ACCT%203151%20Business%20PP8

ACCT%203151%20Business%20PP8 - Duty of care in cases...

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Unformatted text preview: Duty of care in cases involving defective products Manufacturer (No contract) Retailer Are the goods in the same form after they have been made? Consumer Duty of care in cases involving dangerous products Manufacturer Adequate warning to consumers? Consumer (No contract) Retailer Duty of care in cases involving physical injuries and property damage caused by negligence Duty of care? Determining factor: is the physical injuries / property damage reasonably foreseeable? Careless? Determining factor: e.g. adequate warning? Duty of care in cases involving pure money loss caused by careless actions No duty of care in all the 4 following cases. Example 1: A smashed B's car negligently. B could not use the car to meet his client to discuss business. He lost profits accordingly. Example 2: A was trapped in an elevator which malfunctioned due to maintenance. He could not come out to do business for many hours. He lost profits accordingly. Duty of care in cases involving pure money loss caused by careless actions Example 3: A carelessly smashed B's computer. As B could not use the files inside the computer, he suffered a financial loss. Example 4: A traffic accident caused by negligence happened outside a shop, resulting in the shop owner not being able to do business. Duty of care in cases involving pure money loss caused by careless advice Duty of care? Determining factor: proximity between the wrongdoer and the victim. Careless? Reasonable standard in giving advice is required. Duty of care in cases involving pure money loss caused by careless advice Guidelines: Does the wrongdoer have skill and judgment in the area surrounding his careless advice? Does the wrongdoer know that the victim is relying on his advice for a particular purpose? Is the reliance a reasonable one? Has there been a valid disclaimer given by the wrongdoer? How about duty of care in cases involving careless statements made by accountants? Purpose: Shareholders Investment (known people) Purpose: meeting legal X requirement General public X (unknown people) Accountants Is the disclaimer valid? Note that the supply of service law does not apply since there is no contract of giving advice Determining factor: is the disclaimer reasonable? Is a doctor careless in prescribing a particular treatment for his patient which harms him? Is the risk of harm a high one? Is the likely result of the harm serious? Is the treatment necessary? Has the doctor warned the patient adequately about the risk of harm? How about the remoteness of the damage in cases involving medical error? Example 1: A doctor gave a patient an injection. He knew that there were 5 possible sideeffects and he did not warn the patient about this. The patient suffered very seriously from one of the sideeffects. Example 2: Facts as above but the patient suffered from a sideeffect which is not known by the medical profession. Contributory negligence Example: Car A dashed through the red light. Car B speeded. The 2 cars collided with each other in the road intersection. Q: Who is the plaintiff in this example: The driver of car A or the driver of car B? Q: Has there been contributory negligence committed by the other car driver? Is A liable for B's negligence? Yes, if B is A's employee and the negligence has been committed in the course of B's employment No generally, if B is A's independent contractor even if the negligence has been committed in the course of B's duty Contract law action vs torts law action Contract law action Reasonably foreseeable / known loss (including expectation loss) 6 years to take action generally Torts law action All the loss so long as it is of a kind reasonably foreseeable (but not including expectation loss) 3 years to take action generally for cases involving physical injury ...
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This note was uploaded on 02/04/2012 for the course ACCT 3151 taught by Professor Martinko during the Spring '11 term at CUHK.

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