ACCA F4 - Corp and Business Law (ENG)

106 7: The law of torts and professional negligence  Part B The law of obligations

Study guide

Intellectual level

B The law of obligations^

4 The law of torts and professional negligence

(a) Explain the meaning of tort 2

(b) Explain the tort of 'passing off' 2

(c) Explain the tort of negligence including the duty of care and its breach 2

(d) Explain the meaning of causality and remoteness of damage 2

(e) Discuss defences to actions in negligence 2

(f) Explain and analyse the duty of care of accountants and auditors 2

Exam guide

There are a number of ways tort could be examined. Scenario questions may require you to identify

whether a tort has been committed, whether a duty of care exists or if there is sufficient link between the

actions and resulting damage for liability to be established. Other questions may require you to identify the

different types of tort and the circumstances that create a liability for damages.

1 Tort and other wrongs

The law gives various rights to persons. When such a right is infringed the wrongdoer is liable in tort.

1.1 Tort

Tort is distinguished from other legal wrongs.

(a) It is not a breach of contract, where the obligation which is alleged to have been breached arose

under an agreement between two parties.

(b) It is not a crime, where the object of proceedings is to punish the offender rather than compensate

the victim.

A tort is a civil wrong and the person wronged sues in a civil court for compensation or an injunction. The

claimant's claim generally is that they have suffered a loss such as personal injury at the hands of the

defendant and the defendant should pay damages.

In tort no previous transaction or contractual relationship need exist: the parties may be complete

strangers; such as when a motorist knocks down a pedestrian in the street. The claim in tort is based on

the general law of duties and rights.

1.2 Types of tort

The two main types of tort that you need to understand for your exam are ‘passing-off’ and negligence.

1.2.1 ‘Passing-off’

Passing-off is the use of a name, mark or description by one business that misleads a consumer to

believe that their business is that of another. This tort often occurs when expensive 'designer' products

such as watches or clothing are copied and sold as 'originals' to unsuspecting customers.

Key term

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