Law 60104

Question 1.

The scenario of Jim and Charles raises a sole legal issue of whether Jim’s bar is liable in the tort
of negligence against Charles. This issue arises from the fact that Charles breaks his arm while
taking his drinks in the bar. Further, it is clear that the cause of the slippery floor is attributable to
Charles himself. This question will therefore seek to prove whether the elements of negligence
can be proved against the bar on one hand. On the other hand, the question seeks to address on
whether the bar can raise some defences against the claim in the circumstances. Both of these
identified issues are as subsequently delved into.

The first issue to be addressed in these circumstances is on whether Charles succeed in bringing
an action for negligence against the bar. The tort of negligence is governed by the common law
principles that have been established over time. To establish that the tort of negligence exists,
three elements have to be established. These three elements of negligence are thus: existence of
duty of care on the part of the Defendant, breach of the duty thereof and thirdly consequential
damage must be sustained by the Plaintiff and there must be a causal link between the damage
sustained and the action of the Defendant. These elements are mutually sequential and were
established in the case of Donoghue v Stevenson [1932] AC 562.

In the case of Donoghue, the Plaintiff went to a hotel and partook of a ginger beer. While taking
the beer, she found remains of a decomposed snail in the bottle. She suffered nervous shock and
severe gastroenteritis. The Plaintiff sued the hotel for the tort of negligence. It was held that the
hotel was liable in negligence for having caused psychological distress to the Plaintiff. It is in
this case that the neighbor principle was established. The principle states that a person has a duty
of care to every person whom while the former is directing their mind to do or refrain from doing
an act, they can reasonably foresee that their action or inaction will affect the other person. This
is the popular neighbor principle.

In the scenario at hand, it is clear that Charles takes intoxicating drinks in the bar owned by Jim.
Further, Charles spills some drinks on the floor which were wiped by the attendant though the
same was not done completely due to the busy schedule. It is true that the bar owes a duty to
everyone including Charles. However, the cause of the wet floor is Charles who spills some
drinks on it. The attendant wiped it and the same was reasonable in the circumstances. Thus,
establishing negligence on the part of the bar is a huge task in the circumstances.

On the other hand, the question also seeks to address on whether the bar could file some defences
against the claim by Charles. It might well be argued that some defences may be raised by the
Restaurant while defending their case. The various defences available for a claim in tort of
negligence include: volenti non fit injuria, contributory negligence, exclusion of liability and
illegality. As to which of these defences is available to the Restaurant in the circumstances at
hand, the analysis of each of them is as subsequently discussed.

The defence of volenti non fit injuria implies voluntary assumption of risk. This defence can only
be raised where the circumstances leading to negligence are dangerous in public knowledge and
the Plaintiff went on to participate in such ordeals. The position that is informative of this is
clearly seen in the case of Miller v. Decker [1957] S.C.R. 624. This case sets out the elements of
voluntary assumption of risk. In the case, the Plaintiff and the Defendant had gone out and
enjoyed beer. In their journey back, the Plaintiff boarded the Defendant’s car yet both of them
were drunk. The Plaintiff claimed against the Defendant and it was held that the Defendant was
not liable since the Plaintiff had voluntarily assumed the risks of drunk driving. The Court stated
that while establishing voluntary assumption of risk, it must be proved that the Plaintiff had full
knowledge of the extent to which the risk in question could occur. In the instant case, the
Plaintiff knew that the Defendant was intoxicated and that effect the risk was highly likely to
happen.

Taking in the scenario at hand, it is clear and widely known that intoxication can tamper with
one’s stability. In intoxicating himself, a person knows that there is an inherent risk to their
stability. The intoxication is this case was also voluntary. Secondly, there is display of
negligence on the part of the Plaintiff and therefore the defence of contributory negligence can
be invoked. Thus, if the Plaintiff does some acts of negligence that lead to the happening of the
complained damage, the Plaintiff is said to be contributorily negligent. This position has long
been established in the case of Davies v Mann 152 Eng. Rep. 588 (1842).

In the circumstance at hand, Charles spills some drinks on the floor making it slippery. After
sometimes, he slides as a result of the wet floor. He breaks his arm as a result of the slide. It is
clear that he was negligent on his part to a great extent. Thus, it can authoritatively be stated that
he was contributorily negligent in the circumstances.

To this effect therefore, chances are high that the claim for negligence by Charles against the bar
would fail. This is based on the fact that the establishing the elements of negligence is an onerous
task. Further, his position is seen from the fact that the defences of contributory negligence and
voluntary assumption of risk have high likelihood of success.
Question 2.

