Commercial Law: Analysis of Negligence, Liability, and Consumer Rights

This report provides a detailed analysis of commercial law, focusing on negligence, tort law, and product liability. It examines the concept of duty of care, the Wrongs Act 1958, and the conditions necessary for a successful negligence claim, including the establishment of a breach of duty and causation of damages. The report discusses the application of these principles to real-world scenarios, such as the Thermomix appliance case, and explores the liability of manufacturers under Australian Consumer Law. Furthermore, the report delves into the limitations on liability in tort law, particularly the role of caps on compensation for economic and non-economic losses, and analyzes the implications of these thresholds on both wrongdoers and injured parties. The report concludes by highlighting provisions regarding manufacturer liability for product defects and the potential for consumer claims for damages and monetary losses.

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

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Answer 1:
According to negligence of tort law, when a person is obligated to carry out the duty
of care towards another person, will be held responsible for undertaking suitable measures for
ignoring the risks that generally arise from any kind of act or omission of that individual in
causing injury to the injured individual. Therefore, the damage caused to the injured person
must be foreseeable and should be a direct result of the act of the party that has caused such
kind of an injury. Hence, in relation to be successful by getting the claims of negligence, the
injured party should determine a few conditions. The conditions include an existence of a
relationship of duty to care between the plaintiff and the defendant, breach of the duty of care
by the defendant and the damages caused should have a direct result consisting of the breach
of duty.
The law of negligence is governed by the Wrongs Act 1958 and it consists of the legal
principles of duty of care. The individual in this scenario owes a duty of care that is deemed
to carry out the standard of care towards the plaintiff for extending any act on part of the
defendant who is predicted to cause some sort of injury to the defendant. Such a situation
results in the condition of duty of care. The case of Donoghue v Stevenson [1932] states that
the concept of neighbor principle that was established which stipulates the fact that one
person should execute the care towards the neighbor. On the other hand, neighbor is related
to that individual who gets affected by the acts exercised by the defendant.
For establishing a situation when there is breach of duty of care the court should
establish whether the defendant has maintained the reasonable standard to take care while
conducting any activity (Foley & Christensen, 2016). Thereafter, the Court should establish
whether there was any kind of reasonable care that was carried out to the standard of care.
Any prudent individual in the similar situation would exercise the care. However, if the Court

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deems the risk that has been caused by the activities of the defendant and is high in nature
then the defendant can execute additional methods to ensure that the risks should not arise.
Therefore, under these unusual scenarios, the facts of the case makes it evident that the
defendant was negligent enough while carrying out his activities or causing any kind of
damage to the plaintiff. Res ipsa loquitor refers to such a situation. This is because the
principles imply the facts of the existing case and speak for themselves.
It is the duty of the plaintiff to determine the damages that have been caused to the
plaintiff as it was a direct outcome of the breach of duty of care as caused by the defendant.
Thus, situation is referred to as the breach of duty of care caused damages. The plaintiff
thereafter must determine the ‘but for’ test where the plaintiff will not prolong such kind of
damages but for the breach of duty of care by the defendant since the plaintiff had suffered
injuries or loss.
The plaintiff needs to determine the injuries that have caused a direct result of the
activities on the part of the defendant. It is an immediate result and not a remote cause.
Negligence is referred to as a factual causation of harm and it therefore requires the plaintiff
to determine all the facts that have been attributed to the causation of the issue (Henderson,
Kysar and Pearson, 2017). Thus, the plaintiff is required to determine the fact that the injury
or damage suffered was not expected and the plaintiff was unaware of these situations.
Therefore, the plaintiff cannot claim for the damages for any kind of injury that has
resulted from the risk occurred. The risk cannot be ignored in spite of executing a reasonable
standard of care. In the process of establishing the importance of an injury, the Court can
believe that there has been an extent of harm caused to the injured person. Due to the injury
that is the outcome from the breach of duty of care. Similarly, after examining the nature of

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the injury, the extent of the harm caused should be met at the verge of the case related to the
significant injury.
If applied in the scenario of Thermomix appliance, the owners were observed to be
injured and had gone through burn injuries because of the kitchen model. It lacked safety. It
was determined in the case of Donoghue v Stevenson that the manufacturers had a duty of
care towards the customers who had purchased the products. This kind of principle had
transferred into a legal principle that ensures to keep the customers safe from the loss or
injury due to failed commodities.
As it can be observed from the existing law of negligence that the Thermomix
Appliances owed a duty of care towards the consumers and therefore, it is their accountability
to make sure that the products are kept safe for using (Keeton, 2017). Therefore, in such a
case, the company did not receive success for executing the necessary standard of care to
make sure that the products used are kept safe. The care is expected to be maintained in this
particular case, as it is quite evident to notice that the manufacturers will provide the products
without fault and the products that are safe. The individuals should make sure that the
reasonable standard of care in the similar scenario.
The company’s responsibility can arise since the burn injuries are sustained by the
customers and they act as a direct outcome of the breach of the company. This is to ensure
that the goods sold are in good condition and does not consist of any kind of defects.
Thereafter, the damages that have been suffered has the immediate result of the breach of
duty of care and not remote. Such a situation determines all the significant components that
are needed for proving the claims of negligence. The customers are therefore eligible to claim
for the damages that have been caused for the personal injuries that existed because of the
negligence of the company.

