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Business Law A – Revision Guide

Ross Bateman

Business Law A – Revision Guide
Contents Page

Table of Contents
Contents Page
...
3
Characteristics of English Law
...
3
Topic 1: Review
...
5
Sources of English Law: European
...
5
Sources of English Law: The Courts
...
7
Civil Procedure & Alternative Dispute Resolution (ADR)
...
8

Topic 3: Law of Contract I – Formation
...
9
Invitation to Treat
...
10
Topic 3: Review
...
12
Consideration
...
13
Privity
...
14
Topic 4: Review
...
16
Term vs
...
16
Consumer Rights Act 2015
...
17
Unfair Contractual Terms
...
19

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Business Law A – Revision Guide

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Topic 6: Law of Contract IV – Defects of a Contract
...
20
Misrepresentation
...
22
Illegality
...
23

Topic 7: Law of Contract V – Discharge & Remedies
...
24
Agreement
...
25
Breach
...
26
Topic 7: Review
...
28
Employee vs
...
28
Employment Contract & Common Law Duties
...
29
Termination of Employment
...
31

Topic 9: Law of Tort I – Negligence & Liability for Defective
Products
...
32
Three-Stage Test: Stage 1
...
33
Three-Stage Test: Stage 3
...
33
Topic 9: Review
...
36
Negligent Misstatement
...
36
Defences to Negligence
...
37
Topic 10: Review
...


Characteristics of English Law
1
...

2
...

3
...

4
...

5
...


Categories of Law
1
...
g
...
Thompson
...


2
...

Statute law is a body of principles and rules passed by parliament
...
Civil Law vs Criminal Law












Civil law’s purpose is to govern the relationship between individuals, and
enforce individual rights and duties
...

Cases are heard in the county court, or high court
...

The penalties involve correcting the wrong, and compensating the person
who has suffered a loss, e
...
damages
...
Smith
...

Criminal law’s purpose is to regulate behaviour, promote public order, and
preserve the national security
...

Cases are heard in Magistrate’s court (minor offences) or the Crown Court
(indictable offences, e
...
murder and rape)
...

Penalties are to punish, protect, rehabilitate and deter, e
...
prison & fines
...
Smith – and if a defendant loses, they’re guilty
...
Common Law vs Equity



Common law is a very rigid set of rules, which apply to the whole country,
they don’t recognise equality
...


5
...
This is a more flexible way of law
...
Advantages are that its stable and fairer
...
Civil Law: 60% of population live in this system
...

2
...

3
...
It fills gaps
...

4
...
However,
is rigid
...
Criminal vs Civil classification:
Alice & Peter Smith went for dinner at the Aqua restaurant in Nottingham
...
Both Peter & Alice ate the chicken special and the
next day, both were ill with food poisoning
...
v
...

Civil: Peter v
...

Civil: Alice v
...

2
...
Between 2 individuals
...
He fails to
stop at a pedestrian crossing and knocks down an old lady, Beth, as she is
crossing the road
...

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Topic 2: How the Law is Made
Sources of English Law: European
Consisting of 4 institutions: The Council, The European Commission, The
European Parliament & The European Court of Justice
...
Principal treaties are TEU and TFEU
...

Secondary Legislation – Consists of regulations (protecting names of
agricultural products, directly applicable), directives (set out aims, e
...

Working Time Directive, that aren’t directly applicable) and decisions
(directly binding, but only apply to who they’re directed at, e
...
Microsoft
fined)
...





Direct Legislation (Primary) – Becomes an act, it’s passed through courts
and the queen and house of commons & lords
...
g
...

Indirect Legislation (Delegated) – Created by a body with power, made by
someone other than parliament, with authority of parliament
...
g
...


Advantages & Disadvantages of Delegated Legislation
 Speed: quicker to pass
...

 Technical / local knowledge: the knowledge to write in more detail
...

Statutory Interpretation




Judges can interpret legislation, but not fill the gaps and to help them,
judges can use intrinsic or external aids
...

External aids:
o Interpretation Act 1978 – Defines words and expressions
...

o Parliamentary reports – record of what’s said in Parliament
...
The ‘literal’ rule: interpreting the law literally
...
g
...
Chappell (1868): It is an offence to impersonate anyone
voting
...