The main issue in the scenario in question touches on whether the requirements for a valid offer
as an element of contract are met. This is based on the fact that after Charles displays the pot in
question, Adam makes enquiries regarding the negotiability of its price. The displayed price was
of RM 5,000. In the process of negotiation, Adam makes an offer to purchase it but with a price
of RM 3,500. Charles agrees to sell it at RM 4,000 but Adam needs to think over it. The question
that arises is on whether there is any valid contract made thus far.

In the meantime, Elle places an offer which offer was accepted by Charles. The main issue that
arises in the circumstances is on whether there was a valid acceptance of the offer by Adam in
the first place. Upon establishing this issue, the issue of whether there was breach of contract
between Charles and Adam will be arrived at. The rule of law relating to this issue as well as the
analysis of the same are as subsequently delved into.

The main issue in question in the scenario at hand is on whether Adam has met the first and
essential element of contract which is offer. An offer alternatively referred to as a proposal is
said to be made where a party undertakes to perform or refrain from doing something made by
an offeror to an offeree. This is the position under Section 2(a) of the Contracts Act, 1950. An
offer has to be made in an unqualified statement and acceptance of it signified unconditionally.
Offer needs to be unconditional and must be accepted by the offeree without any condition. If the
offer is accepted with some additional terms, that amounts to counter offer and to that effect
cannot be said to be binding on the parties.

In the scenario at hand, it is clear that Charles made an offer for the sale of the pot which offer
could be accepted by any person. Subsequently, Adam and Elle noted the offer and displayed
efforts to acquire the offered pot. The offer was dully made to that effect. Communication of
acceptance is however what is on challenge as far as Adam’s case is concerned. This is traced to
the fact that he entered into negotiations and from the flow of facts, it is clear that the acceptance
of the offer is not clearly communicated in the circumstances.

The importance of offer and acceptance in a contract were illustrated in the case of Affin Credit
Malaysia v Yap Yuen Fui (1984) 1 MLJ 169. In this case, it was held that where the contract does
not consist of offer and acceptance then it is void. This position has also been reflected in the
case of Stover v Manchester City Council [1974] 1 WLR 1403. In this case, it was held that both
the offeror and the offeree must have shown an intention to be bound under the contractual
arrangement. In the circumstances at hand, it is clear that Adam has not communicated any
acceptance after Charles offered to sell the pot at RM 4,000. He took time to think over it.

The rule that silence cannot be presumed to amount to acceptance of an offer has long been
established. This position is reflected in the case of Felthouse v Bindley (1862) EWHC CP J 35. In
this case, the offeree wanted to buy the horse from the offeror. The offeree wrote a letter to the
effect that if the offeror would not say anymore, he would consider the horse as his at 30.15
Euros. The offeror remained silent and the offeree thought the horse was his. It was held by the
court that silence in an offer does not amount to acceptance.

In the circumstances of the scenario at hand, it is clearly seen that there was no communication
of acceptance by Adam after he was told to pay RM 4,000. After this, there was no
communication on the part of the offeree. To this effect, the offeree did not communicate over
the acceptance of the offer. This is the case of silence in acceptance of an offer. Effectively, it is
clear that there was no communication of acceptance of an offer.

It is also clear that Elle heard of the offer and immediately showed her intimation of acceptance
of the offer. This is a clear indication that there was a clear formation of a contract in which the
two parties are bound. Elle and Charles are thus the parties to the contract and they are bound by
the terms of the contract. To that effect, the contract was clearly executed in the circumstances
well between Elle and Charles.

It is worthy to note that an offer is open to everyone who wishes to accept the promise of an
offeror. A promise which an offeror whose intention is to be bound by their word in the legal
sense is thus open to everyone. In the circumstances at hand, the offer was of a universal nature.
It was open to everyone who could access the display. It was not only made to Adam since it was
not an offer of bilateral nature. To this extent, it is clear that since the offer was open to
everyone, Elle rightfully communicated her acceptance. Upon communicating her acceptance, it
is clearly seen further that she proceeded to make consideration without delay. The contract
between her and Charles was thus effectively created.
In conclusion, it is clear that there was no contract at all between Adam and Charles. This is seen
from the fact that there was no proper communication of acceptance of the offer by Adam. On
the other hand, Elle properly communicated her acceptance of the offer. This is also based on the
fact that the offer was a universal and thus was open to acceptance by anyone who came across
it. As seen from the flow of facts, it is also clear that there was no valid contract entered into
between Adam and Charles. To that effect therefore, there is no breach of contract since there
was no contract in the first case between the two parties.
Question 3.

