Commercial Law

Introduction to Law

Law is a set of rules and regulations which are the essential part of the legal system of the society. It is the set of the systematic rules and regulations which are designed for the effective and systematic learning of the societal people.  Law has different  and varied parts which can be characterised as business law, commercial law and criminal law (Chen, 2011). Commercial law is a significant part of law which can be defined in the terms of business law or corporate law. It is that form of law which  applies to rights , relations and conduct of person or persons who are engaged in the business that are engaged and occupied in merchandising and trading of sale of goods or any other transaction. In this report , various aspects of commercial law has been introduced and illustrated.

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1.Concept of Liability in tort of negligence with respect to the given case

Commercial and corporate law is the type of law which has been described in the sense of trading, merchandising  and sale of goods and services between persons of contract. It deals with the rights and liabilities in aspect of the persons who are engaged in the perspective of the commerce and other trade and services (Fombad, 2013). In other words, it can be said that it is often considered as the part of  civil law which deals in both public and private law. Relationship between agent and principal has also been illustrated in the civil law. In this aspect it can also be said that various forms of contracts related to corporates, hiring practices and production and distribution of sale of goods and services are also included in the context of the commercial law. In other words it can be said that  commercial law can be defined as the statutory law which deals and governs the commercial and business law (Rubin, 2011).

In this prospect, there is a concept related to the liability in tort of negligence, which is related to the negligence and carelessness of one party to the contract for another party. Tort law is one of the variable in the commercial law for the time being in force. Tort law is  a civil wrong committed by one person and for which the other innocent party is liable to demand for the damages (Halla, 2010). In this regard,  there is a distinction between a tort and a evildoing, respectively. Negligence is considered as the part of the Tort law which can be circumscribed as a concept in which one party or person to the contract owes another person a duty of care. It is also defined as a term  in which one party fails to perform the the task which would have been performed by him in the reasonable manner, failure of which would lead to the payment of damages by defendant party for any damages, injuries or loss caused  to the innocent one. In accordance with the decided case law of McCANN & ORS v. SWITZERLAND INSURANCE AUSTRALIA LIMITED & ORS (S229/1999), it was  held that there are appellants were entitled to claim the damages from the defendants. In negligence, plaintiff can claim indemnity from defendant in case of any loss or damage caused on defendant's part.

In this context, it can also be considered that there are several legal rules and principles relating to the idea of   Negligence. These can be illustrated as follows:

In order to demand for the compensation from the litigant party, the plaintiff is required to satisfy the three conditions which can be demonstrated as follows:

  • To prove that defendant has a duty of care owed to plaintiff in any course of transaction. Litigant has a reasonable  duty of care  for the plaintiff at the time on which the negligence has been occurred by him (Law and Long,  2012).
  • Duty of care that has been owed, has breached by an act of defendant. In another words, defendant has ruptured the duty of care on plaintiff. It was a failure on the part of him to assure the reasonable and required set standard of care.
  • That breach of duty by defendant has caused damages and personal injuries to injured party. Also, the damage that has been caused was not too remote.

In the aspect of the the term negligence,  case of Donoghue v Stevenson [1932] AC 562  House of Lords,  has set as a landmark case. It also illustrates that the manufacturer is held liable for the damages that has been caused to Mrs Donoghue.

In accordance with the provisions of Civil Liability Act, 2002, There are certain other principles relating to the negligence  which are explained as follows:

A person is not negligent for not taking care of the duty that has been allotted to him in due course until and unless:

  • The risk was foreseeable and predictable (Siems and Deakin, 2010). It means that the defendant and plaintiff are able to foresee that risk.
  • The risk was significant.

In the given case scenario, it has been given that Samsung has been producing  a mobile phone namely, Galaxy note 7 which is being sold in the Australia by Samsung Electronics Australia. It was been assessed that there was some technical issues and faults in the manufacturing process . It resulted into the battery overheating problems and issues.

In this case,  It can be assessed that the company is liable for any kind of damages and injuries that has been caused to  its customers due to an issue of the overheating of battery. In accordance with the provisions of the Tort liability in Negligence, the person who is required to ensure the effective duty of care on another person, if fails to perform then that party must pay the plaintiff for the damages for injuries and it will  be treated as breach of duty of care. So, with reference to the said provision, Samsung can be held liable for the damages for breach of duty of care that has been caused by their mistake and negligence while production of mobile phones. It is due to the reason that they were supposed to ensure the standard duty of care. It  will be considered as the breach of duty of care. They had breached the duty of care for  its Australian customers. Also, the person who was staying in hotel can sue Samsung for its damages for breach of duty.

So, as per the provisions all the terms and conditions of tort in negligence would be  applicable on Samsung electronics, Australia.

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2.Rights of consumers in aspect of Australian Consumer Law

Australian consumer Law is a legislation that has been framed in the respect of protection of rights of consumers from manufacturers and consumers (Louw, 2012). It came into force  on January 01,  2011. the main focus of this act is on the protection of rights and obligations of consumers against malpractices. In the part 3-5  of Australian Consumer law, it has been defined about the rights of consumers and also liability of manufacturers  for goods and services having safety defects (Terpstra,  Foley and Sarathy,  2012).

