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Topic 4 – Causing Harm
Rachel is the sole owner of a restaurant. She is also a belly dancer and she frequently performs at the
restaurant to entertain her patrons. One night, Rachel encourages Barney, a customer who is
celebrating his 60th birthday with his family, to join her in a dance. While vigorously attempting to
keep up with Rachel, Barney breaks his hip. Does Barney have an action against Rachel in the tort of
negligence? In your answer focus on whether or not Rachel owed Barney a duty of care.
Issue
Did Rachel owe Barney a duty of care?
Law
Whether Defendant owes Plaintiff a duty of care is a question of law. The onus is on the Plaintiff to
establish the existence of the duty of care.
If the relationship between the parties is not one that falls within the established duties of care, then
to establish the existence of a duty of care, the Plaintiff must show two things:
1. That is was reasonably foreseeable that the Defendant’s act or omission would cause harm
to someone in the Plaintiff’s position, and
2. That the salient features of the case are consistent with the existence of a duty of care.
Salient features include:
1. The control the Defendant has over the situation;
2. The relative vulnerability of the Plaintiff;
3. The need for people to take personal responsibility for their own actions.
Application
Was it reasonably foreseeable that Rachel’s conduct could cause harm to someone is Barney’s
position? Answer: Yes, it was reasonably foreseeable that Rachel’s conduct by encouraging a 60 year
old man to join her in a belly dance, could cause harm to someone in his position.
The problem therefore turns in the second requirement: whether the salient feature of the case are
consistent with the existence of a duty of care.
Answer: This could be argued either way
1. On the one hand it could be argued that as a professional belly dancer, Rachel has control of
the situation and can be reasonably expected to be able to identify the types of patrons who
should not be encouraged to participate.
2. On the other hand, Barney was not completely compelled to participate and there is a
tendency upon the part of modern courts to recognise an individual’s responsibility to take
responsibility for their own actions.
3. The better view is that Rachel does owe Barney a duty of care, and if it can be shown that
she has breached the duty of care and that the breach caused reasonably foreseeable harm
to Barney, Rachel will be liable to financially compensate Barney for his losses, including the
cost of medical treatment and any loss of income. Opt for a duty of care being established.
Conclusion
Rachel did owe Barney a duty of care
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What are remedies or extent of liability?
Class exercise
Ted is in the final year of his Business Management degree. He orders a pizza from The Lame Duck
the night before his Business Law exam. The pizza contains rotten pineapple, which was carelessly
put on the pizza by one of the chefs. The next day Ted suffers food poisoning, but attempts the
Business Law exam anyway. He fails the exam and has to repeat the course over summer. Can Ted
recover the cost of the summer course from the Lame Duck by suing the Lame Duck in the tort of
negligence? Consider all three elements of the tort.
Issue 1
Did the Lame Duck owe Ted a duty of care?
Law
Whether a Defendant owes a Plaintiff a duty of care is a question of law.
The onus is on the Plaintiff to establish the existence of the duty of care.
A manufacturer owes a duty of care to a person who uses their product. See: Donoghue V Stevenson
[1932] Ac 562.
Application
Is the relationship between the parties one that falls within the established duties of care? The lame
duck is the manufacturer of the pizza containing rotten pineapple.
Ted is the user of the product because he orders pizza from the lame duck. Therefore, the
relationship falls within one of the established duties of care.
Furthermore, it is reasonably foreseeable that the Lame Duck’s conduct could cause harm to its
customers, and the salient features of the case are also consistent with the existence of a duty of
care.
Conclusion
The Lame Duck owes a duty of care to Ted.
Issue 2
Has The Lame Duck breached it’s duty of care?
Law
The civil liability legislation (CLA Qld s9(1)) in all jurisdictions provides that a person will not breach
their duty to take precautions against a risk of harm unless:
1. The risk was foreseeable (that is, it is a risk that they knew about or ought reasonably to
have known about);
2. The risk was not insignificant; and
3. In the circumstances, a reasonable person in their position would have taken the
precautions.
An employer is vicariously liable for torts committed by their employees in the course of their
employment.
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See: Century Insurance Co Ltd v Northern Ireland Road Transport Board [1942] AC 509
Application
In any restaurant, the risk of food poisoning is one that a chef would have known about or ought
reasonably to have known about. A Chef working in the lame duck should or ought to have known
about the risks involved in serving rotten food.
The risk of food poisoning is certainly not insignificant.
A reasonable person in the chef’s position should have responded to the risk of food poisoning by
ensuring that all food (pineapple) was fresh and not rotten.
Is the Lame Duck vicariously liable for the chef’s negligence?
