In the factscenario given, Jeanine has taken over and expanded the family cheesebusiness. This includes rebranding thepackaging and marketing materials and setting up an online shop. Her new business endeavours cause her to bethe subject of a plethora of legal issues. A new buyer places a large order to sample her produce for his café chainand later gets in touch to place a business order which is paid for bycheque. Despite the size of the orderthe client makes, it appears that a formal agreement is never made, giving Jeaninelittle to no contractual security when the client’s cheque bounces after thegoods have been delivered. Separate tothis negotiation, Jeanine enters into several discussions with food chains inhope of securing large deals, which leads to one client commissioning a Christmasthemed cheese.
Jeanine is unable tofulfil the original terms of the agreement, so the client requests a refund. In addition to this, a caterer claims hercheese made hundreds of guests ill, though Jeanine believes there is no legalissue here as her terms and conditions state that the company ‘could not beheld liable for illness occurring as a result of consuming our cheese’. Further to this, one of Jeanine’s customerscomplains that the branding of her cheese as ‘The Smelliest Limburger of themall’ is false as they have found a smellier variety elsewhere.
With reference to case law and statutes, thisessay will explore how Jeanine’s business stands in a very weak legal positionin three of the four issues outlined. Inreference to the complaint made by a catering company that the branding on thecheese as ‘The Smelliest Limburger of them all’ being false, if this werebrought to court as a claim for misrepresentation, the claimant could argue thatthis claim has become a term of the contract, as per the Misrepresentation Act1967. However, luckily for Jeanine, itis clear that, as established in Dimmock v Hallett, this is a mere ‘puff’ Withregards to Jeanine’s dealings with Simon, she is convinced of hiscreditworthiness as she assumed his company ‘Smells Good’ was short for ‘SmellsReal Good’, the larger café chain.
Even ifit could be proven that this was a unilateral mistake as to identity and Simonwas shown to be aware of Jeanine’s wrongful assumption, the business name thatSimon is trading under is not incorporated as a term of the contract. Therefore, as in Smith v Hughes1where Blackburn J asserts that there is ‘no legal obligation in a vendor toinform a purchaser that the latter is under a mistake not induced by the act ofthe vendor’2, thecontract would still stand as the same would arguably apply in instances wherethe vendor was under a mistake as to the business name of the purchaser. As it isevident that Simon has not tried to deceive Jeanine into thinking that herepresents the larger café chain, there is no common intention (as in Raffles vWichelhaus where one contracting party was referring to one ‘Peerless’ vesseland the other another). In the case of Rafflesv Wichelhaus, it is clear that the mistake is so fundamental to the contractthat had Raffles been aware of this discrepancy, he might not have wished toenter into the agreement in the first place. However, whilst in this case Mellish LJ affirms that there is no consensus ad idem (meeting of the minds)and therefore no binding contract3,it is unclear in Jeanine’s case how important it is that she believed Simonrepresented ‘Smells Real Good’.
Onemight argue that as it is only at the point of receiving the cheque that shedecides ‘Smells Good’ is an abbreviated form of ‘Smells Real Good’, thatperhaps this is not central to her deciding that Simon is creditworthy. Whilst thisparticular transaction was made interabsentes (as pre-contractual negotiations take place via email andpayment/goods are exchanged by post), the reasonable person would assume thatit is unlikely that someone other than Simon is dealing with Jeanine. Taking into account the fact that the twohave had a previous business transaction at the marketplace (though not substantialenough prior business so that a regular course of dealing might be established asin British Crane Hire Corp Ltd. v Ipswich Plant Hire Ltd.
4),one might go so far as to decide that it is immaterial which company Simonrepresents, as he is the contracting party, not the business entity. This concept is similarly explored in Ingramv Little5where Devlin LJ cites that ‘if Miss Ingram had been asked whether she hadintended to contract with the man in the room or with P. G. M. Hutchinson, thequestion would have no meaning for her, since she believed them both to be oneand the same’6. However, the distinction between Ingram andthis transaction is that H had intentionally set out to deceive Little as tohis identity, providing a name and address for such P. G. M.
