Business Law

 

 

 

 

 

 

 

Law basics (top)

Source of law  (top)

Legislative process  (by Parliament)  (top)

Delegated legislation (subordinated , subsidiary legislation) (top)

Judicial precedent (judgement) (top)

Statutory interpretation  (top)

 

Judicial System in UK  (top)

Terms / Basics  (top)

CIVIL Justice System (top)

Upper court

-appellate jurisdiction only

 House of Lords    

Ý

    
Court of Appeal    
  Ý    
Lower court

-appellate and original jurisdiction

 High Court > $ 50,000  
Ý - cases which involve $25,000 - $30,000 will be  decided either in High or County County based on complexity  
County Court $3,000-$25,000

- divided into

  • Family division - divorce, marriage

  • Chancery division - finance, property, tax

  • Queen's Bench division - general cases

- contain Small Claims Court which handle < $3,000

CRIMINAL Justice System  (top)

 
Upper court

-appellate jurisdiction only

 House of Lords  

- High Court is under the Upper court !!

Ý

  
Court of Appeal  
Ý  
High Court  
  Ý    
Lower court

-appellate and original jurisdiction

 Crown court - handle indictable (cognizable) offences eg: murder, rape (more serous)  
Ý    
Magistrate court - handle summary (inferior) cases which has < 1 year imprisonment (less seroius cases)

- divided into

  • Family division - 

  • Chancery division -

  • Queen's Bench division -

 

 

 

 

 

Law of contract

Contract vs Agreement (top)

Contract classification (top)

Rule governing OFFER (proposal)  (top)

Rule governing ACCEPTANCE   (top)

Rule governing CONSIDERATION (top)

 

Example of related case law   (top)

Offer  (top)

Characteristic / Rule Description  Cases Outcome
clearly stated terms - statement too vague to create a valid offer Guthing v Lynn (1831) The buyer of a horse promised to pay the seller an extra 5 pounds 'if the horse is lucky for me'. It was held this was too vague to be enforceable
  - unless there is an arbitration clauses Foley v Classique Coaches (1934,CA)  Court of Appeal held that the arbitration clause to supply petrol to coach company ' at a price be agreed in writing and from time to time' would enable any lack of clarity to be resolved as necessary
differs from 'invitation to treat' - 'cheap offer', statement advertising goods are not offer

- Customer make offer when they prepared to do business at the price shown on window display. If seller accept, then it resulted in a contract

 Fisher v Bell (1961,CA) Court of Appeal held that the goods (flick-knife) in a shop window, even those bearing a price tag, represent invitation to treat not an offer. 
    Pharmaceutical Society (GB) v Boots Cash Chemists (Southern) Ltd

Medicine ( which needs supervision of  medical assistant) was displayed on the shelf in a self-service shop 

 The display goods was an 'invitation to treat'

Customer makes offer only when presenting the goods at the check-out /counter
differs form giving 'information' - Asking/ providing for information do not meant to offer Harvey v Facey (1893)

After being asked by Harvey the lowest price of the sale of a land through telegram, Facey replied with a mere statement of price.

 Harvey thought it was an offer but it was not. 

Facey only provide info and no intention to sell his land 
must communicated to the offeree - Offeree must have the knowledge of the offer Carlill v Carbolic Smoke Ball (1893)

Carbolic Company advertised to the public that it will pay S1000 to anyone who caught influenza from using its product.

After using it and still get influenza, Carlill sued the company

 Court of Appeal held that the advertisement was a unilateral offer by Carbolic. It would be accepted by anyone who knew it. Thus, Carlill won her case.  

Besides, there exist definite 'consideration' of  $1000
    Bloom v Swiss Watch Company (1915)

Swiss Company advertised reward for anyone supplying correct information leading to the arrest of jewel thieves

Bloom only knew the Swiss offer after providing the info. 

 Court of Appeal held that the Swiss company not obliged to pay Bloom. 
Termination of offer a) Refusal or

b) Counter offer (indirect rejection) - Offeree make a new term which automatically ended the original offer. 

 Hyde v Wrench (1840)

Wrench offered to sell his land for $1000. Hyde said that he will pay only $950 and the balance $50 other day.

