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Aspects of Contract
and Negligence for
Business
Faculty: Md. Ashiqur Rahman Bhuiyan
Head, School of Business, BAC



Learning Outcome 3 & 4


Name: Orbind Bhakta
ID: 2013121024


SOUTHERN AUTOMOBILES LIMITED
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ACKNOWLEDGEMENT


I would like to acknowledge all the help from Southern Automobiles Limited especially Mr.
Manoranjan Bhakta FCA (Managing Director) who gave me all possible important information
and helped me with the actual contracts and scenarios of the business. I would also like to thank
my respective course teacher Md. Ashiqur Rahman Bhuiyan for his exemplary guidance,
monitoring and constant encouragement throughout the whole semester. Lastly I would like
thank my respective parents, siblings, friends and colleagues to support and helped me to
successfully complete full assignment











.

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Table of Contents
Contents
TORT: ........................................................................................................................................................... 3
Intentional Tort: ........................................................................................................................................ 3
Strict Liability: .......................................................................................................................................... 3
Negligence: ............................................................................................................................................... 4
Duty of care: ................................................................................................................................................. 4
Breach of Duty: ............................................................................................................................................. 5
Causation: ..................................................................................................................................................... 6
Vicarious Liability: ....................................................................................................................................... 8
Reference: ................................................................................................................................................... 12













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LO 3
Understanding the principles of liability in negligence in business activities.
TORT:
The liability of the violation of a fixed law, law arises primarily; this duty is towards persons
generally and its breach is capable of redress by action unliquidated damages. This is a civil
wrong, in the sense that it is committed against an individual, not the State. The essence of tort
law is that a person has certain interests that are protected by law. These interests can be
protected by a court granting a sum of money, known as damages. There are increasingly limited
circumstances where the victim of a tort may avail himself of self-help.
Types of Tort:
There are basically three types of tort:
1. Intentional Tort
2. Strict Liability
3. Negligence

Intentional Tort:
It is a civil offense which occurs when the wrongdoer intentionally engages in conduct that
results in damages to another. Hitting another person in a fight is an intentional act that would be
the tort of battery. Accidentally hit a person would not be an intentional tort because it had no
intention of attacking the person.

Strict Liability:
Sometimes called as absolute liability, it is the lawful responsibility for any damages or injury,
even if the person found strictly liable was not at fault. It has been applied to certain unlawful
activities, such as holding an employer absolutely liable for the wrongful acts of its employees
act, but today is most commonly associated with products manufactured defectively.
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Negligence:
Negligence means a civil wrong committed by failure to act as a responsible person somebody
who features a duty, as needed by law under the circumstances. Moreover, negligent torts aren't
deliberate, and there should be an injury as results of the violation of duty.
Elements of Negligence:
Duty of care
Breach of Duty
Causation

Duty of care:
Duty of care is a requirement that a person acts with others, especially in public, surveillance,
attention, caution and prudence with a show to be reasonable in all the circumstances. If a person
does not meet this standard of care, he or she is considered negligent. The person must take
reasonable care to avoid acts or omissions which he / she can reasonably foresee would be likely
to injure another neighborhood. Here neighbor are referred as to those people who are closely
affected by ones deeds that he/she should have taken care to avoid harming. This is also known
as neighborhood principle which was established through the case Donoghue vs Stevenson
1932.
In the case Cararo v Dickman, Health Law (HL) established 3 stages which are now used to
establish duty of care. The stages are:
Firstly, the Defendant should foresee that the harm/injury actually occurred to the
Claimant.
Secondly, there must be sufficient relationship of proximity between the parties for a duty
to be imposed.
Thirdly, it is fair, just and reasonable in all circumstances to impose duty of care.

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Breach of Duty:

A Breach of duty occurs when a person owes a duty of care and that duty falls below the
standard that is required. A person may be liable for negligence in a personal injury case if his breach
of duty caused another persons injuries.
The duty will be considered to be fallen below the standard if:
A reasonable man placed in his position would not have acted in that way. The
reasonable man is free from apprehension (Glasgow Corporation v Muir 1943)
The reasonable man foresees the risk of harm
Magnitude of the risk: the court would consider the likelihood of the harm. The greater
the risk the greater precaution should be taken (Bolton v Stone)
According to Blyth v Birmingham, a potential drop below the standards of the ordinary
reasonable person in his / her situation, that is, to do something that a reasonable man would do
or not do something that a reasonable man would do. If no reasonable person would foresee a
harmful consequence of an action, then the defendant is not negligent in failing to take
precautions. The court will decide whether the defendant fell below the standards of the
reasonable man. The court will consider the likelihood of damage. The greatest risk of injury, the
greater the precautions that should be taken.
The courts expect people to take only reasonable precautions in guarding against harm to others.
If the defendant acted in accordance with the common practice of others, this will be strong
evidence that he has not been negligent. Grey v Stead 1999
Proof of Breach of Duty: The claimant bears the burden of proving, on the balance of
probabilities that the defendant was negligent. In some situations a claimant may be able to rely
on the things to speaks for itself. By this factor, the mere fact of an accident occurring raises
the inference of the defendants negligence Ballard v North British Railway.