Conclusion
A reasonable person in the chef’s position would have been more careful when preparing the pizza.
Therefore, the chef breached his duty of care.
The Lame Duck is vicariously liable for its employee’s carelessness.
Issue 3
Was the harm suffered by Ted caused by the lame Duck’s breach of duty?
Law
In order to successfully sue a Defendant in the tort of negligence, a Plaintiff must establish:
1. The breach of duty was a necessary condition of the occurrence of the harm (‘Factual
causation’); and
2. It is appropriate for the scope of the liability of the person in breach to extend to the harm
so caused (‘scope of liability’).
Application
Factual causation: If not for the chef’s carelessness, would Ted have been injured?
Scope of liability: Is Ted’s loss – the cost of the summer course – a reasonably foreseeable
consequence of such a breach or is it too remote or farfetched?
The requirement of factual causation may not be satisfied: the cost of the summer course was
caused by Ted’s decision to proceed with the exam despite the food poisoning and not the food
poisoning itself, and Ted may have failed the exam anyway.
Nor is the second requirement satisfied: the cost of a summer course is not a reasonably foreseeable
consequence of carelessly putting rotten pineapple on a pizza.
Conclusion
The Lame Duck will not be liable to compensate Ted for the cost of the summer course.
Topic 5 – Making Deals
Tim advertised his commercial kitchen size pizza oven for sale in a local newspaper. After seeing the
ad, Bob called Tim and offered to pay $5,000 for the pizza oven. Tim accepted the offer and they
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agreed that Bob would collect the pizza oven the following day. After the sale has been completed on
the following day, Tim said to Bob that the pizza oven had “barely been used”. In fact the pizza oven
had been used on most days in Tim’s restaurant in the past 2 years.
a) Did Bob provide consideration for Tim’s statement that the pizza oven has “barely been
used”?
b) Would it have made any difference if Tim had stated this before Bob agreed to buy the pizza
oven?
Issue 1
Was there consideration from Bob to support Tim’s statement that the pizza oven had “barely been
used’?
Law
An agreement is not a contract unless both parties to the agreement have paid, or promised to pay,
a price. The contribution of each party to the agreement is called consideration. Consideration is the
price for which the promise of the other is bought.
If a promise in a statement is given after an act has been performed, this will be considered as past
considerate. Past consideration is generally not sufficient. Therefore a promise given in exchange for
past consideration is generally not enforceable. See: Roscorla v Thomas.
Application
Bob purchased Tim’s pizza oven and, after the sale, Time promised that the pizza oven has “barely
been used”. Tim’s promise was made after consideration was provided by Bob because the sale of
the oven had already been completed.
The better view is that the promise was made after Bob provided consideration – whether the
consideration is considered to be the promise to pay $5,000 or the actual payment of the $5,000. As
such, Bob’s consideration occurred prior to Tim’s statement that the oven has “barely been used”. It
is therefore past consideration and is not sufficient consideration for Tim’s statement. Tim’s
statement is not enforceable.
Conclusion
Tim’s promise is past consideration is not therefore legally enforceable.
Issue 2
Would it have made any difference if Tim had made the statement before Bob promised to pay
$5,000 for the pizza oven?
Law
An agreement is not a contract unless both parties to the agreement have paid, or promised to pay,
a price. The contribution of each party to the agreement is called consideration. Consideration is the
price for which the promise of the other is bought.
If a promise in a statement is given after an act has been performed, this will be considered as past
consideration. Past consideration is generally not sufficient. Therefore a promise given in exchange
for past consideration is generally not enforceable. See: Roscorla v Thomas.
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However, if a statement is made by one party (the promisor) to the other party (the promise) before
the promise provides consideration, the promisee’s subsequent consideration will be considered as
good consideration for the statement and the statement is enforceable. See: Dunlop Pneumatic Tyre
v Selfridge.
Application
Would it have made a difference if Tim had made his statement that the pizza oven has ‘barely been
used’ and, in reliance and in exchange of that promise, Bob had paid the $5,000 for the pizza oven?
Answer: yes – it is very likely. Bob could argue he would have been relying on the fact that the oven
was new and relatively unused and therefore in good condition when he decided to buy the oven.
Alternative Approach:
In this case, Time may try to argue the validity of the term “barely been used”. Tim could argue that
2 years worth of use for a pizza oven that has a life span of say 20 years, means that the oven has
“barely been used”.
It is probable that Tim’s statement would have been legally enforceable if it had been made before
Bob paid $5,000 for the pizza oven.
Conclusion
If Tim had made the statement before Bob promised to pay $5,000 for the pizza oven the statement
would have been legally enforceable.
