Case Study: Vicarious Liability, Contract, and Negligence Analysis

This case study analyzes a scenario involving the Lame Duck Restaurant, focusing on vicarious liability, contract law, and negligence. The case involves Johnny, the restaurant owner, and his employee Steven, who mistakenly quotes a wrong price to Marie for a banquet, leading to a potential bre...Read More

VICARIOUS LIABLITY

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ABSTRACT
Johnny owner of a Restaurant determines two price quotation for hosting banquet.
Wrong price quotation quoted to Marie. She accepted. Later Steven refused if
corresponding price not paid. Marie insisted Steven was legally bound.
Steven sub-contracts gardener for maintaining a garden rooftop apartment. Rooftop access
was restricted by a notice. A resident came to smoke and slipped causing injury;
claims compensation from Johnny.

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CONTENTS
INTRODUCTION...........................................................................................................................4
DISCUSSION..................................................................................................................................4
CONCLUSION................................................................................................................................5
Ques. & Ans.:................................................................................................................................5
QA. Advise Johnny, whether the contract exists?.................................................................5
QB. Was there a mistake? If yes, what kind of mistake?....................................................6
QC. Explain what will happen if the Lame Duck Restaurant is obliged to provide the
premises for the banquet, but refuses to do so?...................................................................6
QD. Advise Johnny on whether there was a tort of negligence?.......................................7
QE. Advise Johnny on whether he is liable for actions of his gardener?...................................8
QF. Advise what damages have to be paid for: medical expenses, money lost by cancelling
holiday or both?...........................................................................................................................8
BIBLIOGRAPHY............................................................................................................................9

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INTRODUCTION
Case Study relates whether a contract exists between Steven and Marie.
Steven fixes two price quotation for hosting banquets.
He mistakenly sent a wrong price quotation to Marie for banquet booking and Marie
accepted the offer. Later, Steven refused to host claiming the respective amount when
Marie countered that under legal obligation Steven was bound to deliver.
DISCUSSION
Johnny was the owner of the Lame Duck Restaurant. He appointed Steven for better
marketing and sales of his restaurant.
Steven and Johnny decided to host banquets at two different price tags, one for birthday
parties and other for alcohol parties. Marie who made a booking for a corporate party,
was mistakenly sent a wrong price quotation and in return she accepted the offer. After
discovering, Steven refused to host the banquet until the respective price was paid for
the party as the quotation was sent in error. Though Marie insisted that there is a
lawful contract between them and under such legal obligation Steven was bound to
deliver.
Post three months, Steven noticed excellent skillful work of his restaurant’s gardener who
manages all his work within 2 hours and wasted the remaining 8 hours. Steven and
Johnny decided to sub-contract him to Marie who would need him to maintain a garden
rooftop apartment. Residents were asked to avoid entering the rooftop pre lunch time
due to garden work via a notice on their respective mailboxes . A resident still comes to
smoke a cigarette and accidentally slips over on a palm leaf which was freshly cut by
the gardener causing severe injury. He had to be hospitalized and later that evening he
complains Johnny. The resident claims compensation for his injury, medical expenses
and for the money lost on an event which he was supposed to go for the from Lame
Duck Restaurant under negligence.

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CONCLUSION
As depicted from the case study the issue relates firstly, whether a contract exists
between Steven and Marie on the grounds of hosting the banquet at the promised price
quotation as it was under a legal contract comprising offer and acceptance on both ends.
Secondly, whether there was negligence on Lame Duck Restaurants part, on such
accident which caused to one of the resident during such course of employment, where
the gardener being an employee of the restaurant was sub-contracted to maintain the
rooftop garden.
Ques. & Ans.:
QA. Advise Johnny, whether the contract exists?
Ans. There is valid contract between Johnny and Marie as Steven who was an employee
under Johnny promised to host the banquet on a corporate party for Marie at a pre-
determined price and under a lawful offer and acceptance on both ends. There is a clause
under the English Contract Law which states that agreements are considered to be
contracts only when they are made between parties who are competent to contracts and
are free from any coercion or undue influence. Also there has to be lawful consideration
along with an object which is lawful, failing to which the agreement is deemed to be
void.1 Here we can find two competent parties, Steven and Marie with free consent to
form a valid contract, in addition to a lawful consideration which is the pre-determined
price quotation set between Steven and Marie, a lawful object is also present which is
the booking made for the banquet to host a corporate party and lastly communication
between offeror and offeree is also present which completes the offer and the acceptance
between them. Thus basic essentials of contracts are fulfilled making it a lawful contract
1 Esso Petroleum v Mardon [1976] QB 801.

