LAW2447 COMMERCIAL LAW – ASSESSMENT 2 TEAM PAPER the summers v chad charles

RMIT UNIVERSITY VIETNAM HANOI CAMPUS LAW2447 – COMMERCIAL LAW ASSESSMENT – TEAM PAPER Lecturer: Dr Loh Ing Hoe Prepared by Team 95 Team members: Pham Quynh Anh – s3821194 Lai Minh Cam – s3802917 Nguyen Ha Linh – s3825960 TABLE OF CONTENTS SCENARIO ISSUE ISSUE SCENARIO ISSUE ISSUE ISSUE ISSUE ISSUE 10 SCENARIO 11 ISSUE 11 ISSUE 12 ISSUE 13 ISSUE 14 ISSUE 15 SCENARIO 16 ISSUE 16 ISSUE 17 BIBLIOGRAPHY 18 SCENARIO ISSUE The Summers v Chad Charles Legal issue Whether Charles was tortiously liable to the Summers when he tried to avoid Free’s car and crashed into the Summers’ wooden playhouse As a result, the truck of Charles has destroyed the playhouse and injured Sarah Summer The subordinate legal issue is whether Fresh Fruit has the vicarious liability to Charles’s conduct Legal rules – Application The legal rules are used in the first issue is Tort of negligence When a person performs careless conduct that causes harm to another, he/she infringes upon the tort of negligence (James, 2017)1 In order to determine this, three requirements must be established by the plaintiff comprising (1) whether the defendant owed the plaintiff a ‘duty of care’ (DOC), (2) if the respondent breached the DOC, and (3) whether the claimant endured injury/ damage/ harm that was reasonably foreseeable2 First of all, according to the DOC, the relationship between these two parties is not detected in the established lists, therefore, the ‘neighbor test’ is used to identify whether the defendant’s conduct was closely or directly influenced the plaintiff as well as was potentially harmful to others The surrounding area of the highway is farmland and the speed limit at 100km/h However, Charles has exceeded the speed limit at 110km/h Consequently, he has served out of the lane and could have been injured anything or anyone nearby the highway Thus, Charles owed DOC to the Summers Second, to verify if the defendant did breach the DOC to the plaintiff, the standard of care must be determined through four factors: the probability of harm, the seriousness of harm, the cost of taking precaution, and social utility4 The higher the probability of harm, the greater the standard of care (SOC)5 This also applied to the seriousness of harm, the higher the likely seriousness of harm, the higher the SOC6 Determining the cost of precautions, when the harm can be avoided with a cheap and easy method, but the defendant failed to take these measurements is likely a breach of DOC7 Jame, 2017, Business Law 4th ed, page 118 Civil Law (Wrongs) Act 2002 (ACT) Chapter Donoghue v Stevenson [1932] UKHL 100 (26 May 1932) Civil Law (Wrongs) Act 2002 (ACT) s 43 Bolton v Stones [1951] AC 850 (10 March 1951) Paris v Stepney Borough Council [1951] AC 367 (13 December 1951) Latimer v AEC Ltd [1953] AC 643 (25 June 1953) 3 Besides, the standard of care may be lowered if the defendant’s behavior is beneficial to society According to the probability, when the drivers exceeded the speed limit, they may not control the steering wheels and cause harm to people or objects on the roads and the roadsides, hence, the probability, in this case, is high The seriousness of harm is noticeable as traffic accidents which are caused by a truck at speed 110km/h will seriously damage the property as well as injure people Moreover, the cost of precaution is really low because Charles just needed to drive at the proper speed Lastly, since no social utility is recognized for driving a truck on the highway, all four factors indicated that Charles did breach his DOC to the Summers Third, taking into account the final element of Tort of Negligence, the Causation principle proclaims that: (1) A decision that negligence caused particular harm comprises the following elements: (a) that the negligence was a necessary condition of the happening of the harm (‘factual causation'); (b) that it is appropriate for the scope of the negligent person's liability to extend to the harm so caused (the scope of liability)9 In this case, the defendant’s conduct was reasonably predictable to cause injuries to the plaintiff However, concerning the contributory negligence, the defendant might get reduced from liability when the plaintiffs also did something careless that contributed to their injuries 10 In this situation, the Summers’ house was built only 15 meters away from the road which is not far enough to maintain the safety of the house Therefore, the Summer has contributed to their house’s damage, and