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According to the Wrongs Act, 1958 the injured individual will not be entitled to
make any sort of non-monetary claims that can be implied. The implication will state the
customers will not be successful in making any kind of claims for the injuries sustained
unless the burn injury is above the 5% as explained in the Medical Association Guidelines
(AMA). The alterations that have been made in the Wrongs Act 1958 in relation to the non-
monetary claims can only be applied when the injuries caused are severe in nature (Winfield,
2016). The injured or damaged parties are suppose to make any kind of claims within a
period of three years from the date of injury sustained. Significant and necessary documents
should be filed within a period of ninety days as per the expiry date of that particular period.
Answer 2:
Restricting the possibility of liability in Tort Law due to the role of caps
Plenty of limitations related to the compensation for the economic and non-economic
loss as an outcome from the person injury caused have been laid down in the Wrongs Act
1958. Caps were introduced and determined under the Australian Law Reform Commission
as it can be applied on the non-economic damages caused (Green, 2015). This is to make sure
that equal importance is provided to the privacy interest and the status of both the injured
party and the wrongdoer.
The damages caused acts as a restraint factor for the wrongdoer as it acts a form of
punishment for the wrongdoer. It prohibits him from conducting any kind of breach of his
duty of care. Nonetheless, the thresholds have been stipulated in the statute have decreased
the probability of liability in law of torts. The following are the methods of how the
possibilities can be used. Firstly, the wrongdoer must be eligible enough to compensate the
injured parties. Secondly, the threshold can reduce the risk management measures of the
incorporation. Lastly, the threshold determines a certain amount of negligent acts that does

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not include the infringing party from facing any kind of consequences related to finance
(Luntz et al., 2017).
However, there have been arguments, which were made in favor of the thresholds that
were imposed to compensate for the damages caused or the losses suffered by the injured
party. When the threshold are awarded to the damaged party, they are made under a certain
situations and circumstances where the injured party determines that they were satisfied. The
threshold that have been imposed for obtaining the concerned compensation. For example,
the injured parties who had suffered or been through 30% of the injuries will only be entitled
to the monetary compensation.
The imposition of thresholds have reduced the likeliness of making any kind of false
claims that included the necessary expenditures linked to the injury that was suffered by the
aggrieved party (Glannon, 2015). Therefore, the injured parties are only entitled to the
monetary damages for the personal injuries that remained. The sustainability of the damages
were based on the level of harm that the injured individual had faced because of the activities
of the wrongdoer.
Under the negligence law, when the aggrieved party has faced the damages are
provided with compensation for all the injuries and losses suffered. In such a situation,
physical injuries will consist of loss of life, emotional trauma, disfigurement and loss of
amenities. The injured person will be entitled to all the general damages that are known as the
economic losses. However, the physical injuries and the emotional trauma caused will not be
compensated with money. The chief reason for compensating the claimant is to help the
aggrieved person for obtaining any kind of alternative source of satisfaction and clear off the
expenses.

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The legal framework of the several states had enforced a number of demerits as
compared to the damages that have been claimed for sustaining the personal injuries.
However, even though plenty of states in Australia had stipulated caps on the losses that
arose from the medical issues but very less states have introduced caps on the non-pecuniary
damages based on the cases linked with the personal injuries. Therefore, the amount of
limitations is treated to be different in all the states that varies from a range of $350,000 to
$750,000 (Riefa, 2016).
Nonetheless, there are a few existing exceptions that are available to the laws that are
linked to the injuries or death when a higher damage cap is allowed or the damage caused is
diminished. The injured party will be entitled to compensation for sustaining the non-
pecuniary injuries as it happens in Victoria. However, if the individual determines almost
30% of the injury that have been sustained is of highly serious nature. Thus, in the state of
Victoria, there is damage cap for the non-pecuniary loss.
Answer 3:
There have been provisions that were stipulated and deal with the liability of the
manufacturer as per the Part 3-5 of the Australian Consumer Law. It also deals with all the
safety defects that are engaged with the existing products. The manufacturer’s liability also
increases with respect to the damage caused and monetary loss suffered by the consumers. If
the losses and damages have been incurred by the customers while making use of the
products by the manufacturers.
In this scenario, if any single customer who has suffered from any kind of personal
damage because of the defect of the products that have been supplied by the manufacturer. If
such is the situation then the manufacturer will be entitled to get the legal claims against the
manufacturer for the compensation. If the injured parties are not being able to recognize the