2
...

e
...
Adler v
...
But was
inside the RAF base, not in the vicinity
...

3
...

e
...
Corkery v
...
But it was a bicycle
...


Sources of English Law: The Courts
Hierarchy and system of judicial precedent
...

This means judges are bound by previous decisions
...

o Whether facts come within scope of the previous case, similarity
...

Ratio Decidendi  Reason for decision, binding part of the decision
...


Court Hierarchy
1
...

3
...

5
...
House of Lords) – Binds lower courts, not itself
...

Divisional Court – Binds all courts below & other divisional courts
...

Inferior Courts (County Courts) – Does not bind other courts
...

Consistency - high quality decisions to be applied in all courts
...

Consistency creates certainty – lawyers can predict outcomes
...

Provides absolute, limited and qualified human rights
...

Separate from law and institutions of the EU
...

All UK legislation must be interpreted in line with Convention rights
...

Unlawful for public authority to act in a way incompatible with ECHR
...

Cases begin by being allocated to a track:




Small Claims Track (£10,000 or less)
Fast Track (generally for claims between £10,000 and £25,000)
Multi-Track (over £25,000, expert evidence or too complex for 1 day)

Alternative Dispute Resolution
1
...

2
...

3
...

4
...


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Topic 2: Review
1
...
Islington LBC (2007): The law stated it is an offence to park ‘on
any part of the pavement’
...
He was guilty
...
Judicial Precedent:
Following Wolman v
...
She receives a
parking ticket for the same offence as Wolman
...

What if Jane’s case came before the Supreme Court?
If it came before this court, it would not be bound by the decision
...

The vast majority are entered without formalities, can be written or oral
...

Types of Contracts
1
...

 Agreements which must be made in writing (credit agreements)
...

2
...

 No requirement for evidence, e
...
getting on a bus
...
Only an invitation to
negotiate, rather than the different invitation to treat
...










Advertisements: Partridge v
...

Goods displayed in a shop: Fisher v
...

Display of goods on a shelf: Pharmaceutical Society v
...

Auctions: Bids are offers, contract made when auctioneer hits hammer
...

Statement of price in negotiations is invitation to treat
...



Key case: Carlill v
...
(1893): Anyone who buys
smokeball, used as directed and catches flu eligible to claim £100
...


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Termination of an Offer
An offer can be terminated by 1 of 4 ways:
1
...

2
...

Hyde v
...
This terminates original offer
...
No contract here
...

3
...

4
...

Revocation
Offer may be withdrawn at any time before acceptance
...
Grant (1828): Routledge said offer lasts 6 weeks, but
revoked before, court held he can do this
...





Byrne v
...
Week later posted
revocation
...

Dickinson v
...
Sold to
someone else before end of offer
...


Acceptance & The Postal Rule




Acceptance must be absolute, unqualified, and communicated to the
offeror
...
Miles Far East Corp
...

Silence can never amount to acceptance: Felthouse v
...
Not a valid contract, as no communication
...

Adams v
...
Court said acceptance was valid as
soon as it was posted
...
g
...
Post = effective when posted
...


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Problematic Situations



Brinkibon Ltd
...
Stahag Stahl (1983): Acceptance was received
outside of office hours – must judge each case on its merits
...
Battle won with fire of last shot
...
v
...
(1979): Offer made on one set of
conditions, but offer accepted on another set of conditions
...
Valid Contract Offers:
Jon puts a teddy bear wearing a price ticket in his shop window?
Not an offer, merely invitation to treat, Fisher v
...

Matilda advertises a reward of £10 for return of her lost bracelet?
Yes, offer exists, unilateral offer, Smoke Ball case
...

Patrick bids for an antique wardrobe at an auction?
Yes, bids are offers
...
Termination of an Offer:
In which of the following circumstances will an offer NOT be terminated?
 When a counter offer is made: rejection, termination
...

 When information is requested about the offer: correct, not
terminated
...

3
...

Eve offers to sell apples to Adam, tells him she will assume he wants them
unless he tells her by Sunday, it’s now Monday: Not acceptance, silence
can never amount to acceptance
...
Mike writes to
accept but his letter is lost in the post: Acceptance soon as it was posted
...
Jo said yes, but Susanna
didn’t hear as the line went dead: No acceptance, not received coherently
...
Means each party must give to
the contract in exchange for a promise from the other party
...




