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COMMERCIAL LAW

COMMERCIAL LAW. REMOTENESS OF DAMAGES/ VICARIOUS LIABILITY/ REMEDIES BY SIRHOLY GIMPA BUSINESS SCHOOL. OUTLINE. SECTION 1 THE NATURE OF REMOTENESS SECTION 2 NOVUS ACTUS INTERVENIENS SECTION 3 THE NATURE OF VICARIOUS LIABILITY

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COMMERCIAL LAW

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  1. COMMERCIAL LAW

  2. REMOTENESS OF DAMAGES/ VICARIOUS LIABILITY/ REMEDIES BY SIRHOLY GIMPA BUSINESS SCHOOL

  3. OUTLINE SECTION 1 THE NATURE OF REMOTENESS SECTION 2 NOVUS ACTUS INTERVENIENS SECTION 3 THE NATURE OF VICARIOUS LIABILITY SECTION 4 VICARIOUS LIABILITY AND INDEPENDENT CONTRACTOR SECTION 5 REMEDIES – DAMAGES AND EQUITABLE REMEDIES SECTION 6 LIMITATION OF ACTIONS

  4. THE NATURE OF REMOTENESS CAUSATION AND REMOTENESS There may be situations where a person may suffer some damages or injury as a result of hearing of some damage to another person or some goods. Could we say that that person is responsible for any accident that may occur as a result of hearing the damage? The answer is no, because he is not directly responsible for the accident. That persons action is said to be remote from the accident.

  5. THE NATURE OF REMOTENESS CAUSATION AND REMOTENESS Theoretically, the consequence of any conduct may be endless but the defendant is not liable for all the consequences that flow from his/her tortuous act, however remote in time and however indirect the process of causation, for otherwise human activity would be unreasonably hampered. The law therefore place a limit in liability.

  6. THE TEST FOR REMOTENESS The test is one of reasonable foresee-ability. For a thin line must be drawn to ensure that not everything is accounted for from a wrongful act, some consequences must be abstracted as relevant not on grounds of pure logic, but simply for practical reasons.

  7. THE TEST FOR REMOTENESS When the cause of some damage has been established and the basic elements to the tort have been proved, the defendant may be able to escape payment of some or all of the damages claimed by showing that there is not sufficient close connection between his behaviour and the damage suffered by the plaintiff, that is, that loss is too remote.

  8. THE STANDARD OF REMOTENESS The standard of remoteness is an objective one. As the test for remoteness is ‘reasonable foresee-ability’. Would a reasonable person have foreseen the damage? If a reasonable man would foresee damage then he is liable but if not foreseen, he/she would not be liable. This can be found in the Wagon Mound (1961).

  9. THE STANDARD OF REMOTENESS The phrase “natural and proximate consequence” creeps in in remoteness of damages. Proximate suggested that the event which occurs immediately before the harm suffered by the plaintiff is always to be selected by the law as the determined cause of that harm.

  10. NOVUS ACTUS INTERVENIENS (INTERVENING ACTS/EVENTS) MEANING OF NOVUS ACTUS INTERVENIENS There may be some novus actus interveniens or intervening acts/events that caused the damage and that the original defendant is not liable. Such event is said to “break the chain of causation”. Novus actus interveniens means an intervening act between the damage and the original act.

  11. THE ACT OF A THIRD PARTY When the act of a third party intervenes between the original act or omission and the damage, that act or omission is considered as the direct cause of the damage if the act of the third person could have been expected in the particular circumstances. This can be found in Wright v Lodge (1993).

  12. CHAIN OF CAUSATION A chain of events may result from a tort as we have seen in Wright v Lodge. The chain of events can be broken by an intervening act/event. A consequence is too remote if it follows a “break in the chain of causation” or is due to a “novus actus interveniens”. This means that although the defendant’s breach of duty is a cause of the damage, in the prima facie (in the eyes of the law), some other intervening event is regarded as the sole cause of the damage.

