Principles of Liability in Negligence in Business Activities

Aspects of Agreement and Neglect for Business

Ingrida Miseviciute

Table of Contents

Task 1 (AC3. 1)1

Task 2 (AC3. 2)2

Task 3 (AC3. 3)3

Task 4 (AC4. 1)4

Task 5 (AC4. 2)5


LO 3 Understand key points of responsibility in negligence running a business activities

Task 1 (AC 3. 1)

Liability in Tort

Contractual liability


  • A tort is a legal term talking about a violation where one person causes damage, personal injury, or harm to someone else. The violation may result from intentional actions, a breach of responsibility as in carelessness, or due to a violation of statutes.


  • The party that commits the tort is named the tortfeasor. A tortfeasor incurs tort liability, meaning that they have to reimburse the victim for the harm that they triggered them. In other words, the tortfeasor who's found to be "liable" or accountable for a person's accidental injuries is going to be necessary to pay damages.


  • Under most tort laws and regulations, the injury experienced by the plaintiff doesn't have to actually be physical. A tortfeasor may be required to pay injuries for other styles of harm, including emotional distress or a violation of personal privileges.


  • Joint Liability
  • Vicarious Liability
  • Liability to/for Third Parties
  • Plaintiff/victim Liability
  • Strict Liability
  • Parent Liability.


  • Contractual liabilityis thought as liability that does not arise by way of neglect, but by assumption under contract or arrangement.


  • A agreement is a legal binding contract between several persons. If you sign, or consent to the terms of an deal, then you have accepted the contractual liabilities established in the doc.


  • Liabilities are things that you will be held in charge of, and could have to repay or replace, when they occur. For instance, a renter'sagreement may state that, "If after moving from the premises stated in the contract, any area of the premises is ruined, you may be accountable for and have to pay to repair, or replace the damage".


  • Contractual liability can take many varieties, but is actually holds you in charge of problems that are stated in the deal. For instance, Commercial contracts, local contracts etc.

Task 2 (AC3. 2)

Negligence is failing to use affordable good care that results in harm to another get together.

There are four important elements to a carelessness lawsuit that must definitely be proven:

  1. The accused owed a responsibility, either to the plaintiff or even to the overall public
  2. The defendant violated that duty
  3. The defendant's violation of the duty resulted in harm to the plaintiff
  4. The plaintiff's damage was foreseeable by a reasonable person.

Donohughe V Stevenson (1932)

This famous circumstance proven the civil laws tort of carelessness and obliged manufacturers to truly have a duty of care and attention towards their customers. The events of the grievance took place in Scotland in 1928, when Ms May Donoghue was presented with a container of ginger beverage, purchased by a friend. The container was later found out to contain a decomposing snail. Since the bottle had not been of clear glass, Donoghue was not aware of the snail until she possessed consumed the majority of its articles. She later fell ill and was identified as having gastroenteritis by a health care provider. Donoghue subsequently got legal action against the manufacturer of the ginger beer, Stevenson. She lodged a writ in the Court of Periods (Scotland's highest civil court) seeking Ј500 problems.

Because her good friend possessed purchased the drink, Donoghue cannot sue on the basis that a agreement have been breached; her lawyers instead needed to declare that Stevenson experienced a obligation of attention to his consumers which he had induced injury through neglectfulness - a location of civil laws that was basically untested at that time. Stevenson's attorneys challenged the action on the foundation that no precedents existed for such a lay claim. However Donoghue was later granted leave to appeal to the home of Lords, which in turn experienced the judicial expert to hear appellate cases. The best judgement, supplied by Lord Atkin in 1932, proven that Stevenson should be responsible for the well-being of people who ingest his products, given that they cannot be inspected. The situation was went back to the original court; Stevenson perished before the case was finalised and Donoghue was granted minimal damage from his real estate.

