Fact-Pattern Analysis: 1) issue 2) applicable legal rules 3) analysis [how legal rules are
applicable] 4) conclusion
1 Introduction; 2 Crime; 3 Property; 4 Torts; 5 Contract Formation; 6 Contract
Operation; 7 Consumer Law; 8 Competition Law; 9 Business Structure; 11 Agency.
¶1-010: Categories of common law
¶1-180: Sources of the Law; stat law advantages; delegated leg; enacted vs un
¶5-010: Contracts vs Agreements
¶5-020: Making a Valid Contract; types of contracts; deeds; writing vs verbal
¶5-050: Intentions to Create Legal Relations; rebuttable presumptions
¶5-130: Agreement; 4 rules of offer; 9 rules of acceptance; termination of offers
¶5-400: Consideration; rules and exceptions; promissory estoppel
¶5-510: Legal Capacity
¶5-610: Genuine Consent
¶5-820: Legality of Objects; restraint of trade
¶6-010: Representations or Terms; warranties and conditions
¶6-015: Interpreting the Contract; 10 rules for interpretation; parole evidence rule
¶6-020: Pre-Contract Representations
¶6-045: Changing Contract Terms
¶6-060: Condition Precedent & Condition Subsequent
¶6-100: Implied Contract Terms; by courts; conditions; good faith; bus usage etc
¶6-150: Uncertain Terms; Meaningless Terms; Ambiguous Terms
¶6-180: Exclusion Clauses
¶6-260: Parties to the Contract
¶6-280: The End of the Contract
¶6-380: Remedies for Breach of Contract
¶4-010: Definition of Tort, distinction from contracts and crimes
¶4-020: Types of Tort
¶4-060: Negligence; Civil Liability Acts limitations and changes; tort law crisis
¶4-070: Suing for Negligence; Three Elements
¶4-080: Establishing a Duty of Care; Reasonable Foreseeability
¶4-100: Breach of Duty; Standard of Care
¶4-130: Causation; ‘but for’ test; supervening causes; scope of liability in CLAs
¶4-140: Remoteness
¶4-160: Defences; contrib. negligence; vol. assumption risk; proportionate liability
¶4-175: Damages in Tort; econ loss; mitigation of loss; accident comp schemes
¶4-230: Negligent Misstatement
¶3-010: What is property? The three types of property
¶3-020: Ownership & Possession
¶3-480: Copyright
¶3-550: Designs
¶3-580: Patents
¶3-650: Trade marks
¶3-685: Action for beach of confidential information
¶2-010: The Criminal Process
¶2-030: Criminal Law Legislation
¶2-040: Classifications of Criminal Law
¶2-050: Classifications of Crime
¶2-110: The Criminal Trial
¶2-240: White Collar Crime (ecommerce, fraudulent conversion, embezzlement)
¶7-010: Consumer Law History & Context
¶7-011: Sale of Goods
¶7-035: Consumer Guarantees
¶7-100: Consumer Guarantees for Supply of Services
¶7-110: Consumer Guarantee Remedies
¶7-120: Exclusion of Seller’s Liability
¶7-206: Manufacturer’s Liability / Product Liability
¶7-216: Consumer Protection under ACL
¶7-510: Consumer Protection, Enforcement and Remedies
¶9-010: Business Structure Choice
¶9-030: Sole Trader
¶9-130: Partnership
¶9-140: Joint Venture
¶9-270: Incorporated Company
¶9-630: Associations
¶9-750: Trusts
¶9-985: Franchise
Chapter 1: Introduction to Business Law________________________________________
Categories of Common Law:
Civil & Criminal Law
- Civil Law (matters between person and person)
- Criminal Law (certain conduct is an offence enforced by gov’t)
Common Law & Equity Law (fused; administered by same courts)
- Common Law (remedy award of damages)
- Equity (appeal to the conscious of the King)
¶1-180: Where does the law come from?
Sep Powers: parliament/legislative, executive[PM & Ms], judiciary [federal courts]
Parliament (power to make/change law), Executive Gov’t (power to put law into action),
Judiciary (power to make judgements on law – should not make law).
Statutory Law Advantages: precedence over case law, can communicate simple and carefully
phrased instructions, parliament can plan for future, can be created and amended whereas
courts are bound by precedent.
Chapter 5: Formation of Contract______________________________________________
¶5-010: Contracts vs Agreements: Contract = legally binding. Agreement = not legally
binding. Contract law is made up of case law decisions and legislation.
¶5-020: Making a Valid Contract: a contract is an agreement containing promises which the
law will enforce.
Six elements for a legally enforceable binding contract:
- intention to create legal relations
- agreement
- consideration
- legal capacity
- genuine consent
- legality of objects
Types of contracts…
- simple contract (ordinary straightforward contract)
- bilateral contract (a promise for a promise)
- unilateral contract (promise accepted by doing something)
- formal contract (executed by a deed. signed, sealed, delivered.
Deeds: a formal contract that is effective through the intention of the parties to take effect as a
deed, and a valid form that is “signed, sealed and delivered”.