After no response from Wrench, Hyde willing to pay the original offer of $1000 

 It was held there exists counter-offer from Hyde of $950. It automatically cancelled the original offer $1000

Hyde could not revive the original offer of $1000 unless Wrench re-make the offer again !!
Lapse of time Offer will vanish if not accepted within any specified / reasonable time Ramsgate Hotel v Montefiore (1866)

Montefiore offered to buy hotel shares in June.

He heard nothing more until November, the company informed him that the shares were his.

 It was held the company's delay resulted the lapse of Montefiore offer. Thus, no contract exist.
Revocation  Offeror can cancel /revocate its own offer before it was accepted. But it must be convey to the offeree either

a) directly OR

b) authorised person

 Dickinson v Dodds (1876,CA)

Dodds offer to sell his property to Dickinson.

Dodds sold it to 3rd party before Dickinson responded.

 The 3rd party best friend informed Dickinson of the sale to 3rd party.

It was held to be adequate notice even the informant did not act on Dodds (offeror) instruction.    
       

Acceptance (top)

Characteristic / Rule Description  Cases Outcome
Acceptance must be communicated to offeror by offeree himself or authorized agent - Offeror must know the offer was accepted Powell v Lee (1908)

Powell applied for the job of headmaster

Someone (who was not authorized by board of members) told Powell that Powell got his job

Then, board of members appoint another person to hold the job

 Powell failed in his action for breach of contract

There is not valid acceptance, thus no contract
Silence do not mean acceptance - Offeror cannot push offeree that being silence means to accept Felthouse v Bindley (1862)

By telegram, Felthouse offered to buy horse from his nephew and stated that 'if  I hear no more, I consider it mine'

His nephew did not respond but accidentally sold his horse in an auction 

 It was held no contract exist between Felthouse and his nephew.

 
Postal communication rule (include telegram)

- do not apply to instantaneous communications (telex, telephone, facsimile, e-mail)

 - Date of offer is defined when only the offeree received the offer letter

-Date of acceptance is defined when the acceptance letter is posted and not the time the offeror received it. 

 Byrne v Van Tienhoven (1880)

Oct 1 : Tienhoven posted offer letter to Byrne

Oct 8: Tienhoven changed his mind, posted revocation letter

Oct 11: Offer letter arrived. Byrne send his acceptance by telegram

Oct 15: Byrne posted second acceptance, this time by post

Oct 20: Byrne received revocation letter 

 Date of offer : Oct 11

Date of acceptance : Oct 11 (telegram)

Revocation was too late and ineffective. To be effective, it should reached before Oct 11
  -can avoid this postal rules by specifying not be bound until receipt of an acceptance letter Holwell Securities v Hughes (1974)

The offeror stated that they must receive acceptance by 'notice in writing'

Holwell posted the acceptance letter before deadline.

Letter arrived at the offeror after the deadline

 Because of the term 'notice in writing', there is no contract although posted before deadline.

Because of the term too, the postal rule of acceptance can be avoided by offeror thus can 'save' the offeror from lawsuit.
Acceptance must be unqualified No exist of counter-offer A offer B his car for $4500.

B accepts but can only make 3 instalments of $1500 

 This is a qualified acceptance

Regarded as counter-offer
Acceptance once given cannot be revoked (cancelled)      
Acceptance must take place within the prescribed time / reasonable time      
       

Consideration (top)

Characteristic / Rule Description Cases Outcome
Consideration must not be past

 

 

 - a promise to pay must precede the act

if not, the promise will be merely gratuitous

 Roscorla v Thomas (1842)

Roscorla bought a horse from Thomas

After contract was over, Thomas promised that the horse sound and free from vice

Later, horse become vice and Roscorla sued for breach of contract

 Promise was made after contract.

No consideration was made for the promise.

Roscorla failed because it was a past consideration. No new contract was created.
Consideration can be an a) executory / future consideration - Contract formed by exchange of promises which will be carried out at a later day. Eg: payment and transfer of bicycle were to take place next week after the contract is made today  
  b) executed / present consideration - the promise or act is performed when contract is made. Eg: someone advertise reward for safe return of a lost cat. The promise to pay is a binding performance of an act of returning the cat. The person who returns the cat is called 'executed consideration'.  
Consideration must be definite, not vague   Shield v Drysdale (1880)

A daughter was promised by father 'some' of his property if she look after her parents

 Agreement was void

Consideration of 'some' was vague
Consideration must be of some value (sufficient) but need not adequate -usually monetary value but other material also can Thomas v Thomas (1842)

A widow was promised a house in return for a ground rent and promising to keep the property in good repair.

