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ASPECTS OF CONTRACT AND NEGLI GENCE

FOR BUSI NESS
Duty of Care
Outcome 3.1: Contrast liability in tort with
contractual liability.
Outcome 3.2: Explain the nature of liability in
negligence.
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Topics
Duty of care
Breach of duty
Negligence vs. contract liability.
Case 1
Robert asked Susan out on a date. At the restaurant,
Susan asked Robert to buy her a Coke. Robert does.
Susan pours some into a glass and drinks it. She then
pours some more and finds part of a human thumb in
the Coke. Susan becomes ill and sues Coke for her
illness. Coke says the contract was between Robert and
Susan so she cannot sue. Who will win?
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Case 2
MegaBank, a publicly traded company, released a
warning that their profits would be lower than
previously anticipated. The stock dropped 50%. Two
months later, they announced their numbers and the
stock dropped another 25%. At this point, Rudy started
buying all the shares of MegaBank she could get in the
market. She acquired 25% of the company. She then
offered to buy all outstanding shares. When she owned
everything, she found that the truth was even worse than
announced and the company was worth almost nothing.
She sued Freddy, the accountant who audited the annual
account report. Who should win?
Case 3
Glasgow Internet workers were digging to lay new cable
to serve customers in a new neighborhood. Leaving for
the day, one hole remained open so the workers put a
piece of yellow tape across the hole so that people would
see the hole and not fall in. A blind woman was walking
by and fell in (not seeing the tape, or the hole). Was
there a duty of care breach or did the workers act
properly?
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Case 4
Eddie became ill after drinking water from a nearby
well which contained arsenic (a poison). Eddie said that
the company which tested the water a few years ago did
not say there was arsenic in the water and did not say
they did not test for arsenic. Eddie said the company
owed a duty of care to the people of that area and they
breached that duty. The company says there was no
proximity between them and Eddie so there was no
duty of care. Who should win?
Case 5
Jerry received a hysterectomy (so she could not have
more children) but ended up getting pregnant. Jerry
sued the doctor who performed the operation for the
cost of raising the new child. Should she win?
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Case 6
The government was owed $9m in tax by Gotcha, Ltd. A
judge issued a court order to freeze Gotchas account at
Habu Bank. Due to negligence Gotcha was able to
withdraw $2.5m from their account. The government
was unable to collect all it was owed and sued Habu for
the $2.5m. Should Habu have to pay?
Case 7
Ron was at a party when he met Annie, an attorney. He
asked her about a problem he was having with a
neighbor. Annie advised Ron to bring a suit in court
because he should easily win. Ron spent considerable
money bringing the suit and lost. Ron sued Annie for
negligent advice. Should he win?
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Case 8
Joan wanted to borrow $50,000 from Kevin. Joan
offered her house as collateral for the loan and offered
to have her lawyer draw up all the legal documents.
Kevin agreed and said he would not hire a lawyer for
this purpose. Joans lawyer said that by Kevin holding
onto the paper title to Joans house, he would have the
security he needed (which actually gave Kevin no rights
at all). Joan did not pay and the problem became clear.
Kevin sued Joans lawyer. Should he win?
Homework
Read about causation and remoteness of damages.