¶5-050: Intentions to Create Legal Relations: the court won’t look into the minds of the
people making the agreement. It will look at the facts and circumstances surrounding the
agreement and determine whether a hypothetical reasonable person, standing in the shoes of
the defendant, would have thought there was an intention to be bound. Rebuttable
presumptions that help the court (2):
- It is presumed that parties to a business agreement intend to make
a contract. government activities not included (can be rebutted
using evidence eg. honour clause, comfort letter)
- It is presumed that parties to a family, domestic, social or voluntary
agreement do not intend to make a contract.
¶5-130: Agreement: consist of offer and acceptance. The rules of offer and acceptance
distinguish a contract from a non-binding agreement. Rules of offer and acceptance also
indicate: whether agreement has been reached, when agreement was reached, where
agreement was reached, what agreement was reached.
4 Rules of Offers:
1) must be distinguished from an invitation to treat
(An invitation to treat is a statement to another inviting them to make an offer.
It is preliminary communications between parties during negotiation. eg. price
lists, catalogues, ads, shop display)
2) can be made to a specific person, class of persons or everyone (but can
only be accepted by those whom it was intended)
3) must be communicated
4) can be revoked at any time prior to acceptance
9 Rules of Acceptance:
1) must be made in response to offer
2) must be complete and unqualified (unconditional)
3) conditional assent (agreement) is not acceptance
4) must be clear and certain (parties definite of exact terms)
5) may be express or implied
6) may be retrospective (related to the past)
7) counter offer is a rejection of an offer (creates new offer)
8) must be communicated
9) offeror may prescribe the method of acceptance to be followed
A contract is formed at the moment of communication of acceptance to the offeror.
Termination of Offer: revocation (formal withdrawal prior to acceptance), revocation and
option, lapse of time (not specified = ‘reasonable time’), non-occurrence of necessary
condition, death of either party.
¶5-400: Consideration: The plaintiff must show that the defendant’s promise, upon which he
was suing, was part of a bargain to which he himself had contributed. It must have been
offered in return for an act done or a counter-promise made by the plaintiff. “The price paid for
the promise”, ie a promise must be paid for to be enforceable. (eg. A promises to work for B in
return for B’s promise to pay A). Exception to consideration: deeds. Rules for Consideration:
1) needed for every simple contract
2) must move from the promisee, but need not to the promisor
3) can be executed or executory but cannot be past (past meaning
the promise is provided after the act has been carried out)
4) need not be adequate (does not have to be equal)
5) must be sufficient (must have some value in eyes of the law)
6) must be possible of performance
Promissory estoppel: cannot go back on your word in certain circumstances. Applies where
the promisee has relied on the promise and would suffer detriment if the promisor went back
on their word. Has 3 elements: assumption (promise assumed particular legal relationship
with promisor), responsibility (promisor was responsible for the assumption), reliance
(promise acted or did not act on the assumption), promisor intended the promise to so act,
detriment (promise will suffer detriment if their assumption is not fulfilled), promisor has taken
no steps to warn promise that the promisor may not deliver.
¶5-510: Legal Capacity: A contract may not be enforceable if one of the parties does not
have capacity:
- minors (if under 18; however, contracts for ‘necessaries’ can be binding eg. food or shelter.
Is the thing capable of being necessary based on the nature of the item, the minor’s life
situation and whether or not the minor is already sufficiently supplied)
- mentally ill (if incapable of understanding what they were agreeing to and the other party
was aware or should have been aware of the incapacity)
- intoxicated (same as above)
- corporations (natural impossibility as a real person like a director must sign the contract. also
legal impossibility)
¶5-610: Genuine Consent: If there is no consent, there is no agreement between the parties.
The contract may be either void or voidable.
Mistake: Remedies are rarely awarded but can be:
- common mistake [both parties make same mistake]
- mutual mistake [both parties make differing mistakes that are fundamental to contract]
- unilateral mistake [mistake by one person as to a contract term] eg mistaken identity,
mistake of law, non est factum
Remedies:
- common law [contract void if mistake goes to very existence of contract]
- equity [follows common law or rescission, restitution, rectification]
- legislation [deceptive; unconscionable conduct, false/misleading representations]
Misrepresentation: False statement or silence amounting to a representation. The statement
is a fact and was intended to induce and did induce entry into the contract.
Remedies:
- non-contractual misrepresentations [minor, not part of contract. cannot be sued. remedy
may be tort, misrepresentation legislation or breach of confidence]
- actionable misrepresentations [induces someone to contract but is not a term of the contract.
can rescind or raise misrepresentation as a defence if sued for damages in future]
- tort [innocent = no remedy, negligent = tort of negligence and breach of duty of care,
fraudulent = tort of deceit as false statement.]
AU Consumer Law makes anyone who makes a misrepresentation of fact liable even if done
innocently. ACL: ‘misleading or deceptive conduct’, ‘unconscionable conduct’, ‘false or
misleading representations’)
Duress: Agreement has been obtained through threats of violence or other intolerable
pressure. Makes contract voidable and the innocent party has the choice whether or not to
rescind
Unconscionable Conduct: Party to transaction is under some special disability that the other
party is aware of and took unfair advantage of. A special disability may be age, intoxication,
emotional dependence, illiteracy, inexperience, lack of education, lack of
assistance/explanation, poverty, need, weakness of mind, weakness of body, unequal
bargaining positions, incomprehensible documents, lack of good faith.
