Commercial Law: Negligence, Liability and Consumer Rights

This commercial law assignment analyzes two distinct scenarios involving negligence and liability under Australian law. Part A examines a case where a spectator is injured during a football game, assessing the liability of the local council and the football club under the Civil Liability Act 2002, focusing on duty of care, foreseeable risk, and vicarious liability. Part B explores product liability concerning a defective lawnmower, evaluating the potential claims of Ann, Bruce, and Carol against Bruce, as well as Hank’s Distributor and Mower under both common law negligence and the Australian Consumer Law (ACL). The analysis covers the elements of negligence, manufacturer's liability, and available defenses, referencing key legal precedents like Grant v Australian Knitting Mills. The report concludes by summarizing the legal positions of all parties involved and the applicable legal provisions.

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

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COMMERCIAL LAW
Part A
Issue:
 What is the applicable law in the given case?
 Can P sue anyone?
 If yes, then against whom can he take legal actions?
Relevant law
The Australian tort law, which had been initially influenced by the common law of other
countries, especially of UK, had been modified by these various statutes. One of such statute is
the Civil Liabilities Act, 2002.
According to the Act, to establish a case of negligence, the plaintiff must prove the
following:
 Defendant owed the plaintiff a duty of care.
 The defendant breached the duty of care.
 Such breach caused the alleged damage to the plaintiff.
According to Section- 5B of the Act, the following must be determined in order to establish
a case of negligence:
 Whether the risk was a risk, which was foreseeable.
 Whether such was insignificant or not.
 Whether a reasonable person, in the person’s position would have taken necessary
precautions.

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According to the common law, in case of negligence, there also exists a liability, which is
called the vicarious liability. Vicarious liability means the imposition of liability on person for
the negligence of another, when such negligent act is in connection with the relationship the two
shares. For example, a company becomes vicariously liable for an employee’s negligence during
any work within the scope of such employment.
Section-5O of the Civil Liabilities Act, 2002 states the standard of care in circumstances
where the defendant is a professional acting in his or her personal capacity. The Act also states
that where it has been established that a professional had acted in a manner, which is widely
accepted in Australia as a competent professional practice, he shall not be liable under the law of
negligence.
Under section-5F of the Act, where there was an obvious risk involved, it can be used as
a defense against the claim for negligence. Self-evidently, an obvious risk means a risk that, in
particular circumstances, would have been obvious to a reasonable person, in the position of that
person and in such cases the defendant has no duty to warn for an obvious risk, unless:
 The plaintiff had requested the defendant to advice or inform about such risk.
 The defendant had a requirement to warn the plaintiff.
 The defendant is a professional.
Section-5J, clearly states that risk can be assumed with regards to any recreational
activities, which also includes any sport at places such as beach, park or other open space.
Furthermore, section-5M clearly states that there is no duty of care owed to the plaintiff for a
recreational activity, where there is a provided risk warning.

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However, in the context of recreational activities (including any sport), the defendant
shall be held liable if there is no provide risk warning and where the defendant is a professional.
In Cleghorn v Oldham(1927) 43 TLR 465, it was held that a competitor owes a duty of
care to the spectators, although it is accepted that spectators assume certain risks when they
attend sports events. There is a voluntary assumption of risk can be therefore a ground of defense
against a claim for being hit by a golf ball or a cricket ball. In this case, it was held that the
plaintiff, who was hit by a golf club during a demo shot, did not assume the risk of such accident
as spectator.
In Langham v Connell Point Rovers Soccer Club[2005] NSWCA 461 it was held that
the organizers or the persons in charge of a ground shall also be held liable for any harm or
injury, for negligence, caused to any spectator as they owe a duty of care to the spectators.
Application:
Certain authoritative organizations own a duty of care towards the people to take
reasonable measures for preventing any foreseeable injury. Sporting organizations,
administrators and facility managers normally have a duty of care to participants to take
reasonable care for ensuring safe playing surfaces and equipment and also owe such duty to
anyone who enters the premises to take necessary steps to prevent foreseeable injury. Therefore,
in the given case, the hitting of a stray ball in a football game is a foreseeable risk and the local
council, in charge of the stadium, had the duty of care to prevent injury of anyone in the stadium.
Hence, there has been a breach of duty of care and negligence can be established by P under
section 5B of the Civil Liability Act, 2002. Moreover, there was no provided risk warning for the
obvious risk under section-5F of the Act, by the local council, where providing such risk

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warning is a duty of the council, being a professional and also the council cannot escape the
claim of negligence under section-5M, which can also be supported by the judgments in the
cases of Cleghorn v Oldham and Langham v Connell Point Rovers Soccer Club. Therefore, P
can sue the local Council for negligence and claim damages.
Similarly, the participants have a duty of care towards other participants and spectators,
to prevent them from injury in the course of the play. Therefore, in this case also there has been a
breach of duty by one of the players, hitting the ball and negligence can be established under
section-5B of the Act. But as, the act of the player was during the course of his work, being
employed as a player of the ABC football club, P shall be entitled to sue the ABC football club
for the negligent act of the player as, the ABC football club is vicarious liable for the acts of its
player under the law of tort.
Conclusion:
Therefore, the provisions of the law of tort and the Civil Liability Act, 2002 will be
applicable in the given case and P can sue the local council, in charge of the stadium, and also
the ABC football club for negligence under tort.
Part B
Issues:
 Can, Ann and or Carol sue Bruce under the common law for negligence?
 Does Hank’s Distributor and Mower own any liability towards Ann, Bruce and Carol
under the law of tort? Are there any possible defenses for negligence?

