Question 1 – Agency Law

Material Facts:

 Samson wants to buy a car to use for his business.

 On 1st April, he engages Roneel a friend for $100 to buy a secondhand car which has not
been involved in any accident.
 He tells Roneel what he needs the car for and asks him to ensure it had not met any
accident.
 On 10th April Roneel found a second-hand car but failed to ensure about its accident.
 On 15th April Roneel paid the seller and purchased the car on behalf of Samson.
 On 16th April, Samson went to inspect the car with a mechanic and found out that it was
involved in an accident and now he refuses to pay Roneel the price of the car.

Issue:

Whether Roneel is liable in negligence for the purchase of the vehicle?

Whether Samson has the right to refuse payment to his agent Roneel for the price of the vehicle?

Relevant Law:

Chaudhry v Prabhakar (1989) – Chaudhry had asked her friend Prabhakar to find and purchase a
second hand car on her behalf. The requirement was that there should not have been any accidents
involving the car that was purchased. Prabhakar, as agent did find a car but failed to ask whether it
had been involved in any accidents. Prabhakar advised Chaudhry to purchase it and she did so. It
was discovered that the car was unroadworthy and Chaudhry sued Prabhakar for negligence.

Application:

According to the material facts above, Roneel as an agent is responsible to Samson as a result of his
negligence. Roneel as the agent also has the right to be paid for his services, to be reimbursed for
the cost of the vehicle and to be indemnified, retain the car and to redirect when instructions of the
principal are followed. However, in the above facts, Roneel did not follow the instructions of
ensuring that the vehicle had not had not been in previous accidents and therefore failed in his duty
of care to Samson. A case similar to this is Chaudhry v Prabhakar where the court held that a duty of
care did exist as the defendant was aware that the plaintiff had relied on his advice and had done so
on the basis that he had held himself out as being knowledgeable about cars.

Conclusion:

Since Roneel was negligent as an agent, he is liable for the losses suffered by Samson and can refuse
payment. The right to indemnification enjoyed by agents is only for those that follow the instructions
of their principal and in this case, those instructions were not followed. Roneel is therefore not
indemnified for the losses suffered by Samson which are not confined to the cost of the vehicle but
the loss to his business.

Question 2 – Sale of Goods

Material Facts:

 Annie sold a condensing machine to Farvey which was in Annie’s store.

  At the time of the sale the Machine was cemented to the floor.
 Both Annie and Farvey reached an agreement that they would remove and take delivery of
the machine the following week.
 the store caught fire before the machine could be detached from the floor and therefore the
machine was destroyed.
 Annie is now seeking the value of the machine from Farvey.

Issue:

Whether Farvey is liable to Annie for the value of the condensing machine?

Has the risk and property passed to Farvey?

Relevant Law:

Underwood v Burgh Castle and Cement Syndicate (1922)

The plaintiff sold a condensing machine to the defendant. At the time of the contract, it was
cemented to the floor.

Application:

According to the material facts, it is clear that no money has passed. The delivery was scheduled for
the following week and since it was attached to the floor it was not in a deliverable state. This is
similar to the case of Underwood v Burgh Castle and Cement Syndicate which held that it was not in
a deliverable state, so that no property had passed.

Conclusion:

The risk remains with Annie as property was not passed on to Farvey. So the risk of loss and damage
remains with Annie. Therefore, Annie will not be successful in obtaining the value of the machine
from Farvey.

Question 3 – Negligence

Material Facts:

 Jane is 6 months pregnant and is craving Japanese food.

 She and her partner go to a fancy Japanese restaurant and personally know the owner of
that restaurant.
 they order soup as an appetizer and after a having a few spoons of soup, Jane notices the
remains of a dead rat at the bottom of her soup.
 Jane becomes sick and she has to be rushed to the hospital.
 Jane is later diagnosed with suffering from food poisoning and shock because of her
contaminated soup.

Issue:

Whether the owner of the restaurant had the duty of care towards Jane?

Relevant Law:

Donoghue v Stevenson (1932)

The plaintiff drank a bottle of ginger beer that a friend had bought for her. The friend first poured a
glass for Ms. Donoghue which she started drinking. Whilst the friend was pouring out her own glass
the decomposed remains of a snail fell out from the bottle. By that time Ms. Donoghue had already
drunk most of the contents in her glass. The plaintiff claimed that as a result of drinking the ginger
beer she suffered shock and severe gastro-enteritis. She sued the manufacturer.

Application:

According to the material facts jane became sick after consuming soup which had the remains of a
dead rat in it. The owner of the restaurant was negligent in his work and owed a duty of care to jane.
This is similar to the case of Donoghue v Stevenson which held that the manufacturer owed the duty
of care to the plaintiff.

Conclusion:

The owner of the restaurant owes a duty of care towards jane and was negligent in his job. As a
result of his negligence, jane can sue him for it.

Question 4 – Discharge of Contract

Material Facts:

 In January 2013 Nadine made an agreement with Chris to let her own house for a week in
February to him so that he can view the Melanesian Cup.
 Chris paid Nadine $200 in advance.
 Just before the match was to be held, the stadium was destroyed by fire and the match was
cancelled.

Issue:

What Chris’s contractual rights and obligations under common law?

Whether this contract can be discharged through frustration?

Relevant Law:

Krell v Henry (1903)

Where a person rented a flat for two specific days to view the coronation procession of King Edward
VII. The event was postponed, and the landlord sued for rent.

Application:

According to the material facts above, the stadium had caught fire which has led to the frustration of
the contract as seen in the case of Krell v Henry where the court held that the substantial purpose of
the contract was to view the procession which did not occur, hence the contract was frustrated.

Conclusion:

The contract between Chris and Nadine is frustrated from the date of the fire and as a result the
contract is discharged. Since the contract has been discharged, so has Chris’s rights and obligations
from date of the frustration. Chris can claim that on the basis of that frustration, both he and
Nadine’s rights and obligations have been discharged with the contract.