Unfair Contract Terms: terms that allow one party, but not the other(s), to avoid the contract or
limit their performance of the contract. Not limited to B2C contracts. Unfair contract term is
void but the rest of the contract will continue if it is able to operate without the unfair term.
ACCC and ACL enforce. Remedies include injunctions, damages and compensation.
Standard Form Contracts & Real Consent: Many standard form contracts (eg online contracts,
mortgages, insurance contracts) are not subject to negotiation. But subject to unfair contract
clauses. These contracts make up for 90% of all.
Comprehensibility of Legal Writing & Real Consent: many standard form contracts are written
in a way that a consumer may not understand.
¶5-820: Legality of Objects: Contracts which are…
Illegal by Statute
- illegal as formed (If a contract is illegal as formed, it is illegal because it is
expressly forbidden by statute.)
- illegal as performed (Even if a contract is legal as formed, it may be illegal if
performed in an illegal way or for an illegal purpose.)
Void by Statute: the void contract will not be enforced by the courts, and it creates no legally
enforceable rights between the parties to the contract.
Illegal at Common Law:
- contracts that involve committing a crime/tort or fraud on a third party
- contracts which are sexually immoral
- contracts which prejudice the due administration of justice (eg. a contract
not to reveal information necessary for a criminal offence.)
Void at Common Law:
- contracts to oust the jurisdiction of the courts
- contracts which prejudice the status of marriage
- contracts in restraint of trade (see below)
Restraint of Trade: Contract which unreasonably or unduly interferes with the free exercise by
a person of his trade or business, by restricting him in the work he may do for others, or the
arrangements he may make with others.
Contracts in restraint of trade are not illegal, but they are unenforceable at common law.
Unless the unreasonable part can be severed or deleted, the whole contract will be
unenforceable. May also be misleading or deceptive or anti-competitive under Competition
and Consumer Act 2010 (Cth). Every restraint is prima facie void. Presumption may be
rebutted by evidence that the restraint is reasonable in the interests of the parties, and in the
interests of the public.
Employer and Employee: A restraint of trade clause is valid if it would be
reasonable between the parties and in the public interest, and to the
legitimate rights of employees to practise their trade or profession and to sell
their expertise.
Buyer and Seller of a Business: Restrictive clauses may be included to stop
one party from competing with the other, otherwise competition might destroy
the goodwill, contacts and custom purchased under the contract.
If the parties are dealing at a more equal level, these restraint of trade
clauses may be valid.
Questions: what is reasonable to protect the parties? what are the legitimate
interests of the buyer of the business? the seller? and the public as a whole?
Trading Agreement between Manufacturer & Retailer: A trading agreement
which regulates an industry and the prices of the products may be
enforceable at common law if it is reasonable for:
the parties themselves, and the public.
Effects of Illegal & Void Contracts (Severance): If part of a transaction is illegal or void by
statute or illegal or void at common law, such as a restraint of trade covenant, the offending
part may be able to be cut (severed) so that the remaining part of the transaction can be
enforced if it is technically possible to sever it and if the contract can take effect with that part
severed. If the severance of the invalid parts changes the extent but not the kind of contract,
the valid parts are severable.
Chapter 6: Operation of the Contract___________________________________________
¶6-010: Representations or Terms:
Representation: non-contractual statement made pre-contract
during negotiations
Term: a contractual statement intended to be legally binding
- Condition: essential term critical for contract.
breach may lead to terminiation
- Warranty: non-essential term of lesser importance to contract
breach may lead to damages
¶6-015: Interpreting the Contract: The contract must be read as a whole and it must be read
in context. The meaning of commercial documents is determined objectively. Words, grammar
and punctuation may be very important to help interpret a contract. 10 Rules for the
interpretation (construction) of a contract:
1) Words must be given their natural and ordinary meaning.
2) Written words take precedence over printed words.
3) If general words like “or other” follow a listing of particular things,
the general words are limited to matters of the same kind as
those listed.
4) Industry practice can be relied upon in certain circumstances.
5) Is a statement a term of the contract? Is it a condition or
warranty?
6) Is there an exclusion clause, and is it effective?
7) Statutory interpretation. A contract may have terms imposed by
legislation like the Australian Consumer Law.
8) Statutory interpretation. Many statutes will regulate different
aspects of contracts. Was a promise misleading or deceptive”?
9) Oral evidence cannot usually be used to contradict or to add to
the terms of a contract in writing (the parole evidence rule).
10) Evidence of post-contract conduct cannot be used to prove
what the parties meant.
¶6-060: Condition Precedent: a precondition which delays a right arising until some event
has happened. It could be a condition precedent to the formation or existence of a contract.
No enforceable contract until the condition is satisfied.
Or it could be a condition which is precedent to the obligation of a party to perform its part of
the contract. Binding contract but the obligation to perform depends on fulfilling the condition
precedent.
Condition Subsequent: an obligation which must be complied with after the contract is made.
If the obligation is not fulfilled, the other party can terminate for non-fulfilment.
¶6-180: Exclusion Clauses: These terms attempt to limit the rights of one of the parties to
the contract. When will an exclusion clause work? Two tests to help work out whether an
exclusion clause will work: 1) Is the clause a term of the contract? 2) Does the exclusion
clause cover the loss or damage that has happened?
