LAW6000 Business and Corporate Law Assessment 2 - Case study analysis

Question 4 ( 25 marks)

Prue, a famous model, is the spokesmodel for the cosmetics firm Slapiton Ltd. Prue is also ambitious to become a screen actor. Prue is required to attend a public event at the Bilton Hotel as part of her contract and so she orders and buys a new gown made by the famous designer, RuPeter, from a trendy boutique called Gladrags. Prue did not try the gown on prior to purchase as there was not one in her size available, and so the gown was quickly made and delivered shortly before it was time for her to leave for her event.
To Prue’s horror, about an hour after dressing in her new gown and arriving at the Bilton Hotel, she is in great pain. An extremely painful red rash of large boils has erupted all parts of her body in contact with the gown and she has a sudden extreme fever. Consequently, Prue is unable to complete her appearance. In addition, as she tries to leave the stage she becomes dizzy and falls of the stage and breaks her leg. Prue is rushed to hospital. Afte removing the gown made by RuPeter and receiving medical treatment in hospital for a period of six weeks, the boils reduce, but sadly they leave permanent ugly scarring on her body. Prue is no longer able to work as a model, representing a loss of income of at least $10million. In addition, Prue had been about to negotiate a movie deal with a major movie studio worth $5million. The movie studio no longer wishes to commence negotiations. Laboratory tests upon the gown reveal the fabric contained residue of a toxic chemical used in an associated manufacturing process. This chemical is supposed to be removed by a washing process before the gowns are released, however due to the rush nature of the order this was not done before the gown was shipped to Prue. This chemical reacted with Prue’s skin causing the violent condition. This toxic chemical could not be detected by normal visual inspection. The hospital bills total $15 000.

Required:

With reference to the sections of relevant legislation and case law, use the IRAC legal reasoning model to advise Prue:

(a) Whether she can take any legal action against Gladrags, RuPeter’s business and/or the Bilton Hotel, and (15 Marks)

(b) assuming she is successful in an action, what damages she is able to claim and why (10 marks)