Annual rent of $1 was imposed.

 $1 was held sufficient consideration for the promise
    Chappell v Nestle (1960)

A promotion by Nestle offered pop music recordings for a sum of money plus 3 chocolate wrappers

 It was held the chocolate wrappers formed part of the consideration
A person already obliged cannot rely on the same act to form a new contract -the act is an insufficient consideration to support a contract Stilk v Myrick (1809)

Sailors were bound to contract of a ship voyage

2 sailors deserted the ship during the course

Captain promised that the wages for the deserted sailors would be distributed among the faithful remainder sailors

Upon voyage completion, captain denied giving the extra money

 The captain had the right to do so

The sailors were already obliged to do pursuant to their contract
    Collins v Godefroy (1831)

Godefroy promised to pay Collins if Collins become a key witness.

 Godefroy promise was not contractual binding.

Collins should give witness testimony in court even if not paid because it was a LEGAL DUTY to do so
Consideration must move from the promisee (offeror) Offeror owns the object thus should decide the amount of consideration (money value) to the offeree.

Promisor (offeree) make promise to pay that amount to promisee (offeror)

    
Consideration must be capable of performance   A agrees to give B a car if B can fly  
Consideration must no be illegal or unlawful   A pay B money to do robbery  
       
Pinnel's Case (1602) (top)

Part payment of a debt will not be adequate consideration to discharge a debt

   Ali owed Ahmad $50

Ali can only pay $35 when the repayment date arrives although Ahmad agreed to receive $35 in full settlement.

 

 Legal logic:

Ali only pay $35 and obtain benefit of $15 from Ahmad but gives nothing in return

Ahmad loses $15 from their agreement

Ali provides no consideration and so Ahmad new promise (to accept in full satisfaction) is not contractually binding; merely a gratuitous promise.

So, if Ahmad would claim $50 from Ali next time, Ali cannot sue Ahmad

 
Promissory estoppel (top)

- equitable defense which may be relevant in part-payment situation

- defense against Pinnel's code

- only applicable if the act of breaking the gratuitous promise is very unfair and irrelevant 

 Parties who gratuitously promise that they will not enforce existing contractual rights may lose their entitlement to do so if it would be unfair to allow them to go back on their promise; they are prevented (estoppel) from breaking the promise Central London Property Trust (CLPT) v High Tree House (HTH) (1947)

CLPT leased some flats to HTH 

Because of war, HTH failed to rent out the flats. HTH cannot afford to pay the leasing fee to CLPT

CLPT promised to reduce the fees during the war.

After the war, CLPT wanted to claim back the full leasing fees during the war period from HTH  

 

 CLPT was not entitled to claim the full leasing fees.

It is unfair to go back and break the promise given by CLPT based on the circumstances 
Privity of contract (top)

- only parties involved can sue each other

 Parties who have not contributed consideration to a  contract cannot usually sue on it if it is breached. Tweddle v Atkinson (1861)

Tweddle engaged to  Atkinson's daughter.

Tweddle's father and Atkinson contracted they would each put money for their children's marriage

Atkinson died before making payment

Tweddle wanted to sue Atkinson (his deceased father in law) estate for money

 Tweddle failed in his quest.

Contract was made between Tweedle's father and Atkinson

Tweedle not involved in the contract
    Dunlop Rubber Co.Ltd v Selfridge (1915)

Dunlop supplied tyres at a discount to Dew Co

Dew Co. promised Dunlop that Dew only sold to traders who agreed not to resell below list price

Dew supplied Selfridge who breached the resale price agreement.

Dunlop took action against Selfridge

 

 Dunlop cannot sue Selfridge

No privity of contract between Dunlop and Selfridge

Dunlop had given no consideration to Selfridge in return fro the promise to stick to resale price

(Action can only be taken by Dew against Selfridge)
       

 

Terms of a contract  (top)

Classification / Title Subtopic Description Case Judgment
Distinction between 'mere representation (statement) and terms (top) -time the statement was made Was it made early of negotiation or close to time the contract was concluded?    
-form of statement Term must be written not in verbal form    
-whether one party of contract has special skills and expertise that are relied on by other party.  If yes, then this may indicate the statement is a term of contract Dick Bentley Production vs Harold Smith (Motors) Ltd

During purchase of a car, Harold told Bentley that the vehicle had a new engine and only been driven 20,000 miles. 