Regulation of Exclusion Clauses: A person is bound by an exclusion clause in a document
they have signed. If the exclusion clause is contained in an unsigned document it is not
effective if the document is a non-contractual voucher or it is effective if sufficient notice is
given. Notice of the exclusion clause after the contract has been made makes the exclusion
clause ineffective.
Previous dealings may suggest that there has been sufficient notice of the exclusion clause.
Special rules may apply to the interpretation of exclusion clauses. A collateral contract may
override the operation of an exclusion clause.
(eg. Third party C (such as an employee) may be able to get protection under an exclusion
clause in the contract between A and B.)
The operation of exclusion clauses has been limited, especially in the consumer context. The
operation of an exclusion clause may be “misleading or deceptive” and therefore in breach of
s18 of the Australian Consumer Law. An exclusion clause may be unconscionable at common
law or under the Australian Consumer Law.
Binding effect of signed documents: A person is bound by a document they have signed,
regardless of whether they have read it; however, this rule has been tempered by consumer
protection statutes, the unconscionability doctrine, and rules relating to vitiating elements.
Vouchers, receipts and tickets are non-contractual: Terms can be incorporated into a contract
from other places by being referred to in the contract. Not notifying a person before the
contract is formed about the terms may result in them being excluded. The responsibility is on
the person who wants to rely on an exclusion clause (D) to bring the clause to the attention of
the other party.
Notice: An exclusion clause will only be effective if notice has been given. Notice must be
given before the contract is made. Was the customer aware, or should the customer have
been aware, of the clause? Previous dealings may suggest that a plaintiff has “sufficient”
notice of an exclusion clause.
¶6-260: Parties to the Contract:
Privity of Contract: Under the doctrine of privity of contract only an original party to a contract
may sue or be sued upon it. Under the privity rule:
- only a party to the contract has any rights under the contract, and
- the contract imposes obligations only on the parties to the contract.
Assignment in Equity: A contract can be assigned in equity if the assignor has done all that is
necessary, and equity will allow the assignee to enforce the assignment against the assignor.
Assignment under Statute: Conveyancing and property law legislation provides for
assignment of a legal or an equitable chose in action.
HOWEVER, certain contracts cannot be assigned:
- The contract may forbid assignment.
- The contractual rights may be of a personal nature.
- A bare right of action to sue cannot be assigned to someone not connected to the litigation
unless the assignee has a proprietary interest in the litigation.
¶6-280: The End of the Contract:
Termination of the Contract: may occur through…
- performance (parties must do exactly what they contracted to do)
- agreement (total breach [a party does not perform at all], partial breach [a
party does not perform full requirements of contract])
- breach (innocent can repudiate and sue for damages for breach of a
condition or an intermediate term if serious. or sue for damages for breah of
an intermediate term if the breach is minor and a warranty of the contract)
- repudiatory breach (1 party breaches and the innocent
may choose to terminate contract)
- anticipatory breach (any breach that happens before
actual time for performance of the
contract. May be unwillingness or
inability to perform)
- lapse of time
- operation of law (merger, death, material alteration of written doc,
bankruptcy)
- frustration (Performance of a contract may become impossible if something
happens over which neither party has any control.
If there is no special provision in the contract to deal with this event, the
contract comes to an end due to frustration.)
Rescission: often used to mean the rightful termination of a contract by a person faced with a
breach of condition or repudiation of a contract. Technically, it is a setting aside of the
agreement altogether.
¶6-380: Remedies for Breach of Contract: The rights of an injured party to enforce a right
under a contract or to get compensation for an injury for breach of contract are known as
“remedies”. The innocent party has a choice between affirming the contract or terminating the
contract. If the innocent party decides to terminate the contract, it may sue for breach of
contract, or wait and use the other party’s breach of contract as a defence if sued by the other
party. Suing for breach of contract includes damages (for breach of condition and for breach
of warranty) and the right to repudiate the contract. The innocent party may choose not to
treat the contract as terminated. In this case the contract continues for the benefit of the
parties, with a claim for damages. Equitable remedies…
- specific performance (a court order to force a person to perform
an obligation)
- injunction (a court order to stop a person breaching their contract
or doing a wrongful act)
- mareva order (If there is a real risk that assets may be moved or disposed
of, a court may issue a Mareva order (freezing order, asset preservation
order) to freeze (preserve) assets to keep them within the jurisdiction of the
court or to stop them being disposed of)
- anton piller order (An Anton Piller order authorises entering premises of a
prospective defendant to inspect documents and records, removing them and
seizing offending items. The order can be issued independently of other
court-ordered powers of inspection under various Rules of Court)
- damages in equity (Damages may be awarded by a court of equity in
addition to equitable remedies)
Damages for Breach of Contract: is there a breach?, causation (were losses caused by the
breach?), remoteness (is the loss too remote?), what damages (can the plaintiff claim?), has
the plaintiff contributed to damage?, mitigation (has the plaintiff made their losses less
severe?), has the plaintiff lost the right to sue?
Damages Recoverable:
- general damages (compensation to plaintiff for loss)
- nominal damages (damages where there is no loss)
- exemplary damages (designed to punish bad conduct)
- expectation damages (protect profits or commercial opportunity)
- reliance damages (expenditure incurred relying on def’s promise)
Contributory Negligence: The civil liability amendments allow apportionment of damages for
negligent breach of contract where the breach of contract is “concurrent and coextensive with
a duty of care in tort”.
