Business Law: A Case Study on Negligence and Misrepresentation

This business law case study analyzes negligence and misrepresentation in two scenarios. The first involves a negotiation agreement where misrepresented profits induce a share purchase, examining fraudulent misrepresentation, duty of care, and contributory negligence under Australian law. The second scenario concerns a contaminated drink causing injury, assessing manufacturer liability under negligence principles and consumer protection laws. The analysis incorporates relevant case laws like Peek v Gurney, Donoghue v Stevenson, and Caparo Industries v Dickman to provide a comprehensive legal understanding and determine potential claims and liabilities.

Business Law
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Table of Contents
Introduction................................................................................................................................3
Question 1..................................................................................................................................4
Question 2..................................................................................................................................7
Conclusion................................................................................................................................10
References................................................................................................................................11
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Introduction
The business report provides a complete discussion about the principles which are followed
in the common laws. This report covers the principles which are based on the principles of
the Australian laws and the cases. The facts and the issues which are involved in the case
scenario given are provided in this report. The negotiation and the negligence provisions are
also provided herein to develop the effective understanding. The case study includes the
complete discussion about the common law rights of the Angela. The liabilities impose on the
manufacturer and the company is also provided in the report. All the facts and the provisions
are discussed taking into consideration the Australian acts and the regulations which develop
the effectiveness of the report.
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Question 1
Case scenario:
The scenario is related to the negotiation provisions and the laws. Herein the negotiation
agreement was formed between Angela and Jessica to purchase the shares of the restaurant.
In this case, the amount of the profits incurred by the restaurant chains is wrongly
misrepresented by the Jessica who induces her to purchase the restaurant. But in fact, the
restaurant business is low for the last years.
Issue:
Herein there is involved the acts of the misrepresentation by the Jessica. In this case, Angels
seek advice regarding the common law rights and the protection which is provided to her in
terms of the Australian laws.
Rule:
This case provides the case application regarding the provisions which are provided in the
common law. The provisions of misrepresentation are applicable herein where the statement
made by the parties is false or misleading (Howells and Wilhelmsson, 2017). As per the
provisions of Australian consumer laws the acts of misrepresentation takes the form of
innocent, fraudulent and the negligent. The provisions provide that in this case there is
observed the fraudulent misrepresentation.
Analysis:
The act which is applicable in the present case is related to the Misrepresentation Act 1972
(SA). As per the act provisions, it is provided that any acts of the parties or individuals which
induce the other to enter into such agreement which is false and misleading are treated as an
offence and parties are liable under such acts.
The penalty provisions are also levied on the individuals and the corporations both. The
penalty of $100000 is levied on the corporates while the penalty of $20000 is applicable to
the company.
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Hence, in this case, it is proved as per the facts of the case the acts of the parties are treated as
a fraudulent misrepresentation. The reason is that herein Jessica made the false statement
with Angelia. This act was made considering the profitability statement and the individual
interests of the parties. The profit figure shows the difference of $8000 which was the broad
amount. Hence the case of Peek v Gurney is also an example which shows that the acts of the
half-truth are also treated as a part of the misrepresentation and in this situation, there is
involvement of the same condition by Jessica.
However, in this case, there is also involved the acts of the negligence wherein the acts of the
negligence is exercised by the Angelia who has not performed her part of the duties to check
the accounts of the restaurant properly (Lexis PSL, 2017). The provisions of the duty of care
are also involved in this case which is not exercised by Angelia.
The Civil Liability Act 1936 is also applicable in the given case scenario which mentions that
the defendant should exercise the effective duty regarding the care which falls as per the
standards.
In the decided case law of Donoghue v Stevenson the decisions regarding the negligent
statement made by the parties. The situation which is discussed in this case also shows that
the acts of the contributory negligence (Legal dictionary, 2017). As per the provisions of the
contributory negligence, it is provided that the parties involved in the negligence have
himself contributed to the acts of the negligence which results in the damages.
In this case, it is analysed from the facts that it is the duty of Angeila to check the accounts
before entering into the negotiation agreement with the Jessica. It is also provided that this act
of Angeila has involved into the contribution towards the negligence. It is provided that the
acts of the negligence are involved on the part of Angeila also which shows the default of her
also (QualitySolicitors, 2016). Hence the damages claimed are also contributed by the parties
involved in the breach of the provisions of the act. In the decided case law of Butterfield v
Forrester is an example of the contributory negligence which is provided in the Australian
laws.
Conclusion
Hence the above case study helps in the development of clear study regarding the provisions
of the negligence and the misrepresentation which is exercised by the parties. Herein it is
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referred that the acts of the Angelia and the Jessica falls under the provisions of the
negligence. The common law rights which are available with the Angelia is to claim the
damages for the loss suffered and also to rescind the contract. But it is also provided that
Angelia should also exercise the duty to care while entering into the negotiation agreements.
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Question 2
Case scenario:
This case provides the details regarding the purchase of the drink from the corner store. The
given case shows the acts of Sandra and Andy and manufacturer. Herein Sandra has
purchased the cola cartoon from the shopkeeper of the corner store. But when the
consumption of the cola was made by Andy then he suffers from the injury and was
hospitalised for more than three days. After the illness of Andy, it is found that the remains of
the cockroach are observed in the drink. Due to this, the party suffers in terms of the medical
treatments and huge expenses are incurred on them. The party suffered wants to sue the
manufacturer of the cola company as the store was bankrupt.