this defense is recognized On the topic of vicarious liability, when the harmful act was done within ‘the scope of employment’, which means that the employer will be vicariously liable to the employees if they were working11 Yet, it did not inform that Charles was on duty when the accident came about Hence, Fresh Fruit was not a vicarious liability to the Summers Conclusion Charles was tortiously liable to the Summers, still, the contributory negligence must be taken into consideration and Fresh Fruit was not vicariously liable to the Summers Civil Liability Act 2002 (WA) s B (2) Civil Law (Wrongs) Act 2002 (ACT) s 45 Ingram v Britten [1994] Aust Torts Reports 81-291 11 Century Insurance v Northern Ireland Road Transport Board [1942] AC 509 (4 March 1942) 10 ISSUE Chad Charles v Fred Free Legal issue Whether Free has a tortious liability to Charles when Free exceeded the speed limit and changed to Charles’s lane too quick that made Charles crash into the cornfield Consequently, the car accident injured Charles and caused damage to his truck Legal rules – Application Considering the legal issue, there are three elements needed to be satisfied: DOC, Breach of DOC, and Causation12 Firstly, the relationship between Charles and Free was identified in the categories of DOC as Motorists and road users13 Thus, Free owed Charles a duty of care Secondly, in order to determine if the defendant did breach the DOC, there are four elements needed to be concerned about (Cited in the case between the Summers v Chad Charles)14 Since Free obviously exceeded the speed limit (110km/h) and changed lane at high speed which can cause accidents to anyone on the roads and in this case is Charles, the probability of harm is high The seriousness of harm is also predicted to be high as a car accident would lead to serious injuries and even mortality In contrast to the cost of precaution, Free just needed to drive at the proper speed and comply with the traffic rules when changing lanes, hence, the cost is cheap and easy Last but not least, no social utility is recognized for changing lanes All four elements have indicated that Free breached DOC to Charles On the other hand, before the accident happened, Charles also exceeded the speed limit which affected his control of the steering wheel and made him unable to react opportunely If Charles drove at the proper speed, he would minimize the chance of the accident Hence, Charles was contributorily negligent Conclusion Free has a tortious liability to Charles Therefore, Charles can win this case However, contributory negligence should be taken into consideration 12 Civil Law (Wrongs) Act 2002 (ACT) Chapter 13 14 Civil Law (Wrongs) Act 2002 (ACT) s 43 SCENARIO ISSUE Tracey Ryder v the 5-year-old girl Legal issue The legal issue is whether the 5-year-old girl committed the tort of negligence owing to her action of letting soap liquid splilled on the floor which caused Ms Ryder's spinal injury and cost her a $40.000 medical bill The subordinate legal issues are whether the child was fully capable of taking legal responsibility for her conduct, and whether her parents had vicarious liability for their child’s action or not Legal rules – Application According to Legal Services Commission of South Australia, a child is generally liable for the repercussions of his/ her wrongdoing15 Though the required level of reasonable care of the child might depend on his/ her age as well as the expected SOC of a child at the same age, the child in this case still had the capability to take responsibility for her own wrongful conduct To determine the tort of negligence, three requirements are needed: (1) DOC, (2) Breach of DOC, and (3) Causation16 In terms of DOC, since the relationship between Ms Ryder and the little girl does not fall within any of DOC established categories, the ‘neighbor test’ is applied17 Considering the required SOC, it makes sense for a child at the age of to aware that spilled liquid on the floor is something unwanted However, it is unreasonable for the child to foresee that his/ her conduct might lead to a bodily injury of someone else who might slip on the wet floor and cost them other losses Hence, the 5-year-old girl, in this case, was not tortuously liable to Ms Ryder As the child did not commit the tort of negligence, her parents accordingly had no vicarious liability to the plaintiff Conclusion The child was free from tortious responsibility for Ryder, thus, her parents also had no vicarious liability to Ryder Legal Services Commission of