Commercial Law Assignment: Understanding Legal Protection Guideline

Question

Task: You will be assessed on the extent to which you have:

• Answered the set question(s);
• Been able to identify, set out and discuss relevant legal issues;
• Justified your position by reference to use of appropriate legal sources, particularly cases and legislation where appropriate;
• Analysed, argued or discussed as required by the task questions; and
• Engaged in legal research and made use of relevant secondary legal sources, in particular a number of legal texts, internet sites and academic (peer reviewed) journal articles and books.

Scenario
In January 2019, Priya gave birth to a baby boy named Aaru. While she was still in hospital recovering from the birth, Priya’s husband Rahul went to a large retail store called Baby’s R Us and asked a sales assistant there what would be the best baby’s cot for a new born baby. The sales assistant, William, suggested either of two cots would be suitable: the “Lullaby Wonder” or the “Sleep Sound”. He suggested that the Lullaby Wonder is quite solid, and so once assembled, it is best to be kept in that state, whereas the Sleep Sound is more portable and can be easily assembled and disassembled, suitable for using in different places.

As Privya and Rahul enjoy travelling in their car, and seeing different parts of Australia, Rahul purchased the Sleep Sound so that it could be taken on their frequent holidays, and would fit easily into their car, a Toyota Corolla. Within two months of Aaru’s birth, the family set out on their first overnight adventure with the Sleep Sound. They stay overnight in an Airbnb. While Aaru sleeps in the Sleep Sound, Priya and Rahul watch television in another room. When Priya later checks on Aaru, she is shocked to see that the Sleep Sound has collapsed, and folded, trapping Aaru inside. Aaru is crying, and they immediately take him to hospital, worried that he may be injured. Priya is also treated at the hospital for shock.

Baby’s R Us bought a large one off shipment of the Sleep Sound from Lars Aaberg, an importer who they have lost touch with. Thus, they remain unsure as to who the manufacturer of this particular cot is.

Please answer both questions:

1. Advise Priya and Rahul what rights they may have to sue in the tort of negligence. Please refer to case law principles and statutory provisions in your answer.
2. Advise Privya and Rahul if they can sue under Part 3-5 of the ACL. If so, who would they sue, and on what basis? Please refer to specific statutory provisions of the ACL in your answer.

Answer

Issue A: Whether Priya and Rahul have any rights to sue Baby’s R Usin the tort of negligence?

Relevant Law: The present issue will be resolved by the application of the law of negligence. in Donoghue v. Stevenson [1932], the law of negligence was rightly explained and it was held that any wrongdoer will be imposed with the liability to make good the loss that is caused to the plaintiff because of the acts of the wrongdoer. But, the liability is only imposed when all the elements of the law of negligence are comply with. There are three main elements that are required to be comply with and the same includes:

1. i. Every wrongdoer must make sure that because of the acts that are carried on by him should not cause any kind of harm to the plaintiff. However, the duty not to cause harm must not be imposed against all the persons. But, the duty is imposed;
   1. Towards such a person who shares the relationship of proximity with the wrongdoer, that is, the acts of the wrongdoer will cause direct impact upon the plaintiff and is held in Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997);
   2. That the plaintiff against whom the duty is imposed must be reasonably foreseeable by the defendant. Those plaintiffs who are out of the vision of the defendant cannot be protected by the defendant by his actions and is held in Mutual Life and Citizens Assurance Co Ltd v Evatt (1968).
2. When the duty is not comply with by the defendant as per the level of care needed, then, the duty is breached. The level of care varies, for instance, when the plaintiff is a child, then, the level of care is much higher than expected and is held Bolton v Stone[1951]. Higher the danger, higher the level of risk and vice versa and is held in Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Limited [2009].
3. Because of the breach there should be loss caused to the plaintiff. The loss should not be remote and should be caused because of the breach. Any loss which is remote will not be compensated by the wrongdoer and is held in Overseas Tankship (UK) v Miller SS Co Pty Ltd, The Wagon Mound (No 2)[1967].

Application of Law: Priya gave birth to a baby boy in January 2019 names Aaru. Rahul (husband of Priya) went to Baby’s R Us to buy a new baby cot. William (sales assistant) was present at the store of Baby’s R Us. Rahul and Priya enjoy travelling by car and the fact was communicated to William. On the basis of Rahul specifications, William recommended Rahul to either buy “Lullaby Wonder” or the “Sleep Sound”. He suggested that “Lullaby Wonder” is a solid cot and is assembled once and thus is best it has to kept in the exact state. But Sleep Sound is a portable cot and can be assembled and disassembled accordingly and can be used at different purposes.

Now, at this point it is submitted that William is aware that the cot is to be purchased by Rahul for a new born baby. Thus, William is under legal duty of care to provide an adequate cot so that the same can be used by the baby without causing any kind of harm to the baby. The duty is imposed because:

1. There is a relationship of neighborhood between William and the baby. Any cot so provided by William will directly impact the baby as the cot is to be used specifically by the baby. Thus, there is a relationship of proximity amid William and baby;
2. Also, William has reasonability to foresee the presence of baby. The presence of baby is not remote though he was physically apart.

Now, based on the recommendations of William, Rahul purchased sleep sound cot so that it can be used for the holiday as it can fit easily in the car. Rahul and Priya went for the holiday and Aaru was kept in the cot. However, later it was found that the sleep sound cot has collapsed and folded resulting in trapping Aaru inside.

At this stage it is submitted that William was aware that the cot is t be used for the purposes of a new born baby and it was his duty to make sure that the cot so provided must be safe enough so that no injury is caused to the baby. But, the cot that was provide by William was not safe as it folded on its own, thus, the level of care that is expected from William considering the fact that the cot is to be used by the bay is not. Thus, there is a clear breach of duty on the part of William.