This case proven several legal key points:

  • Firstly, that neglect is a distinct tort. A plaintiff may take civil action against a respondent, if the respondent's neglectfulness causes the plaintiff harm or loss of property. Recently the plaintiff experienced to demonstrate some contractual design for neglect to be proven, including the sale of an item or an arrangement to give a service. Since Donoghue hadn't purchased the drink, she could demonstrate no contractual arrangement with Stevenson - yet Atkin's judgement proven that Stevenson was still accountable for the integrity of his product.
  • Secondly, manufacturers have a obligation of health care to consumers. Corresponding to Lord Atkin's proportion decendi, "a maker of products, which he sells. . . to reach the ultimate consumer in the proper execution in which they kept him. . . owes a duty to the consumer to take reasonable worry". This precedent has evolved and expanded to create the foundation of regulations that protect consumers from contaminated or faulty goods.
  • Thirdly, Lord Atkin's controversial 'neighbour principle'. Here Atkin brought up the question of which people may be immediately affected by our actions, our do or things we create. "You need to take reasonable care and attention to avoid works or omissions which you can moderately foresee would be likely to injure your neighbour. Who, then, in laws, is my neighbour? The answer seems to be: folks who are so meticulously and directly influenced by my function that I must have them in [brain] as i am I am [considering these] functions or omissions. "

Task 3 (AC3. 3)

Vicarious responsibility is a predicament in which one get together is held partly accountable for the unlawful activities of a third party. The third get together also carries his / her own share of the liability. Vicarious liability can happen in situations where one get together is meant to be responsible for (and also have control over) an authorized, and is also negligent in undertaking that responsibility and exercising that control.

If a worker injures someone throughout their employment, the company may be subject to vicarious liability. This simply means that the injured person might be able to win settlement for the injury from the workplace, as opposed to the employee.

This is not saying, though, that the worker can always count on getting away scot-free. Even when there is vicarious responsibility, the wounded person will not necessarily quit any right he may have to follow the employee individually. If, for some reason, the hurt person is unable to get full compensation from the company, then he might seek to recover the total amount from the staff. In addition, the employer may seek reimbursement for just about any amount paid to the injured person (although used this almost never occurs).

Generally, employers dispute vicarious liability claims on the following grounds:

The person who caused the injury was not a worker, but an unbiased service provider or other non-employee staff member;

The employee did not harm the wounded person throughout the employee's employment.

An illustration of the test is provided by two contrasting cases, [Limpus v London General Omnibus Company] and [Beard v London Standard Omnibus Company], both involving road collisions. Inside the former, a driver pulled in forward of another rival omnibus, to be able to obstruct it. Despite express prohibitions from the employer, these were found liable; this was simply an unauthorised mode of the worker undertaking his obligations (driving a car), not an completely new activity. In comparison, in the last mentioned case, London General Omnibus Company were not liable in which a conductor (employed to accumulate fares up to speed the bus) negligently chose to drive the vehicle instead; this is completely beyond his tasks.

LO 4 Be able to apply guidelines of liability in negligence in business situations

Task 4. 1(AC4. 1)

A tort, in keeping rules jurisdictions, is a civil wrong which unfairly causes someone else to suffer loss or harm resulting in legal responsibility for the person who commits the take action. Although offences may be torts, the reason for legal action is not necessarily a offense, as the damage may be anticipated to neglect which will not amount to legal negligence. The sufferer of the damage can recover their reduction as damages in a lawsuit. In order to prevail, the plaintiff in the lawsuit must show that the activities or lack of action was the legally recognizable reason behind the harm. The same as tort in civil legislation jurisdictions is delict.

Tort law differs from criminal regulation for the reason that: (1) torts may result from negligent but not intentional or legal activities and (2) tort lawsuits have less burden of proof such as preponderance of information somewhat than beyond an acceptable doubt. Sometimes a plaintiff may prevail in a tort circumstance even if the person who induced the harm was acquitted in an earlier legal trial. For instance, O. J. Simpson was acquitted in criminal court and later found liable for the tort of wrongful loss of life.