The statement was untrue as Harold made it believing it was true. 

When Bentley discovered mileage was 100,000 miles, he sued breach of contract. 

 Distance travel become term of contract. 

Person who made the statement, Bentley had special knowledge and skill. 

The statement was made so that both parties should have realized that buyer would rely on it. 
 
Term classification (top)        
express (written /spoken)

Can be divided into

  • condition
  • warranty
 condition -is a term of vital importance                 

-goes to the very heart of a contract                  

-a breach of condition entitles for claim damages AND contract rescission (cancellation)  

-if a party would not have entered a contract but for the existence of  particular term, this will indicate the term is a condition

 

 Luna Park Ltd vs Tramways Advertising Ltd

Tramways entered a contract that it would display 8 hours daily advertisement in Luna Amusement Park. 

However, it failed to do so. 

Tramways argued that it was a warranty, claiming they only need to display average 8 hours a day

 

 The time display of advertisement was essential term of contract. 

Thus, there exists breach of condition not warranty. 

 
  warranty -is a term of less importance             

-breach of warranty entitles for claim damages ONLY 

 

 Bettini v Gye (1876)

A contract was made that Bettini to sing in opera for 6 month period

Bettini was required to arrive at London for rehearsals one week before his first performance

He arrive only 2 days before

Gye claimed breach of condition

 The rehearsal clause was not vital to the agreement. The contract for 6 months was more important.

The rehearsal clause was regarded as a warranty thus Gye entitled for damages only  and not contract cancellation

Only breach of warranty was given
         
implied

Can be implied either by

  • court
  • statute
  • custom / trade usage
 court -It is possible for court to imply a term into a contract where clearly the parties intended it to be term ,but for some reason it is not contained in the contract

-the officious bystander test

  • prima facie that which in any contract is left to be implied and need not be expressed is something so obvious that it goes without saying
  • eg: In contract of employment, the court imply term that employer cannot require employee to do anything unlawful
 Shirlaw v Southern Foundries (1926)

Southern Foundries hired Shirlaw for 10 years in contract

Then, new company took over Southern Foundries in less than 10 years

The new company fired Shirlaw

Shirlaw sued ex-employer (Southern Foundries) for breach of contact 

 Shirlaw failed to sue

Implied term: Needless to say, the new company has the right to fired any ex-employee

Southern Foundries has no say after the take over
  statute Some statutes imply certain contract specific terms Trade Practices Act 1974

-implying terms that goods will be of merchantable quality

- goods must be fit for the purpose for which they have been purchased

  
  custom / trade usage Established practice or custom in respect to certain agreements    
 
Exemption and exclusionary terms (top)
  • ticket cases
  • non ticket cases

 

 ticket cases -Cases where exemption clause relied on is contained on a ticket received by a party as a result of entering a contract

- eg: a ticket received stating the hotel company will not responsible for any loss of belonging

-Test whether a reasonable person would regard the ticket as simply a receipt of payment or regard it as a document containing contractual term

- Thus, for exemption clause to be effective:

  • notice of clause must be given to party before or at the time the contact is made
  • reasonable steps must be taken to notify person of the exemption clause      eg: BIG FONTS use for exemption clause in a ticket for reasonable man to notice it
 Parker v Southern Eastern Railway (1877)

Parker deposited his bag at a cloakroom

He was handed a ticket that had printed on its face 'See Back'

Condition printed on the back was liability for loss per item was limited to $10

Parker wanted to claim loss full value of $24

 Parker was bound by exemption clause

Although he had not read it, the railway company gave him reasonable notice of the existence of clause
      Causer v Browne (1957)

Dress of W (wife)  were left by H (husband) for dry-cleaning

Docket with exemption clause (not liable for loss or damage) was given to H

A week later, W found damage to her dress 

 The cleaners could not escape liability

A reasonable person assume the docket as a receipt and required presentation on collection of the items

No notice of exemption clause had been given
      Olley v Marlborough Court (1949)

A couple checked-in and paid for a week in advance and went to their hotel room

The room wall stated 'Proprietors will not hold temselves responsible for articles lost or stolen, unless handed to the manageress for safe custody'

The wife later left her room, hanging the key on a board at reception desk.

