Custom «Business and its Legislative Foundations» Essay Paper Sample

Case law can be viewed as set of decisions that are used to make interpretations of the law. Such interpretation differs from statutory law. Statutory laws are various codes enacted by governmental bodies. A tort is a civic wrong for which compensation is made available to the offended person in the courts. In the law of Torts, duties are obliged to persons in various situations and legal responsibility for negligent or illegal actions imposed by law on all parties. For instance, a property owner owes a duty of care to all who will be using his property. Tort is different from contract since, in contract, all parties agree to be bound. Law of Tort plays a major role in the provision of the claimant’s appropriate remedies. This is applicable only to claimants who have suffered loss or violation of their rights. These losses may include physical injury of persons or properties, and tainting of an individual reputations or financial interests. A claimant could be compensated only when he proves that a person committing the tort has owed him an obligation of care, and that tort caused the loss (Dawson 1968, p. 23).

The law of tort covers different civic wrongs that include negligence, infringement, and insult. Each tort has its own rules about legal responsibility. Most torts entail a factor of blameworthiness which implies that a liability is only inflicted on a person who inten­tionally acts or fails to act in a certain way. The tort of negligence covers a wide variety of situations where a person causes harm to other people. For the claimant to succeed in the act for negligence, he is supposed to observe the following elements. The defendant should owe the claimant a duty of care. Additionally, he or she must breach the duty of the cycle. Finally, the harm should be caused by the breach of duty. These three elements are often considered together in case of a court case (Dawson 1968, p. 45).

Rational and Research Question

If the care principle is to be applied, then it will mean that every person owes his neighbor any loss suffered because of his actions. As a professional, contractual matters are very important, and one needs to have lucidity on all terms in details. Therefore, any violation of breach of the contract will be interpreted as a misunderstanding of terms stated in the contract. This law outlines conditions for one to enter in a given contract. More so, the law also prohibits other forms of clauses from being implemented (Ponzetto & Fernandez 2008, p. 42).

Another vital aspect of negligence which a professional needs to think about is writing incorrect contents. For instance, when drafting reports or any other documents, careful attention should be taken to avoid the possibility of causing damage or defaming an entity through neglectfulness, misstatement or denouncement. For a denouncement, the defendant has to ensure that his or her statements are right (Ponzetto & Fernandez 2008, p.67).

The development of liability for misstatement is difficult because the reported cases are knotted with legal “bête noire” liability for pure economic loss. In most cases, a plaintiff suffers economic loss in such occurrences. We shall assume that the liability of negligent advice is not inclusive, should there be a physical damage. For instance, take it that Clayton v Woodman architects are held liable for misdirecting a bricklayer, and then a wall collapses only to injure a plaintiff. In this case study, there is no liability for negligent misstatement noticed on the defendant’s side. Therefore, negligent misstatement is bound up with only economic loss (Ponzetto & Fernandez 2008, p. 34).

In such a scenario, it is paramount to establish whether it is logical for the plaintiff to depend on the defender’s proclamation. Courts differ significantly in the way they interpret reasonable confidence. For instance, consider a case where a man is held reliable for giving a friend an ineffectual advice of buying a used vehicle. A claim for pure monetary loss caused by a careless statement may be successful only if there is a close relationship between parties involved. This can only happen if there is a special relationship between the parties. Individuals making statements would avoid being under a duty of care to a crowd of people if they only rely on their statements (Calabresi 1982, p. 17).

Another good example is where a House of Lords constrains an ideology set out in Hedley Burne in a later case of Caparo Industries v Dickman (1990, pg.23). It is evident that the number of prospective claimants who fell within the neces­sary proximity was confidential. Therefore, the court attempts to retain the relationship between the defendant and the claimant. The court accomplishes this by allowing the defendant to know that the statement will finally be communicated to the plaintiff (either a named individual or a particular group of persons). In the presented case study, the advice was essentially given specifically in correlation with a specified transaction. The defendant reasonably anticipated that the plaintiff would probably use the statement for the intention of the transaction without considering other sources of advice (Calabresi 1982, p. 34).

It is important to provide tangible evidence that a claimant has suffered a severe psychiatric illness, for instance, severe stress disorder. Normal anguish, and anxiety, devoid of any physical injury cannot be equivalent to a severe psychiatric illness. In the recent past, the courts have been keen in identifying a duty of care in relation to a given specified psychiatric injury because of many reasons. It is hard to distinguish between psychiatric injury and physical injury and, therefore, it is easier for one to make false claims. It is key to note that problems usually arise when one raises a claim on severe psychiatric injuries. This implies only in cases when the plaintiff suffers psychiatric injuries, though he or she is may not be physically harmed. A claimant can be compensated for emotional anguish and distress as a result of physical injury. A general principle of negligence is utilized when a claimant experiences either a psychiatric injury or physical harm. However, in the situation where a claimant suffers only psychiatric injuries, further necessities have to be achieved for a successful claim to be made (Calabresi 1982, p. 23).