Executed consideration: One party promises to do something in return for
the act of another (unilateral)
...
E
...
promise for item & promise for payment
...
Consideration must not be past: Must follow agreements, not proceed
them
...
Son’s wife carried out repairs and
improvements to house, THEN defendant offered to reimburse her
...

Exception to this rule: if act was done in response to a request
...
Consideration must be sufficient but not need be adequate:
sufficient meaning it must have some real value, but doesn’t need to be of
equal value to other party
...
Ltd v
...
Ltd
(1959): Customers sending in 7
...
Held
that wrappers were part of consideration as they had real value
...

3
...
Godefory (1831)
where C was a police officer and wasn’t entitled payment as he was
performing public duty
...
Myrick (1809): Sailor agreed to work as part of 11-man crew for
£5 a month, when 2 deserted, captain promised extra wages to complete
the journey
...

Exceptions: Unless party promised to exceed their existing duty
...
Roffey Bros
...

RB agreed to pay extra to avoid penalty clause in contract
...


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4
...
Beer (1884): Dr F
owed B £2090 in damages after court judgement, she agreed to accept
lower instalments, but later sued him for the £360 interest
...

Exceptions to this rule under principle of accord and satisfaction: agreeing
to accept lesser sum paid earlier, agreeing to accept something other than
money, agreeing to pay in a different way, or promissory estoppel
...

Central London Property Trust Ltd
...
High Trees House Ltd
...

During WW2, flats difficult to rent, so claimant agreed to pay reduced rent
of £1250/year
...
Held
that claimant entitled to full rent from 1945 onwards, but not able to claim
back money from 1940-45
...

4 key
o
o
o
o

ingredients:
Pre-existing contractual relationship
...

Knowing that the other party would rely on this waiver
...


Intention
For business agreements, there is a presumption of intention to create legal
relations: Esso Petroleum v
...
Is this legally binding contract? Court held yes,
intention to create as is a commercial agreement
...
Burnett (2007): 3 friends went to bingo
...
Held that it
wasn’t legally binding, because it was a social agreement
...



Anyone who is not party to a contract cannot sue or be sued on that
contract: Tweddle v
...
No right to sue
...
Ltd
...
Selfridge & Co
...
(1915):
Dunlop tried to sue Selfridge, but didn’t have a direct contract with them,
and the case failed
...


Capacity (of minors to make contracts)
Minors: anyone under the age of 18
...

1
...
Depends on background
and circumstances of the individual, Nash v
...
S3 also says minor must pay reasonable price
...
g
...

2
...
Forming
partnerships or buying shares
...
Effect is to release minor from future
liabilities, but would still be bound by liabilities already accrued
...
Unenforceable Contracts:
Minors are not bound by contracts for unnecessary good or services, or
loans
...


Topic 4: Review
1
...


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C is often late for work; his boss D offers him £50 if he is on time for a
week: Not binding promise, performing an existing contractual duty, Stilk
v
...

X agrees to sell his laptop to Z for 10p: Yes, binding promise,
consideration sufficient, not need be adequate, Chappell v
...

P offers to let her tenant Q pay only half rent as Q has just lost her job:
Yes, binding promise, promissory estoppel, High Trees case
...

Beer
...
Intention:
If a court had decided than an agreement was not intended to have
legally binding consequences, which of the following would it be talking
about?
An oral agreement between 2 brothers to from partnership selling cars
...

An oral agreement between 2 friends for one to pay for the other to go on
holiday
...
The third is
purely social related, and is assumed to not have legally binding
consequences
...
Privity:
In a contract between ship owners and charterers, a clause was included
for payment of commission to the broker
...

4
...
Her contract with the modelling
agency says that she cannot appear in adverts without their consent
...


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Topic 5: Law of Contract III – Terms of a Contract
Term vs
...
The innocent party can
terminate the contract and get damages
...
Innocent party cannot terminate
contract, but can get damages
...
Decided at the time of the
breach
...
g
...
It was part-damaged, but held not that
serious, important use of the word ‘good’
...





Representation: statement made prior to contract aiming to induce the
other party into entering the contract, if false, there may be a claim for
misrepresentation
...


Incorporation of Terms into a Contract
1
...

