Business Law Assignment: Contract, Negligence, Trade, and Offers

This business law assignment addresses several key legal concepts. It begins by explaining how courts determine a breach of duty of care under civil liability legislation, emphasizing the role of the standard of care and the objective test considering factors like the likelihood and seriousness of harm, prevention costs, and usefulness of the conduct. The assignment then explores causation in relation to damages, outlining the 'but for' test and its modifications when multiple factors contribute to an accident. Further, it differentiates between an offer and an invitation to offer, particularly in the context of electronic communications, and discusses when courts provide protection to employers in restraint of trade cases, considering factors like the duration of restraint and the nature of the employer's business. Part B presents two problem questions: The first analyses a contract law problem between a father and son, focusing on the intention to create legal relations. The second problem concerns a case of product liability, specifically the liability of Acme Imports Limited for damages caused by a defective baby formula under the Competition and Consumer Act 2010.

Running head: BUSINESS LAW ASSIGNMENT
BUSINESS LAW ASSIGNMENT
Name of the Student:
Name of the University:
Author Note:

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Answer 6:
As per the civil liability legislation, breach of duty of care is generally determined by
applying the objective test in which the defendant is generally expected to fulfill the standard
that is possessed by a reasonable man while practicing his duty towards other person to whom he
owes a duty to take care. Objective test is not definite but varies with the circumstances of each
of the case. While deciding the case, the court takes into account four factors mainly to apply the
objective test. They are as follows: 1) Likelihood of injury or harm caused: the defendant
cannot be expected to protect the victim against any unforeseeable event as entrenched in the
decision of Roe v Minister of Health [1954] 2 WLR 915 case.
2) Seriousness or gravity of the harm caused: As seen in the case of Paris v Stepney [1951]
AC 367 House of Lords, when the risk is of serious nature, the standard of care must be greater
because of the foreseeable risk.
3) Cost incurred to prevent the injury or damage: the court will also consider the preventing
cost when taking into account the standard of care. Less the preventing cost, more reasonable for
the accused it will be to take preventing cost and vice versa as observed in Latimer v AEC Ltd
[1953] AC 643.
4) Usefulness of the conduct of the accused: The courts will be applying less care to activities
that are valuable socially and vice versa. It can be understood by referring to the case of Watt v
Hertfordshire County Council [1954] 1 WLR 835.
The standard of care plays a crucial role in determining the duty breach and it will be on
the basis of reasonable foreseeability. This indicates that it will not be asked by the court whether

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the defendants foresaw the affect but instead it will be sought by it to work on what ought to
have been foreseen by the defendant.
Answer 7:
In order to claim damages from the defendant, the victim must prove that in addition to a
duty and its breach, the defendant’s act has caused loss or injury to him. The employed to
determine the causation is called the ‘but for’ test. If the accident will hot have occurred but for
the act of the accused, there lies causation as seen in Chester v Afshar [2004] 3 WLR 927. If the
accident would have occurred in the event, there lies no causation.
When multiple factors results into an accident, then the ‘but for’ test is modified to some
extent. When negligence of a person substantially contributes to any event of accident, it also
amounts to the cause of the accident as observed in McGhee v National Coal Board [1973] 1
WLR 1 case. Hence, it is thus possible to be a reason behind the accident by acting together with
others or failing to stop it.
Answer 9:
A proposal can be treated as an offer or in the other way as an invitation to offer
depending on the facts or terms of the case. An offer can be said to be a proposal made to initiate
a contract and on the other hand, an invitation to offer is made usually with an objective to
negotiate or include any terms of the contract. Usually, when a person expresses his will or
intention to another person or persons specifically to do or abstain to do something by accepting
his offer as seen in Australian Woollen Mills Pty Ltd v The Commonwealth [1954] HCA 20,
(1954) 92 CLR 424, High Court, it is known as offer, whereas, when a person requests others in

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general to invite them to make offer, it is known as invitation to offer as given in
Pharmaceutical Society of GB v Boots Cash Chemists (Southern) Ltd [1956] EWCA 6, [1953]
1 QB 401, Court of Appeal (England and Wales). The essential difference between offer with
invitation to offer is that in offer, the proposal is made to a particular person whereas in
invitation to offer, the proposal is unaddressed and made in general to all not to any particular
person. Similarly in the Electronic Transactions Amendment Bill 2010, it is seen that a proposal
which is not addressed in order to create a contract will be denoted as an invitation for creating
an offer instead of an offer which when accepted will form a valid contract. When someone
responds to the invitation to offer, then he becomes the offeror in such agreement.
Answer 10:
In Australia, the common law doctrine of restraint of trade provides provisions that
impose limitations as well as restrictions on the freedom of a person to get involved in trade or
employment illegal and hence, unenforceable at common law unless it is reasonable in the
interest of the public and the parties. This doctrine in Australia is restricted due to the operation
of the Competition and Consumer Act 2010 that includes most of the conduct that might have
fallen previously under this doctrine.
Every agreement in restraint of trade is void unless such agreement is reasonable in the
parties’ interest and also reasonable in the public’s interest. The restraints an employer may
impose on an employee may vary but in general, such restraints must include any of the
following;
 The employee must not use the confidential information and trade secrets belonging to
former employer.