South Australia n.d, Children and negligence, viewed 10 August 2020, 15 16 17 Civil Law (Wrongs) Act 2002 (ACT) Chapter Donoghue v Stevenson [1932] UKHL 100 (26 May 1932) ISSUE Tracey Ryder v the 5-year-old girl’s parents Legal issue The legal issue is whether Ms Ryder can sue the 5-year-old girl's parents for their failure in supervising their child, which led to Ryder's bodily injury and financial losses or not Legal rules – Application Considering the legal issue, there are three elements needed to be satisfied: DOC, Breach of DOC, and Causation18 In terms of DOC, since the relationship between Ms Ryder and the parents does not fall within any of DOC established categories, the ‘neighbor test’ is applied19 It is reasonably predictable that allowing the child to play with liquid objects in public without supervision may lead to a liquid leak This might cause harm to anyone moving around the area Therefore, in this case, her parents owned the plaintiff's DOC To indicate the breach of DOC, the following SOC's factors need to be taken into consideration 20 Firstly, the probability of a child unintentionally spilling liquid from the bubble bottle is as high as the probability of someone slipping and getting hurt because of the liquid leaked Referring to the seriousness of harm, a slip-on the wet floor in a bad situation would even cause severe bodily injuries such as brain injury Meanwhile, the cost of taking precautions is extremely low, as parents only need to watch their children more carefully and responsibly Last but not least, social utility is not applicable About the causation, the spinal injury that the plaintiff had to suffer due to the slip was reasonably predictable Conclusion In brief, it can be concluded that the 5-year-old girl's parents were tortiously liable to Ms Ryder 18 Civil Law (Wrongs) Act 2002 (ACT) Chapter Donoghue v Stevenson [1932] UKHL 100 (26 May 1932) 20 Civil Law (Wrongs) Act 2002 (ACT) s 43 19 ISSUE Tracey Ryder v Tom v Woodworths Legal issue The main legal issue is whether Tom, the defendant, committed the tort of negligence toward Ryder, the plaintiff, as he opens the bottle of bubble without warning the customer of the possible liquid leak, which results in Ryder’s injury The subordinate legal issue is whether Woolworth Supermarket was vicariously liable for Tom’s conduct Legal rules – Application Based on the main legal issue, three elements need to be examined: Duty of Care (DOC), breach of DOC, and Causation21 Firstly, the relationship between Ryder and Tom does not fall within the required relationship category, so the ‘neighbour test’ was applied22 Opening a bottle of bubbles can not be considered dangerous or have closely or directly affect Ryder Hence, Tom does not owe Ryder DOC Regarding the principle of vicarious liability of employer and employee23(cited above in the case between Summer v Charles), since Tom does not owe Ryder DOC, Woolworth Supermarket was not vicariously liable Conclusion Overall, Tom does not owe Ryder DOC Thus, Woolworth Supermarket was not vicarious liable over Tom’s conduct Ryder cannot successfully sue Tom nor Woolworth Supermarket in this situation 21 Civil Law (Wrongs) Act 2002 (ACT) Chapter 22 Donoghue v Stevenson [1932] UKHL 100 (26 May 1932) 23 Australian Safeway Stores Pty Ltd v Zaluzna [1987] 162 CLR 479 (10 March 1987) ISSUE Tracey Ryder v Robert Legal issue Mr Robert was the one who was standing near Ms Ryder when the accident happened Jumping to the scene and attempting to help, he broke her left arm, which led to her 2-month hospitalization and cost her $15.000 for the medical bill The legal issue is whether Mr Robert committed a tort of negligence to Ms Ryder or not Legal rules – Application The relevant legal rule for this case is the tort of negligence (Jame, 2017, Business Law 4th ed, page 118) (cited above in the case between the Summers v Chad Charles) To determine the tort of negligence, three requirements are needed: (1) DOC, (2) Breach of DOC, and (3) Causation24 Owing to the fact that Ms Ryder is the customer of Westfield Shopping Center and Mr Robert is the passerby, the relationship between the two parties does not belong to any listed categories of DOC Then, the "Reasonable Foreseeability Test" will be examined According to HLS Health Care, lifting a person up incorrectly might cause shoulder and back injuries to that person 25 In this case, Mr Robert's conduct of lifting Ms Ryder did cause a direct harm to her (he broke her left arm) As a result, Mr Robert owed Ms Ryder a DOC The