2
...
These can be implied by the courts for business efficacy (efficiency
and reasonably fair), by custom (customary in particular trade), or by
statute, e
...
Consumer Rights Act 2015
...




Trader: person acting for purposes relating to that person’s trade,
business, craft, or profession
...


The Sale of Goods Act 1979 covers other contracts
...
17 – right to supply goods
...
11 – goods match the description
...
9 – quality is satisfactory
...
10 – goods reasonably fit for
purpose
...
13 – goods match the sample
...
12 – right to sell goods
...
13 – goods correspond with desc
...
14(2) – goods satisfactory quality
...
14(3) – goods reasonably fit for
purpose
...
15 – goods correspond with sample
...
They are usually imposed on the weaker party
...
Is the exclusion clause incorporated? Part of contract?
2
...
Is it valid under Unfair Contracts Terms Act 1977 and Consumer
Rights Act 2015?
Stage 1: Incorporation of Exclusion Clauses


The party singing a document will be bound by its contents, L’Estrange
v
...
Signed sales agreement without
reading it
...
Seller contract excluded statutory
provisions – but is already bound to contract
...
Barry UDC (1940): Claimant
hired 2 deckchairs, injured by them
...




Notice of the exemption clause must be given before or at the time the
contract was made, Olley v
...
(1949):
Notice said hotel not liable for stolen property
...
Held that notice does not
apply, wasn’t given when the contract was made
...
Shoe Lane Parking Ltd
...

Entrance said all cars parked at owner’s risk
...




The more unreasonable the clause, the greater the notice which must be
given of it ‘red hand rule’; clauses that are unreasonable should be
written in red



Can even be incorporated by a previous course of dealings, Photolibrary
Group Ltd
...
Burda Senator Verlag GmbH (2008): Business
relationship of supplying photos, defendant lost 2000 and claimant
claimed
...




How many dealings is enough? Hollier v
...
(1972):
Claimant took car to garage, used 4 times in 5 years
...
This time didn’t – court held not part of
contract, as regularity not enough to establish a clear clause
...


Stage 3: Statutory control of Exclusion Clauses




Business-to-business exemption clauses covered by Unfair Contract Terms
Act of 1977 (UCTA)
...

o Cannot exclude liability for death or personal injury through
negligence
...

Exemption clauses in consumer contracts covered by Consumers Rights
Act 2015 (CRA)
...

o Other exclusion clauses fall under CRA s
...


Unfair Contractual Terms
Some terms are automatically unenforceable
...
31 of CRA: trader cannot exclude consumer rights or remedies in
contracts to supply goods to a consumer
...
62 of CRA: A term is unfair if it causes a significant imbalance in parties’
rights to detriment of the consumer
...
64 of CRA: Court not allowed to judge value, not subject to test
...


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Topic 5: Review
1
...

M&S buys suits from Fashion Wholesalers PLC? SGA as both are
businesses
...

2
...
Divall (1923): Thief stole a car and sold it to D, who then sold
it to R
...
12 of the SGA
...
Australian Knitting Mills Ltd
...
CRA,
s9 or s10 about quality and reasonably fit for purpose
...
Perry (1960): Boy blinded by catapult, shopkeeper sued
wholesaler as catapult tried had not snapped
...
15 that goods
correspond with sample
...
Unfair Contractual Terms:
Ann purchases furniture from Bob, a local furniture business, for her
home
...
Bob damages the furniture and Ann’s
front door when he delivers the furniture
...
Which statute might Ann be able to rely upon?
Consumer Rights Act 2015 – S
...
31 – states that a term is unfair if it
causes a significant imbalance in the parties’ rights and obligations to the
detriment of the consumer
...
Unfair Contractual Terms:
Bob regularly hires skip from Tidy Skips
...
Bob telephones Tidy
Skips and order skip to be delivered
...
The
wall costs £500 to rebuild, and car repairs cost £800
...
g
...
Also, amount of dealings is
not sufficient
...

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Topic 6: Law of Contract IV – Defects of a Contract
A contract can either be valid (legally binding), void (no contract exists, or ever
existed), or voidable (contract exists, but injured party can choose whether to
affirm or avoid the contract)
...
There are
different kinds of mistake:
1
...

This can be through the mistake as to the quality of goods, e
...
Great
Peace Shipping Ltd
...
Tsavliris Salvage International Ltd
...

