BULAW5914 Commercial Law: Negligence and Consumer Law Analysis

This assignment presents two distinct commercial law case studies. The first analyzes Jane's rights after purchasing a defective Samsung Galaxy Note 7, examining potential claims under both negligence and Australian Consumer Law (ACL). It discusses the elements of negligence, including duty of care, breach, and causation, as well as relevant defenses like contributory negligence. The analysis extends to ACL, focusing on manufacturer liability for defective goods causing personal injury and property damage, alongside available defenses. The assignment concludes that ACL offers Jane a more advantageous legal avenue. The second case study assesses Alan's chances of a successful negligence claim after being injured in an accident while accepting a ride from an intoxicated driver. It explores the elements of negligence, the concept of duty of care, and potential defenses such as volenti non fit injuria and contributory negligence, ultimately evaluating the likelihood of Alan's success in court.

Commercial Law
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BULAW5914
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Student’s Name

Commercial Law 1
Contents
Question 1........................................................................................................................................1
Facts 1
Issue 1
Rules 1
Negligence................................................................................................................................2
Australian Consumer Law........................................................................................................3
Application 5
Conclusion 6
Question 2........................................................................................................................................7
Facts 7
Issue 7
Rules 7
Application 8
Conclusion 9

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Question 1
Facts
In the provided case, a person named Jane purchased Samsung Galaxy Note 7. The battery of
this cellphone had overheating issue. Samsung, being the manufacturer of this phone soon
became aware of this issue as many of the people raised their concern. To prevent the further
issue Samsung made a formal recall of all the Galaxy Note 7 devises from the market in October
2016 but Jane did not get her phone replaced and was using the same. In February 2017, she
suffers from a burn in hand as well as her BMW car was also destroyed cause of overheating
phone. Here, in the case, Jane is a victim as he surfed from a loss.
Issue
Following issues need to be answered:
 What are the rights that Jane have according to the provisions of negligence and
Australian Consumer Law
 What are the possible damages under both the aforesaid laws
 What are the defenses that are relatable and can be raised by the defendant
Rules
A person has the right to initiate an action against the other who do not act as a
reasonable person under negligence as well as Australian Consumer Law (ACL). However,
under both of these laws, situations are different, under which a person can initiate such actions.

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Following discussion is focused on right, damages, and defenses available under negligence as
well as Australian Consumer Law.
Negligence
Rights under Negligence
Negligence is a concept of Tort law. According to this law, negligence is a situation where a
person breaches his/her duty of care. However, for the successful claim of negligence, breach of
the duty of care by a person is not enough but in addition to this certain other requirements are
also there which needs to be fulfilled. Following four requirements are mentioned under Tort
Law:-
The defendant must owe a duty of care (Plunkett, 2018)
Such duty of care must be breached
There must be a loss to the victim
Such loss must be a direct result of the negligence of the defendant
(Mccormickmurphy.com, 2018)
If all the four conditions are satisfied then a victim can initiate an action against the
defendant for negligence. According to the decision given in the case of Donoghue v Stevenson
[1932] UKHL 100 a manufacturer owes a duty of care towards the consumer. Similarly,
according to the decision given in the case of Re Polemis & Furness Withy & Company Ltd.
[1921]3 KB 560, a defendant can only be held liable to pay the damage for all the losses that
come out because of his/her negligence. In addition to the Tort Law, Wrongs Act 1958 (Vic)
also contains the provisions related to negligence. Section 18 of the act prescribes the provisions
related to action for damages by a person interested.

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Damages under Negligence
Under Tort Law, a victim can ask for the damages for the loss occurred due to the negligence of
the defendant. Damages can ask by the victim for any loss that comes in the form of personal
injury, economic loss, and psychiatric harm. Wrongs Amendment Act 2015 (Vic.) is another
legislation that has brought some amendments to the provisions related to the amount of
damages. When it comes to the discussion of the amount of damages, amendments in section
28G plays an important role. After Section 28G of the act says that if the victim suffers from a
non-economic loss then he/she is entitled to receive damages up to $577050 (Jade, 2018).
Defenses under Negligence
Under Tort Law, some defenses are mentioned that a defendant can use in order to reduce
or avoid his/her liability under a claim of negligence. Contributory negligence is one of such
defense, which is identified by Wrongs Act 2015 as well as Tort law. It is a situation where a
victim also contributes to the negligence of the defendant. It means it is a situation where in
addition to the defendant, the claimant also failed to take self-care. The study of contributory
negligence is important as the existence of the same reduces the amount of damages.
Australian Consumer Law
Rights under ACL
Australian Consumer Law is basically a part of the Competition and Consumer Act 2010
(CCA) and mentioned under Schedule 2 of this act. the provisions of ACL has been developed
with the objective to secure the interest of consumers. ACL protect the consumers from
fraudulent and behavior and activities of the manufacturer. The same contains all the possible
provisions related to a sale that is covered by this law. Section 7 of ACL provides the meaning of