Key was stolen, room was opened and fu coats were stolen

The hotel sought to rely on exemption clause to escape liability

 

 The hotel liable for the loss

Contract was completed at the reception desk  

No exemption clause was made AT THE TIME the contract was amde

The clause was only given after the contract was made, when arriving at their room, they saw the clause on the wall.
  non ticket cases Cases in which a party has signed a  contract containing exemption clause, they will be bound by it L'estrange v F.Graucob Ltd (1934)

Contract containing exemption clauses    was signed during a machine purchase

The clauses was in small print

 The purchaser was bound by those clauses

It was immaterial that she did not read them
         
         

 

 

 

The Law of Tort (negligence) (top)

Negligence (carelessness) (top)

         
Category / Test / Principal / Topic Subtopic Description Case Judgement
Legal duty on part A towards B (top)
  • Donoghue (neighbour) principal
   -not every careless act done by a person will be held responsible in law

- liable only if he/she under a legal duty to take care

- Way to determine if a person on legal duty is based on the foresight of the reasonable man

 Donoghue vs Stevenson (1932)

-A manufacturer of ginger beer sold to a retailer.                          

 -C bought beer form retailer and treated B.    

-Presence of snail in the beer.                                

-B fall ill and sued the manufacturer

 

 - No contractual duty exists between B and manufacturer

-But manufacturer had duty to take care that bottle did not contain noxious matter

-Manufacturer was held liable
    - it is not required that the plaintiff must be identifiable by the defendant

it is enough if plaintiff is one of a class within area of foreseeable injury

 Haley vs London Electricity Board

-Defendant excavated a trench in the street        

-They took precautions for normal-sighted passer-by                       

-The blind plaintiff suffered injury because precaution taken was inadequate for him

 

 

 - It was held that number of blind persons was sufficient for defendants to take extra precautions.

- Defendants was liable
      Ward v Tesco (1976)

- Customer P slipped on spilled yoghurt in a supermarket

-The spillages had happened 10 times a day

 - The supermarket had not taken reasonable care to ensure customer safety even though the spillage was not caused by their staff
      Clay v Crump (1963)

- Architect and contractor demolished an old building

- A worker was injured during that process

 -Architect and contractor were liable

-They should inspect properly, taking precaution before demolition process began
      Condon v Basi (1985)

- A reckless tackle in a football match led to a broken leg

 -Participants in competitive sport owe duty to one another to take reasonable care

- Upheld the $4900 compensation
      Bourhill v Young (1942)

- A motorcyclist was  accidentally killed by a car

- A female bystander from 20 yards away saw the blood on the road, suffered psychiatric injury and her baby was stillborn

 - The car driver has no legal duty on the bystander

-It was unforeseeable that the bystander would suffered psychiatric injury
      Phillips v Whiteley (1938)

-A woman developed ear infection after having her ears pierced by jeweller

-This happened after few days

 -During piercing, the jeweller had take reasonable care and skill

-The jeweller was not reliable for infection which occur after few days given the fact he was not a surgeon
         
Breach of duty (top)        
Test of Reasonableness

 Reasonable man means an ordinary man who is not expected to have any particular skill such as surgeon, lawyer 

- Up to the judge to determine 'reasonble'

- eg: A passer-by who renders emergency first aid after an accident is not required to show the skill of qualified doctor

-eg: Roe v Ministry of Health (1954)

- 1947, Roe paralysed from waist down because anaesthetic administerd by doctor was contaminated with phenol. This was due to an 'invisible' crack of anesthetic ampule kept in phenol.                     

-The doctor was not liable because the risk of an invisible crack was very small and only drew the medical profession attention in 1951.Morevoer,existing medical literatures in 1947 related to the problem was insufficient 

 

 

 
  • magnitude of risk
  • likelihood the injury will be incurred
 Bolton v Stone (1951)

-Bolton was standing on the highway near a cricket ground            

-Exist 7-foot fence around cricket ground and upward slope of ground                       

-Bolton was struck by a cricket ball

 - Likelihood of injury was very small

- Cricket club was not held responsible
 
  • seriousness of the injury that is risked

 

 Paris vs Stepney Borough Council (1951)

-Paris, a one-eyed man employed by Stepney to work in condition involving some risk eye-injury                  

