Commercial Law

Topics: Contract, Common law, Tort Pages: 59 (13694 words) Published: February 17, 2013
Module 2


Negligence is one of many types of torts.

A tort is a civil wrong that is outside of contract law and arises out of recognition that a person is responsible for their acts and omissions when dealing with others.

The term 'tort' refers to a number of different laws such as: • nuisance,

• trespass and

• assault

Torts generally compensate the individual for personal loss or attacks on reputation, where the loss was caused by another person.

Tort has as its basis common law. Negligence is now the dominant tort and the focus of this Module.


Consumer legislation contained in the Trade Practices Act 1974 (Cth), the Sale of Goods Acts and The Fair Trading Acts (various states legislation) contain consumer protection legislation which allows the consumer in some circumstances to take legal action under that appropriate legislation, rather than using the common law negligence principles.

Elements of negligence


Negligence: Conduct that falls below the standard of care demanded for the protection of others against the unreasonable risk of harm.

A plaintiff who commences an action in negligence must prove a number of factors exist to be successful in that negligence action. These are: • Duty of care

• Standard of care

• Damages

Duty of care

 Case law: Donoghue (or McAlister) v Stevenson [1932]

The duty of care rule was established in the landmark case of Donoghue v Stevenson, a House of Lords decision in 1932.

In this case Lord Atkin formulated the "neighbour test" to determine whether a duty of care was owed by one party to another.

This test established that a person must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour.

Lord Atkins put forward an objective question:

"Who is my neighbour?"

Lord Atkins said the answer was;

"Anyone so directly affected by actions that I ought reasonably have them in my contemplation as being so affected when I am directing my mind to the acts/omissions in question."

Thus the duty of care connection between the parties is vital.

The courts have now accepted that forseeability is not enough and that the proximity of the parties may also be important in determining the duty of care.

 Case law:  Donoghue v Stevenson, The "Snail & Bottle Case"

Recognised duties of care

Cases have accepted that a duty of care exists in particular situations and thus when similar fact situations arise at a later time in the court room, the duty of care is more readily accepted, for example, manufacturers, car drivers, accountants, doctors and owners and occupiers of property.

Owners and occupiers of property owe a duty to take reasonable care to those entering onto their premises. What is reasonable will depend on the circumstances of the entry onto the premises. The landmark Australian case in this area is Australian Safeway Stores v Zalzuna. Mrs Zalzuna slipped and fell on a wet floor at the entrance to a Safeway store. The court decided that Safeway owed Mrs Zalzuna a duty of care, as she was an invitee onto the property.

 Case law: Australian Safeway Stores Pty Ltd V Zaluzna (1986)

This duty extends to people who may enter the property without the consent of the owner or occupier.

Case law: Hackshaw v Shaw (1984), Bryant v Fawdon Pty Ltd (1993) Australian Torts Reports 81-204

Non-delegable duty of care. This imposes a more stringent duty of care on the responsible person. This type of duty arises because of the responsibility undertaken by the person owing the duty, for example, employees, school authorities, hospitals.

Standard of care

 Once a duty of care is established, the next step is to determine whether the duty of care has been breached. To determine a breach, a standard has to be established.

Sometimes standards will be easy to determine....
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