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original manufacturer then they will have the ability to produce assistance in recognizing the
manufacturer for initiating the legal proceedings that are not for the manufacturer regarding
the damaged goods. In such a scenario, the suppliers may nit be successful in providing the
relevant information related to the manufacturer. Therefore, the injured party can become
entitled to attain the compensation from the suppliers for failing to produce the sufficint
information regarding the manufacturer of the damaged goods.
According to the facts specified about the appliance of Thermomix appliances, the
suffered or injured customers are likely to be entitled to bring the legal proceedings against
the existing manufacturer if there is lack of safety defects in the appliances of the kitchen
model that basically caused the damaged to the customers. These consumers will receive the
compensation for the personal injuries and damage incurred.
Nevertheless, the manufacturers will be entitled to a few specific defenses that have
been mentioned under sections 142 and 148 of the Australian Consumer Law. There are few
defenses that are made available to the manufacturers under the ACL. Firstly, the
manufacturer was not permitted by the technical and scientific department for keeping a
check in the default of the goods. Secondly, the manufacturer can contain that the defect in
the products that did not exist while the products were supplied to the customers. Thirdly, the
there was a loss that was suffered because of the damage caused to the building. Fourthly, the
defect found in the products is the outcome due to the conformity with a compulsory standard
that is linked with the product.
Thereafter, if there is a compulsory commonwealth standard is engaged with the
alleged damaged products then the manufacturer will nit be held liable for the defects in the
products instead. The Commonwealth will be held responsible for the loss that has been
suffered by the injured person because of which there have been defects in the products.

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Therefore, as per the Part 3-5 of the ACL, it does not stipulate any kind of penalties or
remedies that are related to the breach of the safety of the products. This is because the
provisions that have been put to use for assisting the Court in order to establish the breach of
liabilities and products of the manufacturers.
Therefore, according to the repots, the complaints of the personal injuries and
damages caused to the customers who have purchased the products. This scenario can be
implied in such a way that the Thermomix Company have not succeeded to the act as per the
provisions. They are set out in such manner that the goods can be recalled for the goods that
have been supplied to the customers to which it can be liable for paying the fine of $1.1
million.
The customers who have suffered a few grievous injuries in relation to the damaged
goods that have been supplied by the company (Fries, Bergmeister & Spindler, 2018). It will
therefore become entitled in making a few monetary compensation till $16,650. The
Thermomix appliances company paid this amount (Weinrib, 2014). The defenses were set out
and argued by the company for exempting the liabilities as per the Part 4-6 of the ACL.
Firstly, the defendant should state and prove that the injury was caused from the factual
mistakes (Goldberg & Zipursky, 2015). Secondly, the injuries faced by the customers had an
effect on the third parties.
As observed from the scenario, the Thermomix appliances company did not succeed
in carrying out the activities as per the legal provisions with respect to the safety standard of
the appliances. Section [106(1)] of the ACL stated that the person who was entitled to pay the
amount of $1.1 million (Mendelson, 2014). Therefore, in this case, the injured customers who
had sustained serious injuries, the company will be entitled to pay the amount of pay $16,500
as a reward of compensation. The available remedy for the injured individuals has been laid

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down under Section [232] of the ACL. According to the legal principles, the customers who
have suffered will attain an extra remedy except the compensation that have been specified
under Section [271] of the ACL.

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References:
Australian Consumer law, schedule 2 of the Competition and Consumer Act 2010 (Cth)
Donoghue v Stevenson [1932] A.C. 562
Foley, M., & Christensen, M. (2016). Negligence and the Duty of Care: A Case Study
Discussion. Singapore Nursing Journal, 43(1).
Fries, A., Bergmeister, A. W., & Spindler, M. (2018). Thermomix by Vorwerk–A New Way
of Cooking. In Fallstudienkompendium Hidden Champions (pp. 73-90). Springer
Gabler, Wiesbaden.
Glannon, J. W. (2015). Examples & Explanations for The Law of Torts. Wolters Kluwer Law
& Business.
Goldberg, J. C., & Zipursky, B. C. (2015). The Supreme Court's Stealth Retrun to the
Common Law of Torts. DePaul L. Rev., 65, 433.
Green, L. (2015). Foreseeability in negligence law. Columbia Law Review, 61(8), 1401-1424.
Henderson, J.A., Kysar, D.A. and Pearson, R.N., 2017. The torts process. Wolters Kluwer
Law & Business.
Keeton, R. E. (2017). Creative Continuity in the Law of Torts. Harvard Law Review, 463-
509.
Luntz, H., Hambly, D., Burns, K., Dietrich, J., Foster, N., Grant, G., & Harder, S.
(2017). Torts: cases and commentary. LexisNexis Butterworths.
Mendelson, D. (2014). The new law of Torts. Oxford University Press.

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Riefa, C. (2016). Consumer protection and online auction platforms: Towards a safer legal
framework. Routledge.
Weinrib, E. J. (2014). Toward a moral theory of negligence law. In Justice, Rights, and Tort
Law (pp. 123-148). Springer, Dordrecht.
Winfield, P. H. (2016). The history of Negligence in the law of Torts. LQ Rev., 42, 184.