football match.
It was held by the court that the standard of care varies based on the expertise of a
player. The court provided that the tackle of the defendant was reckless, and he
failed to maintain a standard of care which is expected from a local league player.
The court further provided that although the players accept the risks of injury which
are inherent to the sports activities, however, they did not accept the risk of injury
which is outside the rules of the game4. Another key element of negligence is that
1 Civil Liability Act 2002 (NSW)
2 Austlii, CIVIL LIABILITY ACT 2002 (2018) Austlii
<http://www8.austlii.edu.au/cgi-bin/viewdb/au/legis/nsw/consol_act/cla2002161/>.
3 [1985] 1 WLR 866
4 Kit Barker et al, The Law Of Torts In Australia (Oxford University Press, 2012).

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the party must owe a duty of care. This element can be understood by the case of
Vaughan v Menlove5. In this case, the defendant paced a stock of hay near the
cottage which was owned by the plaintiff. The defendant further received a clear
warning that there was a substantial risk of fire; however, the defendant did not take
any precautions. The hay eventually ignites and burned the cottage of the plaintiff.
The court held that the defendant owed a duty of care, and he failed to fulfil such
duty due to which the plaintiff suffered loss, thus, the plaintiff has a right to recover
damages6. The final element of negligence is that the plaintiff must suffer loss due to
the breach of duty by the defendant.
In Barnett v Chelsea & Kensington Hospital7 case, the court provided a “but-for” test.
This test provided that the plaintiff would not have suffered damages, but for the
actions of the defendant, he suffered loss. Thus, a suit for negligence can be filed by
him. Furthermore, the principle of vicarious liability as given in the common law
provides that the employer can be held liable for the actions of his/her employee8. In
Benjamin Collett v Gary Smith & Middlesbrough Football and Athletics Club9 case,
Collett was playing for Manchester United, and he tackled the defendant that caused
a fracture. Collett filed a suit for negligence against Middlesbrough FC rather than
Smith based on the principle of vicarious liability. He held that the club is liable for
the action of its players. The court accepted the appeal and held that the club is
liable to pay damages to Collett. In the case of negligence, the defendant can rely on
the defence of voluntary assumption of risk to protect himself. In Wooldridge v
Sumner10 case, the court held that the defendant is not liable for negligence based
on the principles of voluntary assumption of risk because the consent given by the
claimant covers the loss suffered by him and the defendant did not breach his duty11.
Application
In the present scenario, Daniel is required to prove the elements of negligence in
order to hold Jack and Bronco liable for damages. As discussed above, the proximity
5 [1837] 132 ER 490
6 J. Goldring, ‘Civil Liability Law Reform In Australia : The "King Of Torts’ Is Dead" (2005)
10(3) Uniform Law Review - Revue de droit uniforme.
7 [1969] 1 QB 428
8 Barbara Harvey and John Marston, Cases And Commentary On Tort (Oxford Univ. Press, 2009).
9 [2008] EWHC 1962 (QB)
10 [1963] 2 QB 43
11 Carolyn Sappideen, Prue Vines and Penelope Watson, Torts (Thomson Reuters (Professional)
Australia Pty Limited, 2016).