Commercial Law Assignment: Negligence, Consumer Law, and Defenses

This commercial law report examines the legal principles of negligence, duty of care, and consumer rights, particularly in the context of product liability. It analyzes the elements required to establish negligence, including breach of duty of care, causation, and damages, referencing the Wrongs Act 1958 and the case of Donoghue v Stevenson. The report also explores the limitations on compensation for non-economic damages, as defined by the Wrongs Act 1958, and the Australian Consumer Law (ACL). The report further addresses the rights of consumers under Part 3-5 of the ACL, manufacturer liabilities for defective products, and available defenses. It discusses the application of the ACL to product recalls and the potential penalties for non-compliance, with a focus on the Thermomix Appliances case. The report highlights the legal remedies available to injured consumers, including injunctions and monetary compensation, and the defenses that manufacturers can use to avoid liability under the ACL.

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

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Answer 1:
As per the law of negligence, when a person is said to be obligated to carry out the
duty of care towards another individual and is responsible for undertaking the reasonable
measures to ignore the risks that are likely to occur from any kind of omission of the
individual and result in causing injury to the aggrieved individual. Therefore, the injury
caused to the injured party should be reasonably foreseeable and must have a direct result of
the act committed by the party that had caused the injury. Thus, in order to be successful in
bringing the negligence claims, the injured party should establish that there has been a breach
of duty of care. Secondly, a relationship based on duty of care must exist between the
defendant and the plaintiff. Lastly, the damages caused must have sustained in resulting for
the breach of duty.
The duty of care is related to the Wrongs Act 1958 that governs the law of negligence
and entails the legal principles of the duty of care. The situation here states that when an
individual owes a duty of care is deemed to carry out or execute the reasonable standard of
care towards the plaintiff to such a level that any kind of act on part of the defendant is highly
probable to cause injury to the defendant. The scenario that has been established in the case
of Donoghue v Stevenson [1932] A.C. 562, it was thereafter stated that the neighbor
principle was determined which stipulated where an individual can exercise the care for his
neighbor. Therefore, an individual who is precisely to get affected either directly by the
activities of the defendant is referred to as the neighbor.
When an individual has to determine that he had breached a duty of care then the
Court needs to establish whether the defendant has proper and reasonable standard of care
while conducting any kind of actions. Such a situation is known as the breach of duty of care.
Thereafter, the Court will establish if the reasonable care executed is similar to the standard

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of care that was carried out by any other person in such a situation. However, if the court
states that the caused risk is due to the activities of the defendant then it is expected that the
defendant can carry out the extra methods for avoiding the incidence of the risks (Ferrara et
al., 2016). Thus, under the specific and incomparable situation, the activities of the case are
the relevant evidence that the defendant have been negligent about while causing injury to the
plaintiff. In this situation that will be applicable is the principle of res ipsa loquitor which
will be implied on the facts of the case.
In the third element, breach of duty of care caused damages results in a situation
when the plaintiff must determine that the injuries caused to the plaintiff should be direct
outcome of the breach of the duty of care that has occurred by the defendant. However, the
plaintiff should thereafter determine the test of ‘but for’ where the plaintiff will not be able to
sustain the damages or injuries caused. In case of the breach of duty of care when caused by
the defendant, the plaintiff suffered the injuries.
Thereafter, the next concerned element is causation. It illustrates that the plaintiff
needs to determine the injuries that have been caused to the plaintiff, has a direct result of the
actions on part of the defendant, and is therefore not a remote cause. Negligence is said to
have a factual causation of harm and the plaintiff should determine all the facts that have
been attributed to the causation of the issue. This statement has been determined under the
section 51 of the Wrongs Act 1958. The plaintiff thereafter needs to determine the damage
that has been suffered unexpectedly and the plaintiff was not aware of it. Nonetheless, the
plaintiff for the loss incurred cannot claim the damages that have resulted from the risk. The
innate risk is not usually ignored in spite of executing a reasonable standard of care (Keeton,
2017). While establishing the importance of injury, the Court will able to deem the extent of
the harm caused to the injured person because of the injury that has resulted from the breach

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of duty of care. In relation to the result of the injury, the nature of the harm caused should
meet the level of threshold, which is fixed in an essential injury.
In accordance with the Thermomix Appliances, the model of the kitchen had resulted
in causing damage and injuries to the owners had gone through the injuries because there
have been lack of safety and defects in the kitchen. Such a concept was determined in the
case of Donoghue v Stevenson. This case stated that the manufacturers have a duty of care
towards the customers using the product. The principle that have evolved in the legal
principle safeguards the consumers from the injury that have been suffered by them. The law
of negligence states that the Thermomix Appliances had owed to a duty of care for the
consumers who have been using their products and hence it is their responsibility to make
sure that the products produced is safe for using. Thus, the standard of care should be
maintained in this particular case that the company did not succeed in carrying out reasonable
standard of care to make sure that the products are safe (Goldberg & Zipursky, 2015). It is
obvious to note that the manufacturer must provide the goods without any defect and the ones
that are safe. All the existing elements of negligence must be proved. Therefore, the
customers are entitled to claim for the damages that had caused personal injury because of the
negligence of the company.
Answer 2:
As per the Wrongs Act 1958, plenty of limitations exists for the compensation of the
non-economic season that is the outcome from the personal injury sustained by the plaintiff.
It has been introduced and determined by the Australian law reform commission that the caps
can be applied on the non-economic damages to make sure that proper significance is
provided to the status of the injured party and the wrongdoer. It can further be said that the
damages act as the factors of restraint for the wrongdoers as it concerns paying for the