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manufacturer and according to the same, a person who assembles, extract, grows, or produce any
goods is termed as a manufacturer (Classic.austlii.edu.au, 2018). If to talk about the rights of the
consumer under ACL, this is to mention that some guarantees are mentioned under this law.
Manufacture is held liable in cases of failure to provide any one or more than one guarantee to
the consumer. In addition to this, the law develops its focus on the safety of consumers and
therefore section 138 is there. This section says that there will be a liability on the part of the
manufacturer if the same provides some goods to the consumer in the course of trade and
commerce and the same contains some safety defect, which pursues personal injury to the
claimant (Latimer, 2011). Here safety defect refers to a defect because of that a good no longer
remain in a condition in which the same was expected to be.
Damages under ACL
In addition to section 138 of ACL, section 139, 140 and 141 also provides the provisions
of damages. Section 140 of the act says that a manufacturer will also be responsible if because of
any safety defect in the goods supplied by him/her, a person suffers from a loss of any other
goods (Legalvision.com.au, 2016). However, this is necessary to know that for the purpose of
this section, the person must have been acquired such goods for personal/household/domestic
purpose.
Defenses under ACL
Similar to the law of negligence, ACL also identified some defenses, which are
mentioned in section 142 of the act. Firstly, according to the clause a of section 142, a
manufacturer cannot be held liable for any defect if such defect was absent at the event of supply
of goods (Legislation.gov.au, 2018). Clause b of respective section provides that if a defect is

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there in the goods because of certain compliances, which were necessary to meet the standard,
then also manufacturer cannot be held liable to pay the damages. Further, clause C says that of at
the time of supply of goods, it was not possible to discover the defect by using technical or
scientific knowledge then also manufacturer will be free from his/her liability. At last, according
to clause d, the manufacturer will not be held responsible if the safety defect was attributed to the
design or marking of final goods.
Application
As mentioned under Fact section, Jane was using Samsung Galaxy Note 7, here the
company named Samsung was the manufacturer as per the provisions of ACL. Further, if to talk
about the law of negligence, Samsung owed a duty of care towards Jane applying the provisions
of Donoghue v Stevenson. Hence, in such a manner, Samsung was required to behave in a
reasonable manner under negligence as well as under ACL as the same owed a duty of care
towards Jane. Further, Samsung breach this duty under negligence and under ACL as the same
has provided defective goods. If to check the damages under negligence, this is to mention that
damages will only be granted for the physical injury occurred to Jane. Applying the provisions of
the case of Re Polemis & Furness Withy & Company Ltd. Samsung will not be liable for the loss
of BMW. As it was not a direct result of the negligence of Samsung. In addition to this, for
physical injury too, damages will be limited up to $577050. On the different side, Jane is entitled
to get the damages for her physical injury under ACL by the virtue of the provisions of section
138. The issue of overheating of the phone battery was a safety defect as the same did not leave
the product as safe as it was required to be. Jane can also ask damages for the loss of BMW

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under section 140 of ACL as it was other goods that Jane was using for domestic purpose and the
same has been destroyed because of safety defect of phone's battery.
Moving the discussion towards defenses, then Samsung can take the defense of
contributory negligence, as she did not get her phone exchanged even after informal as well
formal recall by the company. However, under ACL, Samsung would not be entitled to take any
defense and therefore the amount of damages will not be reduced or canceled. After reviewing
the rights, damages, and defenses under negligence and ACL, this is to mention that the suitable
course of action for Jane would be ACL as she can get more advantages in the same.
Conclusion
In conclusion, this is to say that under ACL, there is no limit in the amount of damages,
Jane can claim the damages even for the loss of BMW and Samsung has no defense, therefore
Jane is advised to initiate an action against, manufacturer (Samsung) under ACL and not the
negligence.

