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Business Law

Essay by   •  September 9, 2011  •  Essay  •  1,302 Words (6 Pages)  •  1,014 Views

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Introduction

Cassie to sue Insignia Habitat Ltd for negligence of providing wrong information, to be successful Cassie need to carry out three steps. The first step Cassie might prove that Insignia owed duty of care; the second step to substantiate that Insignia has breached of duty of care; the third step is bringing on the damage.

Duty of care

First of all Cassie need to prove that Insignia owed a duty of care of giving the unclear information about the public land which is the only way the car access to the hilltop home. Associated with the "neighbor" principle, a person owes a duty of care to "neighbors" --'persons who are so closely or directly affected by my act that I ought reasonably to have them in contemplation.' In this case Cassie is the client of Insignia, all the information about of property is given by Ted who is the staff of Insignia. So Insignia owned a duty of care to Cassie who is the neighbor of Insignia in this case.

From the "neighbor" test a duty of care exists based on the reasonable forcibility of injury. 'A reasonable person would foresee that Cassie would be injure by the information which given by them.' This is an objective test. In this case Insignia should foresee that Cassie would rely on the information and may result to suffer the economic loss if the information of the road is incorrect. According to the objective test, Insignia owes a duty of care to Cassie.

Because this case is negligence misstatement, so Cassie (plaintiff) must to prove that there is a special relationship between her and Insignia (defendant) . The special relation exists by the following factors:

 Whether the subject matter of the statements was in relation to a serious matter. In this case the information of whether Cassie can drive along the road provided by the Insignia Habitat Ltd was serious because Cassie bought the property for 200,000 and with the wrong information she suffered a substantial financial loss of over 200,000 dollars by the wrong information.

 Whether the Insignia (defendant) realized that s/he was being trusted by the plaintiff to give information that the plaintiff believed the defendant to have. In this case Insignia was aware that it was being trusted as it was the developer of property promoted and it is a source of information. Clearly Cassie believed Insignia to possess or have access to the relevant road information, because the purpose of Cassie inquiry to Ted was to ascertain whether the only car access was public land and whether she can use the road or not.

 Whether the Insignia (defendant) should have reasonably foreseen that the plaintiff would have acted/ relied upon the statements. In this case a reasonable person would have realized that Cassie would rely upon the road information and Cassie would act on the information and purchase the rainforest property.

 Whether it was reasonable under the circumstances for the Cassie (plaintiff) to act/rely on the statements made by the defendant. In this case a reasonable person in these circumstances would rely and act upon the information provided by the Ted, because Insignia is a developer which regard as the official developer sources of information.

Sub-conclusion: Therefore, a special relationship did exist between the Insignia and Cassie.

Conclusion: According to the neighbor principle and a special relationship real exist so Insignia owed a duty of care to Cassie.

Breach of duty of care

The second step Cassie must prove that whether Insignia breach of duty of care. Associate with Wyong Shire Council v Shirt to determine whether Insignia exercise a reasonable standard of care. It will consider whether 'a reasonable person would have foreseen the possibility of harm in the situations and taken steps to prevent it'. It will identify with the following factors:

 Firstly, it considers the magnitude of the risk , in this case it is the high magnitude because by forbid Cassie to drive along the road will cause a serious financial loss.

 Secondly, it considers the degree of the probability of its occurrence. In this case the degree of the probability is high, because if Cassie cannot use the road which the only car access to the hilltop she need to use other transport. It means that she needs to spend extra

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