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and legally binding upon the offeror to perform the contract. Under the English Contract
Law a valid contract can either be expressed or implied, oral or written.2
QB. Was there a mistake? If yes, what kind of mistake?
Ans. Yes, there exists a mistake on part of Steven because he accidentally quoted the
birthday occasion price instead of corporate party price to Marie who made a booking
for a corporate party on the new year eve. English contract law recognizes three types of
mistakes in a contract namely: Common mistake, Mutual mistake, Unilateral mistake.
Here we find it’s a unilateral mistake wherein only one party is mistaken, further
Unilateral mistake can be subdivided into: Mistake as to terms of contract and mistake
as to identity. Mistake as to terms of contract satisfies the case study here. There was
a mistake in value while the contract was made initially and mistake in value is
considered one of the terms in a contract. As in ‘Hartog v. Colin & Shields [1939] 3All
ER 566’, the contract was void for mistake. Thus this is a void contract as to a
mistake. English contract law also recognises a doctrine: Inter absentes. It states a
contract which is made over telephonic conversation or via online and not with the help
of physical presence of parties to the contract. As in ‘Cundy v Lindsay [1878] 3 App
Cas 459’. The case study over here relates the contract was made over telephone with
Marie, thus satisfies this provision too.
QC. Explain what will happen if the Lame Duck Restaurant is obliged to provide the
premises for the banquet, but refuses to do so?
Ans. The provisions of English Contract law is applicable here because the essentials of
contract are fulfilled as per the case study, which further obliges Johnny the owner of
Lame Duck Restaurant to perform the contract at the initial quoted price which his
employee Steven had communicated to Marie for hosting the banquet. Steven was in the
course of employment under Johnny when such legal contract with Marie was
undertaken. Thus Johnny is vicariously liable for the promise which his employee Steven
has undertaken on behalf of Johnny and so must perform to avoid breach of the said
contract else Marie can sue Johnny and his Lame Duck Restaurant for breach of contract
2 https://www.lawteacher.net/free-law-essays/contract-law/uk-contract-law.php

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as per the provisions defined in the contract law. In breach of contract either one or
both the parties failed to perform an act which was already promised in the contract . It
occurs:
 When one party makes a refusal to perform a promise which agreed under the
contract
 Does something which is void under the contract, or
 Prevents the other party from performing its obligations under the contract.3
Under the English contract law, compensation for breach of contract states when a
contract has been broken, the party who suffers by such breach is entitled to receive,
from the party who has broken the contract, compensation for any loss or damage
caused to him thereby, which naturally arose in the usual course of things from such
breach, or which the parties knew, when they made the contract, to be likely to result
from the breach of it.456
QD. Advise Johnny on whether there was a tort of negligence?7
Ans. Under tort of negligence the basic elements are as follows:
 Duty of care- Minimum duty of care has to be taken to avoid tort of
negligence which defendant owes to plaintiff.
 Breach of Duty- Defendant is liable if the defendant breaches the minimum
duty of care towards the plaintiff.
 Causation- If the breach of duty causes injury to the plaintiff.
 Damages- If the breach of duty causes injury then the damages for such
injury has to be borne by the defendant.
3 Case law- Hochster v De la Tour (1853) 2 E & B 678.
4 Cundy v Lindsay (1878) 3 App Cas 459.
5 Addis v Gramophone [1909] AC 488.
6 http://e-lawresources.co.uk/Contract-remedies.php.
7 http://e-lawresources.co.uk/Tort-law.php.