Mitigation: The law does give the injured party the right to sue, but it also expects the injured
party to mitigate (minimise) its losses. The burden of proof is on the defendant to prove that
the plaintiff has failed to mitigate the losses, not on the plaintiff to prove mitigation.
Loss of Right to Sue: The right to sue for a breach of contract, either at law or in equity, may
be lost. For example: Statutes of Limitation, or Equitable defences:
Laches – inaction in enforcing a right, Acquiescence – matters like agreement without protest,
Delay – the period of inaction.
Restitution: unjust enrichment… Where someone has benefited at the expense of someone
else and where it would be unjust to allow that person to keep the benefit.
Four tests of restitution…
1) Was there a benefit and an enrichment by D:
- a positive enrichment such as an increase in wealth to the
defendant, or
- a negative enrichment, such as the defendant saving an
expense?
2) Was D’s enrichment at the expense of the P?
3) Was D’s enrichment unjust?
4) Are there any defences such as estoppel, change of position,
purchase in good faith, illegality and/or incapacity?
The unjust enrichment principle in these four tests is the basis for remedies for restitution
concerning:
- Restitution of money paid under a mistake of fact or law
- Restitution of money paid under an ineffective contract
- Recovery of misdirected or stolen funds at common law and in equity
- Non-contractual claims for contribution
- Moneys paid for a purpose which fails or later becomes falsified
- Certain non-contractual claims for interest
- Claims to recover money paid under judgments later overturned
- Moneys paid under illegal or unconstitutional demands.
Chapter
4:
Tort
in
the
Business
World___________________________________________
¶4-010: Definition of a Tort: a tort is a civil or legal wrong. The operation of tort law is an
attempt to allocate risks according to law. The person who commits the wrong is called the
“tortfeasor”.
Comparison to Contract: in a contract the parties agree to allocate risks, where in tort the risks
are allocated by law. A tort is a breach of a duty “owed generally to one’s fellow subjects, the
duty being imposed by law and not as a consequence of duties fixed by the parties
themselves” (compared with, say, contract).
Comparison to Crimes: crimes justify punishment where a tort involves compensation. There
may be an overlap.
¶4-020: Types of Tort:
- Breach of Statutory Duty
(eg. an action for breach of standards leading to workplace injury)
- Conspiracy
(agreement between 2+ conspirators to commit a wrongful act)
- Deceit
(fraudulent misrepresentation which doesn’t form part of contract)
- Defamation
(protects a person’s reputation from being unjustly injured)
- Injurious Falsehood
(publishing a false statement to damage someone)
- Negligence
(one person breaches a duty owed to another and causes damage)
- Nuisance
(eg. noxious gases)
- Passing Off
(somebody wrongfully claims that their goods are yours)
- Trespass to Goods
(authorised access to private goods)
- Trespass to Land
(unauthorised entry on private land)
- Trespass to the Person
(assault or battery)
¶4-060: Negligence: Protects the person, property and economic interests from damage
caused by another person not taking reasonable care. Held, Lord Atkin: “You must take
reasonable care to avoid acts or omissions which you can reasonably foresee would be likely
to injure your neighbour.”
Limitations by the Civil Liability Acts: personal injury claims under the common law of
negligence have now been limited by the Civil Liability Acts which were passed in 2002-2003
in all jurisdictions in respond to the “tort law crisis”. It promotes personal responsibility – you
are responsible for your acts and that you take some of the risks and responsibility for the
decisions you make.
¶4-070: Suing for Negligence: 3 elements need to be established…
- the defendant owed the plaintiff a duty of care
- the defendant was in breach of this duty of care
- the defendant’s breach of duty was the cause of the plaintiff’s loss
- the damage suffered by the plaintiff was not too remote
(also consider whether there are any relevant defences such as voluntary
assumption of the risk, contributory negligence as a partial defence, or
effective disclaimer)
¶4-080: Establishing a duty of care: “A duty, recognised by law, requiring conformity to a
certain standard of conduct for the protection of others against unreasonable risks.” A man is
entitled to be as negligent as he pleases towards the whole world if he owes no duty to them.
The fact that someone has been injured in an accident does not mean that someone is going
to be liable for negligence.
Three Part Test:
1) Is there an established case? If yes, use the precedent.
2) If not, and case is physical injury, use reasonable foreseeability
3) If not physical injury, consider a range of factors…
- was the plaintiff vulnerable to harm because of the defendant’s
activities?
- was the defendant’s behaviour unlawful or offensive?
- Did the defendant have a practical measure of control over the
plaintiff’s economic well-being?
- Was there a close relationship between the plaintiff and the
defendant?
- Was the plaintiff a “first line” victim?
- Was the defendant’s behaviour reckless or grossly careless?
- Did the defendant already owe a duty of care to another?
- Would imposing liability intrude into an already established
area of law?
If no established case, use the test of reasonable foreseeability: The law will compensate
people who are foreseeably imperilled, lest defendants be crushed by the burden of excessive
liability for some quite trivial fault.
The plaintiff must show that it was “not unlikely” that a class of persons of which he or she
was one might reasonably suffer an injury “of the same general character” as the one that the
plaintiff actually suffered. What class of people might possibly be put at risk of injury in some
way if the defendant failed to take reasonable care? Is the plaintiff one of those people?