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damages. It can therefore be treated as a form of punishment for the individual who have
committed the wrong activities. It further prohibited him from executing any kind of breach
of duty of care (Riefa, 2016). Few of the thresholds were provided in the legislation as the
main objective of it is to decrease the liability of the wrongdoer when the matter is of
negligence.
One of the arguments that stated in favor of the determination of each thresholds aim
to compensate the injured party for the non-economic damages incurred by him. For
receiving the compensation by the injured party, the basic essential element for the party is to
determine that he had satisfied the threshold for attaining the compensation in terms of
money. On the other hand, the argument that have been discussed is in favor of the above
mentioned thresholds. It prohibits the false claims for the insignificant and irrelevant
expenditure that is related to the damages of the victims that were said to be capitalized.
Lastly, it can be stated that the plaintiffs are suppose to receive the benefits in terms of money
only in certain circumstances. The circumstances states that if the injured person sustains the
personal injuries based on the level of the damage that was exposed by the claimant because
of the negligence caused by the wrongdoer (Fries, Bergmeister & Spindler, 2018). As based
on the law of torts and negligence the following measures are to be followed. Firstly, the
eligibility of the wrongdoer is to produce sufficient compensation to the aggrieved party.
Secondly, in relation to the negligent acts, the infringing parties must not go through any kind
of financial consequences. Thirdly, the threshold decreases the measures of risk management.
Nonetheless, there are few specific exceptions that are made available to the rules or
law that is in relation to the injuries or damages caused. It can be observed when a higher
damage cap is allowed or it is diminished completely. In the state of Victoria, the injured
person will be able to compensate for the sustained damages or non-pecuniary injuries if the

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individual determines that around 30% of the injury results in a serious kind (Mendelson,
2014). Thus, it was further observed that the damage cap for the pecuniary loss is in Victoria.
Answer 3:
The issue related to this scenario is that whether the injured consumers have any
particular rights under the Part 3-5 of the Australian Consumer Law. Another issue related to
this is what will be the available defenses to the manufacturers that have been used against
the claim of users. It was observed in the Part 3-5 of the Australian Consumer Law that the
liability of the manufacturer will rise in relation to the loss of money or any sort of personal
damage, which is suffered by the consumers who have used the products of the
manufacturers. Thereafter as per Part 4 of the Australian Consumer Law, the violation of
any certain legal provision can lead to serious injuries and they are treated as serious criminal
offenses which is subjected to penalty. The complaints that were made to the injuries and
damages caused to the customers of the products can be implied and said that the Thermomix
Company did not succeed to act according to the provisions that are set out for recalling the
goods, which were supplied to the customers. However, they will be liable to pay a fine of
$1.1 million.
When a single customer has suffered any kind of personal damage because of the
defects that were noticed in the supplied products. The manufacturer for bringing the legal
claims against the manufacturer for paying the compensation supplied the products. If the
individuals were not being able to recognize the actual manufacturer then they would require
proper assistance for identifying the manufacturer (Weinrib, 2014). The legal proceedings
should be followed for the identification process and from obtaining compensatory money
from the suppliers.

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Thereafter, the customers that have suffered a few serious injuries in relation to the
defected goods that were supplied by the manufacturers and the company. The injuries that
were sustained by the customers does not result from the activities of the third parties and that
the company had therefore undertaken sufficient measures for averting this kind of injury.
The defendant should also state that the causation of the injury that resulted in the rational
and factual mistakes. However, the relevant remedy that is available to the aggrieved
consumer is laid down under the section [232] of the ACL. As per the legal provisions in the
case of Thermomix Company, the injured customers will attain the injunction orders from
the Court that will be infringing the standard of safety provisions. Thus, of a manufacturer
has contravened any consumer guarantee, the injured customer will bring all the legal
activities that will result against the manufacturer for a period of three years.
The customers in relation to the defected goods that were produced by the company
have suffered serious injuries. Therefore, one will become responsible in making the
monetary compensation from the Thermomix Appliances Company. The Part 4-6 of the
ACL, lays down the principles and defenses that was discussed and argued by the Thermomix
Company for exempting from the liabilities. Part 5 of the ACL states that the monetary
penalties is imposed on the wrongdoer by the Court. The civil penalties will only be applied
in the wrongdoer that have been provided by the infringer. However, the Thermomix
Company did not succeed with the legal provisions in relation to the safety standard of the
appliances of the kitchen. As per the provisions of Section 138 of the ACL legal proceedings
should be taken against the company Thermomix for the safety defects existing in the kitchen
appliance model. According to the Section 271, the customers have the authority to recover
for the damages from breaching the consumer guarantees.

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References:
Donoghue v Stevenson [1932] A.C. 562
Australian Consumer law, schedule 2 of the Competition and Consumer Act 2010 (Cth)
Ferrara, S. D., Baccino, E., Boscolo-Berto, R., Comandè, G., Domenici, R., Hernandez-
Cueto, C., ... & Pinchi, V. (2016). Padova Charter on personal injury and damage
under civil-tort law. International journal of legal medicine, 130(1), 1-12.
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.
Competition and Consumer Act 2010
Luntz, H., Hambly, D., Burns, K., Dietrich, J., Foster, N., Grant, G., & Harder, S. (2017).
Torts: cases and commentary. LexisNexis Butterworths.
Keeton, R. E. (2017). Creative Continuity in the Law of Torts. Harvard Law Review, 463-
509.
Mendelson, D. (2014). The new law of Torts. Oxford University Press.
Goldberg, J. C., & Zipursky, B. C. (2015). The Supreme Court's Stealth Retrun to the
Common Law of Torts. DePaul L. Rev., 65, 433.
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.

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Winfield, P. H. (2016). The history of Negligence in the law of Torts. LQ Rev., 42, 184.