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Here a proper notice was placed beforehand in each of the resident’s mailboxes that due
to some garden work residents are requested not to access the rooftop till lunchtime. This
proves that adequate duty of care was taken for the sake of the residents so that a
mishap is not occurred. A resident only breached the notice and came up to smoke in-
spite of knowing that he was not supposed to come up during the course of the work.
This clearly proves that Johnny was not responsible for the acts of his gardener though
he was in the course of employment under Johnny at that time because they fulfilled the
basic duty of care which they owe towards the residents by placing a notice which
restricted the entry of resident’s in the rooftop while garden work was in progress. As
decided in Stanley v Powell8, the plaintiff and the defendant were members of the
shooting party, went for pheasant shooting. The defendant fired at a pheasant, but the
shot injured the plaintiff after it glanced off an oak tree. The defendant was not held
liable as because it was an inevitable accident.91011
QE. Advise Johnny on whether he is liable for actions of his gardener?
Ans. Under vicarious liability in law of torts, an employer is liable for the actions of
his employee if such employee is under the scope of his employer’s employment. In this
case Johnny sub-contracted the gardener with Marie, so Johnny forms an employer-
employee relationship with his gardener where Johnny can be held liable for the acts of
his gardener because his gardener was under the scope of his employment when such
accident happened. Vicarious liability of a sub-contractor negligence states that a defendant
can be held liable for vicarious liability for those acts that are committed by his own
officers or employees who are employed by him and not for those acts of the officers
8 Case law- Donoghue v Stevenson [1932] AC 562.
9 http://e-lawresources.co.uk/Negligence.php.
10https://www.lawteacher.net/free-law-essays/medical-law/tort-of-negligence-in-english-legal-
system-law-essay.php.
11 ALISON BELLINGHAM & OTHERS V JAMES TODD [2011] CSOH 74 - 5TH MAY
2011.

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and employees who are employed as an independent contractor (Sub-Contractor). So, it
proves that Marie cannot be held liable anyway over here because she only took the
gardener from Johnny as an independent contractor without forming an employer/
employee relationship.1213
QF. Advise what damages have to be paid for: medical expenses, money lost by
cancelling holiday or both?
Ans. As this case is not holding Johnny liable for tort of negligence due to the reasons
stated above, thus Johnny need not pay any medical expense or the money the plaintiff
lost by cancelling a holiday. Johnny is not liable for negligence because he took
adequate/ sufficient duty of care for the residents before his gardener started to work by
placing a notice to each individual resident’s mailboxes which stated entry to the rooftop
was restricted due to the garden work which was in progress. The resident who was the
plaintiff came at his own wish and discretion in-spite of the statutory warning and
slipped causing injury to himself.14
12 Lister v. Hesley Hall Ltd. [2001] UKHL 22.
13 Alcock v. Wraith (1992) 59 BLR 16.
14 https://www.inbrief.co.uk/claim-preparations/the-law-of-tort/.

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BIBLIOGRAPHY
1. Sources: http://www.e-lawresources.co.uk/Esso-Petroleum-v-Mardon.php
2. https://www.lawteacher.net/free-law-essays/contract-law/uk-contract-law.php
3. http://e-lawresources.co.uk/Hochster-v-De-la-Tour.php
4. http://www.e-lawresources.co.uk/Cundy-v-Lindsey.php
5. http://e-lawresources.co.uk/cases/Addis-v-Gramophone.php
6. http://e-lawresources.co.uk/Contract-remedies.php
7. http://e-lawresources.co.uk/Tort-law.php
8. http://lawgovpol.com/case-study-donoghue-v-stevenson-1932/
9. http://e-lawresources.co.uk/Negligence.php
10. https://www.lawteacher.net/free-law-essays/medical-law/tort-of-negligence-in-english-
legal-system-law-essay.php
11. https://www.casecheck.co.uk/alison-bellingham-others-v-james-todd-2011-csoh-74-5th-
may-2011.html
12. https://en.wikipedia.org/wiki/Lister_v_Hesley_Hall_Ltd
13. https://www.i-law.com/ilaw/doc/view.htm?id=151509
14. https://www.inbrief.co.uk/claim-preparations/the-law-of-tort/.