Recognised Duties of Care:
- professional person/client
(owe their clients a duty of reasonable competence as judged by objectively
analysed community standards)
- negligent misstatement / negligent advice
- drivers
(owes a duty of care to the person and property of other users of the road)
- occupiers
(duty of care to visitors if their premises are dangerous because they control
the premises)
- manufacturers
(owe a duty of care in design, production and packaging of goods)
- suppliers
(duty of care with regard to dangerous things, such as asbestos, cigarettes,
firearms and pharmaceutical drugs)
Bailees
(have a duty of care while goods are in their possession)
Builders
(liability extends to future owners)
Authorities
(eg public authority in charge of the highway is liable to users of the road)
No Duty of Care: The law does not impose a duty on a person to take affirmative action to
protect another person from self-harm. Two police officers who spoke to a suicidal man before
he killed himself did not owe a duty of care to him or to his wife to prevent him from
committing suicide.
¶4-100: Breach of Duty: What is the standard of care required to decide whether there has
been a breach of the duty of care?
Standard of Care: the standard (level) that the wrongdoer’s conduct is measured against. The
general standard of care is “reasonable care in all the circumstances” – doing what the
ordinary, reasonable and prudent person would do. Being negligent is doing something that a
reasonable person would not have done. It involves balancing the size and probability of the
risk of harm with the costs of taking preventative measures.
Standard of Care under Civil Liability Acts: now define the standard of care for personal
injuries caused by negligence. Also a new standard of care for professionals to protect
professionals who provide treatment that is in line with peer professional opinion.
Damange must be caused: Law of negligence only compensates actual damage (damage to
property or person; or economic damage [loss is purely financial).
¶4-130: Causation: there must be a causal connection. Can use the “but for” test: The
defendant’s fault is a cause of the plaintiff’s harm if such harm would not have occurred
without (but for) it.
Supervening Causes: Breaking the chain of causation requires a voluntary human action or
independent event which is coincidence.
Causation under Civil Liability Acts: There must be evidence the negligence was a necessary
condition of the occurrence of the harm (factual causation), and it is appropriate for the scope
of the negligent person’s liability to extend to the harm so caused (scope of liability).
¶4-140: Remoteness: Not a proximate cause. Eg: Liability did not extend to a fire caused
when a spark hit oil from a leaking ship. It was not reasonable for liability to extend this far.
¶4-160: Defences:
- Contributory Negligence
(People must not be careless towards themselves, and if they are, any compensation will be
reduced (apportioned) to show that they contributed to the injury. Statute law provides for the
apportionment of damage where both parties have contributed to the damage. To be
“contributory”, the negligence must help cause the damage. Under the Civil Liability Acts, the
court can reduce liability by 100%. There is a presumption of contributory negligence if P is
intoxicated, and damages will be restricted if the use of drugs have contributed to the injury.)
- Voluntary Assumption of the Risk
(The plaintiff was aware of the risks of negligence on the part of the defendant and/or the
plaintiff consented to that particular risk. Under Civil Liability Acts, there is no liability for an
“obvious risk” or the materialisation of an inherent risk. Good Samaritans and volunteers that
are acting in good faith while doing community work also do not incur personal civil liability.)
Proportionate Liability: a injured person must commence a negligence action against all
potential defendants. In some jurisdictions, the parties can agree – expressly or by implication
– that the proportionate liability legislation does not apply. Proportionate liability replaces joint
and several liability.
Vicarious liability of employer: the employer is liable for the negligence of the employee.
Exists when the defendant is liable even though not personally at fault. Was the person
committing the tort an employee and were they acting in the course of employment at the
time? (not on a frolic of their own and the task was reasonably incidental to his/her
employment).
¶4-175: Damages in Tort: Basic remedy in tort is an award of damages as compensation.
The purpose of an award of damages is fair compensation. A damages award aims to put
plaintiff P in the position in which P would have been if the tort had not been committed. If
property is damaged, you will only get market value for your losses. Consequential (indirect,
further) loss is also recoverable in the case of damage to or destruction of a profit-generating
object such as machinery.
Exception to the Compensation Principle: The injured party is under a duty to minimise or
mitigate losses.
-> Nominal damages involve the award of a token amount where the plaintiff established that
the defendant committed a technical breach of a legal right but where the plaintiff should not
have brought the action because there was no compensable damage.
-> Aggravated Compensatory Damages: awarded if a plaintiff’s injury has been made worse
by conduct of the defendant.
-> Exemplary Damages: awarded if the defendant has acted in a “high-handed, insolent,
vindictive or malicious” manner or “had in some other way exhibited a contumelious disregard
of the plaintiff’s rights.
-> Exemplary, Punitive & Aggravated Damages: abolished in some states by CLA
Damages for Personal Injury:
- Pecuniary loss (can be estimated in money terms)
eg loss of income, hospital costs, etc.
- Non-pecuniary loss (pain and suffering, loss of amenity)
Liability for Economic Loss: D knows that physical damage would cause economic loss to P.
