Business Law 2

Question 1

What is tort negligence and the 3 steps of proving it

Answer 1

Negligently harming others
1- owe duty of care
2- breach duty of care
3- damage caused by breach

Question 2

Duty of care - relevant case

Answer 2

Donoghue v Stevenson 1932
-You owe duty of care to a person who could be reasonably foreseen to be injured by their actions.- also know as neighbours principle.

Question 3

Three stage test for Duty of care

Answer 3

Camaro v Hickman 1999
Is the harm foreseeable- Margereson v JW Robert’s Ltd 1996
Sufficient relationship of proximity to injury
Fair and just to impose duty of care to defendant.

Question 4

Pure economic loss

Answer 4

Loss of profit not from damage to property not recoverable - Weller v foot and mouth research institute
Recover loss from damage but not of potential profit from supply stoppage- Spartan steel v Martin & Co contractors Ltd 1973

Question 5

Exception to the rule of pure economic loss

Answer 5

Ross v Counters 1980- lawyer lost recipients will causing pure economic loss to be enforced as there was a duty of care
Spring v guardian assurance 1995- bad reference caused job loss

Question 6

Pure economic loss due to negligent statement.

Answer 6

When defendant expressed responsibility to exercise care in making the statement.

Question 7

Special relationship criteria

Answer 7

1 Defendant knows communication will reach claiment
2 advice in connection to a transaction
3 reasonable anticipation that the claiment is reliant on the statement
Morgan crucible v Hill Samuel Bank 1991

Question 8

Standard care

Answer 8

Expected level of skill, e.g licensed drivers expected to drive as well as any other driver - Nettleship v Weston 1971

Question 9

Extra factor considered for duty of care

Answer 9

-potential seriousness of the injury- Paris v Stepney borough council 1951
-probability of injury -
Miller v Jackson 1977
-Cost to benefit ratio- Haley v London electric board 1965
- value of what defendant was doing which caused the accident- Watt v Hertfordshire County council 1954

Question 10

Child has lower expectations than adult

Answer 10

Orchard v Lee 2009

Question 11

Apology does not equal admission of negligence and take in account if reducing risk makes the action boring

Answer 11

Compensation act 2006

Question 12

Criteria to prove breach of duty of care

Answer 12

-Defendant was in control of the thing that caused the damage
-Damage wouldn’t normally be caused without carelessness
-Exact cause of the accident cannot be determined

Question 13

Remoteness of damage

Answer 13

• damage reasonably foreseeable Overseas Tankship v Morts Dock & engineering Co Ltd
• doesn’t need to be exactly predictable in nature but people know it would happen- Hughes v Lord advocates 1963
  -Even if foreseeable damage is minor defendant is still responsible for full extent of claiment damage-Egg shell skull principle
  Egg shell also applies to pure economic loss - Lagden v Conner 2003

Question 14

General defenses in tort

Answer 14

Contributory negligence partial defence:
Claiment own negligence contributed to the cause or level of damage - Sayers v Harlow UDC 1958 or Froom v Butcher 1976 respectively.
Consent :
Defendant not liable if claiment consented to the risk
- consent by action e.g disregarding safety regulations Ici v Shadwell (1965)
- not valid for drunk drivers and their passengers - Morris v Murray 1990
- consent implied in sport - SIMM v Leigh rugby football club 1969
Illegality
- clear link between criminal conduct and loss suffered - Ashton v Turner 1989
- must be proportional - Revill v newberry 1996
Vicarious liability:
Employer liable for employee actions

Question 15

Steps of establishing vicarious liability

Answer 15

1- establish employee negligence
2- Look at employee defences
3- Establish vicarious liability : contract of employment
Event occurred during employment

Question 16

Outside scope of employment therefore not vicarious liability

Answer 16

Iqbal v London transport

Question 17

What is a exclusion clause

Answer 17

Removal of responsibility from contract

Question 18

Steps for a clause to be incorporated

Answer 18

1-Term brought to the attention of the party
2-Term must be contained in a document which was intended to have contractual effect
3-Reasonable notice

Question 19

Exception for clause incorporation

Answer 19

Previous dealings enable exemption from the term being brought to attention of the part so long as it is consistent with previous dealings - Spurling and Bradshaw
Requires a certain number of transactions or can be argued not reasonable to remember the clause- Hollier v Rambler motors

Question 20

What makes written signed contracts

Answer 20

Assumed party read through it and has agreed to all detail even if they didn’t read it. Grogan v Robin Meredith Plant Hire

Question 21

Vitiating factor and examples

Answer 21

Invalidating factors of the creation of a contract
Misrepresentation
Undue influence
Illegality
Mistake
Duress

Question 22

Way to perform misrepresentation

Answer 22

Misrepresentation by conduct e.g withholding info- Spice girls v April is world service BV 2002
If the truth changes the contractor must update contractee- With v oflanagan 1936
Misleading truth counts as mis rep- Dimmock v Halley 1866

Question 23

Difference between statement of fact and opinion

Answer 23

• a statement of fact does not include exaggerated advertising/boasts - Ford v Harwood 1999
• statement of fact includes intention to do something in the future - edgington v fitz Maurice 1885

Question 24

Requirement for misrepresentation to be recognised

Answer 24

Statement must have induced the other party to enter the contractual
If claiment isn’t relying on statement then not misrepresenting- Atwood v small 1838

Question 25

If claiment can be easily proven false would it still be mid rep

Answer 25

Yes - Redgrave v Hurd 1881

Question 26

Types of misrepresentation

Answer 26

Fraudulent - knowingly make false statement Negligent - negligently making false statement - Howard Mann and dredging co v Ogden and sons 1928 Innocent

Question 27

Remedies for misrepresentations

Answer 27

Recission- reverse position to point before contract Damages - payment for damages caused by misrep- Smith new court securities v Scrimgoer Vickers 1996

Question 28

4 steps for proving Mis rep

Answer 28

1- a false statement of existing fact or law 2- made by one party to the other party 3- Before the time of formation not after 4- Intended to induce the other party to enter the contract and was such an inducement.

