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LAW105 Introduction To Business Law
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LAW105 Introduction To Business Law
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Course Code: LAW105
University: Charles Darwin University
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Country: Australia
Question:
Johnny has been training a new chef, Rupali, in the kitchen of his restaurant. Johnny thinks Rupali is almost ready to prepare food for customers. Johnny and Rupali arrange for a small group of CDU students and their friends to come to the restaurant one evening, when the restaurant is ordinarily closed, to try Rupali’s food. Johnny explains to the guests that Rupali is being left alone in the kitchen to prepare the meal by himself, without supervision. Rupali prepares a delicious three-course meal for the guests, including a daring and innovative durian pie. Unfortunately, Rupali does not peel the durian fruit before putting it in the pie, and the sharp thorns cause three of his guests moderate injury before everybody else realises that the durian pie should be avoided.
(a)Has Rupali breached any legal duty of care? (b)Did Rupali owe a lower duty of care to the guests due to inexperience? (c)Is Johnny vicariously liable for anything that occurred?
The Lame Duck Restaurant owned by Johnny appoints a sales and marketing representative (Summer) to design and launch a new website for the restaurant. Summer is very bright and her design looks amazing. As the website is exceptional, Johnny decides to revamp the pricing system and put a 15% mark-up on all food. Summer develops a beautiful design for the new pricing system and posts it online. Two weeks later after the prices are changed, Li books the wedding using the menu he found on one of the tables. Summer mistakenly accepts the booking, asking Abu from accounts to accept the deposit and finalise the invoice. Li calls, accepts the quoted price, pays the deposit and books the date for the wedding. The same day, Li sends out invitations to all her friends studying at CDU. The day before the banquet, the error in the quotation is discovered. Johnny gets involved, calls the customer and says that the Lame Duck Restaurant cannot host the wedding because the quotation was made in error. However, Li insists that ‘we have a contract’ and says that under the law the Lame Duck Restaurant must host the wedding banquet.
(d)Advise Johnny, whether the contract exists.(e)Was there a mistake? If there was, what kind of mistake?(f)Explain possible legal consequences if the Lame Duck Restaurant is obliged to provide the premises for the wedding, but refuses to do so.
Answer:
Introduction:
This issue can be solved by discussing the relevant laws of tort of negligence, which means a careless injury that leads to damage (Kelly, Schwartz and Partlett 2015). The essential element of negligence is causing breach of duty. To make a party liable for negligence, it must be shown that the plaintiff had a duty of care towards the defendant. It needs to be proved that there was a standard of care that that a reasonable man would have followed if he was placed in the position of the defendant. The breach of duty by the defendant should result in a harm to the plaintiff. The test of identifying duty of care was formulated in the famous case of Donoghue v Stevenson [1932] All ER 1, which signifies that, it is dependent on the activity of a reasonable person holding the same position of that of the defendant, if the injury was foreseeable.
In this scenario, Rupali owed a duty of care to the guest. The injury which can be resulted to a guest from eating a durian pie if the durian fruit is not properly peeled, can be foreseeable by any reasonable man. Rupali should have exercised due care while making the pie and ensure that the sharp thorns of the fruit were duly peeled, so that it does not cause an injury to anyone. In the case of Perre v Apand [1999] 198 CLR 180, it was decided that whether the injury received by the plaintiff was reasonably foreseeable in regard to relationship of the defendant and plaintiff should be considered in every case (Luntz et al. 2017). Here, the harm which the guests faced was treasonably predictable by Rupali. Hence, it can be said that he has breached his duty of care.
It can be concluded from the above discussion that Rupali had breached a legal duty of care which he owed to the CDU students and their guests.
The issue is to determine whether the duty of care that Rupali owed to the guests, was lower, as he was inexperienced.
The relevant law of negligence with respect to duty of care, provides that if the damage caused to the plaintiff was foreseeable by the supervisor of a person who owe a duty of care to someone, he can be held liable as decided in the case of NSW v Godfrey. In Trustees of the Roman Catholic Church for the Diocese of Canberra & Goulburn v Hadba [2005] HCA 31, it was decided that, damages can be recovered from the supervisor if it is proved that he owed a duty of care towards the plaintiff and the injury would have been prevented by constant supervision (Levine et al. 2016).
In the present scenario, it can be assumed that Rupali owed a lower duty of care, as he was inexperienced. Rupali was a trainee under Johnny, and Johnny was supposed to supervise Rupali over her while he prepares a meal. In this context, Johnny also owed a duty of care to the plaintiffs, which he failed to perform. Johnny had a duty to supervise Rupali to prepare the pie. The injury would have been avoided if Johnny had supervised Rupali to peel the durian fruit and prepare the pie. Rupali was just a trainee, and it can be assumed from this fact that she was inexperienced and needed proper guidance. Hence, Rupali owes a lower duty of care due to his inexperience.
It can be concluded that Rupali was inexperienced in making durian pie and needed supervision in preparing it. Hence, he owed a lower duty of care.