Vulnerability to P. D assumes responsibility. Four types of econ. loss:
1) economic loss due to property damage or physical injury to person
(purpose of damage is to put the plaintiff in the same position as if the
defendant did not breach the duty)
2) economic loss due to property damage or physical injury to a third party
(plaintiff able to recover damages for pure economic loss without having
suffered any physical injury)
3) economic loss due to defective product with no injury to person or property
(establishing a duty of care is owed to person/property. Recovery is also
available to a person able to avert a foreseeable injury)
4) economic loss due to negligent statements (a provider of information is
under a duty to use reasonable care when that person knows or ought to
know that the recipient may or will act on it)
Mitigation of Loss: Plaintiff must (after the injury) minimise the loss sustained.
Reasonable steps: a reasonable person in the circumstances as they existed for the plaintiff.
Accident Compensation Schemes: There are calls for a national compensation scheme.
Compensation in addition to or as an alternative to remedies in negligence may be available
under the following statutory provisions:
- workers’ compensation
- criminal injuries compensation
- social security
¶4-230: Negligent Misstatement: Courts were reluctant to extend negligence to cover
statements; until Hedley Byrne & Co Ltd v Heller and Partners Ltd. If advice is given to be
relied upon there is a duty of care. Any person with a “special” skill is under a duty to take
care with the accuracy of advice or information — written or spoken. Duty of advisers covers
both careless statements and the failure to disclose information.
Special Relationship: The “special relationship” is an application of the “who is my
neighbour?” principle. The special relationship arises where there is reliance, and the reliance
is reasonable.
Chapter 3: Property__________________________________________________________
¶3-010: What is property? Three classifications…
- real property (land)
- personal property (eg. cell phone)
- intellectual property (eg. copyright)
Ownership versus Possession:
Owner is entitled to all the legal rights over the property:
Owner has title to the property, and
Owner has a proprietary interest in the property.
Possessor has:
physical control, and
the intention to claim exclusive control.
Rights of the Person in Possession: The person in possession has rights protected by the law.
Possession is good against the whole world except the owner.
INTELLECTUAL PROPERTY
¶XXXX: Why IP? Intellectual property (IP) is the property of your mind or proprietary
knowledge and can be an invention, a trade mark, a design or the practical application of your
idea. IP rights are an incentive to encourage and reward innovation. They provide a
competitive advantage and can also form an important asset on the balance sheet of a
business. Like a piece of physical property, IP rights are owned and can be transferred via a
sale or licensing deal. They offer protection and can act as a deterrent to would-be infringers.
They provide exclusivity and can be used to protect different aspects of a product or service in
different countries (IP Australia, 2013).
¶3-480: Copyright: Legal protection to the author or creator of an original work in writing,
visual images, music and film. Copyright owners have the exclusive statutory right to control
their property. There is no protection in ideas, concepts, names, titles and slogans. There is
no need to register to get copyright protection.
Two Categories of Material: ‘works’ (original literacy, dramatic, musical or artistic works);
‘secondary works’ (subject matter other than works such as sound recordings, films, television
and sound broadcasts.
Two Categories as per Copyright Act 1968: published works (work is first published in
Australia, work is original, author is a qualified person. Is in the expression of the idea and not
the idea itself); unpublished works (work is original, author is qualified person).
Copyright Rights (Sect 31, Copyright Act 1968): reproduce, publish, publically perform,
publically communicate and adapt the work. Artistic Work: reproduce or republish. Literacy
Work (includes Computer Programs): commercial rental arrangement.
Further Author’s Rights: assignment of copyright (sell), licensing, statutory license, crown
copyright (gov’t documents)
Ownership: employment (if created in course of employment, then copyright belongs to
employer); educational copyright (staff and students may retain in certain circumstances
however not course materials); journalists copyright (goes to paper unless it is being included
in a book); family photos (vests in the family).
Duration: 70 years after the death of the copyright owner. Material becomes public after this
time.
Literacy Work: a table, or compilation, expressed in words, figures, or symbols (whether or not
in a visible form); and a computer program or compilation of computer programs. Computer
program means an expression, in any language, code or notation, of a set of instructions
(whether with or without related information) intended through conversion or reproduction to
cause a device having digital information processing activities to perform a particular function.
Copyright Infringements: occurs when there is an act that compromises the copyright (eg.
copyring/reproducing, uploading, P2P sharing). HOWEVER, converting the formats of files is
not in breach, ISP is not liable and time recordings where programs are not kept is not a
breach of copyright.
Secondary Infringements: importation for sale/hire of pirate copies, parallel imports, permitting
a place of public entertainment to be used for a performance of a work.
Infringement Exceptions: authorisation, educational use, fair dealing (criticism/review,
research, study, news reporting BUT must be fair).
Author’s Moral Rights [3] (Copyright Act 1968): the right of attribution (right to be identified as
author); right not to have authorship of a work falsely attributed; right of integrity of authorship
(not to have work treated in a derogatory way).
Infringement Remedies (Statutory): injunction (restrain actual or threatened infringement),
compensatory damages (damages as a result of loss suffered), account of profits (equitable
remedy where plaintiff gets share of profits due to breach), flagrancy damages (additional,
exemplary damages), criminal proceedings (for making fakes or other forms of piracy).
Infringement Remedies (General Law): tort of passing off, Mareva order (preventing goods
being moved/disposted), Anton Piller order (court order to enter premises and inspect
documents).