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Question 2
Facts
In the provided case, Alan took a lift from Steven. Steven and Alan, both were
intoxicated. In order to impress Alan with the driving skills, Steven was driving on high speed
and met an accident. Both Alan and Steven suffered from personal injuries.
Issue
What are the chances of Alan to be successful under a claim of negligence?
Rules
A certain relationship exists in the world where a person owes a duty of care towards the
other. Such a relationship are those where people carry a trustworthy or proximate relationship
with each other. Some of the examples of such relationship are doctor-patient, solicitor-client,
parent-child and these relationships are defined under Tort Law itself. Tort Law has set out the
requirement that needs to be fulfilled to establish negligence in a situation. First of all, the duty
of care must be there at the end of the defendant. Another requirement is a breach of such duty.
Further, loss to another person must also be there and lastly, the sole reason for such loss to the
victim must be a breach of the duty of care by the defendant. If all the conditions are satisfied in
a case, then a person can initiate action against the other who breaches the duty.
To establish a duty of care too, some requirements are there to satisfy. As per the decision
of the case of Caparo Industries PLC v Dickman [1990] UKHL 2, a duty of care seems to be
there in the cases where people have a proximate relationship with each other. Further, the

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defendant might be able to see the risk and at last imposing penalty on the defendant must be
fair, equal, just, and reasonable. Another concept named defense is also there under Tort Law.
The defenses are the excuses that a defendant of a case can use to avoid or reduce the amount of
damages. Following four defenses are there in the Tort Law:-
Contributory Negligence
Volenti non fit Injuria
Ex turpi Causa
Exclusion of Liability (E-law resources, 2018)
Volenti non fit injuria is a defense where a victim was aware of the risk involved in a
particular situation and even after knowing the same victim taken such risk voluntarily. This
defense is one of the significant defenses in those cases where a defendant is an intoxicated
person. It was given in the case of Morris v Murray [1991] 2 QB 6, that if a person takes a lift
from an intoxicated person then in the cases of any losses, an intoxicated person can take the
defense of volenti non fit injuria.
Application
If to check the duty of care relationship between Alan and Steven, this is to state that
Steven and Alan had a proximate relationship. It was the responsibility of Steven to drive
carefully. Further, he can assume the risk involved in driving in a drunken situation and at last, it
seems to be just and fair to impose a penalty on Steven for the cause of negligence. Applying the
provisions of Caparo Industries PLC v Dickman, Steven owed a duty of care towards Alan. In
such a situation, Steven was required to drive in a careful manner. He breached this duty by

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driving negligently. Because of his negligence, they both met an accident. Alan suffered from a
serious injury in his hand. In addition to this physical injury, he also faced economic loss. He lost
his employment because of his injury. The sole reason for these losses was the accident, which
was a result of the negligence of Steven. As all the four conditions are satisfied, Alan can ask the
damages from Steven under negligence.
However, a defense that Steven can take in this case is a necessary topic to discuss. Alan knew
that Steven is drunk and not in sense, yet he been agreed to take a lift from Steven. Alan in such
a situation taken risks in a voluntary manner. Applying the provisions of the decision of Morris v
Murray, Steven can use this defense.
Conclusion
Although a situation of negligence was there, yet Alan will not be able to get any
damages because of the defense Volenti non fit injuria.

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References
Caparo Industries PLC v Dickman [1990] UKHL 2
Classic.austlii.edu.au. (2018). Competition And Consumer Act 2010. Retrieved from:
http://classic.austlii.edu.au/au/legis/cth/consol_act/caca2010265/toc-sch2.html
Competition and Consumer Act 2010
Donoghue v Stevenson [1932] UKHL 100
E-law resources. (2018). Defenses. Retrieved from: http://e-lawresources.co.uk/Defences-in-tort-
law.php
Jade (2018). Wrongs Amendment Act 2015 (Vic). Retrieved from: https://jade.io/j/?
a=outline&id=491318
Latimer, P. (2011). Australian Business Law 2012. Australia: Australian Business Law 2012.
Legalvision.com.au. (2016). What is a Defective Goods Action? Retrieved from:
https://legalvision.com.au/what-is-a-defective-goods-action/
Legislation.gov.au. (2018). Competition and Consumer Act 2010. Retrieved from:
https://www.legislation.gov.au/Details/C2013C00620/Html/Volume_3
Mccormickmurphy.com. (2018). Understanding the 4 Elements of Negligence. Retrieved from:
https://www.mccormickmurphy.com/diy/liability/negligence/
Morris v Murray [1991] 2 QB 6