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Causation:
After establishing that there has been a violation of the duty, the claimant must prove that the
defendant's actions caused him/her injury. A defendant will not be liable in negligence if but for
his act or omission he damage would not have occurred. The claimant must prove that the
defendants breach of duty caused the harm/injury. This might be a difficult task for the claimant
to undertake, particularly where the incident leading to the damage has been a result of more
than one cause or from an unusual type. The defendant does not have to provide an explanation
for the cause of harm but a failure to do so may be a factor in deciding whether the claimant of
the cause should be acceptable.
Although in many cases where the negligence of the defendant is obvious the facts allow to test
to operate simply and straightforwardly. The negligence either was the cause of the damage or
there was some alternative cause and the defendant is not liable. In the case Barnett v Chelsea &
Kingstone Hospital, the patients went to the hospital at around 5 am in the morning, complaining
about vomiting and stomach pains after drinking tea. The doctor on duty refused to attend to
examine them and rather told them to call their own doctor in the morning. There was a clear
breach of duty which resulted in one of the patients death. The court found that the hospital was
not liable for the failure to treat, even though it was a clear breach of duty. It was proves that the
patient would not have recovered even if he had received treatment. Therefore failure to treat
was not the cause of death.

For example, Andrew was a bus conductor and Brown was the bus driver. Brown found his job
very boring so he gave Andrew to drive the bus and Brown got down from the bus. Andrew
decided to try a hand break turn at the traffic signal. He checked to see if any passenger were on
board, but could see none. So he went up to the traffic signal and quickly pilled the hand break
and the bus drifted. At one point the bus crashed into a passing car. No passenger in the car was
hurt but Andrew was unaware that there was a passenger, Clark, in the back of the bus. Clark
was seriously hurt but was only discovered by the Highway Police when they attended the
incident. Meanwhile, at the scene of the accident, a witness David was suffering from fit as a
result of observing the bus crashing into a car. David later died entirely to the shock caused by
this incident.
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Here the bus driver, Brown breached his duty of driving the bus himself. It was Browns
responsibility to drive the bus and not Andrews. While Andrew was driving, it was Andrews
duty to take care of the passenger in his bus. Though Andrew was not the driver, he has full
control of the bus and could foresee the injury caused by his act. Therefore Andrew was
automatically imposed with duty of care towards the passenger. Andrew was liable for his
negligence as he did not notice Clark in the back of the bus. Thus his act of negligence makes
him liable. The witness David died from shock observing the incident. According to Caparo v
Dickman, Andrew did not have sufficient relation or proximity with David to have imposed with
duty of care nor could foresee the injury caused to David. Therefor Andrew did not have any
Duty of care towards David.














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Vicarious Liability:
Vicarious liability is where one person is held liable for the tort of another. This is usually where
an employer is liable for the tortious act an employee. The employer is not normally liable
merely because an independent contractor commits a tort in the course of his employment. He is
liable only if he himself is deemed to have committed a tort.
For the employer to be liable:
i. The tortfeasor must be an employee
ii. The tort must take place during course of employment
Torts servant theory holds that the employer is responsible for the failure of an employee of
the duty of the employee. Theory holds that subsidiary official is responsible under the
responsibility of the employees. Therefore if the liability of agents is limited or prevented in any
way, limitations or avoidance the benefit of the employer that he / she will also not be liable
vicariously.
The law tends not to hold a responsible person in tort unless the person has caused or contributed
in some way to damage suffered by the plaintiff. It has been found that vicarious liability is an
exception to this trend as an employer will be vicariously liable for acts of an employee if the
employer is at fault.

For example, the security guard BAC is responsible for keeping the frontal area of the campus
clean. Someone accidentally spilled water on the floor and the security guard did not notice.
After a few moments, a student entering the campus, slips into the water and breaks a leg. In this
case, the responsibility for negligence is the security guard, and it was their responsibility to
keep it clean they did not. Therefore BAC is vicariously liable for the damage to the student and
can be sued for the incident as BAC is the patron of the guard.


