Commercial Law Case Study

This case study examines two legal issues in commercial law: the entitlement of Esther’s Estate to commence legal action against Zooland Ltd for negligence, and the nature of an offer versus an invitation to treat in a contract scenario involving Zooland and Charles. It discusses the essenti...Read More

Running head: COMMERCIAL LAW
Commercial Law
Name of the Student
Name of the University
Author Note

1COMMERCIAL LAW
Answer 1 (Chapter IV pg 83)
The issue in this case is whether Esther’s Estate entitled to commence legal action and whether
the Casino is entitled to bring about legal action
Negligence is the careless causing of injury to any person or property of another person
(Abraham 2017). In order to bring legal action for negligence, the aggrieved person must
establish the following essential elements of negligence:
 Duty of care- the defendant must owe a duty of care to the plaintiff and the parties must
have a direct link between each other, which is known as proximity. As was held in
Childs v Desormeaux [2006] SCC 18 if proximity and foreseeability exists, duty of care
is owed.
 Breach of duty - the standard of care exercised by the defendant shall be compared with
the standard of care that any reasonable person would exercise in equivalent
circumstances; if the defendant had failed to exercise standard of care, he has breached
his duty of care (The Law and Business Administration 2017).
 Damage or injury to the plaintiff- the injury sustained or the damage suffered by the
plaintiff is the result of the conduct of the defendant. The harm may amount to physical
injury, mental injury or purely economic loss including loss of profit; however, the
plaintiff should actually sustain such damage. Causation of Damage- the plaintiff must establish that ‘but for’ the negligent conduct of
the defendant, the plaintiff would not have sustained any injury as was held in Resurfice
Corp v Hanke [2007] 1 S.C.R. 333.

2COMMERCIAL LAW
The defendant may use the defense of voluntary assumption of risk to establish that the
plaintiff was aware of the risk of harm before undertaking the activity and has given consent to
such risk of harm voluntarily. The doctrine of Eggshell skull or the thin skull rule states that the
tortfeasor is liable for all the consequences resulting from the actions or omissions that caused
injury to the plaintiff even if the damage suffered is unusually high, even if the tortfeasor did not
intend to cause injury. It would include social, physical and economic attributes that might make
the plaintiff more vulnerable to the injury sustained (The Law and Business Administration
2017).
In the given scenario, Zooland Ltd owed a duty of care towards the patrons as any
conduct or omission may cause direct damage or harm to the patrons. Thus, there is a link
between the patrons and the Zooland ltd, which makes its liable for exercising duty of care. The
patrons included Esther 65 years old who lost consciousness seeing the fake arm and the blood.
The conduct set loose the bear and caused mental harm to Esther who was also a heart patient.
The entire crowd also panicked from such conduct, which was reasonably foreseeable and any
reasonable person would not have acted in such a manner.
In case of the casino, Chauncey was shocked seeing the bear and hit the hydro
transformer and caused damage to the Casino. Under both the circumstances, the thin skull rule
should be applicable according to which the tortfeasor shall be liable for the unusually high
damage caused or injuries sustained by Esther and Casino even if the harm was not intended as
the harm included a physical, mental harm and pecuniary loss caused to Esther and pecuniary
loss suffered by the Casino. Hence, Both Esther and the Casino shall be liable to bring legal
action against Zooland Ltd.

3COMMERCIAL LAW
Question 2 ( Page 128)
The issue in this scenario is whether there was an offer or an invitation to treat and whether the
offer was revoked, accepted or revoked.
A contract is formed when one party has made an offer and another party has accepted
the offer. It includes set of promises that the offeror is willing to make and the offeree agrees to
such set of promises (McKendrick 2014). An invitation to treat or offer is a mere invitation to do
business such as advertisements as was held in Pharmaceutical Society of Great Britain v Boots
Cash Chemists (Southern) Ltd [1952] 2 ALL ER 456. Advertisements to sell goods at a certain
price are an invitation made to the public. However, advertisements can be offer when it offers to
sell a fixed item at a fixed price to those who accepts the offer first (The Law and Business
Administration 2017).
An offer must be clearly communicated and may be terminated if:
 the offeree fails to accept the offer within specified or reasonable time;
 an offer is revoked any time before the acceptance of the offer;
 an offer may be rejected by the offeree or it may be rejected by making a counter offer;
However, mere inquiry cannot be considered as counter-offer.
In the given scenario, Zooland has sent a letter to 10 largest zoos in Canada and USA
which amounts to an invitation to offer that is communicated by Zooland. The terms of the offer
included a specific time within which the offer should have been accepted. The offer included
that acceptance should be made before 21st of February.

4COMMERCIAL LAW
As counter offer invalidates the original offer but a mere inquiry does not the amount to a
counter offer. Charles merely inquired whether the offered price $100000000 could be reduced
or whether the payment could be made in installments over 3 years. However, Zooland stated the
price cannot be reduced and needs to be accepted before 21 February. However, Charles mailed
on 19 February that he needs an approval from the Board and contact thereafter. The Board
meeting was held on 21 February and Charles sent a mail accepting the offer of purchasing the
Bear at the offered price.
However, Zooland had concluded the deal with Los Angeles Zoo. Here, the offer made
was an invitation to offer and the terms of the offer explicitly mentioned that the offer should be
accepted before 21 February. An offer may be terminated if the acceptance is not made within
the stipulated time mentioned in the offer. Charles had accepted the offer on 21 February
whereas the stipulated time of acceptance was before 21 February. Hence, the offer was
terminated and there was no breach of the contract committed by Zooland.

5COMMERCIAL LAW
Reference List
Abraham, K., 2017. The forms and functions of tort law. West Academic.
Childs v Desormeaux [2006] SCC 18
Hunter, H., 2017. Modern Law of Contracts.
McKendrick, E., 2014. Contract law: text, cases, and materials. Oxford University Press (UK).
Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1952] 2 ALL
ER 456.
Poole, J., 2016. Textbook on contract law. Oxford University Press.
Resurfice Corp v Hanke [2007] 1 S.C.R. 333.
The Law and Business Administration. (2017). 14th ed. Canada.