-Likelihood of injury was not sufficient to provide goggles t a normal 2-eyed workers

 - Stepney was liable and should provide goggles

- Paris risked much greater injury of total blindness as compared to risk of loss of one eye in respect of a 2-eyed man.
  • importance of objects to be obtained
 - necessary to balance the risk against the consequences of not taking it Watt vs Hertfordshire County Council (1954)

-Watt , a fireman used a jack to save a trapped women under a heavy vehicle

-During the procedure, Watt injured because using inappropriate jack        

-Watt sued fire authority of not providing proper saving equipment 

 -Fire authority was not negligent

- The jack was the only available tool during that emergency time of saving the women

- Saving life was more important at that time

-Rushing back to get proper jack would only waste. 
  • practicability precaution
   Latimer vs AEC (1953)

-A factory floor became slippery after a flood. 

-The owner did everything possible to reduce the slippery floor                              

-But, plaintiff was injured and said the owner should close down the factory 

 -Risk of injury due to slippery floor was small. 

-It was not so great to justify the precaution of closing down factory
Test of Foreseeability   - deals with direct consequences

- a reasonable man must be able to foresee the extent of consequences / damages done

 Re Polemis (1921)

-C hired a ship from its owner to carry cargo business           

-Under contract, C and owner were free form fire liability               

-C carried benzene tins which leaked and produce vapour in the ship's hold.       

-During shifting of cargo, stevedores (servants of C) negligently drop a plank into the hold.  

-Ship caught fire and destroyed everything.

 -Fire exception clause did not cover negligence on part of servants

-C was liable for all direct consequences of the negligence, even they could not have been anticipated
Test of Remoteness   - Consequences are too remote if a reasonable man would not have foreseen them The Wagon Bound (1961)

-OT Ltd was charterers of the ship, Wagon Bound

-OT Ltd servants accidently spill fuel oil in a Sydney harbour 

-The spill spread to MD Ltd wharf which was 600 feet away. In MD Ltd wharf, Corrimal, (another ship) was under welding process for repair.              

-MD Ltd manager aware of the presence of oil. He continued the welding process as believe the spill oil was non-inflammable     

-OT Ltd also took precaution to prevent further spillage          

-2 days later, MD Ltd wharf caught fire and was destroyed

 -It was unforeseeable that fuel oil spread on water would catch fire

-Re Polemis rule by substituting 'direct' for 'reasonable foreseeable' consequence was equally illogical and unjust

-It is the foresight of reasonable man which ALONE can determine responsibility

-No one was liable for the case
         
Unintended consequences (top)
       
 
  • pecuniary (monetary) amount of damage
 -If a person injures a high-income earner / valubale piece of property, he cannot argue that he did not expect the loss to be so great -eg: In a car accident, X who knocked down a surgeon whose earning is Rm30,000/month would liable to pay higher damages.

-eg: X pay less if knocking down a unemployed ex-labourer

  
 
  • extent
 -If occurs in a foreseeable way, defendant must pay a much greater in extent than would have been anticipated -eg: As a result of X neglicence, Y was hit in the head. Y suffered brain damage and X was liable  
 
  • 'egg-shell skull' principal
 -Defendant must take his victim as he find him -eg: If a woman hits a man on the head with a hammer, she cannot defended that the man's head was badly hurt because he had a 'thin skull'  
 
  • plaintiff's impecuniosity (financial disability)
 -If plaintiff suffered more damages due to his own financial disability, he cannot sued to get more compensation

-financial disability of plaintiff was disregarded. Such loss is too remote as the plaintiff's want of means is an extraneous matter 

 Liesbosch Dredger vs Edison SS

-Edison (ship) by negligent navigation fouled and sank the dredger Liesbosch.  

