Business Law Application Assignment

Business Law Application Assignment

This Business Law Application Assignment discussed the important issues for application of business law.

Answer 1

  1. Whether the local authorities are liable to Barney and Ted loss and injuries suffered by them on the freeway?
  2. Whether Robyn can be held liable to Ted for the injuries caused to him?
  • Whether Marshall can claim for the loss suffered by him because of the delay caused to him by Barney, Ted or Robyn? Also, whether Marshall is liable to Lily for the loss caused to her?
Business law application assignmnet


The law of negligence is a common law duly and which imposes a duty of care on the wrongdoer to protect the sufferer from the loss that may be caused top him if the duty is breached. The law was established in Donoghue v Stevenson (1932) case. (Negligence, 2016)

In Donoghue v Stevenson (1932) it was held that the wrongdoer has a duty to protect his neighbour regardless whether such person is known to him or not. When the duty of care is violated causing harm to sufferer then it is violation in common law and is termed as negligence. The various essentials of law of negligence are:

  1. There must be duty of care imposed upon the wrongdoer and he should act in such a way so that no loss should be caused by his act to any other person. The duty arises when the wrongdoer and the injured must be in close proximity with each other and it is the acts of the wrongdoer which must have caused the loss to the injured (Cook v. Cook (1986)). Duty of care can only be imposed upon the wrongdoer if the reasonable prudent man can ascertain the risk in like situation, that is, the wrongdoer is liable when the acts which cause loss to sufferer are reasonably foreseeable (Grant v Australian Knitting Mills (1936). (Estrange, 1987)
  1. When the duty imposed on the wrongdoer is overlooked and not comply with then the duty is said to be breached (Blythv Birmingham Waterworks (1856)). The duty is breached when the wrongdoer does not act in the manner a prudent person would have acted in the like situation. Also, when the standard of care that is expected from the wrongdoer is not complying with then the duty is violated (Bolitho v City & Hackney Health care Authority (1997) HL).  (Souper, 2008)
  • Lastly, the acts of the wrongdoer must be the reason for the injury caused to the injured. If that is not the case then the liability under law of negligence cannot be imposed upon the wrongdoer .The loss caused must be reasonably foreseeable and should not be remote. (Overseas Tankship (UK) Ltd v Morts Docks & Engineering Co Ltd (The Wagon Mound No 1) (1961) AC 388).
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However, there are certain defences under which the wrongdoer can protect himself: (quizelet, 2016)

  1. When the notice regarding the risk had been put up by the wrongdoer in order to inform the sufferer then the duty to provide care is shed away and if any injury is still caused to the sufferer then no liability can be imposed upon the wrongdoer.Woods v Multi-Sport Holdings Pty Ltd (2002)
  2. When the injured himself had contributed to his injury then the wrongdoer is not completely liable as there is contributory negligence on the part of the injured. (McLean v Tedman (1984)).
  • volenti non fit injuria also protects a wrongdoer. When the injured knew about the risk and still continues with the actions which involves the occurrence of such risk then the wrongdoer cannot be held liable. (Fallas v Mourlas (2006).
Now, the law is applied to the facts of the case.

Application of law Part 1

Issue i

In general the authorities are liable to the pedestrians who got injured but in the instant case there was a clear specification by the authorities regarding the danger that was there on the freeway. Inspite of that Barney and Ted went along the freeway which did not even have a pedestrian way. Thus, in instant case the authorities are though imposed with a duty of care o provide a safe freeway, but the duty is shed away by placing a warning board on the pathway. Thus, the authorities cannot be held liable because Barney and Ted both themselves consented to the danger and moved ahead. Thus, the principal of  Volenti non fit injuria will apply and the authorities can be safeguard.

Issue ii

Normally, the person driving the car must be careful and drive in such a way so that no injury is caused to another as a driver is imposed with a duty of care to protect the pedestrian. But in instant case there was a danger notice that was displayed by the authorities, so, Robyn have not thought that anybody can be walking there, but, Ted who was walking on freeway was himself  wrong as he himself inspite of knowledge of danger took freeway. However, Robyn also took her eyes of the car and thus hit Ted, so both Ted and Robyn were negligent and thus Robyn can take defence of the contributory negligence on the part of Ted. Thus both will liable for the injury caused to Ted and can reduce the compensation by applying the principal of contributory negligence.

Issue iii

Marshall got stuck in traffic due to the accident by Robyn’s car with Ted on the freeway and thus he was late for his repairing work to Lily, who in turn had to throw her food items as they went bad due to non repairing of the refrigerator. In instant case the damage which had been caused to Lily is too remote and thus cannot be reasonable foreseeable by a prudent person. So in this case Ted, Robyn and Barney will not be liable as they would not have anticipated the damage which had been caused to Lily. So no damages can be claimed by Lily.

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Answer 2

  1. Is there a contractual relationship between Leonard and Sheldon?
  2. Is there a contractual relationship between Rajesh and Sheldon?
  • Is Sheldon duty bound to deliver the car Jacks to Howard?