In accordance with this provision, it can be said that there are certain rights by which consumers are entitled to perform in certain situations. These can be defined as follows:

  • Consumers have a complete right to ask and demand for the damages in the case of loss which has been occurred due to the negligence regarding the safety of a particular product.
  • Also, if it has been proved that it is the duty of the manufacturer to take care of the duty and adopt reasonable steps then, it consumers can sue the said manufacturer for any loss or personal injuries caused.
  • Also, it can be said that if the manufacturer  has supplies and goods and services in the reasonable course of action and trade but the goods had safety defects then the said manufacturer and producer will be held liable  for the amount of damages, loss and personal injuries  suffered by consumer (Lydersen and et. al., 2010).
  • Owners and innocent third party or bystanders can also claim for indemnity if the goods are defective in nature in regard to safety.

With reference to the given case scenario, Samsung electronics has defaulted in the production of its mobile phone namely Galaxy note 7 which Is consist of the design and production defaults causing in overheating of phone.  So its consumers in Australia has a right to claim for the damages suffered by them, in accordance to the provisions of the part 3-5 of the Australian Consumer Law. So, in this case the consumers who  are having the said phone which is defective in nature can sue the defendant for the indemnification.

The consumers in this case, can demand for compensation on the basis of defect in goods in respect of safety.

On the contrary, as per the legislations illustrated in the  part 3-5 of the Australian consumer Law, the defendant has also some rights I accordance with the case. The defendant can file his defence in pertaining the following:

There are four defences that are made available for the defendants for filing their defence which can be characterised as :

  • The defendant can claim that there were no defects detected  at the time when the goods were being sold to the costumers. In this, if it has been shown by the manufacturer that the goods were defective free at the time of  delivery then  it will be considered as a defence.
  • It can also be asserted by litigant that proper compliance with the mandatory standard has been ensured, even though defect occurs.
  • The defence has been considered as the art defence.
  • In the end, it is  a component defence.

So, in accordance with the above said provisions, the Samsung electronics  can file his defence in the against of the claim made by consumers. It can be alleged by the cited company that all the said standards have bee ensured in the process of production of Galaxy note 7 then, the manufacturer will not be held liable.  Also, if it has been proven that the goods were defect free at the time of sale, then also no liability will arise on the part of Samsung electronics.

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3.Role of relevant caps on personal injures or tort

As,  liability of tort is commitment of civil wrong action. In accordance with the provisions and terms specified in the context of the Australian Consumer Law, various caps on the damages of amount of personal injuries or losses by defendant has also been fixed (Ngaido,  2016). It  has been imposed with the purpose of reducing the tort liabilities that has been committed by persons. Imposing relevant caps on the penalties will result in the stabilities in the rate of crime and other aspects. Also, it is considered as the political issue it also advocates several limits on the ability to file claims and capping the awards that are required to be given in the context of the decision making regarding tort. In accordance with the provisions of the ACL, it can also be stated that in the existing tort system, it is consist of system which explores costs and expenses of  awards but ignore and avoid the benefits of current tort system (Roters  and et. al., 2010). It can also be stated that court in order to avoid any future damages, it may award any retaliative damages to reject that particular conduct and action in near by future.


From the above mentioned report,, it can be held that  negligence and tort law are the part of commercial law. In this report various aspects and terms  of the negligence and tort has been illustrated. Also, the case study of Samsung Electronics has also been demonstrated. Furthermore, in this light,  different obligations and duties of care to be performed by one party to another party to the contract is also discussed. Moreover, various rights of consumer and manufacturers has also been depicted in this report it can be further analysed that there is an amount that has  been fixed for the damages paid to plaintiff. It is the concept related to the term Tort reforms.


  • Chen, N., 2011. Securities laws, control of corruption, and corporate liquidity: International evidence. Corporate governance: An international review.19(1). pp.3-24.
  • Fombad, C.M., 2013. Some reflections on the prospects for the harmonization of international business laws in Africa: OHADA and beyond. Africa Today.59(3). pp.50-80.
  • Halla, M., 2010. Tax morale and compliance behavior: First evidence on a causal link. Bonn: IZA.
  • Kitagawa, Z., 2016. Dispute Settlement (Vol. 5). Doing Business in Japan.
  • Law, M.T and Long, C.X., 2012. What do revolving-door laws do?. The Journal of Law and Economics.55(2). pp.421-436.
  • Louw, A.M., 2012. Ambush Marketing & the Mega-Event Monopoly: How Laws are Abused to Protect Commercial Rights to Major Sporting Events. Springer Science & Business Media.
  • Lydersen, L and et. al., 2010. Hacking commercial quantum cryptography systems by tailored bright illumination. Nature photonics.4(10). pp.686-689.
  • Ngaido, T., 2016. Making laws and building institutions in the Sahel: The case of Niger.
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