Originally posted by Lazarus
The Trade Practices Act implies terms into all sales contracts for the goods to be of "merchantable quality" and to be "reasonably fit" for their intended purpose. These terms were breached.
As El_chupah_nebre said: The scenario can be distinguished from Donoghue v Stevenson because, in that case, Mrs Donoghue was not the purchaser of the product and so was not privy to the contract between retailer and consumer, thereby preventing her from suing in contract law.
It can't be tort law, as there was no personal harm - there's nothing to compensate.
Donoghue V Stevenson  AC 562 (House of Lords)
Mrs Donoghue visited a caf with a friend, who bought her a bottle of ginger beer. After some of the drink had been consumed, a partly decomposed snail floated to the surface. The sight of the snail and the effects of the drink she had already consumed caused a severe bout of nausea and gastroenteritis. Mrs Donoghue launched legal proceedings against the manufacturer of the ginger beer.
After several appeals the case reached the house of lords, which was asked to consider whether a manufacturer of a good is liable to its final consumer.
In the decision of the house of lords, it was stated by Lord Atkin that a consumer must have remedy against a manufacturer who allows the contents of foods to be mixed with poisons, when the consumer is not able to inspect the food because it is in a container. This was the case with the bottle of ginger beer. The manufacturer claimed that there was NO CONTRACT with Mrs Donoghue because she had not purchased the drink, and there was therefore no legal relationship between them. However the court held that there was an implied contract; a reasonable person would expect that the goods would be of merchantable quality and therefore safe to consume. Damages were awarded to Mrs Donoghue.
The importance of this case went well beyond consumer law as it set the precedent of a duty of care. This precedent asserts that a person has a legal responsibility to ensure that their actions do not harm others.
The Question There was no contract between Mrs Donoghue and the manufacturer. On what basis was she able to recover damages for the injury she suffered?