Or this can be through the mistake as to the existence of goods, maybe
they were destroyed before contract created, Couturier v
...

But need to distinguish between specific (particular, specified goods) and
ascertained goods (one of a good, not specific)
...
Mutual Mistake: Parties are at cross-purposes, mistake as to the subject
matter of the contract
...
Wichelhaus (1864): Contract for sale of cotton arriving on
‘Peerless’ from India, but there were 2 ships of that name
...

3
...

This can be due to a mistake as to the identity of the other party
...
Lindsay (1878): Rogue pretended to be reputable company and
obtained handkerchiefs on credit from claimant, then sold them to
defendants
...

Lewis v
...
Not void for mistake as Lewis has
contracted with man in front of him
...
Can
exceptionally invalidate the contract if claim non est factum – it is not my
deed (usually for older, vulnerable people)
...

Even a course of conduct can amount to misrepresentation, e
...
nodding, or
smiling
...
Wilkinson (1927):
Seller told claimant sheep farm support 2000 sheep, but claimant knew
farm had never been used for sheep farming
...

Statement must induce other party to enter contract: Attwood v
...
Expert mistakenly agreed with defendant, held that claimant had
not relied on statement, so claim for misrepresentation failed
...
g
...

O’Flanagan (1936): Vendor stated income of £2000, but by time of sale,
income had decreased significantly, held as misrepresentation as failure to
disclose a change in circumstances
...
Fraudulent Misrepresentation: Made knowing it was untrue, not
believing if it was true, or not caring it was true
...
Negligent Misrepresentation: Honestly believing it was true, but
without reasonable grounds for such belief (Misrepresentation Act 1967)
...
Wholly Innocent Misrepresentation: Made honestly believing it to be
true, with reasonable grounds for such a belief
...

For negligent misrepresentation, claimant must prove it was made,
burden of proof then on defendant to prove on balance of probabilities
...


Remedies for Misrepresentation




Rescission (call contract off) is available
...
g
...
Available for all 3 types
...

Damages also available
...


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Duress & Undue Influence
Parties must enter contract freely and voluntarily or it may be voidable for
duress
...
But can include economic
duress (economic threats)
...
v
...
Contract for A to deliver K’s products, £1
...
First shipment only 200 cartons, so wanted K to guarantee
minimum
...

Undue Influence
Subtler than duress
...
Contract made will be assumed to
have resulted from undue influence
...
Such
relationships include:





Doctor & patient
Solicitor and client
Trustee and beneficiary
...


Outside these relationships, claimant must prove undue influence
...

Contracts illegal at common law include contracts to: commit crimes, promote
sexual immorality, corruption in public life, trading with enemy in wartime,
impeding administration of justice (preventing prosecution)
...
g
...
g
...

They will, however, be valid if there is a legitimate interest to protect, the
restraint goes no further than is reasonable to protect that interest and the
restraint is not otherwise against the public interest
...
Misrepresentation:
Jane buys painting from Harry, thinking that it is by famous Victorian
artist
...
Harry told her that painting was by this artist, but he also
told her that he did not know much about art and bought because he
thought it looked nice
...
Can Jane sue Harry for misrepresentation?
No she cannot
...

2
...
Misrepresentation:
Monday – Alex sells car to rogue, Bob, who pays with stolen cheque
...

Tuesday – Bob sells car to Charles, innocent third party, who pays
reasonable price for car
...

Mistake – claim can claim for unilateral mistake, because mistake about
identity, e
...
Lewis v
...

Misrepresentation – fraudulent misrepresentation, making contract
voidable
...

3
...
Given contract in which he agreed he would never
tell anyone any of the secret processes used by X
...

Contract void at common law unless it is shown to be reasonable
...
Defective Contracts:
Contract with accountant to help client dodge taxes
...

Contract for the sale of Joe’s computer to Jenny, who was falsely told by
Joe that it operates Apple software
...

Contract for barn full of hay which burnt down prior to contract agreed
...
6 of SGA
...

Voidable for undue influence, as is a fiduciary relationship
...
If a contract is breached,
injured party may seek remedies for the damage they have suffered
...

Cutter v
...
He died 2 weeks before
end of 2-month journey
...

