Business Law Donoghue V Stevenson Case Study

Topics: Contract, Contract law, Tort Pages: 6 (1951 words) Published: August 10, 2009
Section A
Question 1)

a) In the case of Donohue v Stevenson[1], Donohue won the case. The ratio decidendi in the case was that the liability of negligence did not depend on the contractual relationship and that Stevenson owed the duty of care to Donohue as a manufacturer, not to cause foreseeable injuries to the users of the products. As there was an owed duty, Stevenson failed to practice the appropriate standard of care and in turn, the negligent act had caused the injuries to Donohue. Therefore, Stevenson loss the case.

b) Regarding to the obiter dicta of the case, Lord Atkin, one of the case’s judges, had mentioned the “Neighbour Principle”, stated that a person is responsible not to harm another party or parties if he or she can directly affect them. In other word, the neighbour in this meaning is anybody who can be affected by the act or the omission of that person.

c) Donohue and Stevenson was an English case. Stevenson was the manufacturer of soft drinks and Donohue was the consumer of his product. Donohue drank a bottle of Stevenson’s ginger beer before she found in the end that there was a dead snail in the bottle. She was shock and suffered from gastroenteritis. However, she could not sue the seller of the ginger beer since she was not the one who bought it. Instead, she sued the manufacturer, Stevenson, for negligence. Stevenson argued that he was not liable for the injuries as there were not any contracts between them.[2]

d) Mrs. Donohue did not have any contracts with anyone. Stevenson did not make any offer to her, which meant that the first basic element of a contract between two parties, an offer, was missing. Thus, it also meant that between Stevenson and Donohue, there were none any of the rest elements which are acceptance, consideration, and the intention to be legally bounded. In fact, Donohue was not even the one who bought the drink. Her friend bought it and gave it to her. Thus, there was no contract in this case.

e) This case is a civil case because it was a case between one party (Donohue) against another part (Stevenson) not a case between a person against the state. In addition, the remedy for this case which Donohue was looking for was the compensation which is the civil cases’ remedy not a punishment which is a criminal cases’ remedy.

Question 2

Contracts are agreements between two or more parties[3], which is intended to be legally binding. In order to create a contract, there must be an offer and acceptance. An offer is an expression of intention by one party (offeror) to another (offeree) to show his wiliness to perform a promise and be bound by the promise if the offer is accepted the offeree.

Both parties have to understand each other that by accepting the offer, there will be a contract between them. They have to clear every point in the contract so there will not be a misunderstanding later.

Misrepresentations are wrong statements made by one party to another party. It might happened to ensure the other party so that he will accept the offer. There are three types of misrepresentation.

The first type of misrepresentation is fraudulent misrepresentation. Fraudulent misrepresentation is an act of saying an untrue statement that make the third party get into the contract. The acceptance of fraudulent misrepresentation can claim damages and sue him if he suffer a lot of loss.

The second type of misrepresentation is negligent misrepresentation. Negligent misrepresentation is an act of saying a statement without any proof or concern about his words. The acceptance negligent misrepresentation can cancel the contract if any damages found or out of the words that the offeror said.

The third of misrepresentation is Innocent misrepresentation. Innocent misrepresentation is an honest statement the the offeror said innocently. The acceptance of Innocent misrepresentation cannot cancel the contract if the contract has already been performed,...

References: Sweeney B & O 'Reilly J, 2007, Law in Commerce (3rd edn), LexisNexis Butterworths, Australia.
[1] Donohue v Stevenson (1932) AC 562
[2] Sweeney & O’reilly, (2007), p.38
[3] Sweeney & O’reilly, (2007), p.160
[4] Sweeney & O’reilly, (2007), p.419
[5] Sweeney & O’reilly, (2007), p.185
[6] Sweeney & O’reilly, (2007), p.175
[7] Sweeney & O’reilly, (2007), p.451
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