Now, because of the collapse of the cot, Aaru was directly taken to the hospital.

There were injuries that are caused to Arau which are sustained by him because of the breach on the part of William. The injuries is caused are because of Williams actions and the injury is also not remote. Thus, the injury so caused to Aaru must be imposed on William.

However, Priya also sustained shock because of the incidence. However, the shock was too remote to be anticipated by William and the shock is also not because of any breach of duty towards Priya., Thus, William is not liable for the loss of Priya.,

Conclusion
Thus, William was under duty of care which was not met by him resulting in harm to Aaru. But, William s not liable for the loss caused to Priya as the same was too remote to anticipate.

Issue B:Whether Priya and Rahul can sue Baby’s R Us under Part 3-5 of the ACL. If yes, who would they sue, and on what basis

Relevant Law: The Australian Consumer Law was established in order to protect the interest of the consumers at the hands of sellers or manufacturers or the importers.

As per section 3 of the ACL, any person is held to be the consumer when the product so purchased by him is not of the value which is more than $40,000. If the value of the product is more than $40,000, then, the product so purchased must be for personal use only and not for any commercial purposes. Any consumer has the right to sue any seller or manufacture or importer of the products in order to make sure that all the provisions of part 3-5 of the ACL are comply with and is held under section 7 of the ACL. There are several provisions which are imposed on the seller or manufacture or importer of the product and the same includes: (Latimer, 2012)

1. As per section 51 of ACL, the seller must have the authority to sell the goods and is held in Rowland v Divall [1923].
2. As per section 55 of ACL, the goods that are provided by the seller must be such that to fit the purpose of the buyer/consumer (Grant v Australian Knitting Mills [1936]. If the consumer has specified the purpose for which the goods are required, then, the goods so supplied must fit the specified purpose (Griffiths v Peter Conway Ltd [1939].
3. Also, as per section 54, the goods that are provided by the seller must be of acceptable quality, that is the goods must be safe, durable, free from defects, etc (Henry Kendall & Sons v William Lillico & Sons Ltd [1968].
4. As per section 56, if any description is provided then the goods must match with such description and is held in Varley v Whipp [1900] and Metal Roofing & Cladding Pty Ltd v Amcor Trading Pty Ltd (1999).

Application of Law: Priya gave birth to a baby boy in January 2019 names Aaru. Rahul (husband of Priya) went to Baby’s R Us to buy a new baby cot. William (sales assistant) was present at the store of Baby’s R Us. On the basis of Rahul specifications, William recommended Rahul to either buy “Lullaby Wonder” or the “Sleep Sound”. He suggested that “Lullaby Wonder” is a solid cot and is assembled once and thus is best it has to kept in the exact state. But Sleep Sound is a portable cot and can be assembled and disassembled accordingly and can be used at different purposes.

Now, based on the recommendations of William, Rahul purchased sleep sound cot so that it can be used for the holiday as it can fit easily in the car. Rahul and Priya went for the holiday and Aaru was kept in the cot. However, later it was found that the sleep sound cot has collapsed and folded resulting in trapping Aaru inside.

Now, considering that the cost of the baby cot was not more than $40,000, then, the purchase can be easily comes in the preview of section 3 of ACL and thus Rahul can be considered as the consumer of the product. Also, if the cost of the baby cot was more than $40,000, still the cot that is purchased by Rahul is to personal use, that is, for the use of his baby, thus, Rahul can still be considered as the consumer under section 3 of the ACL.

Now, every consumer has the right to sue the manufacture for the breach of the provisions of ACL . however, the cot was pursed by Baby’s R Us from Lars Aaberg, an importer. Baby’s R Us are not awrea of who the manufacturer of the cot. However, as per 7 a consumer has the right to sue either the manufacturer or the importer or the slect of the product.

Thus, Rahul being the consumer has every right to sue Baby’s R Us as the importer and the manufacturer are now not traceable.

It is submitted that every seller of the product must ensure that he must comply with all the conditions and provisions that are made part of the ACL. However, Baby’s R Us is found to be in breach of many of the provisos of Baby’s R Us which includes:

1. Now, since the importer and the manufacture of the cot are not traceable, thus, it is Baby’s R Us who must comply with the provisions 51 of ACL. Thus, Baby’s R Us is authored to sell the cot to Rahul as it purchased the same from the importer and thus Baby’s R Us is rightful seller of the cot.
2. Now, Baby’s R Us has violated section 55 of ACL. Raul has specified the purpose for which the cot is to be purchased, that s, for the new born and that they are frequent travelled. Considering the specification, made by Rahul, the cot that s provided by William was not right as it folded automatically and thus is not adequate for travelling purposes.
3. Also, there is a clear volition of section 54 of ACL, as the cot that is provided s not of acceptable quality. The cot was folding automatically and thus is very risky for a new born child.

Conclusion
Thus, Rahul has the right to sue Baby’s R Us as there are various implied guarantees that are violated by Baby’s R Us . Baby’s R Us can be sued as per section 7 of the ACL.

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Reference List
Bonython, W. (2011). The standard of care in Negligence: the elderly defendant with Dementia In Australia, 2011. Canberra Law Review , Vol. 10.

Latimer, P. 2012. Australian Business Law 2012, CCH Australia Limited.

Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 188 CLR 241 (HCA);

Mutual Life and Citizens Assurance Co Ltd v Evatt (1968) 122 CLR 566.

Overseas Tankship (UK) v Miller SS Co Pty Ltd, The Wagon Mound (No 2)[1967]AC 388 PC

Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Limited [2009].