The neighborhood principle was established by Lord Atkins in the case of Donoghue v Stevenson (1932). Under normal circumstances for a consumer to claim damages for the purchase of a defective item, there has to be a valid contract in place.
There are five elements to a contract, offer, acceptance, consideration, intention, and form. Offer is the act of making an offer to sell or displaying an item for sale. Acceptance is the act of accepting the item or buying or purchasing the item that is on display and consideration is paying the offeror (the person who is selling the item) for the purchase of the item.
Consideration has to be in monies or monies worth. In addition to that, there is also a general undertaking that is given by the offeror, at the time of the purchase, to the offeree (the person who is purchasing the item) that the item is of merchantable quality or fit for its purpose i.e. the purpose for which it was purchased or intended.
Intention simply means that there is an intention or it is the intention of both parties (the offeror and the offeree) to enter into or to create a legal and binding agreement and this at times may be inferred. Form is the form of the contract i.e. it may be either written or oral. (we’ll look into contracts and the elements in a contract further when we do contracts).
Let’s look at a present-day example: – A man buys a mobile phone for his daughter as a Christmas present. He gift wraps the device and puts it under the Christmas tree and on Christmas morning, his daughter unpacks the gift and is delighted to find the phone. She turns on the phone, but it doesn’t turn on. She turns to her father for help who in turn takes the phone back to either the retailer or to a manufacturers’ outlet to have it replaced.
At the retailer or the manufacturers’ outlet the lady at the counter politely asks him for the proof of purchase which in most cases, especially in instances of small portable items is a receipt. The man hands her the receipt and she takes the defective phone back and hands him a new phone.
The receipt is proof of purchase and it normally states the date the item was purchased on, the make and model of the item, the quantity and the amount that was paid as consideration for the item. In some cases or instances the details of the sales person who assisted with the purchase is also on the receipt or the proof of purchase. It is in essence a valid contact.
Now let’s say for example that the girl is so taken in by her present, that she runs off to show it to her friend at the park, without turning it on and in the excitement that follows forgets all about the phone and leaves it on a park bench and rushes home for Christmas breakfast.
The phone is then discovered by Mr. Smith, who is out walking his dog, Muffin. Mr. Smith tries to turn the phone on and finds that the phone is defective. He determines the make and model of the phone from its appearance and he takes the phone to the manufacturers’ outlet and demands that the polite lady at the counter replace his faulty phone. The lady in turn asks Mr. Smith for the receipt or the proof of purchase and she soon realizes that Mr. Smith doesn’t have it on him. She then politely tells Mr. Smith that she’ll be happy to replace the phone as soon as Mr. Smith returns with the receipt. A disgruntled Mr. Smith has no choice but to leave the store.
The above example is one of the reasons why there is sometimes an insistence on establishing the contractual element or a contractual relationship, in cases of defective items, i.e. to prevent fraudulent claims that may result from an unexpected stroke of good fortune or from theft.
It is however important that we realize that thus far no illness or injury has resulted from the use of the defective item. The situation might be different if Mr. Smith in good faith turns the phone on, to determine the identity of the owner and it explodes in his hand because of an inherent defect and Mr. Smith is injured as a result of the explosion. While there is no contract and Mr. Smith cannot commence an action in contract, he may have an action in Tort.
In Langridge v Levy (1837). A man sold a gun which he knew to be dangerous to the purchaser who bought it for his son. The gun exploded in his son’s hands and he was held to have a right of action in tort against the vendor, despite the fact that the person who suffered the injury was not a party to the contract.
Let’s compare the decision in Langridge v Levy (1837) with the outcome in another case, Winterbottom v Wright (1842). In the latter case, a carriage, that the defendant was contracted to maintain broke down and the plaintiff was injured. The plaintiff brought an action against the defendant, for injuries incurred, but his action was dismissed because he was not privy (party) to the contract.
We can distinguish between the facts of Langridge v Levy (1837) and Winterbottom v Wright (1842) in that, in the latter case, both the plaintiff and the defendant were contracted to the Postmaster’s officer. The defendant was contracted to maintain the carriages of the Postmaster General and the plaintiff was either contracted or employed to drive the carriages and if an action was to be brought, it should have been brought against the employer for failing to maintain the carriages in good condition.
Copyright © 2018 by Dyarne Ward