probability of harm from the action of lifting Ms Ryder up quickly is extremely high as HLS mentioned above Thus, the SOC is also higher Moreover, before that, Ms Ryder had already been suffering a spinal injury from the slip, so his careless conduct of lifting her up could make the seriousness of harm become more severe On the other hand, if Mr Robert had been more careful and lifted her up in the right way, her arm would not have been broken The cost of taking precautions is low and easy but Mr Robert failed to it Hence, this was considered to be a breach of DOC Besides, though Mr Robert's action stem from his wanting to help her out, this action did not work but coincidentally made her injury more serious So, this can not be considered as a social utility In this scenario, Ms Ryder's broken arm is actual harm Without the conduct of Mr Robert, Ms Ryder would not have to suffer broken arm injury The 'but for' test is satisfied Moreover, the consequence from his reckless action is reasonably predictable, so he has tortious liability for it 24 Civil Law (Wrongs) Act 2002 (ACT) Chapter Elissa, S 2017, ‘Injuries to Nurses and Carers by Lifting Patients Incorrectly- HLS’, hlshealthcare, December 2017, viewed 25 July 2019, 25 Conclusion All the aspects of the tort of negligence rules were examined It came to a conclusion that Mr Robert committed a tort of negligence to Ms Ryder As a result, Ms Ryder can successfully sue him and make him compensate her for the injury ISSUE Tracey Ryder v Westfield Shopping Center Legal issue Did Westfield Shopping Center have tortiously liability to Ryder since the Shopping center did not take appropriate action against the slippery floor in the Common Area which led to Ryder’s injuries Legal rules – Application Considering the tort of negligence, three elements must be taken into account: Duty of care (DOC), Breach of DOC, and Causation26 First of all, the relationship between Ryder and Westfield Shopping Center at the time the incident happened was occupier and guest, which was listed in the categories of DOC Therefore, the defendant owed the plaintiff the duty of care Second, the four components required in SOC (cited above in the case between Tracy Ryder v The 5-years-old girl) is applied to determine did the defendant breach the DOC Regarding the probability of harm, the injuries cause by the fall on a slippery floor in the mall can be serious, thus, the probability is high Likewise, the seriousness of harm is also high since the fall could cause serious trauma or even mortality In contrast to the cost of precaution, as the shopping center just needed to train its sanitation staff more carefully There was no social utility because the shopping center made profits out of its customers Finally, the gap between liquid spelling and Ryder’s incident is rather short, hence, the Westfield Shopping Center did breach the DOC Conclusion According to occupier’s liability rules, Ryder has shown that the Westfield Shopping center committed a tort of negligence and the shopping center also needed to compensate for Ryder’s injuries Hence, Ryder can successfully sue the Westfield Shopping Center 26 Civil Law (Wrongs) Act 2002 (ACT) Chapter 10 SCENARIO ISSUE Thi Ngoc Hien Vo v Hoa Legal issue The main legal issue is whether Ms Hoa, the defendant, commit Tort of negligence toward Ms Vo, the plaintiff when she carelessly dropped a water bucket causing Ms Vo’s injury The minor legal issue is whether Thu Phung Desserts is vicariously liable for Ms Hoa’s conduct Legal rules – Application According to the legal issue, three elements must be examined thoroughly: Duty of Care (DOC), breach of DOC, and Causation27(cited above in the case between Summer v Charles) Firstly, based on the DOC requirement, the plaintiff and defendant are outside of required relationship categories, so the “neighbor test” was applied to assess two requirements: whether the defendant’s conduct had potentially harmful to others and whether the defendant’s action affected closely or directly the plaintiff28(cited above in the case between Summer v Charles) Dropping a bucket of water without cleaning or prober warning people around could result in the slippery floor and injured people nearby, including Ms Vo Consequently, Ms Hoa owes Ms Vo DOC Secondly, based on breach of DOC, four aspects of the Standard of Care must be considered: Probability of harm, Seriousness of harm, Cost of precaution, and Social Utility 29(cited above in the case between Summer v Charles) In this situation, Ms Hoa