Chapter 25 Guidance on answering the questions in the book

Capacity and parties

Seville Ltd is prima facie responsible for breaches of obligations in contract and tort. Tort liability might be either direct or vicarious. If it is poorly capitalised, then claimants might seek to sue for torts committed by directors personally. It is clear that directors will be liable for their acts of deceit (intentional tort): Standard Chartered Bank v Pakistan National Shipping. However, when it comes to negligence, the courts are more reluctant to create personal liability in directors. As evidence of this reluctance, the courts have specified that the director is personally liable only when they have ‘assumed responsibility’ for misstatements etc: Williams v Natural Life Health Foods. The court is then required to examine the exchanges which cross the line between the parties, looking at such things as whether invoices are on company letter-headed paper etc. The contacts between the claimants and Yolanda are not very convincing evidence of an assumption of responsibility – except that, when Yolanda speaks to Barbara on the phone, she uses the plural ‘we’ in going so far as to ‘guarantee that you will not need to worry’. This does look like an assumption of personal responsibility. If Yolanda is made personally liable, then Seville Ltd and Yolanda are joint tortfeasors liable for the causation of the same damage. In theory, the rules of contribution would apply – so that the claimant would need sue only one of the parties, that defendant being able to seek contribution from any other liable party. Contribution amounts would be determined according to what is just and equitable having regard to the share of each in the causation of damage: Civil Liability (Contribution) Act 1978.

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