-Liesbosch's owner were under contract with 3rd party to complete a piece of work

- The owner incurred a lot of expenses in fulfilling this contract because too poor to buy a substitute for the dredger

 -Damages can only be recovered for market price of a comparable dredger Liesbosch and compensation for loss in carrying out the contract between date of sinking and date of availability of the substituted dredger

-Claim for extra expenses due to poverty in not being able to buy a substitute dredger was rejected 
  - Consequence is too remote if it follows a 'break in the chain of causation' or due to nova causa interveniens    
 
  • intervening natural events
 -Defendant would not be reliable if loss is caused by natural event which occurs independently of the defendant's breach of duty Carslogie Steamship Co.Ltd vs Royal Norwegian Governemnt (1952)

-Plantiff's ship was negligently damaged by defendant's ship

-Defendants made temporary repairs for plaintiff's ship to a sea-worthy condition so that she can sail to US for further repair. The advanced repair would also be made by defendants

-During the sail, the plaintiff's ship suffered damages to heavy weather

-In US, defendants extensively repair the ship but took longer time because presence of further damage by weather

-Plaintiff wanted to claim the loss of not utilizing the ship well and time wasting by the defendants 

 -It was unfair for defendants to cover the loss of time-wasting repairing the ship

-The time was wasted to repair damages by weather.

-Besides, the heavy weather was a supervening event

-Plaintiff claim was rejected
 
  • intervening act of 3d party
 -Defendant would not be reliable for damages done by independent 3rd party 

-It will amount to nova causa interveniens

 The Oropesa (1943)

-The Oropesa (ship) an The Manchester Regiment (ship) collided. Both parties were at fault

-Master of Manchester wanted to cross over in a boat to Oropesa to discuss salvage arrangement  

-The boat overturned and master of Manchester drowned

 -The death caused and flowed from collision

-The action in taking the boat did not constitute a nova causa interveniens
    -But if the action of 3rd party is not truly independent, then the defendant is reliable  Stansbie vs Troman (1948)

-Troman, a decorator was told by Stansbie, owner of a house to close front door whenever he left the house

-Troman left the house for 2 hours to get wallpaper. He left the house door unlocked

-A thief stole a diamond bracelet from the house

 - Troman was liable for the loss.
      Haynes vs Harwood (1935)

-Harwood's servant left a 2-horse van unattended in a street which has many children

-A mischievious boy threw a stone at the horse causing them to bolt, injuring Haynes

 -It was negligent to leave the van alone

-Third party intervention (boy) was not considered as an independent action
 
  • intervening act of plaintiff
 -Defendants would not be reliable if plaintiff's own act  break the chain of causation McKew vs Holland, Hannen,Cubits (1963)

-McKew was injured in an accident caused by the defendants. As a result, his left leg lost control

-After a few days, McKew went up steep stairs without handrails to inspect a building flat

-He descended the stairs holding his young daughter by the hand, going ahead of his wife and brother-in-law

-He lost control of left leg and sustained ankle fracture 

 -Defendants played no role in his ankle fracture

-Chain of causation had been broken by his own conduct

-Knowing of his left leg problem, he could have descended the stairs slowly or sought the assistance of his wife or brother-in-law
         

Defense against negligence lawsuit (top)
Contributory negligence   - If plaintiff's injuries have been caused partly by negligence of defendant and also by his own, the plaintiff can recover  partly or nothing Refer to case :

McKew vs Holland, Hannen,Cubits (1963)

  
      Nettleship v Weston (1971)

- P supervised D who is taking her first learning driving lesson

- D crashed into a lamppost and P was injured

-P claimed damges from D

 -There is legal duty of D (driver) towards her passenger, P and other road users

-But the claims was reduced and subject to a deduction for contributory negligence (P was supervising D to drive)
Voluntary assumption of risk (violenti non fit injuria)   - If the plaintiff voluntarily to take the risk of negligence, the defendant would not liable Eg: Knowing the risk of climbing mountain, tour guide would not be blamed if any injury happens to tourists  
         

 

 

 

Business Organization (top)

Company (top)

  Company Partnership
Definition association of persons who come together for a specific purpose sum total of persons who come together to share profits of business carried on by them or any of them
Incorporation Company Act 1965 Partnership Act 1961
Number of member Public - minimum 7 to infinity

Private -2 to 50

 Banking - 2 to 20

Other business - 2 to 10
Separate legal entity Presence Absence
Liability of members Limited by share, guarantee, both Unlimited
Property belonging Belongs to company and not to its member Belong to partners, collectively entitled to it
Transfer of share Can be transferred without permission of other member (public company)

But  need approval to transfer share from board of directors in private company

 Require other partners consent before allowing share transfer
Making decision Majority prevails Require 100% consensus
Perpetual succession Presence - can only be dissolved through court of law Absence - partnerships dissolved upon death of one partner
     

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