Business Law -Tort Law

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INTRODUCTION TO BUSINESS LAW

The Law of Tort

Core Reading:

Lucy Jones, Introduction to Business Law (Oxford University Press, 2011). Chapter 11 on The Tort of Negligence (Refer to pages 340 – 374). Please note that we ARE NOT going through every single areas in relation to negligence. For instance, the area on nervous shock.

Aims and Objectives: -
To enable students to appreciate the general law of tort, especially the concept of negligence; To understand how this area applies in business context and its wider importance; The relationship between Law of Contract and Law of Tort (Both are civil in nature)

Further Reading: -

Keenan and Riches Business Law – Part 3: Business Transactions, Chapter 11

Mortimer, T; Business Law – Lecture 10 (All Inclusive)

INTRODUCTION: -

The concept of business law primarily involves contractual matters. The concept of offer and acceptance, together with other positive criteria are vital in order to commence a legal relationship between the parties. These involves relationship between seller and buyer, employer and employee, manufacturer and distributor or even owner and visitor to the land!

Therefore, the relationship between the parties does potentially cover other aspects of law as well. For instance, a person could commence an action under tort if he suffers injury or losses as a result of the company’s negligence.

What is Tort?

1.The word “tort” is derived from the Latin word “tortus” meaning “twisted”. It came to mean, “wrong”, and it is still so used. In English the word “tort” has a purely technical legal meaning: - a legal wrong for which the law provides a remedy.

2.It is now generally accepted that the purpose of tort is to protect a person’s right and its aim is to provide compensation to those whose right has been affected. Basis for tortuous liability

Tort has traditionally been based on principle of fault. As a general rule, the defendant will not be liable to compensate the P unless he is at fault i.e. the “fault principle.” It is the P who bears the legal burden of proving that the D was at fault. This is based on the concept of justice and fairness.

THE LAW OF NEGLIGENCE

1.The first and the most important element which must be proven by the P is that the D owed a duty of care to the P, otherwise, there will be no point in considering whether a particular act or omission which has resulted in harm was negligent.

[Donoghue v Stevenson (1932)]
(Action by consumer against manufacturer in respect of personal injury)

FACTS: A manufacturer of ginger beer sold to a retailer the ginger beer, which contained in an opaque glass. Hence its contents were not visible. The retailer resold it to Mrs.Donoghue/M’Alister (P)’s friend, who treated P with its contents. She drank some of the contents and when her friend refilled her glass from the bottle, there floated out the decomposed remains of a snail. She suffered from shock and severe gastric as a result. She sued the manufacturer for negligence.

HELD: The doctrine of privity of contract prevented her bringing a claim founded upon breach of warranty in a contract of sale, as she was not a party to the contract. But majority of HOL came to conclusion that the manufacturer owed her (as consumer) a duty of care that the bottle did not contain noxious matter and that he would be liable in tort if that duty was broken.

-Where Claimant might not have sufficient action contract might nonetheless have valid claim under tort. In order to show whether the person owes a duty of care, there MUST be PROXIMITY, FORESEEABILITY OF DAMAGE and FAIR, JUST AND REASONABLE TO IMPOSE THE DUTY ON THE PERSON. [Caparo v. Dickman Industries]

Gorham v British Telecommunications plc (2000) – CA

FACTS: A man G was advised to change from the BT pension scheme to a Standard Life personal pension, and did so, but it subsequently became clear that he (like many...
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