dropped a bucket of water on the floor during the working hour of the shop; there is a high possibility that a customer walking pass by will trip on it The seriousness of the injury is medium since most injuries are related to sprains or skin-deep wounds30 However, the cost of precaution is low since Ms Hoa only needs a little time to clean up the water or put a warning sign nearby The social utility for not cleaning the puddle is not recognized since Ms Hoa did not have a reason not to clean up Hence, a reasonable person would have taken some measures to avoid causing harm This is due to the high probability of harm, medium seriousness of harm, low cost of precaution, and no social probability in not taking precaution measures Consequently, Ms Hoa did not what a reasonable worker would have done in the same situation Hence, Ms Hoa breaches her DOC to Ms Vo 27 Civil Law (Wrongs) Act 2002 (ACT) Chapter 28 Donoghue v Stevenson [1932] UKHL 100 (26 May 1932) 29 Civil Law (Wrongs) Act 2002 (ACT) s 43 Office of Industrial Relations, Slips, trips and falls prevention (n.d.) Workplace Health and Safety Queensland 30 11 Thirdly, considering the Causation principle31(cited above in the case between Summer v Charles), Ms Hoa’s conduct responsible for Ms Vo’s harm because Ms Hoa caused the plaintiff reasonably foreseeable injury To examine if Thu Phung Desserts (TPD) is vicariously liable for Ms Hoa’s conduct, this paper will apply the vicarious liability between employer and employee32 (cited above in the case between Summer v Charles), On the day the incident happened, Ms Hoa, an employee of TPD, accidentally dropped a bucket of water while working, which caused Ms Vo’s injury Hence, TPD has vicarious liability for the worker’s conduct Conclusion Conclusively, Ms Hoa was tortiously liable toward Ms Vo, while TPD was vicariously liable for Ms Hoa’s conduct Therefore, Ms Vo could win the case ISSUE Thi Ngoc Hien Vo v Ben Legal issue The legal issue is whether Ben, the defendant, commits the tort of negligence toward Ms Vo, the plaintiff, when he carelessly leaves the sugar cane juicing machine unattended, resulting in a significant injury The minor legal issue is whether Thu Phung Desserts is vicariously liable for Ben’s conduct Legal rules – Application To determine if the defendant commit tortious liability, three elements need to be examined: Duty of Care (DOC), breach of DOC, and Causation 33(cited above in the case between Summer v Charles) First, this paper will check if Ben owes Ms.Vo DOC Similar to the issue Thi Ngoc Hien Vo v Hoa, Ben and Vo have no required relationship, so the ‘neighbor test’ was applied 34 Leaving a juicing machine still working unattended can be potentially dangerous to people nearby, which in this case is Ms.Vo Indeed, Ben owes Ms Vo DOC The next requirement that needs to be inspected is Breach of DOC Whether Ben failed to perform Standard of Care toward Ms.Vo, this paper will apply the four Standard of Care elements35 In this 32 Civil Law (Wrongs) Act 2002 (ACT) s 45 Australian Safeway Stores Pty Ltd v Zaluzna [1987] 162 CLR 479 (10 March 1987) 33 Civil Law (Wrongs) Act 2002 (ACT) Chapter 34 Donoghue v Stevenson [1932] UKHL 100 (26 May 1932) 35 Civil Law (Wrongs) Act 2002 (ACT) s 43 31 12 case, Ben left the juicing machine unattended, which can lead to a high possibility of harm as people nearby could accidentally bump into In the worst-case scenario, significant injury such as crushed arm like in this case can happen However, it only took Ben little effort and time to ask another worker to supervise the machine Hence, the cost of the precaution is low There is no social utility in leaving the machine unattended while going to the restroom Due to the high probability of harm, high seriousness of harm, low precaution cost, and no social utility, a reasonable person would have asked someone to supervise the machine or turn it off while going to the restroom Hence, Ben failed to attempt what a reasonable person would have done and breached his DOC toward Vo The final requirement is Causation rule are satisfied as Ben’s conduct caused Ms Vo reasonably predictable harm36 According to the rule of vicarious liability of employer and employee37 (cited above in the case between Summer v Charles), Ben left the juicing machine unattended when he was on duty Hence, TPD was vicariously liable for Ben’s conduct Conclusion In conclusion, Ben commited a Tort of negligence toward Ms Vo, and TPD was vicariously liable for Ben’s conduct Hence, Ms Vo can successfully sue