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 The employee must not work for the competitor after he left the previous employment.
 The employee must not solicit customers, staff and clients from the previous employer.
Usually, it is of two types, non-competition which states that a former worker is prevented
from competing against the institution that employed him previously and non-solicitation clause
that aims to prevent the worker from soliciting clients to bring them to the new business. The
court while deciding whether a restraint is reasonable will take into consideration several factors
like negotiation process, duration of restraint, nature of the employer’s business and
characteristics of employee and others.
Part B:
Answer 1:
Issue:
The issue to be determined here is whether Richard can succeed against his father for the
breach of contract.
Rules:
One of the important conditions of a contract under common law is the presence of
intention of the parties to form a contract. In commercial agreements, it is assumed that the
parties shall possess the intention to be bound legally unless it is expressly stated by them in the
heads of the agreement. In the case of Rose & Frank Co v JR Crompton & Bros Ltd [1924]
UKHL 2, the agreement between the two parties who are doing business cannot be not enforced
as there was a clause in the agreement stating that it was not a commercial or legal agreement.

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Again, on the other hand, social or domestic agreements like that between the children
and parents are usually not enforceable due to public policy. For instance, in the case of Balfour
v Balfour [1919] 2 KB 571, the husband agreed to give 30 pounds to his wife a month when he
was not in home. However, the court did not enforce the agreement when the husband did not
pay. On the contrary, in the case of Merritt v Merritt [1970] EWCA Civ 6, the agreement
between an estranged couple was enforced by the court as the situations suggested that such
agreement was made to have legal output.
Application:
In the present case, the agreement entered between Richard and his father was social in
nature as it lacks any legal consequences as per the case of Merritt v Merritt. Moreover, if it was
a commercial agreement, such agreement would have been converted into writing like the part of
the document as seen in Rose & Frank Co v JR Crompton & Bros Ltd.
Conclusion:
Thus, Richard cannot succeed against his father for the breach of contract as it cannot be
enforceable being a social contract.
Answer 2:
Issue:
The issue to be determined is whether Mary can sue for the damages caused to her
babies’ kidneys against Acme Imports Limited.

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Rules:
According to section 7 of Competition and Consumer Act 2010 - Schedule 2 under
Australian Consumer Law, a person who imports goods into Australia will be treated as
consumers. As per section 106, a person shall not trade, commerce or supply goods if such
product does not comply with the safety standard. As per section 138, a manufacturer will be
liable if he supplies goods with defect and the individual who has suffered injuries due to such
defect.
Application:
In the present case, as per section 7, Acme Imports Limited can be regarded as the
manufacturer for it imports Infantmilk from China. As per section 106, he will be liable as he
was marketing baby formula though the manufacturer included melamine in formula. As per
138, he was also supplying the baby formula that was not suitable for consumption by the babies.
Conclusion:
Thus, Mary can sue for the damages caused to her babies’ kidneys against Acme Imports
Limited.

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References:
Australian Consumer Law
Australian Woollen Mills Pty Ltd v The Commonwealth [1954] HCA 20, (1954) 92 CLR 424,
High Court
Balfour v Balfour [1919] 2 KB 571
Chester v Afshar [2004] 3 WLR 927
Competition and Consumer Act 2010 - Schedule 2
Latimer v AEC Ltd [1953] AC 643
McGhee v National Coal Board [1973] 1 WLR 1
Merritt v Merritt [1970] EWCA Civ 6
Paris v Stepney [1951] AC 367 House of Lords
Pharmaceutical Society of GB v Boots Cash Chemists (Southern) Ltd [1956] EWCA 6, [1953] 1
QB 401, Court of Appeal (England and Wales)
Roe v Minister of Health [1954] 2 WLR 915
Rose & Frank Co v JR Crompton & Bros Ltd [1924] UKHL 2
The Competition and Consumer Act 2010
Watt v Hertfordshire County Council [1954] 1 WLR 835