The scenario in question at hand seeks to analyze on whether the relationship between Jane,
Karen and Lily earns description of a partnership in legal sense. it is clear from the flow of facts
that Jane and Karen were actively involved in the website design business. Also, Lily is only
approached to give loan to the business. The main issue to be interrogated in the circumstances is
on whether the arrangement between the three parties amounts to partnership. The subsequent
paragraphs bring out exposition on this.

The rule of law relating to partnerships is provided for under the Partnership Act. The Act
defines partnership under its Section 3(1) to refer to a relation that subsists between two or more
persons who carry out business with an aim of making profit. In the circumstances of the
scenario at hand, it is clear that the three parties came up with an aim of starting a business aimed
at making profits. The first element of aiming at profit making is established in the scenario at
hand. The Act further proceeds to describe circumstances that do not amount to bankruptcy. The
circumstances depict that the mere fact a person is involved in profit sharing of the business does
not by that mere fact crown that person with the description of being a partner. Further, the fact
that a person is working for the business does not automatically translate to such an arrangement
being a partnership. Other factors are then to be considered in order to establish whether
partnership business exists in the circumstances of the scenario at hand.

The other issue that arises from the flow of facts in the scenario at hand is on the part of Lily. On
her part, Lily lends money to the business the aim of which aim was to form part of the money
that is invested in the business. Further, Lily was entitled to receive interest from the amount lent
to the business. The main issue on this arrangement is thus an interrogation on whether such
amounts to partnership arrangement under the perspective of the law. With regards to this issue,
the Partnership Act provides that an arrangement of a business in which a party lends money to
the proposed business in order to obtain interest thereon does not directly add up to being a
partner. This is clearly provided for under Section 4 (c) (iv) of the Act. The lender in that
arrangement is also shielded from being liable in case of bankruptcy. Further, in scenarios of
bankruptcy, the loan amount is to be recovered under such by the person who lends the money to
the business. This is pronounced expressly under Section 5 of the Act.
In the scenario at hand, the fact that Lily lends the amount of money to the business to be
invested as part of the capital raises an issue on whether she is indeed a partner. Further, she was
entitled to receive interests accruing from the lent amount. As seen from the circumstances of the
scenario at hand, it is clear that the provisions of the Act are authoritative of the fact that such an
arrangement does not amount to her being automatically a partner. It is also worthy to note that
such a scenario on the lent amount does not change even if the agreement was executed in
writing. In the circumstances at hand, the agreement between the three parties is a written one.
From the foregoing, it is clear that the agreement was executed in writing yet the law is clear that
that does not entitle her to be a partner in the business.

There are various decided cases which have been applied to test whether partnership exists from
a given situation of business. All of the decided cases point out that whether partnership exists or
not, that such is to be determined as a matter of fact. Therefore, in the circumstances at hand, an
interrogation on factual basis as to the existence of partnership has to be done. Clearly seen, all
facts point out that even though the parties run a business, the agreement on loan is a proof that
establishing existence of partnership arrangement is difficult in the circumstances.

The position on formation of partnership and interrogation on whether partnership arrangement

exists was dealt with under the case of Appleby v Buck 351 S.W.2d 494 (1961). In this case, the
parties were partners dealing in petroleum gas. They leased premises for the purpose of carrying
out such business. The defendants later went to the owner of the land and falsely represented that
the Plaintiffs had withdrawn from the arrangement. This came by after the Defendants and the
Plaintiffs fell out and disagreed on how to proceed with the business. The Plaintiffs then
instituted a suit on the grounds of fraud on the part of the Defendants on the basis of the
misrepresentation. The issue that arose was on whether partnership actually existed between the
parties. It was held that in the circumstances that the mere fact that the parties had entered into an
agreement for the sale of petroleum products had not crowned the parties that description of
being partners.

In the scenario at hand, it is also evidently clear that the three parties came together to carry out
business with an aim of making profits. However, as seen from the preceding parts of this paper,
that alone does not crown the operation as partnership. Clearly seen therefore, several other
factors need to be taken into consideration.
In conclusion, it is clear from the foregoing that the question of existence of partnership is a
matter of fact. This can clearly be seen from the law as well as the decided cases. In the scenario
at hand, the fact that Lily lends the money to the business does not automatically crown her as
being a partner. Further, the fact that she was entitled to earn interests is dispositive of this
proposition. To that effect therefore, partnership does not exist in the circumstances.