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 What are the rights of Ann, Bruce and Carol under the ACL against Hank’s Distributor or
Mower?
 What are the possible defenses that Hank’s Distributor and Mower can raise under ACL?
Relevant Law:
Under the common law of negligence, product liability is the area in which
manufacturers, distributors, suppliers and retailers are held liable for any injuries that the
products cause. Regardless of any contractual limitations of liability, under the common law, a
manufacturer will be held liable in cases where a product or any of its parts are defective.
In Australia, the common law liability is owed to anyone the manufacturer should
foresee as likely to suffer injury or damage if the product is defective. However, under the
common law, the normal elements of negligence must be proved. In order to make a
manufacturer liable, it must be established that he was negligent in the manufacture, design or
presentation of the product. But, where negligent has been established, the manufacturer shall be
held liable to every person who has suffered a loss or injury duty the defective in a product under
the common law.
In Grant v Australian Knitting Mills, which is a landmark Australian case, it was held
that a manufacturer owes a due of care towards a consumer and shall be liable for any injury or
damage caused to a consumer due to any defect in the product.
However, in such cases, certain grounds of defense can be adopted under the common
law. They are:

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 That the product had been misused by the consumer or used knowingly, in a way
in which it should not be used.
 That the manufacture had anticipated intermediate examination of the product by
the suppliers, retailers or distributors.
 Defense may be available where, at the time of supply, the product was defective
was neither known nor discoverable by the defendant given the state of technical
and scientific knowledge at that time.
 Defense may be available where the products are supplied by learned
intermediaries in case of special products.
 Where the product was supplied in bulk, as in such cases it is expected that the
person acquiring such products will provide with proper warning and instruction
to the consumers.
Parts 3-5 of the Australian Consumer law (ACL), being schedule 2 to the Competition
and Consumer Act, 2010, deal with the rights against manufacturers in case of product liability
for dangerous goods under sections- 138 to 150. These sections deal with the liability of
manufacturers and importers for products having a safety that causes injury. The individual who
has suffered injuries shall have the following rights: Section-138 and 139- A person who has suffered personal injuries or a person
dependant on such person can claim damages against the manufacturer (including
importer).
 Section-140 and 141- Any other person who has suffered loss or injury in goods
or real property due to any defect in a product can sue the manufacturer.

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 Section-146- No liability arises in case the injuries are covered by worker’s
compensation.
 Section-147- In case the manufacture is unknown, the plaintiff can require the
retailer to provide with his name and if the retailer fails, he is assumed to be the
manufacturer.
 Section-148- Where goods are were defective due to compliance with any
commonwealth standard, the plaintiff can claim damages from the
commonwealth.
On the other hand, under the ACL, the manufacturer can defend a claim in the following
ways as per section-142:
 There was no defect at the time of supply by the manufacturer;
 The defect was due to compliance with a mandatory standard for the goods;
 The state of scientific or technical knowledge, at the time of supply, by the manufacturer,
was not sufficient to discover the defect.
 The product was incorporated as part of other goods and those other goods were
defective.
Application:
Therefore, in the given case, according the common law of negligence, Ann and or Carol
cannot sue Bruce as a for a claim due to injuries for a defective product the manufacturer,

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supplier, retailer, distributors or an importer becomes liable to the consumer of the product and
any other person who gets injured due to such defect. This can also be supported by the landmark
judgment in Grant v Australian Knitting Mills. PC 21 OCT 1935 Moreover, as Carol is Bruce’s
wife, she cannot sue him as she is Bruce’s dependant.
Similarly, in the given case, Hank’s Distributor and Mower, being the distributor and
assembler, shall be held liable for damages by Ann Bruce and Carol according to the common
law. On the other hand, Hank’s Distributors and Mower can use the grounds, as mentioned
above, as grounds of defense to escape from the liability of the losses or injuries caused to Ann,
Bruce and Carol.
Ann, Bruce and Carol shall have all the rights in sections- 138 to 150 of the ACL
(parts- 3 to 5), for the damage or loss that they suffered due to explosion of the defective
lawnmower (which has been mentioned above).
On the other hand, under the ACL, Hank’s Distributor and Mower can defend such
claims by Ann, Bruce and Carol by using the grounds of defense, under section-142 of the ACL,
(which has been stated above).

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Conclusion:
Therefore, Ann and or Carol cannot sue Bruce for damages under the law of negligence,
but they can sue Hank’s Distributor and Mower for the damages caused to them under the
common law of negligence and they shall be entitled to the rights under the ACL, provided in
sections- 138 to 150. Moreover, Hank’s Distributor and Mower can defend themselves under the
grounds of defense provided in the common law or the grounds provided in section-142 of the
ACL.

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References:
Australian Consumer law (ACL)
Civil Liability Act 2002 (NSW)
Cleghorn v Oldham (1927) 43 TLR 465
Competition and Consumer Act, 2010
Grant v Australian Knitting Mills. PC 21 OCT 1935
Langham v Connell Point Rovers Soccer Club [2005] NSWCA 461