Business Law Case Study: Analysis of Tort Liability in Refueling

This case study examines tort liability issues arising from an aircraft refueling business owned by Sam. The analysis focuses on three distinct scenarios involving White Ltd., Blue Ltd., and Green Ltd. The core legal issue revolves around whether Sam is liable for damages due to negligence. The study applies principles of tort law, particularly negligence, duty of care, and defenses such as Volenti non fit injuria. It concludes that Sam is liable for damages to White Ltd. due to fuel contamination but not liable to the car owner as the damage wasn't a direct consequence. Sam is not liable to Blue Ltd's passenger as no duty of care existed. Finally, Sam is not liable to Green Ltd. because the pilot voluntarily assumed the risk by flying despite knowing about the fuel contamination. The case study references legal precedents like The Wagon Mound no 1 and Wooldridge v Sumner & Anor to support its conclusions.

Business Law Assignment
Student’s Name
8/11/2018

Business Law 1
Contents
Issue.................................................................................................................................................2
Law..................................................................................................................................................2
Application......................................................................................................................................3
Conclusion.......................................................................................................................................4
References........................................................................................................................................6

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Issue
In the given case, three situations have been provided. The lead issue in the case is to
identify that whether Sam is liable to pay damages or in any other manner in respect of White
Ltd. Blue Ltd and Green Ltd (Claimants)?
Law
The case given hereunder is related to Tort Law. In a literal meaning, a tort is a civil
wrong. The tort law is related to common law, which is not mentioned or written anywhere but is
applicable to a particular case according to the requirement. Tort is a wrongdoing that a person
does to another (Bar, 2009, p. 244). In many of the relationships, one person owns standard of
care to other person and therefore is liable to perform the same. Whenever a person does not
perform his/her duty and due to this another person suffers a loss, then such an act is treated as a
tort. Three types of torts are there and these are Intentional torts, Negligence torts and strict
Liability torts (The 3 Different Types of Tort Law, 2018). A tort can be held in various forms.
Negligence is one of the ways of tort. In such a situation, a person does not follow his/her civil
liability and acted in a careless manner. This is to be stated that negligence is different from the
error of judgment and mistakes (Legal Services Commission of South Australia, 2018).
Under tort law, the other person must come out with certain kind of loss. This loss can be
an economic loss, personal injury, or psychiatric injury. It was held in the case of The Wagon
Mound no 1 [1961] AC 388 that the loss must be a direct consequence of the tort act of the
defendant. In conjunction with this, defenses are also an important aspect of tort law. Defenses
are the excuses that a defendant can take in order to escape or reduce the liability related to

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damages in a case. Under tort law, the following four are the lead defenses that are available with
the defendant.
1. Contributory Negligence
2. Ex turpi causa
3. Exclusion of liability
4. Volenti non fit injuria (UPrepareLaw, 2018)
It was held in the case of Wooldridge v Sumner & Anor [1963] 2 QB 43 that whenever a
claimant has knowledge of risk and still the same continuous with his/her act, then it is assumed
that the same is taking the voluntary assumption of risk and accepting the involved risk (Cross &
Miller, 2011, p. 284).
Under different defenses, different reliefs have granted to the defendant. In some the
defenses, the defendant can be free from his liability, whereas in some of them the amount of
damages reduced up to a level. For instance, in contributory negligence, the defendant remains
liable till the end, although the amount of damages get reduced according to the level of
negligence of claimant (Findlaw, 2018). Whereas in the cases of Exclusion of liability and
Volenti non fit injuria, the defendant need not pay anything to the claimant.
Application
Being the owner of the business of refueling the aircraft, it was the legal liability of Sam
to deliver a quality of fuel, but the same failed to do so. In the studied case, Sam owned a duty of
care to the owners of aircraft. Three aircrafts companies are involved in the cited case. In the first
situation, due to fuel contamination, the engine of the aircraft owned by white Ltd. has cut off.

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Results of such engine failure, white Ltd. has suffered from a loss worth $ 1 million. In addition
to this, as this aircraft has lost it is controlled, therefore the same met an accident with a
Mercedes Benz which was parked over there. Due to the accident the owner of the mentioned
care has suffered from a loss of $ 75000, however applying The Wagon Mound no 1, such loss
was not a direct consequence of Sam’s negligence.
In case of the second aircraft which was owned by Blue Ltd. Sam has stopped the pilot
by taking off and prevents the future possible accident. However, in this case, due to this sudden
cancellation of flight, one of the passengers has come out from a loss value of $ 250000.
Applying the principles of tort law, this is to mention that Sam was not liable, as he did not own
any duty of care in respect of the passenger; therefore provisions related to tot law cannot apply
here.
Apart from the said two situations, in the third circumstance, Sam again acted like a
responsible and reasonable person and tried very hard to stop the aircraft owned by Green Ltd.
from taking off. In this situation, Sam has informed the pilot of the subjective aircraft about the
bad quality of fuel and consequences thereof, yet the Pilot did not listen to him and continued his
flight. Later on, as expected engine of this aircraft has cut off and the aircraft company i.e. Green
Ltd suffered damages worth of $200000. As Pilot was aware with the danger, yet he has accepted
the risk and continued his performance, therefore Sam can escape from the liability of damages
by taking the defense of Volenti non fit injuria.
Conclusion
In order to conclude the asked issues, this can be stated that:-

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1. Sam will be liable to pay the damages accrued to White Ltd as his negligence was the
reason for such loss. Further, loss accrued to car owner was not a direct result of the
negligence of Sam and Sam need not to pay anything to the car owner.
2. No loss has happened to Blue Ltd. and Sam will not be liable in any manner towards the
passenger no standard of care existed there.
3. In case of Green Ltd, Sam will not be liable in any manner as Pilot of the aircraft has
voluntarily assumed the risk and accepted the same

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References
Bar, C., V. (2009). Non-contractual Liability Arising Out of Damage Caused to Another: (PEL
Liab. Dam.), München : sellier. european law publ.
Cross, F, B and Miller, R, L (2011). The Legal Environment of Business: Text and Cases:
Ethical, Regulatory, Global, and Corporate Issues 8th ed, South Western: Cengage
Learning.
Findlaw. (2018). Contributory and Comparative Negligence. Retrieved from:
https://injury.findlaw.com/accident-injury-law/contributory-and-comparative-
negligence.html
Legal Services Commission of South Australia. (2018). What is negligence? Retrieved from:
https://www.lawhandbook.sa.gov.au/ch29s05s01.php
The 3 Different Types of Tort Law. (2018). The 3 Different Types of Tort Law. Retrieved from:
https://www.injurylawcolorado.com/legal-library/tort-law-types.html
The Wagon Mound no 1 [1961] AC 388
UPrepareLaw. (2018). General Defences in Torts Law Notes pdf With Case Laws. Retrieved
from: https://upreparelaw.com/general-defences-in-torts-law-notes-pdf-cases/
Wooldridge v Sumner & Anor [1963] 2 QB 43