  13. Lamb v Camden Borough Council (1981) similar to the situation in Weija in Ghana on 28th November, 2007, where the Ghana water company carry out a demolition exercise and thieves went on a looting spree. Knight v Johns (1982) it was held that D was not liable for P’s injuries since P’s accident was not a reasonable foreseeable result of D’s negligence

  14. THE NATURE OF VICARIOUS LIABILITY Meaning of vicarious liability Vicarious liability means liability for the torts of others. That is, if a person commits a tort, another person can be held liable for that tort. For this to be applicable there must be a relationship between the parties which can be: • Relationship between the employer and his/her independent contractor; or • Relationship between the employer and his/her employee or what is popularly called master/servant relationship.

  15. THE REASONS FOR VICARIOUS LIABILITY • The master have been negligent in employing a negligent servant; • Failing to adequately control him; • That the master has set the whole thing in motion; • That the master benefits from the servant’s work; and • That the master has a deeper pocket.

  16. EMPLOYMENT AND NON-EMPLOYMENT SITUATIONS Unless the wrong falls within the course of the servant’s employment, the master is not liable. A wrong falls within the scope of employment if it is expressly or impliedly authorized by the master or, is an unauthorized manner of doing something which is authorized, or is necessarily incidental to something which the servant is employed to do.

  17. CARELESSNESS OF SERVANT When an employee commits a tort during the course of employment, the general rule is that, the employer would be vicariously held liable for the tort of the employee. The tortuous act must be the wrong way of doing what the employee in employed to do.

  18. CARELESSNESS OF SERVANT The commonest tort committed by employees is due to unlawful carelessness. When a servant is on a frolic of his own, and a tort is committed, he master would not be held liable for that tort. Century Insurance Co. Ltd v Northern Ireland Road Transport Board (1942). Beard v London General Omnibus Co. (1900) Kyeremanten v Amadu (1972)

  19. IMPROPER PERFORMANCE WITHIN SCOPE OF EMPLOYMENT Sometimes an employee would perform improperly an act which is authorized to perform. In such a situation, the employer can be held vicariously liable for the act of the employee. An act which is an improper way of performing what an employee is authorized to perform should be distinguished from an act which is beyond the scope of employee’s duties, in which case the employer is not liable. Yortuhor v Brako (1988) it was held that the master was only liable where the servant was acting in the course of his employment.

  20. FRAUDULENT AND CRIMINAL ACTS Fraud involves the persuasion of the victim, by deception, to part with his property or in some way to act to his own detriment and to the profit of the person practicing the fraud. Lloyd v Grace Smith Co. (1912). The acts were within the scope of the apparent or ostensible authority with which he had been clothed by the defendants and it is by this reason that the employers were held liable. If the servant’s fraudulent conduct did not fall within the scope of his authority, actual or ostensible, then the master will not be liable.

  21. VICARIOUS LIABILITY AND INDEPENDENT CONTRACTOR Meaning of independent contractor An independent contractor is a person who has been engaged by another person and who has undertaken to produce a given result, and who in the actual execution of the work he/she has been engage to do, is not under the control of the person for whom he does the work.

  22. THE GENERAL RULE As a general rule, the employer is not liable for the tort of his/her independent contractor. However, if the employer has not taken care to select a competent contractor or has employed inadequate number of men, he would be held vicariously liable for the tort of the independent contractor. Tarry v Ashton (1876) Padbury v Holliday and Greenwood (1912)

  23. COLLATERAL OR CAUSAL NEGLIGENCE OF INDEPENDENT CONTRACTOR If there is a causal relationship between two things, one thing is responsible for causing the other thing. For vicarious liability however, a person may not be responsible for the tort of the other if that negligence is outside of which was delegated to be done. The employer is not liable for the collateral or causal negligence of an independent contractor.