Ben and TPD ISSUE Thi Ngoc Hien Vo v Thu Phung Desserts Legal issue The legal issue is whether TPD, the defendant, commit the tort of negligence toward Vo, the plaintiff, due to the company negligence in training employees, which caused Ms.Vo significant injury Legal rules – Application Based on the legal issue, three elements need to be examined: Duty of Care (DOC), breach of DOC, and Causation38(cited above in the case between Summer v Charles) Firstly, The relationship between TPD and Ms.Vo falls within the Occupiers – Guests Category because, at the time of the incident, Ms Vo visits the shop to purchase drink as a customer Hence, the defendant owed the plaintiff DOC 36 Civil Law (Wrongs) Act 2002 (ACT) s 45 37 Australian Safeway Stores Pty Ltd v Zaluzna [1987] 162 CLR 479 (10 March 1987) Civil Law (Wrongs) Act 2002 (ACT) Chapter 38 13 Secondly, to determine if TPD breached its DOC, four elements of Standard of Care need to be considered39 The probability of harm result from inappropriately training staff can be high, because untrained staff can make the shop unsafe for customers For example, in this case, untrained employees lead to a wet floor and dangerous machine working without a supervisor which leads to Ms Vo’s incident The seriousness level of harm can vary from low to high In the worst case, a customer can receive severe injuries like bleeding or broken bone It only takes TPD a low amount of money to set out safety rules in the shop or prober training the staff The social utility did not exist in this case since the shop earns money from customers, so customers’ safety should be its priority Based on the high probability of harm, diverse seriousness of harm, low cost of precaution, and no social utility, a reasonable shop owner would have set out the safety rule to avoid incidents inside the shop Thus, TPD breached its DOD toward Ms.Vo Thirdly, the Causation rule40 is established because TPD’s conduct was sensibly foreseeable to cause the plaintiff’s injuries Conclusion To sum up, Thu Phung Desserts did commit the tort of negligence toward the plaintiff Thus, Ms Vo would win the case ISSUE Thi Ngoc Hien Vo v Hung Vien Tran Legal issue The legal issue is whether Hung Vien Tran has vicarious liability over Ben and Hoa’s conduct Legal rules – Application According to the rule of vicarious liability of employer and employee41, Hung Vien Tran does own vicarious liability over his employees' conduct Ben and Hoa are employees of TPD and due to their negligence while working caused Ms Vo injury (proved above in the case between…) Hence, Hung Vien Tran owns vicarious liability over the conduct of Ben and Hoa Conclusion In conclusion, Ms Vo would win if she sues Hung Vien Tran for vicarious liability over Ben and Hoa’s conduct Civil Law (Wrongs) Act 2002 (ACT) s 43 Civil Law (Wrongs) Act 2002 (ACT) s 45 41 Australian Safeway Stores Pty Ltd v Zaluzna [1987] 162 CLR 479 (10 March 1987) 39 40 14 ISSUE Thu Phung Desserts v Ben and Hoa Legal issue The legal issue is whether Ben and Hoa (the defendants) commit a Tort of negligence while working, which affects TPD's reputation (plaintiff) Legal rules – Application According to the legal issue, three elements must be examined thoroughly: Duty of Care (DOC), breach of DOC, and Causation42(cited above in the case between Summer v Charles) Firstly, based on DOC rule, TPD v Ben and Hoa not have the required relationship Hence, “neighbor test”43( cited above in the case between Summer v Charles) will be applied As prove from the case… above, Ben and Hoa’conducts was potentially harmful to other people and directly affected TPD’s reputation Thus, Ben and Hoa owe Thu Phung Desserts DOC Secondly, to determine if Ben and Hoa breached their DOC, four elements of Standard of Care need to be analyzed 44(cited above in the case between Summer v Charles) The probability of harm due to the worker's negligence can be high since employees are the face of the brand Anything an employee does can affect the organization as a whole The seriousness of harm can be diverse due to the employee’s conduct In the worst case, employee misconduct can ruin a brand's reputation and result in a boycott of the brand in the market The cost of precaution is low since Ben and Hoa only need to be more careful in the workplace There was not any social utility in negligence while working, which causes accidents in the workplace Based on the high probability of harm, low cost of precaution, and no social utility, a reasonable worker would be more careful in working