There are some exceptions to this rule:
1
...
Atkinson (1808): Captain
agreed to carry cargo of hemp at £5/ton, but only carried half agreed
cargo
...

2
...
Hoenig v
...
Mahadeva (1972): First case; decorate flat for £750, defects
cost £55, so held that amounted to substantial performance
...
Held that not
amounted to substantial performance
...
Acceptance of partial performance: Other party accepts, but must be
freely accepted (voluntarily)
...
Prevention of performance: If one party is prevented from fully
performing obligations, they may be entitled to quantum meruit payment
for work completed (for as much as if deserved), Planché v
...

Held that claimant was entitled to payment for work already carried out
...
This is
agreement and consideration to end contract
...




Bilateral discharge: if contract still wholly or partially executory, each
party is giving up their rights
...


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Frustration
If, after the contract is made, a change in circumstances makes the contract
either:





Impossible to perform: Taylor v
...
Music hall destroyed by hire, held to be
frustrated for illegality
...

Basis of contract becomes radically different: e
...
hiring a room to
watch an event, event cancelled, contract frustrated
...


Limits to Frustration
Frustration doesn’t apply:




If the parties have foreseen the frustrating event, e
...
having a clause to
cover such an event
...

If the contract is merely more difficult or expensive to perform, David
Contractors Ltd
...
Fareham UDC (1956): Claimant agreed to build
houses for council
...
Not frustrated as it’s only more difficult
...
Money owed ceases to be payable
...
Money already paid can be recovered, subject to deduction of expenses
incurred
...
If one party has received a ‘valuable benefit’, court can order that they
receive compensation for this
...
If breach of warranty, contract
carries on
...

Or they can wait until performance is due
...
Aim to put injured party in same
position as if contract had not been performed
...


2 key questions to be addressed when awarding damages:
1
...
How can the damage be quantified? (how much claim for)
Remoteness of Damage
Injured party can recover damages for loss resulting naturally from breach, in
usual course of events (damage anticipated), and for loss which was reasonably
in contemplating of the parties when the contract was made (knew about)
...
Newman Industries Ltd
...
Held that defendant
liable for normal loss of profits, but not liable for contract lost as it was not
reasonably in contemplation of the defendant
...
There are 3 bases of
assessment; loss of a bargain (place claimant in same financial position as if the
contract was performed), reliance loss (claim initial losses) and restitution
(recovery of payments made, e
...
a deposit)
...

Damages aren’t always an adequate remedy, alternatives are:





Specific performance: order to force a party to carry out obligations
...
Nelson (1936): Prevent Nelson from working for anyone
else
...


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Topic 7: Review
1
...
He delivers
30 tons:
If priced at £500 per ton? Yes, appears to be a divisible contract
...
If so, it’s
acceptance of partial performance
...

If a new law makes the sale of rare minerals illegal? Yes, illegality,
frustration
...

2
...

Contract frustrated due to impossibility
...
He
underestimates the days needed to complete the work and thus will lose
profit on the price agreed
...

As a lecturer, I have agreed to take 15 students on a trip to court
...
Contract frustrated due to illegality
...
In fact, war is declared after
the making of the contract
...

3
...
Jas pays a £600 deposit and will pay the balance of £2000 on 1st
October
...
If the contract has
been frustrated, does Jas have to pay the balance of £2000 which was
due on 1st October and can she recover the £600 deposit?
Jas can recover the deposit, and she does not have to pay the balance of
£2000 on October 1st
...
Worker








Self-employed, worker or employee
...

Rights differ between employers and workers, e
...
NI, sick pay
...
Covers agency workers, care workers
...

Employee shareholder: starts off as employee, but can give up for £2000
+ worth of shares
...


Employment Contract & Common Law Duties
Employer must provide written particulars within 2 months, S1 of the
Employment Rights Act 1996 (ERA)
...

Terms of employment contract, implied terms may arise from:






Custom and practice
...

Collective agreements
...

Common law rights and duties
...

Employer must show mutual respect, pay wages, not undermine trust of
employee, provide work if none available, indemnify employees (pay back for
expenses occurred), provide a true reference and provide safe working
conditions
...
This created the health and safety executive which is an enabling act
to allow bodies to pass delegated legislation
...

Common Law Health & Safety (CIVIL)
Implied terms in employment contract requiring employer to take reasonable
care of the employee
...