  24. REMEDIES Damages The main remedy for the victim of a tort is an award of damages. Damages is a sum of money payable by the defendant. Tort damages are always unliquidated, i. e. they clearly cannot be fixed by prior agreement between the parties.

  25. COMPENSATORY DAMAGES The aim of damages in the law of tort is to place the plaintiffs in the position they would have been in, had the tort not taken place. The aim of damages is to compensate the plaintiff in monetary terms. Damages can be awarded to compensate for loss of income, loss of enjoyment of life and for pain and suffering.

  26. COMPENSATORY DAMAGES In Pickett v British Rail Engineering (1980), it was held that the plaintiff could recover damages for loss of income on the basis of his pre-accident life expectancy. In Atsyor v Donkor (1980) it was held that damages for loss of expectation of life could be recovered on behalf of the deceased’s estate.

  27. CONTEMPTUOUS DAMAGES The amounts awarded here is merely derisory i. e. not to be taken seriously or not worth considering. Damages of this kind may imperil the plaintiff’s chances of getting his costs. The award is at the discretion of the judge.

  28. NOMINAL DAMAGES These are damages that are awarded to an innocent party when only a technical injury is involved and no actual damage (no financial loss) has been suffered. Nominal damages are very small damages to show that the loss or harm suffered was technical rather than actual.

  29. NOMINAL DAMAGES Many times a party that has been wronged but is not able to prove significant damages will sue for nominal damages. This is particularly common in cases involving alleged violation of constitutional rights, such as freedom of speech.

  30. NOMINAL DAMAGES When a breach of contract occurs, the injured party is held to a duty to mitigate, or reduce, the damages that he or she suffers. Mitigation of damages means taking reasonable steps to reduce a loss.

  31. NOMINAL DAMAGES A worker who is wrongly dismissed must attempt to find out other work; a seller whose goods are rejected must attempt to get the best price for them elsewhere; a buyer of goods which are not delivered must attempt to buy as cheaply as possible elsewhere.

  32. Loss arising from failure to take reasonable step will not be recovered. On the other hand, only reasonable steps need to be taken to mitigate; the buyer, for example, need not tour the globe looking for the cheapest alternative supplier.

  33. EXEMPLARY/PUNITIVE DAMAGES These are damages designed to punish a wrongdoer and set an example to deter similar conduct in the future. Generally termed exemplary damages, are not awarded in order to compensate the plaintiff, but in order to reform or deter the defendant and similar persons from pursuing a course of action such as that which damaged the plaintiff.

  34. EXEMPLARY/PUNITIVE DAMAGES Punitive damages are awarded only in special cases where conduct was egregiously invidious and are over and above the amount of compensatory damages. Punitive damages, generally, are not reasonable in an action for breach of contract.

  35. EXEMPLARY/PUNITIVE DAMAGES Such damages have no legitimate place in contract law because they are, in essence, penalties, and a breach of contract is not unlawful in a criminal sense. A contract is simply a civil relationship between the parties. The law may compensate one party for loss of bargain-no more, and no less.

  36. INJUNCTION This is an equitable remedy. The plaintiff may seek an injunction to prevent the occurrences of harm in the future and in this area the ‘preventive’ function of tort predominates. It is the primary remedy for such nuisance and the so-called ‘economic torts’.

  37. RESTITUTION Orders for specific restitution of property may be for the recovery of land or for the recovery of chattels. This remedy is confined to cases where one man is in possession of another property and this limits them to tort infringing such possession.

  38. LIMITATION OF ACTIONS Period of limitation Persons who are injured or suffered some damages have time limit within which they can sue and this can be found in the Limitation Decree, 1972. After a certain period of time stated by statute, actions in legal suits cannot be initiated in court. One would therefore be said to be statute barred.

  39. TIME LIMITS Land – 12 years Personal injury – 3 years Libel and slander – 3 years

  40. COMMENCEMENT OF THE PERIOD The period of limitation runs from the date on which the cause of action accrued.

  41. THANK YOU

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