Business and Corporation Law: Negligence, Tort, and Liability Report

This report delves into the intricacies of business and corporation law, specifically addressing a case involving negligence and product liability. The report examines a scenario where Aurora is injured by a power drill manufactured by Mac Tools Ltd. The analysis focuses on the principles of tort law, particularly negligence, and assesses the responsibilities of both the manufacturer and the user. The report breaks down the elements of negligence, including duty of care, breach of duty, and causation, referencing relevant case law such as Donoghue v Stevenson. It concludes that both the manufacturer and the user bear some responsibility for the damages, considering the failure of the manufacturer to warn of potential risks and the user's failure to follow safety instructions. The report also touches upon the concept of remoteness of damage and available remedies, providing a comprehensive overview of the legal issues at hand.

BUSINESS AND
CORPORATION LAW

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
Issue.............................................................................................................................................1
Law..............................................................................................................................................1
Application..................................................................................................................................3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
In this modern era, law can be considered as a significant part for functioning of a
country. There are several parts of legislation like business, corporation, criminal and civil
legislation, etc. Hence, in this light, report will be discussing about several aspects of business
and corporation law. Also, concepts of tort law and negligence will also be given with effect in
this present report.
TASK
Issue
In this given case scenario of Mulan and Aurora, damage has been caused to Aurora by a
power drill which was bought by Mulan but manufactured by Mac Tools Ltd. Aurora did not
read all specified instructions. Along with this, fault in drill machine resulted in breakdown of
vase of Jessie which was worth $1000. Hence, in this regard, it can be held that:
 Mac Tools Ltd is liable to Aurora in aspect of negligence.
 Aurora is held responsible for the damage caused to Jessie in terms of negligence of their
duty.
Law
Negligence:
In accordance with the provisions of Tort law, tort can be considered as a civil wrong. In
simple words, it is a wrong doing and unfair act which is caused by one person to another person
resulting in harm or loss or a legal liability. There are various parts of negligence which can be
characterised as negligence, defamation, nuisance and trespass (Module 3: Torts- Elements of
liability). Considering this, Negligence is a part of Tort law which is concerned with failure of
performing duty of care that a reasonable man would have exercise in similar or like situations.
In other words, it is an act of noncompliance with the set standards of behaviour, instituted by
laws and legislations for an aim of safeguarding other people in order to protect them from
unreasonable risk of damage or harm.
In simple words, Negligence can be well-defined as a tort which involves from breach of
duty of care. Duty has been owed by one person to another person from the viewpoint of a
reasonable person. In this light, there is a landmark case of Donoghue V Stevenson [1932] AC
562, which depicts the concept of tort of negligence in an efficient manner. This test was been
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applied in terms of “Civil Liability Act, 2002”. Therefore, there are various elements of law
which assist in determination of liability of negligence as well as it renders success in negligence
claim. However, these three essentials must be proved by plaintiff which can be demonstrated as
follows:
 The defendant owed a person a Duty of Care.
 Defendant was in breach of that respective duty.
 Damage has been caused by breach of duty.
1st Essential- Duty of care:
It means that defendant has owed plaintiff a duty of care with the aid of special
relationship or with any of the other principle or norms. It can also be said that liability of a
defendant in legal terms is based on his failure to recognise responsibility, as imposed by law
and of which the plaintiff is anticipated beneficiary or a person in good faith. It has been defined
in the case of Donoghue V Stevenson that it was the duty of manufacturer of beer to render
goods with due diligence and care.
A duty of care can be arising from various situations, which includes physical,
circumstantial, causal etc.
2nd Essential- Breach of duty:
It is a next step, which proceeds with recognition of a duty of care. Once it has been
instituted that it was defendant’s duty to take care for plaintiff, then the matter of whether or not
duty was fulfilled or breached is considered. This test is concerned with both objective and
subjective. As per the decided case law of Vaughan v Menlove (1837) 3 Bing NC 467,
objective test was applied for the determination of breach of duty. In this law, it was held by the
court that best judgement of defendant was not satisfactory.
3rd Essential- Factual causation:
Afterwards, establishing the fact that it was defendant’s duty to care, and there was non-
compliance of duty by him, the next step involves that it must be proved by plaintiff that due to
omission of specified activities, damage and injury has been caused. However, this is not
considered as mandatory that plaintiff is required to prove that damage has been caused by
defendant. The main essence of action is that insufficient care was taken which causes damage.
As per the decided case law of Barnett v Chelsea & Kensington Hospital [1969] 1 QB 428, it
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was held by court that hospital can be considered as responsible for death of patient due to
doctor’s failure to examine.
Remoteness of damage:
It involves arise of a matter of fact that how remote a consequence of a harm caused to
one person is due to negligence of another person.
In addition to this, it can be said that there are various remedies which are available to
both plaintiff and defendants (Module 4: Torts – Damages and defences). These can be realised
in terms of monetary payments rendered by defendant to plaintiff for losses, injuries and any
other damage caused. Also, there are remedies which can be defined as:
 Equitable remedies.
Application
With reference to the current case scenario, it can be held that Aurora suffered from eye
injury from the use power drill. Also, Aurora has not read all the instructions. In addition to this,
Mac Tools Ltd did not specify that there was a chance of 1 % that short circuit will be occurred
in case if drill was used for more than 5 minutes. But, it did not recall the drills. Also, due to use
of drill, electric supply of power was interrupted. So, this causes damage to Jessie as well.
In accordance with the provisions and norms of negligence, it can be evaluated that it was
the duty of Mac Tools Ltd to ensure effective car while manufacturing and distribution of its
goods. In this light, it can be held that Mac Tools Ltd is held responsible for any damage caused
to her (Module 15: Company’s liability in crime, tort and negligence). As per norms, it is the
duty of defendant to ensure effective care. But Mac Tools Ltd has failed in delivering quality
services. Also, they did not mention that use of drill machine more than 5 minutes would cause
electric short circuit as it would cost to them worth $500,000. So, organization will be held liable
for all damages and injuries caused to Aurora. On the other side, Aurora did not read all safety
instructions which were asked to be read which resulted in injury of her eye.
CONCLUSION
From the above mentioned report, it can be concluded that Aurora is also responsible for
the damage that has been caused to her as she did not pay attention to safety instructions.
Moreover, Mac Tools were considered to have limited liability for Aurora. It can be evaluated as
per provisions of negligence and its three elements. While, Jessie did not use power drill, so Mac
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Tools Ltd does not assume any liability for loss caused to her. In spite of cited company, Aurora
is responsible for her injury.
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REFERENCES
Charles Sturt University (2017). Law504- Module 3: Torts- Elements of liability. Faculty of
Business, Charles Sturt University.
Charles Sturt University (2017). Law504- Module 4: Torts – Damages and defences. Faculty of
Business, Charles Sturt University.
Charles Sturt University (2017). Law504- Module 15: Company’s liability in crime, tort and
negligence. Faculty of Business, Charles Sturt University.
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