13 Business Liabilities

1
1 Civil criminal liabilites 2 Contract tort
liability 3 Vicarious liability 4 Strict
liability 5 Trade Description Act 1968 6 Criminal
liability 7 Tort liabilty 8 Contract liability 9
Unfair Contract Terms Act 1977
2
1 Civil criminal liabilites 1.1 Burden of proof
Criminal case presumption of innocence. In order
not to wrong an innocent people, we would rather
let an evil person pass.
3
1.2 Elements of crime (1) Two actus reus (guilty
act), mens rea (guity mind) Murder intend to
kill or intebd to cause serious
harm Manslaughter act in grossly negligent or
recklessly manner (2) Two elements must
coincide Transferred malice same crime
4
Case 1 R v Pembliton (1874) Pembliton and his
friends had been thrown out of a pub. They then
fought with a crowd of people. After fight he
threw a large stone at the people he had been
fighting with intending to hurt them. The stone
missed the people, but broke a large window. He
was accuded of maliciously damaging the
window. Court
Not guilty.
5
Case 2 R v Latimer (1866) Latimer had a fight
with another man at a club. Having got the worst
of the fight, he went out into the pub yard. He
came back with his belt in his hand and swung it
at the man with whom he had been fighting. The
belt only grazed the man, but bounced off him and
severely wounded woman he was talking to. He was
accused of maliciously wounding the woman. Court
guilty.
6
2 Contract tort liability
2.1 Tort negligence (1) Duty of care (2)
Violation of that duty (3) Causation (4)
Foreseeable damages resulting from the violation
7
(No Transcript)
8
2.2 Contract liability Violation of the
contract 3 Vicarious liability 3.1 Two
conditions Employment relationship Employee
committed the tort in the course his
employment. 3.2 Employee? (1) Control test Boss
controls what he does and how he does
it. Disadvantageous to highly skilled workers.
9
Case Walker v CPFC (1910) Walker, professional
footballer signed a 1year contract with CPFC. He
was paid 3 10s per week and had to attend
training at 1030 am. While playing he was
injured. If he was worker, he could obtain
compensation under laws then in force. If he was
IC, that law wontt help him. Court
Y, Employee.
10
(2)Integration test Employee as part and parcel
of the organization. (3) Multiple test most
favored by courts If he agrees to provide his
own work and skill for wages If he agrees that
he will be under the control of the one paying
for his work. If the rest of the terms of the
contract are consistent with a employment
contract.
11
3.3 In the course of employment 3.3.1 Four rules
If he is doing what he was expressly or
impliedly authorized to do. Case Poland v John
sons (1927) An employee wrongly believed a boy
was tampering with a bag of sugar on one of the
employers wagons. He slapped the boy who fell
the wagon suffering injuries. Privy Council
Y. Vicariously liable.
12
If he negligently performs an act to be done
properly. CaseCI Co v NIRTB (1942) The driver of
a petrol tanker, while empting his tanker, lit a
cigarette and threw away the match. This caused a
huge explosion. House of Lords
Y. Vicariously liable.
13
If he is doing some act designed to help his
employer. Case Kay v ITW (1967) The assistant
manager of warehouse was authorized to drive
small vans. In order to make space in the
warehouse, he moved a large diesel truck of
another firm. He didnt noticed the truck was in
reverse and he ran over plaintiff in starting it
up. Court of appeal
Y. Vicariously liable.
If he is doing something entirely of his own
benefits
14
3.3.2 Liability for prohibited acts Case 1
Iqbal v LTE (1973) A bus conductor was expressly
prohibited from driving buses. The bus on which
he worked caused obstruction. He was ordered to
fetch an engineer to move it. He attempted to
move it himself and caused accident. Court of
appeal
N. Not liable.
15
Case 2 Limpus v LGOC (1862) LGOCs bus driver
obstructed a bus of plaintiff in order to prevent
it passing. This caused injury to plaintiffs
horses and damage to his bus. The driver was
specifically ordered not to race with or obstruct
other buses. Court
Y. Vicariously liable.
3.4 Defenses Victim consented Contributory
negligence
16
4 Strict liability 4.1 Civil liability Product
liability (1) Consumer protection Act 1987 (2)
Liable person Manufacturer Extractor of raw
materials Own branders Importers
17
(3) Defective goods 4 factors Way of
marketing Instructions and warnings
Reasonable expectation from the product Time
when the product was supplied. (4) Damage
suffered To person death or any injury To
property only if above 275. Not include the
goods in question
18
(5) Defenses Result of compliance with UK or EU
laws Not manufactured or supplied in the course
of business Defect didnt exist at the time of
being put onto market Supplier of component
misuse by finished product maker. Development
risk defense.