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LO4: Be able to apply principles of liability in negligence in business situations.
Southern Automobiles Ltd has 75 employees who are currently working in their workshop at
Dhaka. Each employee is responsible for their work to repair faulty cars. One day a customer
came with his complaining about a broken rear axle, gear changes, leaks in the rainy season and
a custom paint job car. The employee takes two weeks to complete the whole task in relation to
the car. At the end of the second week, after the paint job, repair leaks and fixing the gearbox, it
was the turn for the shaft to be repaired. The day when the shafts were to be repaired, the worker
did not come to work that day and delegated his duty to his colleague to take responsibility for
the car. The worker delegate had no knowledge of the problem of the wheel and the car delivered
to its owner stating all the problems were solved. The customer was in a hurry so did not wait to
check the problems and eventually left with his car. A little more than crossing a traffic light, the
rear axle broke in two pieces and the car crashed into a bus approaching. No one on the bus was
injured except for the owner of the car was seriously injured and hospitalized immediately.
In the above scenario, a worker who was primarily responsible for the repair and maintenance of
the car, he was automatically imposed a duty of care to his client. According to the three stages
set by Caparo v Dickman case, the worker could foresee that the axis of broken car can cause an
accident if not repaired. The worker and the client had a reasonable relationship to the worker
was in a contract to repair the car with the owner of the car and was reasonably fair and the
employee was employed to fix the car. Therefore the employee had a clear duty of care to the
client.
On the day that the shafts must be repaired the worker was absent. Also delegated his task to his
colleague and not inform him about the broken shaft to be repaired. First, the worker has not
come to work which automatically results in violation of duty. Second, he did not inform his
colleague to repair the axle which translates into negligence. The risk was high. As a
professional worker, he knew that broken axle can cause a big accident. Therefore, this shows
that the breach of duty was initiated by the worker Blyth v Birmingham.


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LO 4.2
Southern Automobiles Ltd has its own filling station of petrol, diesel and octane in Dhaka.
Southern Automobiles appointed Mr. Biplob to take responsibility for the station in 2006. During
many years of service, sales went very well. In late 2010, some customers complained that they
were not getting the amount of gas they were paying. Later after thorough internal investigation
by the Southern, they found that for every liter of gas that a customer bought, Mr. Biplob stole
103 ml of it. It means that if the customer paid for 30 liters of gas, 3.6L was stolen from it and if
there was a total sale of 1,000 liters of gas, he stole at least 120 liters, which summarizes TK 11
880, for a single day. Many large companies, such as British American Tobacco, buy at least 700
to 900 liters of petro from the station way every day. After encountering such fraudulent act, they
stopped purchasing gas from Southern, resulting in large number of declining in their sales.
Subsequently Mr. Biplob was completed from the job in 2012 for his illegal acts.

In the above scenario, Mr. Biplob was accused of an act of theft. Normally, Mr. Biplob have
been responsible for his own actions, but as the Southern is the employer, the company would
have been held liable. Here the tortfeasor, Mr. Biplob, was an employee of the Southern, and the
crime was committed in the course of their employment. According to the theory of "servant"
grievances, the employer is liable for the wrongful act of the employees. Since the law tends not
to bear a burden of wrong person if you have not caused some damages suffered by the plaintiff,
Mr. Biplob act resulted in the theft and fraud to customers, which was regarded as damage
towards the applicant. It was found that Mr. Biplob stole an estimated TK 10 million in 5 years
of his service. Southern should have been aware of this illegal act, but continued to ignore the
fact that it could happen and they could have been sued for it. The overriding principle is that
there must be a sufficiently close connection relationship between the wrongful act of the worker
and the work they used to do. The employer was vicariously liable to the customer for the theft
by an employee or if such liability arises only if the employer had undertaken a duty to the third
party that had been delegated to the employee. Considering whether there has been a sufficient
nexus between employment and theft since the employer had simply given the employee an
opportunity to steal. The liability of the defendant has been based on the direct-delegable duty.
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Although customers do not charge anything against them, but Southern could have faced cutting
actions taken against them if they were sued.
The scenario relates to the case Brinks Global Services Inc & others v Igrox Ltd, where an
employee stole silver bars from a container where he was supposed to be fumigating.















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Reference:
1. Case Breifs. 2014. Vicarious Liability. [ONLINE] Available at:
http://www.casebriefs.com/blog/law/torts/outline-torts-law/imputed-
negligence/vicarious-liability/. [Accessed 08 June 14].

2. Murphy, JM, 2007. Street on Tort. 12
th
ed. New York: Oxford Press.

3. TORTS OUTLINE. 2010. NEGLIGENCE. [ONLINE] Available at:
http://law.wustl.edu/sba/firstyearoutlines/torts/Unknown/TORTS_OUTLINE.pdf.
[Accessed 08 June 14].

4. Turner & Hodge, CT & SH, 2004. Unlocking Tort. 4
th
ed. London: Routledge.