and not let such incidents take place Thus, Ben and Hoa breached their DOC toward TPD Thirdly, the Causation rule 45(cited above in the case between Summer v Charles) is not entirely established because Ben and Hoa might not predict that such small careless action can lead to such consequence for the shop Conclusion In summary, TPD can sue Ben and Hoa for negligence in working, which affects the shop's reputation However, the case might not be a success since Ben and Hoa might not sensibly predict that their careless action can have such a negative impact on the shop 42 Civil Law (Wrongs) Act 2002 (ACT) Chapter 43 Donoghue v Stevenson [1932] UKHL 100 (26 May 1932) 44 Civil Law (Wrongs) Act 2002 (ACT) s 43 45 Civil Law (Wrongs) Act 2002 (ACT) s 45 15 SCENARIO ISSUE Gary Grice v Jamala Turner Legal issue The legal issue is was there a legally enforceable contract between Gary – the buyer and Jamala – the owner of the apartment about the apartment which was sold at the price 500,000$ and closing costs Legal rules – Application There are three elements that must be considered in a contract: agreement, consideration and intention to be bound First, an agreement contains offer and acceptance 46 An offer must be distinguished from a request or a supply of information 47 or an invitation to treat 48 An offer must comply with certain rules: Offer must be straightforward and absolute 49, the offer can only be accepted by the offeror 50, the offeror can cancel the offer at any time prior to acceptance 51, communication must be required between offers 52 and revocation must be informed to the offeree 53 The regulation of acceptance is 100% identical to the offer 54, unconditional 55, explicit and certain 56, the offeror may demand a specific way of acceptance 57 and communication about the acceptance is compulsory 58 When the offeree accepts the offer, the acceptance becomes effective at the time the letter of acceptance is sent, not at the time it is received 59 The case indicated that on January 5, 2017, Jamala sent Gary an email attached with ‘an agreement of sale’ which included everything they have discussed before: the address, description, condition, sale price ($500,000), and closing costs Moreover, the documents also came with the expiration date (9 a.m January 19, 2017) and the method of acceptance that was to send to her office a signed acceptance On January 10, 2017, after hearing about fact between Jamala and Jones’ Flipped Properties, Gary instantly sent the signed agreement to Jamala house’s address along with the Smith v Hughes (1871) LR QB 597 Harvey & Anor v Facey & Ors [1893] UKPC (29 July 1893) 48 Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] QB 401 (5 February 1953) 49 Mildura Office Equipment & Supplies Pty Ltd v Canon Finance Australia Ltd [2006] VSC 42 (16 February 2006) 50 R v Clarke (1927) 40 CLR 227 51 Dickinson v Dodds (1876) Ch D 463 52 Ibid 53 Ibid 54 Hyde v Wrench (1840) 49 ER 132 55 Masters v Cameron (1954) 91 CLR 353 56 Scammell and Nephew Ltd v Ouston [1941] AC 251 57 Eliason v Henshaw (1819) Wheaton 225 58 Felthouse v Bindley (1862) 142 ER 1037 59 Henthorn v Fraster [1892] Ch 27, 33 46 47 16 proposal of Jamala to include the custom-sized furniture in the apartment Regarding the Postal Rule, the acceptance was effective since it was sent before the withdrawal of Jamala happened 60 In addition, Gary has obeyed properly the method of acceptance The next email was regarded as a mention about the contract, not a counter contract Therefore, the original offer was valid Second, following the rule of consideration: consideration must be taken into account in all simple contracts 61, it cannot be past 62 and it must be sufficient 63, but not need to be adequate 64 According to the agreement of sale, Gary has made a commitment to pay $500,000 plus closing costs in exchange for the apartment The payment of money is a form of sufficient consideration Therefore, there was a legally enforceable contract Third, when an arrangement is established in the commercial sense, it is implied that the parties intend to be bound 65 unless it is obvious that the parties not intend to create legal relations 66 As Gary has promised to pay $500,000 plus the closing cost for the Jamala’s house and there was a document called ‘an agreement of sale’, thus, this agreement was established in the business context Therefore, the parties are presumed to have the intention to be bound Conclusion When it comes to the sale of the apartment, a legally enforceable contract has been