Question 29

Silence is not misrep

Answer 29

Smith v hughes 1871

Question 30

3 types of contract mistakes

Answer 30

Common- both parties make the same mistake on a aspect of the contract- Coutrier v Hastie 1856 Mutual- where the parties are at cross purpose- two different understandings of the facts and not reconcilable.- Raffles v Whichelhaus 1864 Unilateral - only one party is mistaken - Hartog v Colin & Shields 1939

Question 31

Mistake to quality does not qualify as a voidable mistake

Answer 31

Smith v highes 1871

Question 32

Mistake as to identity

Answer 32

If signed at a distant claiment must demonstrate a identifiable person they intended to deal with- Cindy v Lindsey 1878 Unable to claim if face to face when signing - Philips v Brooks 1914 If you don’t have an identifiable person you can still claim mis rep- King Norton Metal v Edridge merrett 1897

Question 33

Two ways of enforcing mis representation structurally

Answer 33

Step 1 identify actionable misrepresentation Step 2. Classify type of mis representation (fraud, negligent, innocent) Or Common law Special knowledge Who possess it Is it relied upon in contract Negligent steps from criminal negligence. (Duty of care etc)

Question 34

Types of Duress

Answer 34

-threat of violence - Barton v armstrong - economic duress- atlas express v kafco- must be greater than normal commercial pressure e.g negotiations- CTN cash and carry v Gallagher 1994

Question 35

Types of undue influence

Answer 35

- relationship of dominance- bank credit and commercial SA v Aboody 1999 - presumed undue influence - relation ship of trust and confidence- Allcard v Skinner - constructive influence - e.g husband - contractor then needs to have one to one meeting or provide source of independent advise to offset this.

Question 36

Defense against signed written contract

Answer 36

Mis representation in being induced to sign Non est factum- Saunders v anglia building - inability to comprehend content and incorrectly in formed of its contents

Question 37

The three prong rule on exclusion clauses

Answer 37

1 Does the clause expressly exempts liability for negligence, if not go to 2- the word negligence or synonyms must be used, loss whatsoever do not suffice 2 Are the word interpreted in their ordinary meaning wide enough to cover negligence(if ambiguous then no) if yes go to step 3 3 Does the clause cover liability other than negligence-if yes the clause covers that liability not negligence.

Question 38

Defense against the three prong test

Answer 38

HIH Casually and General Insurance Ltd v Chase manhattan Bank 3 prong seen as guidance not the rule and courts should look at intention instead

Question 39

Mis representation is not actionable if opinion

Answer 39

Biased v wilkson

Question 40

Mis representation of law is actionable mis representation

Answer 40

Panamanian v LB Hackney

Question 41

What is inducement

Answer 41

When a claimant relies on the statement of defendant when going into the contract

Question 42

Defense against inducement

Answer 42

Atwood v Small If claimants representee or agent checked the validity of the info

Question 43

Inducement

Answer 43

But for the statement claimant wouldn’t have went into the contract- Applicable for regular people while misrep applies on a individual case

Question 44

Defense to inducement

Answer 44

Defence - if representee or agent checked the validity of the inducing statement - Attwood v small

Question 45

If representee has the info available to them and did not check it are they still reliant on the statement

Answer 45

Yes- Redgrave v Hurd

Question 46

Remedies for different types of mis rep

Answer 46

Fraudulent - rescission and damages Negligent - rescission and damages forseeable Innocent- damages or rescission

Question 47

Restrictions to rescission

Answer 47

1- Third party acquired the rights- unless you take steps to rescind the contract like in - Car & Universal credit v Caldwell 1964 2- Representee affirms the contract- acts to continue the contract- Long v Lloyd 1958 3- lapse of time- Leaf v International galleries 1950 4-Resitution to original condition is impossible

Question 48

Difference between negligent mis rep under common law vs 1967 mis rep act

Answer 48

Common law requires proof from claimant of a special relationship with claimant and false statement While 1967 mis rep act requires only proof of false statement.

Question 49

Types of common mistake and if they are voidable

Answer 49

Existence of the subject matter - voidable unless on party is responsible for ensuring the existence of the subject - McRae v commonwealth Disposals 1952 Ownership of subject matter - voidable Mistake of subject quality - not voidable

Question 50

Is undue influence a subjective or objective test

Answer 50

Subjective test- taking into account actual victims belief rather than a reasonable persons belief.

Question 51

Two special relationships that induce influence

Answer 51

1- Fiduciary relationship- relationship of trust and confidence e.g religious advisor- Allcard v skinner 1887 2- Husband/Wife- requires other party not to provide constructive notice - Barclays Bank plc v O’Brien 1994 e.g provide private one to one legal advisor.