Transcript 13 Business Liabilities

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
1 Civil & criminal liabilites
1.1 Burden of proof
Prosecutor
Criminal law
Beyond reasonable doubt
Civil law
Plaintiff
Facts alleged are true
Such facts lead to liability
Criminal case: presumption of innocence.
In order not to wrong an innocent people, we would rather let an
evil person pass.
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
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.
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.
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
Injury:
Prevention:
Probability
Seriousness
Cost
Duty
broken
Usefulness of defendant’s act
Duty not
broken
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.
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
10:30 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 wont’t help him.
Court:
Y, Employee.
( 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.
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 employer’s wagons. He slapped the boy who fell
the wagon suffering injuries.
Privy Council:
Y. Vicariously liable.
* If he negligently performs an act to be done properly.
Case:CI 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.
* 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 didn’t 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
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.
Case 2: Limpus v LGOC (1862)
LGOC’s bus driver obstructed a bus of plaintiff in order to
prevent it passing. This caused injury to plaintiff’s 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
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
(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:
(5) Defenses
* Result of compliance with UK or EU laws
* Not manufactured or supplied in the course of business
* Defect didn’t exist at the time of being put onto market
* Supplier of component: misuse by finished product maker.
* Development risk defense.
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
5 Trade Description Act 1968
5.1 This is also about strict criminal liability.
Trader can be guilty of crime even if he didn’t know he
was committing it.
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
5.4 Defenses
*Another person’s acts
*Has exercised due diligence
*Lack of knowledge
*Advertisement: applies to advertisers
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.
7 Tort liability
(1) Foreseeability and causation are important limitations on extent
of tort liability.
(2) Victim’s 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.
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.
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 wasn’t.
(2) Amount of damages: market rule
(3) Mitigation
Case 1: BTC v Gourley (1956)
Due to Gourley’s negligence, BTC lost earning of $37000.
However after paying tax these earning they would have been
reduced to $6000.
House of Lords:
Only entitled $6000.
(4) Agreed damages
Pre-estimate of loss
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 Lumley’s 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.
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
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.
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.
9.2 Avoiding liability other than for negligence
(1) Classes of people:
* Those dealing as a consumer
* Those dealing on the other party’s written standard terms
(2) Such protection unavailable for:
* Those unreasonably violating the contract
* Those unreasonably failing to perform
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.
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. .
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.