Claimant must then act upon and prove the 3-stage test (talked about in tort)
...
Wrongful Dismissal:
a
...

b
...

c
...

d
...

2
...
Statutory claim where employee was dismissed unfairly
...
Employee must claim within 3 months, have been employed for at
least 2 years and prove that they have been dismissed
...
Employer then must then disprove unfairness
...

A dismissal is only fair in certain circumstances: when the employee has a
lack of capability, bad conduct, redundancy, statutory restriction (law) or
some other substantial reason
...
g
...

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Section 98(4) says that fairness is judged whether the employer has
acted reasonably, e
...
was it appropriate given all circumstances?
Remedies of unfair dismissal include reinstatement, re-engagement order
(similar job), or most commonly: compensation (basic award and
compensatory award)
...
Redundancy:
a
...

b
...

c
...

To calculate redundancy payments (basic award for unfair dismissal):
Take employee’s weekly wage OR £479 (whichever is smaller), and
multiply it by:
Half a week’s pay for each complete year aged 22 and under
...

One and a half week’s pay for each complete year aged 41 or more
...
Health & Safety at Work – Civil vs Criminal:
Heather is employed as a factory worker by Boxing Clever, a supplier of
boxes to the manufacturing industry
...
She was not seriously injured, but
her injuries were exacerbated by the lack of a conveniently located first
aid kit
...

Civil liability – Heather would need to claim under the tort of negligence
and prove the 3-stage test that the employer owed her a duty of care,
that they broke that duty and she suffered damage as a result
...
Boxing Clever – under the H&S at Work Act
1974, S2 states that the employer must ensure as far as reasonably
practicable the employees safety and welfare, e
...
not providing a first aid
kit may have broken this
...
Unfair & Wrongful Dismissal:
On 26th March 2012, Mario starts work for BioTech PLC
...
On the 15th March 2013,
he is dismissed on the spot after he discloses confidential information to a
rival company
...

Can Mario claim for wrongful dismissal?
Depends if his actions amounted to a serious breach of conduct, in which
case it would be justified under summary dismissal
...
Redundancy:
Alan is 52 and has been made redundant after 18 years’ continuous
employment
...
He would be entitled to a redundancy payment of how much?
1
...

2
...

3
...
5) (employment between 41 and 52, also use one and
a half week’s pay) = £7,903
...

4
...
50 = £11,256
...

Most important tort for business is negligence, especially to protect
consumers
...
Liability is
fault based, and damages aim to put parties in position as if tort had
never been committed
...
Stevenson (1932)
Mrs Donoghue’s friend bought her a bottle of ginger beer from a café
...
She subsequently became ill and sued the manufacturer
...
This
established a general principle of product liability – that the manufacturer owes
the ultimate consumer a duty of care (neighbour principle)
...
The defendant owed the claimant a duty of care, and
2
...
The claimant suffered reasonably foreseeable damage as a result of the
breach
...

However, an incremental approach was adopted by Caparo Industries v
...
Was the harm reasonably foreseeable?
2
...
g
...

3
...


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Three-Stage Test: Stage 2
Stage 2 highlights the breach of the duty of care
...
Higher standards are expected of
professionals, e
...
doctors and surgeons
...
Stone (1951): Cricket ground, Stone injured by a cricket ball
...
Courts will weigh the likelihood of harm
and seriousness of harm against the cost of prevention and defendant’s actions
...

However, if the claimant can’t prove how the defendant has breached the duty of
care, they can claim ‘the thing speaks for itself’, e
...
Ward v
...


Three-Stage Test: Stage 3
Stage 3 highlights causation, the claimants must show that they would have not
been injured but for the defendant’s behaviour (‘but for’ principle):
Barnett v
...
Held that they claimant
would’ve died regardless of misdiagnosis, and claim failed
...
Held that the defendant not liable as the damage was not reasonably
foreseeable
...
If there are multiple causes
of damage, e
...
injuries from multiple employers, claimant can claim against any
one negligent employer
...
Offers alternative claim to
negligence
...





S
...
(Means not business users)
...
2 – Defendant’s supplying goods in course of business may be
defendant
...
1 – ‘Product’ can include packaging and instructions, agricultural
products, and even things like electricity and water
...
3 – dangerous and
standard of safety is that which people generally entitled to expect), and that
damage was suffered as a result (must be over £275), BUT cannot claim cost of
the defective item, damage to property below £275 or any damage to ‘business’
property
...

