Business Law: Tort Law Assignment - Sam Speed's Liability Analysis

This assignment solution addresses a Business Law problem involving the tort of negligence. The scenario involves Sam Speed, who runs a business providing refueling services for aircraft. Due to Sam's negligence in failing to secure the fuel tank lid, the fuel becomes contaminated. The soluti...Read More

BUSINESS LAW
TORT LAW
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BUSINESS LAW
Issue
The key issue is to ascertain the liabilities that Sam would have to incur on account of the
damages suffered by the potential plaintiffs based on the underlying situation.
Rule
In order to determine if the tort of negligence is applicable, it is imperative that there central
conditions must be fulfilled. First, it is essential that the there must a duty of care on
defandant’s part towards the plaintiff to be decided by the neighbor test. Second, it is
imperative to establish that the breach of the above duty was observed by the defendant by
not taking requisite measures to ensure prevention of foreseeable damages. Third, it needs to
be established that damages incurred by the plaintiff are attributed to the above breach and
could have been prevented in the event the above breach was not done. Before testing these
conditions for the given case, we must understand these conditions in some detail.
Duty of Care
The “neighbor test” offers the most convenient manner to determine if the duty of care does
exist with regards to a given plaintiff in a particular scenario or not. As per this, neighbor is
defined as any entity which the action doer believes may be reasonable impacted or harmed
by the choice made by the action doer to either pursue with a particular course of action or
inaction in the given context (Davenport & Parker, 2014). It is essential that duty of care
essentially arises on the action doer with only when there is some foreseeable harm or
damage that may happen to the plaintiff in line with the verdict advocated in Donoghue v.
Stevenson [1932] AC 562 at 580 case. With regards to ascertaining whether a particular
injury or damage is foreseeable or not, the courts normally rely on the given circumstances of
the situation (Harvey, 2009).
Breach of Duty
As discussed above, the duty of care requires that the action doer takes reasonable measures
regarding foreseeable damages so that the underlying chances of these occurring to the
neighbor are minimized. In this context, it is essential that the extent of care provided to the
neighbor must be representative of the extent of risk and its underlying severity. For instance,
if it is possible that the neighbor may loss life and significant property, then the duty of care
requires that measures taken must also be drastic since the underlying damage could be

BUSINESS LAW
irreparable (Gibson & Fraser, 2014). Breach of duty may be defined as the absence of
reasonable measures which should have been taken by a reasonable person (of average
intellect) in order to discharge the duty of care towards the neighbors. It is noteworthy in this
context that duty of care does not extent to unforeseeable damages and hence there is always
the risk of the neighbor suffering damages despite the extension of the best care. However the
damage in these cases do not amount to breach of duty (Latimer, 2016).
Damages
With regards to damages, only such damages are included which can be attributable to the
breach of duty on the defendant’s part. The primary way to ascertain this is to test if the
damage would have occurred even if the action doer would not have breached the duty to
care bestowed on the action doer (Lindgren, 2011). If on application of the above test, it is
ascertained that the damages could have been reasonable avoided if the action doer would
have not breached the duty to care then this amounts to negligence on defendant’s part. It is
imperative to note that the damage covered within the ambit of tort of negligence is not
limited to physical harm or monetary loss but also includes mental and emotional harassment
caused due to breach of duty. (Gibson & Fraser, 2014).
Application
In the given case, Sam is the owner of the business which is into refuelling business. The
business has a duty to care towards the clients as the quality of fuel is a key determinant of
the engine performance. Further, considering the implications of contaminated fuel in terms
of loss of life and the high financial damage, it is reasonable to expect in the given situation
that the highest level of care would be observed by Sam. Clearly, this is not the case as he
forgot to close the lid which led to contamination. Also, there was no checking of the sample
by Sam or any representative before passing this fuel to the aircrafts. The aircraft owner and
pilots have no way to ascertain if the fuel is contaminated or not as it is pumped directed into
the airplane. Hence, it is apparent that breach of duty has been indeed observed.
White Ltd – The owner of White Ltd has suffered financial damage owing to crashing of
aircraft to the tune of $ 1 million. Also, the plane crash has damaged a Mercedes Benz to the
tune of $ 75,000. Both these damages are foreseeable and could have been avoided if breach
of duty had not occurred. Hence, Sam would be held liable for these losses.

BUSINESS LAW
Blue Ltd- Sam notifies the pilot on time owing to which the flight is cancelled and hence no
loss of life or aircraft is suffered. However, a passenger owing to this is not able to reach
Sydney and cannot certify a ship as seaworthy owing to which the ship owner Safmarine Ltd
suffers loss. Clearly, Sam would not be responsible for this damage as this is not foreseeable
and is quite less likely.
Green Ltd – Sam notifies the pilot about the contaminated fuel but the pilot ignores his advice
and hence the plane suffers damage. Clearly, Sam would not be held responsible for the
damage here as if the pilot would have listened to Sam’s advice the damage could have been
avoided. Thus, the damage is on account of negligence by pilot.
Conclusion
Based on the above discussion, it is apparent that Sam would be responsible for the losses
caused to the plane of White Ltd and also the loss of the Mercedes owner. However, he will
not be responsible for the loss of Green Ltd and Safmarine Ltd.

BUSINESS LAW
References
Davenport, S. & Parker, D. (2014). Business and Law in Australia (2nd ed.).
Sydney:LexisNexis Publications.
Gibson, A. & Fraser, D. (2014). Business Law (8th ed.). Sydney: Pearson Publications.
Harvey, C. (2009). Foundations of Australian law (2nd ed.), Victoria: Tilde University Press.
Latimer, P. (2016). Australian Business Law CC (1st ed.). Sydney: LexisNexis Study Guide.
Lindgren, KE. (2011). Vermeesch and Lindgren's Business Law of Australia (12th ed.).
Sydney: LexisNexis Publications.