Issue:
The issue which is observed in the given case is to analyse that the Australian manufacturer is
liable for the acts involved in the negligence which has caused the serious injuries to the party
involved. The issue is also to analyse the amount of the claim which is granted to the party
suffered for the acts of the negligence.
Rule:
The case involves the application of the provision which is provided in the Law of
negligence and Limitation of Liability Act 2008. The provisions of the negligence are
provided under the law of Tort. As per the provisions the term negligence includes the acts
wherein the parties have breached the principle of the duty of care which is exercised by
them. As per the provisions of the act there are involved several conditions by the parties
which are provided thereunder:
 The duty of care is exercised by the defendant.
 There is also involved the breach of the principle of the duty of care by the defendant.
 The party suffers from the damage which is caused by the breach.
The neighbour test is also included in the acts of the negligence. This test was provided in the
decided case law of Donoghue v Stevenson. In the neighbour test, it is provided that the
damages are such which is foreseeable by the parties then in this situation the duty of care is
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exercised by the defendant. But in this situation, the acts of the breach has caused the party
suffering from the damages to the claimant. This case also involves the application of the
provisions of the Consumer Protection Act 1987 which provides the safety laws for the
customer’s security. Hence these provisions help in safeguarding the rights of the consumers.
It is also assessed that the consumer interest should not be affected by the acts of the
manufacturer or which causes the harm to the health of the customers.
Analysis:
The given case scenario provides the idea that the cola which is drunk by the husband of
Sandra is infected with the remains of the cockroach which causes serious injuries to him.
Hence it is provided that the expenditure which is incurred by the parties on the medical
expenditure is considered to be the act of the negligence which is exercised by the
manufacturer (Comino, 2014). The remain of the cockroach which is found in the cola is a
fault of the manufacturer and for this, the company should be liable towards the payment
made to the parties. It is also analysed from the case that the negligence falls under the part of
the tort in Australia.
In the given case scenario it is analysed that although the cola cans are sold by the corner
stores which gets bankrupt the main production is done by the manufacturer. Hence in such
cases, the manufacturer is liable for the harm produced to the customers. It is also found on
the close inspection of the bottle that it contains the remains of the cockroach which is
injurious to the health of the customers (Howells and Weatherill, 2017). This inspection gives
an idea that the manufacturer has not exercised the duty of care while production of the cola
bottles which results in the harm to the health of the customers. Hence in such case when the
store from which the cola is purchased is bankrupt but then also the parties can claim the
damages from the manufacturer of the cola. In the decided case law of the Caparo Industries
v Dickman, the decision provided is such which proves that the three phases are involved in
exercising the duty of care (Travers and Manzo, 2016). But it is also provided that it is on the
plaintiff to prove the claim in relation to the negligence.
The applicable provisions of the Consumer Protection Act provide that the health of the
consumers cannot be compromised and strict provisions are applicable on those who are
involved in the acts of the production of the defective goods (Ramensky, 2018). Hence in this
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case also the manufacturer is liable for the acts of medical expenses charged on to the
customers.
Conclusion
It is concluded from the above case application that the Sandra Smith has the right to claim
the number of damages which is sustained by them on the consumption of the infected cola.
The number of damages and the medical expenditures held can be claimed by the parties
involved in such acts.
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Conclusion
This report helps in the clarification of all the provisions related to the acts of the negligence
and the common law rights which is availed by the parties. These provisions help in the
development of the understanding regarding the claim attained by the parties involved in the
contract agreement. The acts of the misrepresentation are also cleared from the application
and the solution of the cases which is provided in the report. The case laws are also illustrated
to develop the analysis of the decisions given by the judges in terms of the solution of the
cases. The solution to all the cases is analysed effectively from the completion of the report
which also clears the legal understanding and the acts. Hence this report provides the clear
specification of the laws formulated in Australia.
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References
 Comino, V. 2014. "James Hardie and the Problems of the Australian Civil Penalties
Regime" . University of New South Wales Law Journal 195.
 Howells, G. and Weatherill, S., 2017. Consumer protection law. Routledge.
 Howells, G.G. and Wilhelmsson, T., 2017. EC consumer law. Taylor & Francis.
 Legal dictionary, 2017. Tort law. Available at: https://legaldictionary.net/tort-law/.
[Accessed on: 24.05.2018].
 Lexis PSL, 2017. Tort, negligence and nuisance claim—overview. Available at:
https://www.lexisnexis.com/uk/lexispsl/disputeresolution/document/
393747/59PMBBC1F18B-72Y2- 00000-00/Tort,%20negligence%20and%20nuisance
%20claims—overview. [Accessed on: 24.05.2018].
 QualitySolicitors, 2016. Six clear steps to making a professional negligence claim,
Available at: http://www.qualitysolicitors.com/consumer-rights/professional-
negligence/legal-process. [Accessed on: 24.05.2018].
 Ramensky, G., 2018. Fraud and negligence. Findlaw Australia. Available at:
http://www.findlaw.com.au/articles/134/fraud-and-negligence.aspx [Accessed on:
24.05.2018].
 Travers, M. and Manzo, J.F., 2016. Law in action: Ethnomethodological and
conversation analytic approaches to law. Routledge.
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