In order for a professional to succeed in a negligence claim, he or she must confirm that the defendant owed him an obligation of care, and that he or she breached that particular duty of care. Addition­ally, he or she must verify that the loss he suffered arose from the defendant's breach. There exist two factors linked to this element; first, the defendant must have been the cause of the claimant's damage. This is a realistic matter which is usually analyzed by the 'but for' test. Second, the damage undergone by the claimant must be logically foreseeable, i.e. the damage must not be too remote (Priest 1977, p.23).

A professional may incur liability in a Supreme Court. For instance, the court of late has been addressing one contentious issue. It has been trying to find out whether a claim can made when the negligent misrepresentation is not made to a different individual who attempts make an inquiry on behalf of a defendant rather than a plaintiff directly, but to which the plaintiff is concerned. According to our case study, there could be no liability as the defendant asserted since the testimonial was not made directly to a plaintiff. Unfortunately, the court rejected the defendant’s argument. It held that the declaration made would be used by the plaintiff only if there was a close relationship between the involved parties. It was logical that the accused was held liable, and he was to pay damages to the plaintiff for any losses suffered. For the Supreme Court to fulfill the "proximity" test in respect of negligent misstatement, the following factors had to be considered: First, individuals concerned were inclusive of individuals in a limited and in a given class. Additionally, statement makers were to expect that their arguments would be based on the plaintiff’s statements. More so, it was expected that an individual at the root of the statement could or could not behave in a dignified manner. Remember, proximity test usually embraces individuals who could logically be anticipated to rely on incorrect information from an adviser, even if an adviser may not have an intimate relationship with an individual (Priest 1977, p. 32).

Recently, a High Court pronouncement which reaffirmed a law that an adviser is charged with the responsibility of ensuring that the information they supply, to help of a limited group of individuals, is logically correct in a given situation. This is true only when there is a special relationship between the involved parties (Priest 1977, p. 37).

A professional also needs to consider the presence of a waiver which could make a party not liable from legal responsibility arising from a careless misstatement. Regarding our case study, the existence of a disclaimer on the material that contains the misstatement, led to the barring of the existence of a special connection which could make it difficult for the Court to place blame on them. However, the waiver was not adequate to alleviate the defendant of liability regarding the court findings. The Court suggested that the publication of the disclaimer was irrelevant because the information was heading for a plaintiff who had influenced it (Priest 1977).These cases demonstrate an example of potential disclosure of monetary organization as a result of negligent misstatement. This adversely affects, and disqualifies an individual need of being linked to an adviser. Advisers should be cautious of their probable liability because of the onus entrusted on them when providing advice to a given individual, and to a third party inquiring about an individual in question (Priest 1977, p. 45).

It is paramount to observe some key issues in law. For instance, defective confession to the ASX may lead to charge in the Corporations Law for organizations and for directors. This type of conduct by directors may result to violation of their legislative or common law duties.  Additionally, faulty revelation in connection with a prospectus may lead to legal accountability under the Corporations Law for the corporation, for directors, worker, and advisor professionals. In certain situations, a "due diligence" defense is available. Careless reporting can cause one to suffer from defamation. Failure to take precautions when reporting can expose the careless reporters to an act of neglection (Sustein 1995, p. 17).

A professional has to some extent protection from charge for “negligent reporting” under the principle of vicarious liability and the statutory defense provided by insurance legislation. An employer is accountable for an employee's conduct. Therefore, in case of any damage, the employer is required to pay a third party as the final result of the worker’s behavior. Consequently, an employer’s insurer cannot declare in disagreement to a worker for recovery of an amount paid out under an assert by a third party unless the misbehavior by the employee is willful. The employer can sue his employee in case he suffers a loss due to misconduct of an employee. More so, a third party may also prosecute the employee directly. The prohibition on confusing and deceiving behavior controlled by the Trade Practices Act is an exclusion giving rise to strict liability. A professional cannot defend himself by lack of purpose to give the wrong impression about something, and it is no protection to say that all due care was taken (Sullian 1993, p. 23).

Conclusion

A professional who is implicated with preparing material for reporting that may lead to misstatements should be aware of the repercussions of not making proper reporting to investors. Careless reporting to an investor may result to an individual liability on that person. Careful conformity with the JORC policy requirements and observance to the ethics laid down in the Code for the regulation of professionals. The code places a professional in a situation where they are able to declare the "due diligence" protection. Nevertheless, even where such a protection is not existing and strict liability applies observance to the policy and the taking of all outstanding care should reduce the probability that some act or omission will leave professionals exposed to legal liability (Sullian 1993, p. 28). Advisor professional may be accountable to the one, who has undergone loss in negligence or in the Corporations Law. However, he may be accountable in contract for infringing the agreement with the company (Priest 1977, p. 19).

Summary

An Individual who is entrusted with making material for reporting that may cause misstatements should be aware that in the event he fails to make proper reports to an investor, he or she may cause individual liability on that particular person. Therefore it is important for one to observe JORC policies. More so, false revelation in connection with a prospectus may result to legal accountability under the Corporations Law for the corporation, for directors, worker, and advisor professionals. Under specific circumstances, a "due diligence" defense is available. Careless reporting to investors can cause one to suffer from defamation. Additionally, failure to take precautions when reporting can expose the careless reporters to an act of neglection (Sustein 1995, p. 17).