2105AFE Introduction to Business Law: Problem Solving Assignment

This document presents a comprehensive solution to a business law assignment, specifically addressing the hypothetical ILAC question and two short response questions from Griffith University's 2105AFE Introduction to Business Law course. The assignment explores key concepts in tort law, focusing on professional liability, negligence, and contributory negligence. The ILAC question analyzes a scenario involving a financial advisor's duty of care and potential liability for financial losses incurred by a client, referencing the Civil Liability Act 2003 (Qld) and the case of Hedley Byrne & Co. Ltd. vs. Heller & Partners Ltd. The short answer questions address issues of negligence related to a council's duty of care regarding a beach incident and a food manufacturer's liability for food poisoning, referencing the cases of Donoghue vs. Stevenson and relevant sections of the Civil Liability Act. The solution demonstrates a thorough understanding of legal principles and their application to the given scenarios.

Running head: BUSINESS LAW
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BUSINESS LAW
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ILAC QUESTION
Issue
The issue involves in this given scenario whether Kathy is entitled to claim
compensations from the financial advisor, Peter.
Law
Laws relating to the responsibilities and obligations of a professional and its
consequences will apply here to decide the liability of a financial professional, as well as his duty
towards his profession. The responsibilities of a customer of such a financial advisor are also
important in this context. It should be considered in this context to decide for claiming any
compensation from the defendant. Division 5 of Chapter 2 of the Civil Liability Act 2003 (Qld)
deals with the duties of the professionals. Section 20 of this Act has defined the term
professional. According to this section, the term ‘professional’ means an individual who is
practicing his profession in any respective field. Section 22 of this Act deals with standards or
principles of the duties of care for the professionals. According to this section, any professional
can not breach his duty, which is arising from any provision or section of his professional
service. Section 13 of the Civil Liability Act 2003, which deals with the obvious risk that is
predictable for natural prudence. A person or individual who has suffered harm is one of the
risks. A risk or threat to some degree that has been occurring, and it may be an understandable or
obvious risk though there is a small probability of happening or occurring. Section 15 of the Act
describes that a person is not bound to owe such duty to warn for an obvious or predictable risk
to any other person or a plaintiff in a suit. However, in subsection (2) of section 15 of the Act, it
describes that if the defendant of any case is a professional, then he or she should have to warn or

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inform to the plaintiff that there may be a risk arise when the customer will do so following the
advice of the professional. Section 19 of this Act has supported that the defendant will not be
liable for any personal injury of a plaintiff who has been suffered from any type of obvious risks.
Despite the fact, the common object of a standard of care may not be decent; it can be able to
raise where an individual has impliedly, as well as expressly represented his abilities and skills in
for the advice to any ordinary one. In the case of Hedley Byrne & Co. Ltd. vs. Heller & Partners
Ltd 1964, the court of law has created a set of rules of ‘reasonable reliance’ of the claimant on
such abilities or skills of a defendant. There is a professional duty of care towards the plaintiff
that the plaintiff should not suffer any loss for his advice. The plaintiff should have acted on such
advice from the professional.
Application
In this given scenario, Kathy is the owner of an activewear company, namely, ‘Lara Jean
Pty. Ltd.’. Her business has become very famous in Queensland, and she has opened three (3)
stores in this territory. She has appointed Peter to provide financial advice on whether she can
able to expand her business outside Queensland or not. Peter has almost 20 years’ experience as
a financial advisor. He has advised Kathy to open a shop in Western Australia after checking the
financial condition of her business. He has further advised her that she can stock shoes in her
cloth shop. She has expensed almost $500,000 for opening such a shop in Western Australia.
However, she has lost to her business there. Now, she wants to claim that amount from Peter.
Applying Section 20 of the Civil Liability Act 2003 (Qld) in this given scenario, it can be
said that Peter can be categorized as a professional because he has worked as a financial advisor
for almost 20 years. Kathy has engaged him as a financial advisor for a certain reason regarding

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her company. Therefore, Peter has possessed a professional duty towards Kathy and her
company.
Applying Section 22 of this Act in this scenario, Peter should have a duty to his customer
and should provide them advice with the duty of care. It should be established that such a
professional has acted in such a way that the other professionals have generally accepted that
opinion. It should be opined by several numbers of respected and experienced practitioners in
that individual field as a competent and proficient professional practice. In this situation, he has
checked the last year financial account book and provided advice that she could open business
outside Queensland. Therefore, Peter will be liable for any financial loss to Kathy.
Applying Section 13 of the Act in this scenario, there may be a risk in any business.
There may be a loss, as well as profit in any business. But it is not an obvious risk that a business
must have been losing in any situation. As a financial advisor, Peter should inform about this
loss. However, he did not do so. Therefore, he will be responsible for such loss.
Applying subsection (2) of section 15 of the Act in this given situation, Peter should have
to warn regarding such loss of the business. Therefore, Peter has responsibility for such loss of
Kathy.
Applying section 19 of the Act, Peter has possessed a standard of duty of care to Kathy as
a financial professional or advisor to the business of her. If there is any issue arising out of an act
for the advice of the financial advisor, then this professional will be responsible for such loss.
Therefore, Peter will be responsible for such loss to Kathy, as she has expanded her business on
the advice of Peter.

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Applying the decision of the case Hedley Byrne & Co. Ltd. vs. Heller & Partners Ltd
1964, in this scenario, Kathy has opened her shop following the advice of Peter. Therefore, Peter
will be responsible for such negligence, which has occurred a loss in her business.
Conclusion
Therefore, it can be concluded in this given scenario, Peter, the professional financial
advisor, will be responsible for such loss in the business of Kathy, as she has expensed a lot of
money in accordance with his advice. Kathy will be entitled to claim compensation from Peter.
Short Question 1
Application
In the given scenario, Forestdale Shire Council has a responsibility to the Stormy Beach
where the plaintiff, Harry, has injured, as he caught in a strong current. He knows that he is not a
good swimmer, and he may be caught in any strong current. Section 9 of the Civil Liability Act
2003 (Qld) states that any person may not breach his duty for taking any precaution against such
risk of injury unless such risk is anticipatable and is not insignificant. Therefore, in this scenario,
the risk is significant, and the Council should appoint any lifesavers in that area. The Council
will be responsible for such injury. However, sections 23 and 24 of the Act deal with
‘contributory negligence’ that means the plaintiff also makes negligence for his injury. The court
can reduce any claim for injury for such contributory negligence. Harry has made contributory
negligence that knowing such risk; he has gone swimming there.
Conclusion
Therefore, it can be concluded that Forestdale Shire Council has a duty of care towards
Harry, but it is not entitled to give such compensation in defense of contributory negligence.

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Short Question 2
Application
In the given scenario, Ted has suffered from food poisoning after eating a pizza, which
contains rotten pineapple. In the case of Donoghue vs. Stevenson 1932, the court of law has
concerned about the breach of duty of a manufacturer towards his customer. There should be a
direct, as well as proximate relationship between such duty of a manufacturer of any food and
the injury caused by such breach. In this scenario, Ted has suffered from food poisoning, as he
has consumed the pizza with rotten pineapple. The doctor has advised that such food poisoning
has triggered an ulcer in Ted’s stomach, and it has cost almost $800,000 to recover. There is a
direct relation in such suffering and food poisoning for eating such pizza.
Conclusion
Therefore, it can be concluded that there is a breach of duty on the part of Johnny, and
Ted can able to recover such cost of his medical treatment.

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References
Civil Liability Act 2003 (Qld)
Donoghue v Stevenson [1932] UKHL 100
Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465