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Strict Liability vs
...

For claim under CPA, liability is strict, not based on fault
...

No need to prove how / why product is defective
...

Product was not supplied in the course of business, e
...
given away or
lent means the defendant was not liable
...


Main defence is the ‘state of the art/developments risk’ – that technical
knowledge at the time was not such that a producer might have been expected
to discover it
...
Mothercare (2001): Claimant (aged 12) was blinded by
defendant’s product
...
Held that
Mothercare was held liable even though this damage could not have been
reasonably foreseen
...
Standard of Care:
Emily has just passed her driving test when she negligently knocks over a
cyclist
...

2
...

Dr Julie, who had seen Matt on numerous other occasions refused to see
him
...
It was discovered that he was suffering from
poisoning from which there was no cure
...
There must be a link
between the breach of duty and the damage suffered as a result by the
claimant
...

3
...
Can Sam claim for:
Damage
Damage
Damage
Damage

to
to
to
to

clothes? Yes, private property and over £275
...

kitchen? Yes, land damage, if over £275
...


4
...
Outline her possible claims under:
Contract Law: Contracts Rights of Third Parties Act as exception to
doctrine of privity
...

Tort of negligence: Would use the 3-stage test: would need to prove that
the manufacturer owed a duty of care to her, that they broke the duty of
care and that she suffered damage as a result, e
...
burnt hole in carpet
...


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Topic 10: Law of Tort II
Negligent Misstatement
A negligent misstatement is a claim which arises when one party makes a
statement which is considered to be negligent and that the defendant relied
upon
...
Heller & Partners (1963): Merchant bankers gave negligent
credit reference to claimant, the ad agents claimed against the banker
...

There can be a duty of care in certain situations – if a special relationship is
involved
...

The defendant knew, or reasonably should have known, that that claimant
was relying on him, and
It was reasonable in the circumstances for the claimant to rely on the
defendant
...
Dickman (1990): Defendant auditors reported Fidelity
PLC made profit, but had actually made a substantial loss
...
Held that the defendant was not liable because
their duty of care was owed to shareholders as a whole, not the individual
shareholders seeking to increase their shares
...


Passing Off
Unregistered trademarks can only be protected by the common-law tort of
passing off
...

Illicitly using the claimant’s trade mark or a version of it
...


United Biscuits UK v
...
Held
that passing off claim was successful, injunction granted as the products were
too similar
...
Where there has been contributory negligence (contributed towards):
Badger v
...
Held that this amounted to
contributory negligence, and his damages were reduced by 25%, as they
were partially at fault
...
Consent: to one who volunteers, no harm is done
...

3
...

Joyce v
...
So, claimant held on to the back of the van and as injured when
thrown from the van
...


Vicarious Liability
Where an employee commits a tort negligently, and the employer is vicariously
liable, and thus is sued
...

Century Insurance Co
...
Northern Ireland RTD (1942): Petrol tanker driver lit
cigarette and threw away match whilst emptying tanker, caused huge explosion
...

If the employee is acting entirely for his own benefit, employer is not liable:
Hilton v
...
Key question = is the employee ‘on a
frolic of his own’?

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Topic 10: Review
1
...
During the course of
their conversation, Zoe tells Margaret that she has just inherited a large
sum of money and is looking for an investment opportunity
...
Margaret remembers that she
has a copy of Wobbly’s accounts in her bad and gives them to Zoe
...
In
fact, Margaret has prepared the accounts negligently and they were not
an accurate reflection of Wobbly’s precarious finances
...

IRAC RULE:
Issue: Negligent Misstatement claim
...
Heller
rules to decide whether Zoe was relying on the statement? Caparo
Industries v
...

Analysis: No special relationship involved, it’s not a professional context,
is only social
...

2
...

Copying packaging of a rival product; Passing off
...

Launching new product intended to rival existing product; Not Passing off
...
Vicarious Liability:
Reg is bus driver, and his employer’s rules state he must not race other
bus drivers
...

Is Reg acting in the course of his employment? Yes
...

Is Reg’s employer vicariously liable for his actions? Yes
...

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