A contract is formulated between two persons when there is an offer by one and the same is accepted by another along with consideration, legal intention and capacity. (McKendrick & Qiao Liu, 2015).

An offer is the intention of the offeror to offeree to formulate the contract with him. An offer must be specific and must be communicated to the offeree. (Carlill v Carbolic Smoke Ball Company (1892). When the offer made is assented by the offeree on the terms contained in the offer then the same is known as acceptance. Acceptance must be communicated to the offeror to make it complete. Acceptance is concluded when it reaches the offeror. (Taylor vLaird(1856)). (Moles, 2016)


Whenever the offer is accepted with some deviation then the same cannot be termed as acceptance but the same is known as a counter offer. As soon as a counter offer is made the original offer comes to end (Hyde v Wrench (1840)). The counter offer then becomes the original offer and the same can be accepted by the original offeror who made the offer at the first instance to formulate a valid contract. Mere slight deviation does not ends the original offer.

In case of acceptance through post, the acceptance is complete as soon as the letter of acceptance is posted or put in transit by the offeree. It makes no difference that an acceptance may or may not be in the knowledge of the offeror when postal acceptance rule is applied (Adams v Lindsell (1818). However, an acceptance by email does not apply postal acceptance rule. In Olivaylle Pty Ltd v Flottweg GMBH & Co KGAA (No 4) (2009) it was held that the acceptance is complete when the mail is received by the offeror. (Allen, 2009)

Further, there must be consideration along with offer and acceptance to make a contract binding. Consideration means the payment made in cash or kind in return of the promise.  Consideration can be present or future but the same cannot be past (Harrington v Taylor 36 SE 2d 227 (1945).

But at times, lack of consideration may also make a binding contract and is governed by principal of promissory estoppel. The theory states that when one person promises to enter into a contract with other if such other persons acts in a certain way and if such other person actually acts in that way, then, the first party is stopped and must perform his part of promise. The promise itself is considered as a valid consideration (Solle v Butcher (1950).

The capacity of the parties must also be present to make a valid contract. Intention to be in legal relation must also be there to make a binding contract. (Monahan, 2001)

Now, the law is applied to the facts of the case.

Application of law Part 2

Issue i

In the instant case the original offer of  Leonard dated 12 October lapsed when the counter offer was made by Sheldon on 13 October as he did not accepted the offer but wanted to accept it with deviation in the original offer which cannot be permitted as the acceptance must be absolute and mirror image of offer. Now, the mail of Sheldon on 13th can be considered as a new offer.

However, on 14th October Leonard refused to the offer of Sheldon. On 16 October when Sheldon accepts the offer originally made to him on 12 October then he cannot do that as it had already lapsed by counter offer made on 13October by Sheldon.

Issue ii

In the given case, Sheldon sends a letter by post on 22 November and on 24 November Rajesh accepts the offer but adds his term of supplying tyres till end of month. But as per law of contract the acceptance must be same and mirror image of offer. In case of any deviation the original offer comes to end and thus the counter offer becomes the new offer. But in case of minor deviation the original offer does not comes to end. Thus, the deviation by Rajesh in the letter of 24th November is a minor deviation (the tyres were to be sent by end of month) thus, there is binding contract between two. Although Sheldon sends his cancellation before receipt of acceptance but then also the acceptance is complete as the letter of acceptance was put in transit by Rajesh and there is applicability of postal acceptance rule. Thus Sheldon will have to clear the bill raised by Rajesh.

Issue iii

Sheldon promised car jacks to his friend on the basis of past consideration which is not valid as past consideration is no consideration. Thus, there is no contract amid Howard and Sheldon as the offer and acceptance is no supported by consideration.

But in the instant case Howard hired mechanics on the promise of Sheldon which means that the rule of promissory estoppel will apply and will bind Sheldon to perform the promise made by him and thus will have to deliver the jacks as per promissory estoppel rule.

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Thus, the authorities are not liable as they took the defence of ‘display of warning notice’. Further, Ted cannot claim full damage from Robyn as he himself was liable and thus the law of contributory negligence will apply. Also, Marshall cannot claim as the damage caused to him and Lily is not foreseeable and thus is too remote.Thus, by concluding the facts and the applicable law is submitted that in Leonard- Sheldon case the parties are not bound as there was no contract because here was no corresponding acceptance against the offer. But in case of Rajesh- Sheldon and Howard- Sheldon cases, the parties will have to perform the contract as a valid contract is established by applying he law of postal acceptance rule and promissory estoppel respectively.



Allen B (2009). Australia: Termination For An “Oily” Breach Of Contract Estrange LA (1987). ‘Proximity and the standard of care — cook v. Cook’ QLD. INSTITUTE OF TECHNOLOGY LAW JOURNAL. G Monahan (2001).‘Essential Contract Law’ ‘second edition’. McKendrick & Qiao Liu (2015). ‘Contract Law: Australian Edition’ (25-Sep-2015) Palgrave Macmillan. Adams v Lindsell (1818). Blyth v Birmingham Waterworks (1856). Bolitho v City & Hackney Health Authority (1997) HL. Carlill v Carbolic Smoke Ball Company (1892).