HA2022 Business Law Report: Contract and Negligence Cases

This report provides a comprehensive analysis of two case problems in Business Law, focusing on contract law and the law of torts and negligence. The first part examines the formation of a contract between Bruce and an auctioneer, considering issues of offer, acceptance, consideration, and capacity, applying relevant legal principles and case law. The second part assesses the liability of Bandalong Surfwear in several negligence scenarios, including incidents involving Steve, Drew, Sandra, and Eve, examining the duty of care, breach of duty, causation, and vicarious liability, with reference to key legal precedents such as Donoghue v Stevenson and Caparo Industries PLC v Dickman. The report follows the IRAC method, providing a structured approach to legal problem-solving.

PART A
Issue (1)
Whether a valid contract was there between Bruce and
auctioneer? Whether Bruce is liable to fulfill promises under the
contract?
Rules
• Every contract contains some factors that are essentials for the
same. It means the absence of anyone or more factors prevents
the development of agreement into a contract. Offer is the first
essential that refers to a proposal from one party to another.

RULES
• The third element is a valid consideration. According to
the same, both parties must be likely to achieve
something out of a contract that can be anything having a
legal value.
• It means the consideration is not required to be monetary.
• The next element is the capacity of the parties which is
one of the significant essentials that also influences other
essentials such as consent sometimes.

RULES
• When a party being in an intoxicated state enters into a
contract, the same is not likely to be bind with the same.
• Nevertheless, it should have proved that at the time of
making an offer or providing the consent to an offer, a
person was not in the state to understand the nature of
the subjective transaction or was not aware of the nature
of the contract he/she was entering into.

APPLICATION
• In the case given hereby, it is not given that whether the
subjective auction was with reserve or without reserve
hence to assume that the same was without reserve.
• Applying the provisions of Heathcote Ball v Barry it was
a unilateral offer . Bruce accepted this offer by making a
successful bid.

APPLICATION CONT…
• In addition to this, the other party i.e. auctioneer had full
knowledge about the lack of capacity of Bruce to enter
into the contract.
• As both the conditions are given in the case of Blomley v
Ryan, it does satisfy here hence the Bruce can held the
contract void.
• Later on, he ratified the contract with the auctioneer but
further refused to complete the contract.

REFERENCES
• Australiancontractlaw.com. (2020) Capacity to contract.
[online] Available from:
https://www.australiancontractlaw.com/law/formation-
capacity.html#intoxication [Accessed on 29/01/2020]
• Blomley v Ryan (1956) 99 CLR 362
• Edwards v Skyways Ltd [1964] 1 WLR 349
• Heathcote Ball v Barry [2000] EWCA Civ 235
• Scammell & Nephew v. Ouston [1941] AC 251

PART B
Issue (1)
Whether Bandalong Surfwear can be held liable for negligence to the
injury happened to Steve.
Rules (1)
• In the case of Donoghue v Stevenson [1932] UKHL 100, it was given
that a person owes a duty of care to a neighbor and for this definition;
a neighbor is a person that is likely to be affected by one's action.
• A party held liable for the negligence where the same held breaches
duty of care owed to others and due to such breach, the other person
suffers from some loss.

PART B
Issue (2)
• Whether Bandalong Surfwear can be held liable for negligence to the
incident happened to Drew.
Rules (2)
• In the case of Caparo Industries PLC v Dickman [1990] UKHL 2, it was
given that a duty of care seems to be there if there is a relationship of
proximity between parties, the risk was foreseeable and it is justified to
held the defendant liable.
• The other condition for successful claim of negligence are breach of duty
by defendant, loss to claimant and a direct relationship between such loss
and negligence.

PART B
Issue (3)
• Whether Bandalong Surfwear can be held liable for
negligence to the incident happened to Sandra.
Rules (3)
As mentioned above, four conditions need to satisfy for
being successful in a negligence claim. Breach of duty is
one of the significant requirements that demand the
defendant to fail in pursuing the duty of care.

Application (3)
• The incident to Sandra happened at her home. No breach
of duty seems to be there due to a lack of likelihood of
an incident.
• Although at the time of the incident, she was working
for the employer yet the risk was not foreseeable to
Bandalong Surfwear.

Issue (4)
• Whether Bandalong Surfwear can be held liable for negligence to
an action done by Eve.
Rules (4)
• There is an exception under Tort Law where one person may held
liable for negligence done by another person and this principle is
well known as vicarious liability.
• As per the provisions of this principle, the court may held liable an
employer for the wrongs done by his/her employee conducted
during the performance of their job (Humanrights.gov.au, 2020).

REFERENCES
• Caparo Industries PLC v Dickman [1990] UKHL 2
• Donoghue v Stevenson [1932] UKHL 100
• Humanrights.gov.au. (2020) Vicarious liability. [online]
Available from:
https://www.humanrights.gov.au/our-work/employers/vicarious-
liability [Accessed on 29/01/2020
• Roe v Minister of Health [1954] 2 WLR 915