Torts may be grouped in several ways, with a particularly common department between negligent and intentional torts. The standard action in tort is neglect. Neglectfulness is a tort which comes from the breach of the work of health care owed by one person to another from the perspective of an acceptable person. The majority determined that the definition of neglectfulness can be divided into four component parts that the plaintiff must prove to establish neglect. The elements in deciding the responsibility for neglect are:

  • The plaintiff was owed a responsibility of care through a particular relationship (e. g. doctor-patient) or various other principle.
  • There was a dereliction or breach of this duty.
  • The tortfeasor straight caused the personal injury [but for the defendant's actions, the plaintiff wouldn't normally have suffered an harm].
  • The plaintiff experienced damage because of this of that breach.
  • The damage had not been too remote; there was proximate cause showing the breach triggered the harm.

Elements of Negligence

Proximate cause

Proximate cause means that you need to have the ability to show that the harm was induced by the tort you are suing for. The defence may claim that there is a previous cause or a superseding intervening cause. A common situation where a prior cause becomes an issue is the personal injury car accident, where the person re-injures an old injury.

Duty of care

It comes up when one party creates a circumstance that gets the potential to damage the other get together. Duty focuses on relationship between your two gatherings:

The test whether the accused owes a work of attention to plaintiff includes:

  • Would an acceptable person have foreseen that the actions would have caused injury to the plaintiff?
  • Reasonable person represents a target standard.

Breach of duty

Breach of work occurs when a "reasonable person" is not doing exercises the degree of care that would have expected from him/her for the reason that situation. Reasonable person can be an average person. It does not require efficiency, but considers that an average person does not foresee every risk. The average person is not assumed to be perfect, but ordinarily careful and advisable.

Actual Harm

Actual injury could maintain the form of physical or emotional injuries, property damage or financial loss.

The main remedy against tortious damage is compensation in 'damage' or money.

According to the scenario, Chris was in an internet cafe. He acquired up to buy a caffeine and was slipped on some drinking water that was on to the floor and broke his arm. This is dependent upon the intent of Chris. If Chris slipped intentionally and performed foresee this car accident, then the cafe' will never be accountable for the damages triggered. If this isn't the case, then your elements of carelessness have to be applied to decide if Chris can promise the problems.

Negligence is important aspect to check out, means that the accused (the cafe') didn't act in a reasonable manner under the circumstances. For example, it is fair to anticipate that the cafe' located a warning signs in recently mopped areas or damp surface. If this isn't done, then this means that the cafe' didn't fulfil the work of care. Chris can state damages consequently than it as he slipped and broke his arm. There are various implications on the scenario in conditions of obligation of care, neglect (intentional or otherwise) which is up to the court to decide the outcome.

Task 5 (AC4. 2)

Two clear elements must be founded in order to establish a vicarious responsibility:

  1. Was the tortfeasor the defendant's employee; and
  2. Was the tortfeasor operating in the course of his or her employment at that time the tort was determined.

The existence of a relationship of workplace and employee

  • Many assessments have been suggested for distinguishing between a agreement of service and a agreement for services. These include:
  • Control test - Ready Mixture Concrete Ltd v Minister of Pensions and National Insurance (1968)
  • Integration test - Stevenson Jordan & Harrison Ltd v MacDonald & Evans (1952)
  • Organisation Test - Albrighton v Royal Prince Alfred Hopital (1980)

"The ultimate question will be whether one is performing as the servant of another or on his own behalf and the answer to that question may be indicated in ways that are not always the same and which do not always have the same significance".

Conclusion as to whether defendant can be an employer or service provider.

  • If the defendant is an indie contractor the company can't be vicariously responsible for the acts of that contractor. The employer is only going to be liable (as, the burkha liability) if the employer's tortious work is, in law, non-delegable: Kondis v STA; Burnie Interface Authority v Standard Jones Pty Ltd.