The issue is to determine in this ace is whether Johnny was vicariously liable for the incident that happened.
Vicarious liability means the imposition of liability upon one person for the negligent act of another person for performing some act on their behalf. An employer can be held vicariously liable for the negligence of his employee during the course of employment. Vicarious liability of the employer is in addition to the primary liability of the negligence of the employee. They are both liable jointly and severally. In the case Prince Alfred College Incorporated v ADC [2016], the High Court held that vicarious liability can be imposed on an employer even if he is not at fault. A test was also provided in the case as to determine whether act of the employee was authorised or not.
As decided by the High Court in New South Wales v Lepore & Anor, vicarious liability can be established in a case where the wrongful act by the employee was committed within his scope of employment. Here, Johnny had invited the guest to try the food made by Rupali. Rupali was a trainee who needed supervision under Johnny. Though the restaurant was closed at that time, yet Rupali was engaged in making the pie during her course of employment. It can be assumed that Johnny should have exercised his power of supervision, by which the injury caused to the guests could have been prevented.
Therefore, it this case, Johnny can be held vicariously liable for the injury that happened to the guests.
In this present context, the issue is to determine, whether a contract exist between Johnny and Li.
A contract is assumed to be made in good faith of the parties. A misrepresentation or mistake in the essential terms of a contract could make the contract void or voidable (Sen, 2015). The subject matter or the terms of a contract should be stated to the parties. The Court in such situation, shall consider that the contract is not existing based on the mistake. In the case of Boulton v Jones [1857] 2 H. & N. 564; 157 E.R. 232, it was decided that a contract shall be held to be void where a mistake as to a term or subject matter of a contract was known to the other party or have been negligently induced by a party.
The rules of mistake in terms of the contract can be applied in the case to resolve the issue. Johnny had appointed Summer to be the sales and marketing representative for his restaurant. In the general sense. It can be assumed that, Summer had the knowledge of the prices and he is aware of the consequences if he makes a misrepresentation or mistake as to the price to a party. While entering into a contract with a party, Li was expected to exercise due care and state the price to the party. If Summer made a mistake as to the price of contract and accepted the quoted price given by Li, the contract will be void and not existing in the eye of law.
It has to be determined in this case that whether there was a mistake in this case while making the contract.
When both the parties in a contract have an error in comprehending the facts of a contract, which may cause the parties to enter into a contract not having the proper understanding of the result or obligation (Stone and Devenney 2017). If there is a contract where both parties are confused regarding the price of the subject matter, the contract may cease to exist. In this regard the case of Webster v Dessil can be discussed where the Court had decided that a contract can be avoided where there is a mistake as to the subject matter of the contract. When in a situation, only one party to the contract is under the erroneous belief of the fact, it shall be known as unilateral mistake.
In this there was a mistake as to the quotation of price of the foods. In this case, Summer was only under mistake as he accepted the booking and the deposit for booking at the quoted price mentioned in the menu of the tables, so the mistake was unilateral. Where the mistake has been resulted from a negligent or fraudulent misrepresentation, the contract can be rendered voidable and may be rescinded at a suit by the aggrieved party.
The issue in this case is to determine any action that Lame Duck Restaurant may face if they refuse to provide the premises for wedding.
The general principle of contract is that parties are bound by their obligation. Without reasonable excuse, they cannot refuse to perform their part of the contract. If they refuse to perform their part of the contract, they shall commit a breach of the contract. Legal remedies may be available including damages for breach of contract.
In this case, Li booked the restaurant paying an amount to Summer, who was the representative of the Restaurant. So, the Restaurant was obliged to provide the premise to Li. If they refuse to give the premises to Li, they shall commit a breach of contract. The court may order specific performance by the Restaurant or Li can claim for damages.
Conclusion
Lame Duck Restaurant shall be liable to damage or specific performance if they refuse to provide the premises for the wedding to Li.
Reference
Boulton v Jones [1857] 2 H. & N. 564; 157 E.R. 232
Donoghue v Stevenson [1932] All ER 1
Kelly, K., Schwartz, V.E. and Partlett, D.F., 2015. Prosser, Wade, Schwartz, Kelly, and Partlett’s Torts, Cases and Materials. Foundation Press.
Levine, L.C., Vetri, D., Vogel, J. and Gassama, I.J., 2016. Tort law and practice. Carolina Academic Press.
Luntz, H., Hambly, D., Burns, K., Dietrich, J., Foster, N., Grant, G. and Harder, S., 2017. Torts: cases and commentary. LexisNexis Butterworths.
New South Wales v Lepore & Anor
NSW v Godfrey
Perre v Apand [1999] 198 CLR 180
Prince Alfred College Incorporated v ADC [2016]
Sen, G.M., 2015. Law of Contract.
Stone, R. and Devenney, J., 2017. The modern law of contract. Routledge.
Trustees of the Roman Catholic Church for the Diocese of Canberra & Goulburn v Hadba [2005] HCA 31 Webster v Dessil
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