PRINCIPLES: (i) Neighbour principle- A person is liable if he harms his neighbours. A neighbour is one whose action affects another.
(ii) One is liable only for contractual relations
FACTS: X manufactures a food item and sells his food item to Y, a whole seller. Y appoints Z, a retailer to retail these items. Z sells the food item to a consumer who after eating them falls ill. X is liable to the consumer because _______.

of contractual relations

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of the Food Adulteration Act

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the consumer is the neighbour of X

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of the consumer protection law

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Solution

The correct option is A the consumer is the neighbour of X
The principle established in the case of Donoghue v Stevenson can be followed in this case. It held that although no contract was entered into between the manufacturer and the customer, negligence could nevertheless be proved as the customer is to be directly affected by the product of the manufacturer.
So, X's product has a direct impact on the ultimate consumer although no direct contract for sale has been entered into.

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