Was the staff behaving within the span of employment?

General rule is that whilst acting in the course of employment the company is not vicariously responsible for independent wrongful acts of employees (Bugge & Dark brown).

In determining the opportunity of the job relationship the activities of the staff must be reasonably incidental to occupation i. e. the employer is not vicariously liable if the employee is on the frolic of their own (Joel v Morison).

(Situations to consider & the required authorities)

  • Wrongful method of doing authorised work - workplace vicariously liable (Bugge & Dark brown)
  • Express prohibition by workplace not necessarily a defence if the employee's function was still a setting to do what he staff was used to do - workplace vicariously liable (Century Insurance Company v North Island Road Carry).
  • Acting outside opportunity of employment romantic relationship - employer not vicariously liable (Koorang Opportunities v Richardson).

Driving cases

For example, there are a variety of truck traveling cases where in fact the court has already established to decide whether the driver was performing within the span of his work when driving the automobile outside a chosen route.

Essentially, the structure seems to be that if the driver's job is to get from Point A to Point B, and his detour from the specified course was simply yet another way to getting to Point B, then he is behaving within the span of his employment.

On the other hand, if the driver takes a detour for a few other, non-business goal (such as picking up a partner and taking her shopping) then he'd likely be regarded as acting beyond your course of his career.

According to the scenario, Trevor is a drivers who drives a lorry for a Haulage firm. He provides deliveries for the business which suggests that he's a worker of the company. Whilst at work, he detours the lorry and fulfills his girl friend. This is a non business goal which means he's acting outside the range of his tasks. As he leaves his girlfriend's house to keep deliveries, he negligently crashes into an automobile park.

As explained above, two conditions must be met in order to establish a vicarious responsibility:

  1. was the tortfeasor the defendant's employee; and
  2. Was the tortfeasor behaving throughout his / her employment at that time the tort was determined.

In this circumstance, the tortfeasor was Chris and the accused is the Haulage organization. Chris was an employee and also he was performing throughout his career to meet his partner and later on crashes his lorry. The vicarious responsibility is established and therefore Chris is liable rather than the haulage organization.


Tort Responsibility (2014). Available: http://www. legalmatch. com/law-library/article/tort-law-liability. html. [Previous reached 10 March, 2014]

Donoghue V Stevenson (1932). Available: http://lawgovpol. com/case-study-donoghue-v-stevenson-1932/. [Previous seen 12 March, 2014].

Negligence (2014). Available: http://www. lawyersandsettlements. com/lawsuit/negligence. html?opt=c&utm_expid=36075225. Uj6X3hD9S1KR79nt0Iy0tA. 1&utm_referrer=https%3A%2F%2Fwww. google. co. uk%2F#. UySBAj9_sSM. [Last accessed 12 March, 2014]

Accidents and traumas (2014). Available: http://www. findlaw. co. uk/law/accidents_and_injuries/accident_claims/500045. html. [Last utilized 13 March, 2014]

Vicarious Responsibility (2014). Available: http://en. wikipedia. org/wiki/Vicarious_liability_in_English_law. [Last reached 13 March, 2014]

Breach of work (2014). Available: http://en. wikipedia. org/wiki/Breach_of_obligation_in_English_law. [Last accessed 14 March, 2014]

Tort (2014). Available: http://en. wikipedia. org/wiki/Tort. [Last seen 14 March, 2014]

Eustace, D, (2007) Negligent Misstatement - Dillon Eustace.

Keenan, D. , and Smith, K. , (2006) Regulation for Business (13th Release) Pearson Education Small.

McKendrick, E. Contract Rules (2000). fourth release. McMillan. Basington.

Poole, J. Casebook on Contract Legislation (2001). 5th edition. London.

Vickneswaren, K. , (1997) Responsibilities: Contract Legislation (1st Edition) Old Bailey Press: London.

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