Class Exercise
Johnny wishes to purchase a new MP3 player. He visits BJ Hi-Fi and checks out the range of MP3
players they have available. One particular model, the Orange ePod, is on sale: there is a small stack
of ePods under a sign that states: ‘Special offer! Only $100’. Johnny says to himself, ‘Well, that’s an
offer that is too good to refuse’, and takes one from the stack. He takes the ePod to the counter,
hands it to the cashier, and says ‘I’ll take this’. He then remembers seeing ePods on sale for $90 at
another store. He says to the cashier, ‘I’m sorry, I’ve changed my mind’. The cashier responds, ‘No,
I’m sorry, I’m afraid it’s too late. You have to buy this now. You are legally committed’. Is the cashier
correct? Focus upon whether or not there is an agreement between Johnny and BJ Hi-Fi.
Issue 1
Is there an agreement between Johnny and BJ Hi-Fi?
Law
As a general rule, an agreement consists of an offer plus an acceptance of that offer.
Neither advertisements not the display of goods in a shop are likely to be legal offers. Rather they
are ‘invitations to treat’. I.e. an invitation to members of the public to offer to buy the product from
the seller.
Invitations to treat are discussed in: Carlill V Carbolic Smoke Ball Co [1893]
An offeror is entitled to revoke their offer at any time prior to acceptance.
Application
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The display of ePods in BJ Hi-Fi was not an offer because, by law, a display of goods in a ship is not
treated as an offer. Instead, the display of ePods should be viewed as an invitation to treat.
When Johnny handed the ePod to the casher it was therefore the offer.
By law, Johnny was entitled to change his mind because at no stage had there been any formal
acceptance.
It was Johnny who made the offer when he approached the cashier and since he changed his mind
before the cashier accepted his offer, there is no agreement and no contract between Johnny and BJ
Hi– Fi.
Conclusion
There is not an agreement between Johnny and BJ Hi-Fi.
Topic 6 – Enforcing Deals
Pip has paid to attend the Formula 1 Go Kart Centre on a number of occasions. On each occasion she
has stored her belongings in one of the lockers made available for customers. In September 2011, Pip
is at the Formula 1 Go Kart Centre when someone opens her locker and steals her laptop. The thief
was able to open her locker using a key taken from an unlocked box at the unattended front desk of
Formula 1 Go Kart Centre. After hearing how the thief was able to gain access to her locker, Pip
demands that the Formula 1 Go Kart Centre pay for a new laptop. The manager says the Formula 1
Go Kart Centre is not liable because a sign displayed in the locker room states:
The Formula 1 Go Kart Centre does not accept any responsibility whatsoever for any loss or damage
suffered by customers while on the Formula 1 Go Kart Centre premises however that loss or damage
may arise or be caused.
Is the Formula 1 Go Kart Centre liable for the loss of Pip’s laptop? Focus upon whether or not the
Formula 1 Go Kart Centre is protected by the disclaimer in the locker room.
Issue 1
Is the disclaimer a term of the contract between Pip and Formula 1 Go Kart Centre?
Law
A disclaimer is a statement that one of the parties will not breach despite failing to perform one or
more of their contractual obligations.
A disclaimer typically protects the seller rather than the buyer.
Whether a disclaimer will effectively protect a business from liability for breach of a contract
depends upon whether the disclaimer is in fact a term of contract, and whether the disclaimer will
be interpreted as applying to the particular breach in question.
A disclaimer is only a term of the contract if:
• It is expressly set out in a written contract that has been signed by the parties; or
• It is expressly brought to the attention of the other party by reasonable notice given before the
contract is formed; or
• It is implied into the contract as a result of prior dealings between the parties.
Prior dealings: a term can be implied into a contract as a result of the continuing relationship
between the parties. If the parties have entered into similar contracts in the past, and those
previous contracts contained a particular term, than that term is implied in the present contract.
See: Balmain New Ferry Co. v Robertson (1906) P290
Thornton v Shoe Lane Parking
Application
The disclaimer is not a contained in any written and signed contract between Pip and the Formula 1
Go Kart Centre.
The disclaimer was not brought to Pip’s attention by reasonable notice before the contract was
formed because of the sign being placed in the locker room, thus only being viewable after the
contract has been finalised.
NB: Had the disclaimer been placed in the reception area, the situation would be different and this
test may be satisfied. It should be accepted here that you are told that the disclaimer was in the
locker room and that there is no additional information (that is, she wasn’t told about it earlier”). Be
careful not to assume things. Answer question on the basis of the information given – that you are
provided with all relevant information.
The disclaimer is implied into the contract as a result of prior dealings.
Conclusion
