The snail and the ginger beer case. In 1928, Mrs Donoghue (the Plantiff) went to a cafe in Scotland and with her friend. Mrs Donoghue drank a bottle of ginger beer manufactured by Stevenson. Friend bought the drink from a retailer and gave it to Mrs Donoghue. The bottle however contained a decomposed remains of a snail. The colour of the bottle had prevented any detection of the snail.
This case should highlight the following principles: the existence of a duty of care, reasonable foreseeability, the neighbour principle, and the proximity test.
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Mrs Donoghue claimed to have suffered gastro-enteritis and severe shock as a result. Mrs Donoghue sought to recover damages from Stevenson, claiming that the presence of the snail was due to his negligence.
Can Donoghue bring action in negligence against Stevenson? With no contract, no intention, no agreement, and no consideration.
Doctrine of Privity Contract. Only those who are parties to a contract have rights or liabilities with the contract. Was Stevenson liable?
As Donoghue did not form the contract with Stevenson, the intention to form a contract was firstly discussed along with the doctrine of privity.
Majority rejected the privity of contract rule, believing Donoghue did not have to hold the contract in order to seek remedies for the negligence given by Stevenson.
With this result, the answer of the breach of duty of care could take place.
By a 3:2 majority, The House of Lords found the Plantiff (Donoghue) was entitled to remedies needed, for the negligence caused by Stevenson and the manufacturing of the ginger beer.
Lord Atkin also responded to this case with a public announcement on the neighbour principle. At 580 he announced “You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who, then, in law, is my neighbour? The answer seems to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question.”
Significance of Case
This case has created four main principles of law: 1. negligence is a distinct tort, 2. a contract is not necessary, 3. manufacturers liability, and 4. the neighbours principle.
Australian Consumer Law 2010 (Cth)
Under this law, it is now possible for consumers to sue the manufacturer if: the goods are defective, liability doesn’t depend on the consumer having entered into a contract with the manufacturer.
Rights of Action Against Manufacturers
The ACL imposes terms into every agreement by a manufacturer to supply goods to a consumer. These include: fitness for disclosed purposes s74B, correspondence with description s56, merchantable quality s54, and express warranties s59.
Under the Australian Consumer Law 2010 (Cth): Imposes strict liability on manufacturers and importers of defective goods that cause personal injury or property damage (s318), the individual is protected (s138), the meaning of a manufacturer (s7), and the process of how the product is manufactured (s7).
Erwin V Iveco trucks Australia LTD : Manufacturer of Truck (respondent), Truck owner (appellant), and plaintiff (injured).
Graham Barclay Oysters V Ryan : Council and State, Graham Barclay Oysters, Ryan (injured party).
Today the manufacturer maybe liable to compensate not just the individual who is injured (s138), however: an injured third party, such as a bystander (s139), a person for damage to personal, domestic, or household goods (s140), and a person for damage to land, buildings or fixtures (s141).
The Case Evolving
Hedley Byrne & Co LTD V Heller & Partners LTDH . Showed an economic loss-negligent misstatements build onto the remedy for breach of duty of care.
Caparo Industries PLC V Dickman . States that a duty of care will exist if three key factors are met: The likelihood of damages is foreseeable, the claimant is not too remote from the defendant, and it is just to impose a duty, having to regard all the facts.
Significance in Today’s Business
With the concepts of Donoghue V Stevenson, all businesses across all industries today are now affected by the decision of the case including: retail, hospitality, travel/tourism, construction and electricians.
Advice for Businesses Today
Immediate examination or inspection of goods, if a product is dangerous per se, then there is a duty to give adequate warning for taking precautions, sellers and repairers under similar duties to distributors and manufacturers, be aware of the enactment of the Australian Consumer Law (which adopts parts of the Trade Practices Act 1974 (Cth).