19
4.2 Strict criminal liability Consumer
Protection Act 1987, Part II (1) Applies to
anyone supplying goods. (2) Penalty 2000 fine,
6 months jail (3) Defenses
20
5 Trade Description Act 1968 5.1 This is also
about strict criminal liability. Trader can be
guilty of crime even if he didnt know he was
committing it.
21
5.2 Applying false trade description to goods (1)
Any person includes company. (2) Only penalize
dishonest business. (3) Guilty acts. (4) Trade
description 5.3 Applying false or misleading
statement to services (1) Guilty acts
22
5.4 Defenses Another persons acts Has
exercised due diligence Lack of
knowledge Advertisement applies to advertisers
23
6 Criminal liability (1) Each crime has a maximum
sentence. (2) Normally a criminal is not
sentenced to the ceiling. (3) A criminal
repeatedly commits the same offence, the maximum
may be imposed.
24
7 Tort liability (1) Foreseeability and
causation are important limitations on extent of
tort liability. (2) Victims consent and
contributory negligence are also important
limitations on extent of tort liability. (3)
Court system judge measures damages in the UK.
This may be the most important limitation. In US,
jury tends to award absurdly high levels of
damages.
25
8 Contract liability 8.1 Damages (1) Remoteness
of damage A loss is recoverable if it arises
naturally from the breach in the usual course of
things. Other losses are recoverable if it can
be reasonably foreseeable as arising from the
breach.
26
Case 1 VL Ltd v NI Ltd (1949) NI agreed to sell
VL, the laundry a boiler knowing that they needed
it immediately. NI violated the contract by
delivering it 5 months late. VL claimed for two
losses first, they claimed 16 per week for
trade they lost by having to continue with their
old boiler second, they claimed 262 a week
which the new boiler would have allowed them to
make an unexceptionally lucrative dyeing
contract. Court of appeal
First claim was recoverable, the second wasnt.
27
(2) Amount of damages market rule (3)
Mitigation Case 1 BTC v Gourley (1956) Due to
Gourleys negligence, BTC lost earning of 37000.
However after paying tax these earning they would
have been reduced to 6000. House of Lords (4)
Agreed damages Pre-estimate of loss
Only entitled 6000.
28
8.2 Equitable remedies (1) Specific performance
Not available for continuous contract like
employment contract requiring constant
supervision. (2) Injunction Case Lumley v Wagner
(1851) Wagner agreed to sing at Lumleys theatres
twice a week for 3 months and not to sing
elsewhere during this period. She decided to
break the term. Court
Injunction was awarded.
29
8.3 Time limits on remedies (1) Simple contract
6 years after the right to sue arose (2) Contract
by deed 12 years after the right to sue
arose. 8.4 Exclusion of liability (1)
Reasonableness of the exclusion (2) Reasonable
notice to other party
30
9 Unfair Contract Terms Act 1977 9.1 Liability
for negligence No contract may exclude
liability for negligence resulting in death or
personal injury. If causes other damage, it
can be excluded as long as exclusion is
reasonable.
31
Case Smith v Eric Bush (1989) Plaintiff applied
to the building society for a mortgage to buy a
house. Such society employed the defendants to
make a survey. Plaintiff paid 40 to the building
society, who agreed to supply her a copy of
report. A disclaimer said neither the building
society nor surveyors would be liable for any
inaccuracies. The report also containing similar
disclosure of liability said the house was worth
16000 and no major building work was necessary.
18 months later the chimneys fell through the
roof because a chimney breast had been removed
without proper support being fitted. Plaintiff
sued for negligence, but defendants relied on
disclaimer. House of Lords
Liable.
32
9.2 Avoiding liability other than for negligence
(1) Classes of people Those dealing as a
consumer Those dealing on the other partys
written standard terms (2) Such protection
unavailable for Those unreasonably violating
the contract Those unreasonably failing to
perform
33
9.3 Indemnity clause Person dealing as consumer
cannot be unreasonably asked to give any
indemnity. Non-consumer contract no provision
unless touched by other provisions. Case PP Ltd
v Hyland (1987) Plaintiffs were in business and
hired excavators and driver from hire company. A
term of the contract provided that plaintiffs had
to indemnify hire company for any damage caused
by driver. Driver damaged the plaintiffs
buildings. Plaintiffs sued hire company who
relied on the indemnity clause.
34
Court of Appeal Non-consumer case, indemnity
clause does not apply. Defendants negligence had
damaged plaintiffs property. Exclusion only
applies to damage to property caused by
reasonable negligence. As the clause was not
reasonable, the defendants were not protected by
such indemnity clause.
9.4 Guarantee of consumer goods Producer cannot
use guarantee to prevent person from suing for
loss caused by goods negligently produced. .
35
9.5 Exclusion of statutory implied terms
Consumer contract N Non-consumer contract Y
if it is reasonable. 9.6 Liability for
misrepresentation No clause can restrict
misrepresentation liability unless reasonable.