made between Gary and Jamala, which means that Gary can successfully sue Jamala for violating the contract when she revoked the deal ISSUE Russel Jones’ Flipped Properties v Jamala Turner Legal issue Was there a legally enforceable contract between Russel – the buyer and Jamala – the apartment's owner, on purchasing the apartment for a $450,000 cheque Legal rules – Application In order to make a contract, three requirements must be concerned about: agreement, consideration, and intention to be bound, In the business context, to be a legally enforceable Adams v Lindsell 106 ER 250 Chappell & Co Ltd v Nestle Co Ltd [1960] AC 87 62 Roscorla v Thomas (1842) QB 234 63 Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130 64 Thomas v Thomas (1842) QB 851 65 Esso Petroleum Ltd v Commissioners of Customs and Excise [1976] WLR 66 Rose & Frank Co v JR Crompton & Bros Ltd [1924] UKHL (5 December 1924) 60 61 17 contract, parties must intend to create legal relations 67 Absolute proofs can be used to disprove the presumption about the parties did not intend to create legal relations 68 According to Jamala’s voicemail to Russel, she ironically responded that she would sell her half-million-dollar apartment for $450,000 cheque and told Russel to hire young people so he did not live in the dark ages She was telling sarcasm about Russel’s proposal, which implied when she said ‘It would be wonderful to sell it to a club that tears down perfectly beautiful homes and then entrust the club to make cheap, cost-cutting renovations with my dear granda’s house.’ Jamala’s response revealed that she did not intend to accept the proposal and make it become legally enforceable Therefore, the presumption was disproved Conclusion No legal binding contract is established between Russel Jones’ Flipped Properties and Jamala In addition, due to the lack of intent to be bound in the contract, Russel cannot sue Jamala BIBLIOGRAPHY A Cases Adams v Lindsell 106 ER 250 Australian Safeway Stores Pty Ltd v Zaluzna [1987] 162 CLR 479 (10 March 1987) Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130 Bolton v Stones [1951] AC 850 (10 March 1951) Century Insurance v Northern Ireland Road Transport Board [1942] AC 509 (4 March 1942) Chappell & Co Ltd v Nestle Co Ltd [1960] AC 87 Dickinson v Dodds (1876) Ch D 463 Donoghue v Stevenson [1932] UKHL 100 (26 May 1932) Eliason v Henshaw (1819) Wheaton 225 Esso Petroleum Ltd v Commissioners of Customs and Excise [1976] WLR Felthouse v Bindley (1862) 142 ER 1037 Harvey & Anor v Facey & Ors [1893] UKPC (29 July 1893) Henthorn v Fraster [1892] Ch 27, 33 Hyde v Wrench (1840) 49 ER 132 Ingram v Britten [1994] Aust Torts Reports 81-291 Jame, 2017, Business Law 4th ed, page 118 Latimer v AEC Ltd [1953] AC 643 (25 June 1953) Masters v Cameron (1954) 91 CLR 353 Mildura Office Equipment & Supplies Pty Ltd v Canon Finance Australia Ltd [2006] VSC 42 (16 February 2006) Paris v Stepney Borough Council [1951] AC 367 (13 December 1951) 67 68 Rose & Frank Co v JR Crompton & Bros Ltd [1924] UKHL (5 December 1924) Rose & Frank Co v JR Crompton & Bros Ltd [1924] UKHL (5 December 1924) 18 Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] QB 401 (5 February 1953) R v Clarke (1927) 40 CLR 227 Roscorla v Thomas (1842) QB 234 Rose & Frank Co v JR Crompton & Bros Ltd [1924] UKHL (5 December 1924) Scammell and Nephew Ltd v Ouston [1941] AC 251 Smith v Hughes (1871) LR QB 597 Thomas v Thomas (1842) QB 851 B Legislation Civil Law (Wrongs) Act 2002 (ACT) Chapter Civil Law (Wrongs) Act 2002 (ACT) s 43 Civil Law (Wrongs) Act 2002 (ACT) s 45 C Other Elissa, S 2017, ‘Injuries to Nurses and Carers by Lifting Patients Incorrectly- HLS’, hlshealthcare, December 2017, viewed 25 July 2019, Legal Services Commission of South Australia n.d, Children and negligence, viewed 10 August 2020, Office of Industrial Relations, Slips, trips and falls prevention (n.d.) Workplace Health and Safety Queensland 19 ... would have done in the same situation Hence, Ms Hoa breaches her DOC to Ms Vo 27 Civil Law (Wrongs) Act 20 02 (ACT) Chapter 28 Donoghue v Stevenson [19 32] UKHL 100 (26 May 19 32) 29 Civil Law (Wrongs)... v Zaluzna [1987] 1 62 CLR 479 (10 March 1987) 33 Civil Law (Wrongs) Act 20 02 (ACT) Chapter 34 Donoghue v Stevenson [19 32] UKHL 100 (26 May 19 32) 35 Civil Law (Wrongs) Act 20 02 (ACT) s 43 31 12. .. predict that their careless action can have such a negative impact on the shop 42 Civil Law (Wrongs) Act 20 02 (ACT) Chapter 43 Donoghue v Stevenson [19 32] UKHL 100 (26 May 19 32) 44 Civil Law (Wrongs)