Hutchinson, a realperson. If Jeanine had been askedwhether she had intended to contract with ‘Simon from the market’ or ‘Simonfrom ‘Smells Real Good”, she would have stated that she believed them to bethe same person. However, Simon at nopoint states that he is from ‘Smells Real Good’, thus it is only due to Jeanine’slack of due diligence that she did not confirm he represented the company thatshe thought he did. Whilst I would arguethat Simon later selling the goods on to the chain ‘Smells Real Good’ mightsomewhat suggest that he was aware that Jeanine might be led to believe thathis company name could be interpreted to be the same as ‘Smells Real Good’,this is a separate issue and has no bearing on the agreement in questionbetween Jeanine and Simon as he does not fraudulently misrepresenthimself. Perhaps adding insult toinjury, I would add that Jeanine does not have a case to seek damages from ‘SmellsReal Good’ for non-payment as they acquired the goods from Simon and had nointention to contract with Jeanine.In the caseof the caterer that claims several guests at an event are taken ill afterconsuming cheese purchased from Jeanine, she takes comfort in the existence ofthe clause in her terms and conditions that states her company ‘could not beheld liable for illness occurring as a result of consuming our cheese’. On one hand, it is common for a retailer to excludesome degree of liability on their part in relation to goods and services.
This is not a particularly onerous term and isoften incorporated in terms and conditions to limit the scope of negligenceclaims.However, asper the Consumer Rights Act 2015, ‘a trader cannot by a term of a consumercontract or by a consumer notice exclude or restrict liability for death orpersonal injury resulting from negligence’. 7Furthermore, whilst Jeanine might try to claim that the contract is between herand the caterer, as established in Donoghue v Stevenson8,a duty of care exists that dismisses the privity of the contract. In other words, as a vendor of foodstuffs, Jeaninehas an established duty of care to keep her produce safe. Whilst she did not contract directly with theguests at the event, it is reasonably foreseeable that her product might be consumedby a broad range of persons that may not have purchased the product (as inDonoghue v Stevenson)9.Despitethis, Jeanine is not immediately liable for any of the guests at the eventbecoming ill. In order to establish if aduty of care exists (and, in turn, if a negligence claim is likely to besuccessful), the Caparo test (as developed by Lord Oliver in Caparo v Dickman10)is used.
According to the Caparo test,there are three parts to establishing a duty of care: foresight (it being reasonablyforeseeable that consumption of the cheese could result in illness); proximity(there being a relationship between Jeanine, the vendor, and the consumer (theguests at the party); and it being fair, just and reasonable to suggest thatany illness developed is as a direct result of consuming the cheese. In this scenario, I would therefore adviceJeanine to request evidence that any illness can be directly linked to theconsumption of her cheese. We do notknow the full fact scenario surrounding the illnesses, though it would not beunreasonable to suggest that the event served foods other than just thischeese. If she is able to establish thatthis is the case, she might be able to argue that the illness could have beencaused by another food served at the event, or at the very least, assert thatit is difficult to pinpoint the exact cause of the illness. Further to this, a reasonable person wouldfollow packaging instructions in relation to food, i.e.
consuming it by its ‘UseBy’ date and storing it at the correct temperature. If Jeanine is able to prove that any illnessis as a result of the caterers incorrectly using the cheese past its ‘Use-By’date or storing it incorrectly, this would exclude her company’s liability.1Smith v Hughes2Ibid3Raffles v Wichelhaus4British Crane Hire Corp Ltd. v IpswichPlant Hire Ltd.5Ingram v Little 1961 QB 31, 51, 60.6Ibid7CRA 20158Donoghue v Stevenson9Kidner’s Casebook on Tort10Caparo v Dickman