University Law Assignment: Business and Corporation Law Case Study

This case study analyzes a scenario involving Mac Tools Ltd, Aurora, and Jessie, focusing on issues of negligence and liability within business and corporation law. It examines whether Mac Tools Ltd is liable for negligence due to a defective drill, considering the duty of care established in Donoghue v Stevenson. The analysis evaluates Aurora's contributory negligence for failing to follow safety instructions, applying the principles of workplace safety and the 'but for' test. Additionally, the case assesses Jessie's liability for economic loss. The study references key legal precedents, including Caparo Industries pIc v Dickman, Barnett v Chelsea & Kensington Hospital, and Hedley Byrne & Co Ltd v Heller Partners Ltd, to determine the responsibilities of each party and the legal outcomes of their actions. The conclusion assigns liability based on the application of negligence law principles.

Running head: BUSINESS AND CORPORATION LAW
Business and Corporation Law
Name of the Student
Name of the University
Author Note

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BUSINESS AND CORPORATION LAW
Issue
Is Mac Tools Ltd liable for committing negligence?
Is Aurora liable for committing contributory negligence?
Is Jessie negligent for the broken glass vase?
Law
Negligence
The negligence law was established in the case Donoghue v Stevenson [1932] that stated that in
order to establish a claim for negligence; the claimant must establish the following elements:
Duty of care
In order to establish that the defendant owed a duty of care towards the defendant and is
responsible for personal injury, the test of proximity is applied. It states that defendant must be
so close to the plaintiff that his actions or omissions would reasonably cause damage to the
plaintiff as was observed in Caparo Industries pIc v Dickman [1990].
Breach of the duty
In order to determine whether the defendant has caused breach of the duty, the court shall
apply the objective test explained in Vaughan v Menlove [1837]. The test determines the
foreseeability of the risk where the defendant must make efforts to avert the risks. The action of
the defendant to avoid such risks shall be such that any reasonable person would take such steps
to avoid the same risks (Graham, 2016).

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BUSINESS AND CORPORATION LAW
Breach of duty resulted in damages
Whether the damages were caused due to the breach of the duty is usually determined by
the courts using the ‘But for’ test that was established in the Barnett v Chelsea & Kensington
Hospital [1969]. The ‘but for’ test inquires ‘But for the act of the defendant, would the harm
have taken place?’ In case there are two parties who are responsible for causing damages for
their negligent acts and where their individual acts would have individually caused damages,
both such parties shall be liable for negligence, as each of the causes shall be considered as
considerable factor.
Damage was foreseeable and not remote
Further, the defendant shall be liable if the damages suffered by the plaintiff were
foreseeable by the defendant and the damage was the direct result of the breach of duty of care
defendant.
Contributory negligence
If the plaintiff voluntarily pays no attention to basic rules or warnings and fails to ensure
his/her own safety, the plaintiff is said to be partly liable for the damages caused to him/her.
However, contributory negligence cannot be used as a defense unless the plaintiff has voluntarily
assumed the risk, which any reasonable person would have voided under the same
circumstances.
Workplace Safety Practice
The Work Health Safety practice requires the workers to use any personal protective
equipment while working and not willfully themselves or others. Employees must exercise duty

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BUSINESS AND CORPORATION LAW
of care to guard against any economic loss in performing their work otherwise, they shall be
liable in the event of a loss as was held in Hedley Byrne & Co Ltd v Heller Partners Ltd [1964].
Application
In the given scenario, MacTools Ltd is liable for negligence and Aurora is liable for
contributory negligence. This is evident from the fact that Mac Tools Ltd was aware of the fact
that if the drill is used for more than 5 minutes, there is a 1% chance it may result in short circuit
and cause injury or damage to the user. However, the company did not rectify the defect, which a
reasonable person would, due to huge expenses.
As was held in Donoghue’s case, any person whose actions or omission would directly
cause damage to other person owes duty of care towards the person. Here, Aurora was the
consumer of the drill sold by Mac Tool Ltd , hence, the company breached its duty of care
causing damage to Aurora and Jessie due to the over usage of the drill and power cut due to the
short circuit defect. The damage caused must be a direct result of the breach of the defendant’s
duty. Mac Tool Ltd could reasonable foresee that the defect in the drill would result in short
circuit yet it did not mae attempt to avert the risk.
While Mulan lent the power drill to Aurora with the instructions, which included the
safety warnings that required the users to wear protective goggles, aurora did not read the
instructions, used it for 10 minutes, and lost her eye. Here, Aurora voluntarily refused to read the
safety warnings and assumed the risk which any reasonable person would have avoided. Here if
the but-for test is applied it can be observed that even if Mac Tool mentioned about the short
circuit warning, Aurora would have suffered the injuries as she voluntarily did not read the
instructions which required her to wear protective goggles for eye safety.

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BUSINESS AND CORPORATION LAW
Jessie is personally liable for the economic loss to her employer as she should have
exercised duty of care and should have used personal property equipment while making the
glass, as she is personally responsible to guard against any economic loss as held in Heller’s
case.
Conclusion
Mac Tool Ltd is liable for negligence and Aurora is responsible for contributory
negligence. Jessie is liable for breaching duty of care while making the glass vase.

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BUSINESS AND CORPORATION LAW
References
Barnett v Chelsea & Kensington Hospital [1969] 1 QB 428
Caparo Industries pIc v Dickman [1990] 2 AC 605
Donoghue v Stevenson [1932] AC 562
Graham, J. C. (2016). Proof of Negligence. Florida Torts, 1.
Hedley Byrne & Co Ltd v Heller Partners Ltd [1964] AC 465.
Vaughan v Menlove [1837] 3 Bing NC 467