¶3-550: Designs: Protects the overall appearance of an article. Its purpose is to encourage
innovation by giving designers the exclusive right to exploit their designs for a limited time and
prevent competitors from free-riding. “Design” in relation to a product, means the overall
appearance of the product resulting from one or more visual features of the product (ss5, 6
and 8). The Act provides a publically available register of existing designs. Note the overlap
between design and copyright/patents.
Registration: two-step test (design must be new and not publically used in Australia; design
must be distinctive and not substantially similar in overall impression to another design).
Multiple design/product applications can be submitted. Protection is for ten (10) years. A
design examination is not required for registration.
Infringement & Remedies: Infringement occurs when a person without licence or authority
makes, imports, sells or hires a product which is identical or substantially similar in overall
impression to the registered design. Remedies include injunction to restrain the infringement
and either damages or an account of profit.
¶3-580: Patents: A patent is a temporary monopoly by which the inventor gets the exclusive
use of and right to sell its new invention in return for public disclosure by way of publication of
the patent specification. Patent application and specification is expensive and is usually
handled by a patent attorney. Some inventors may not patent to keep their invention secret.
Patent law does not provide that the employer will automatically get the Patent rights when an
invention is developed in the workplace. A patent grants an exclusive right to exploit the
invention and authorise others to do so.
Types of Patents (Patents Act 1990): standard patent (extendable to 20 years from date of
patent); innovation patent (second tier, lower level, 8 year protection); pharmaceutical patent
(extendable to 25 years).
Patentable Invention Requirements: a manner of manufacture (device, method, substance,
process); which is novel (invention must already be known); involves an inventive step (must
not be obvious to someone with knowledge and experience in the technological field of
invention); is useful (must do what it says it will).
Applying for a Patent: 3 ways… provisional patent application (not necessary, can establish a
date for innovation); complete patent application (must be done and specify fully the request
for the patent); international application (can apply for patents in many countries at the same
time).
Infringement Remedies: injunction, damages, flagrancy damages, account of profits,
inspection order.
Patent Revocation: a patent may be revoked at the petition of the minister or any other person
on grounds that the patentee is not entitled, that the invention is obvious and not patentable,
or if the patent was obtained by fraud.
¶3-650: Trademarks: Trade Marks Act (1995) protects marks used by manufacturers to
identify a link between the manufacturer, the product, and brand identity. A registered
trademark gives the owner a monopoly over the trademark and the trademark can be licensed
to other users.
Definition: “Trade mark” is a sign used, or intended to be used, to distinguish goods or
services dealt with or provided in the course of trade by a person from goods or services so
dealt with or provided by any other person. (s17)
“Sign” includes “… any letter, word, name, signature, numeral, device, brand, heading, label,
ticket, aspect of packaging, shape, colour (if it distinguishes on trader’s goods or services
from another’s), sound or scent (if sound/scent can be represented graphically).” (s6)
Conditions & Entitlements: Can be registered in respect of goods or services or both. Must be
capable of distinguishing the Applicant’s goods or services. Upon registration – the exclusive
right to use and authorise others to use trade mark in relation to those goods and services.
“Use” – use upon or in physical relation to goods or services otherwise it may be removed.
Registrable Trade marks: collective trade marks (signs used by member of an association);
certification trade marks (shows goods are of a particular standard); defensive trade marks
(prevent another business in an unrelated field from using).
Infringement: Infringed if someone uses a sign which is substantially identical with, or
deceptively similar to the trade mark in relation to goods or services in respect of which the
trade mark is registered, or goods of the same description or closely related if using the sign
is likely to deceive or cause confusion. HOWEVER: honest concurrent user (eg, use in good
faith or person using their own name); comparative advertising; with consent; or earlier use of
an identical trademark is not a trade mark infringement.
¶3-685: Action for beach of confidential information: Where information is secret or
confidential and the plaintiff has a reasonable expectation that the information would not be
published.
Elements for Action for Breach of Confidence/Privacy:
- The information is confidential or private
- There is an obligation of confidence – Pl has a reasonable
expectation the information will not be published
- There is an unauthorised use of information.
Invasion of Privacy Tort Breach: where the right is invaded in four ways…
1.
Intrusion upon seclusion
2.
Appropriation of name or likeness
3.
Publicity given to the private life of another
4.
Publicity placing a person in a false light
Chapter
2:
Business
Ethics
&
White
Collar
Crime__________________________________
¶2-010: The Criminal Process: “A crime (or offence) is a legal wrong that can be followed by
legal proceedings which may result in punishment.” “The criminal quality of the act cannot be
discerned by intuition; nor can it be discovered by reference to any standard but one: Is the
act prohibited with penal consequences?”
Features of Crime: publicness (offence against community or public); moral and ethical wrong
(breach community values); punishment (jail and/or fine).
State Intervention: The state intervenes to protect the integrity of the individual in society, to
protect the state, and to protect societal mores (fundamental values).
Aims of Criminal Law: 1) punishment or retribution; 2) deterrence; 3) incapacitation; 4)
reformation and rehabilitation.
¶2-030: Criminal Law Legislation: state legislation; common law (has legislation amended
by Acts of parliament); Commonwealth legislation.
Criminal Code Act 1995: physical element (conduct, omission to perform an act); fault
element (intention, knowledge).