Economic Loss an Negligent Misstatement

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  • Created by: hishymimi
  • Created on: 15-07-17 17:43
Basic Rule
No recovery for pure economic loss
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Spartan Steel & Alloys Ltd v Martin & Co [1973] QB
Held: The damaged metal was physical damage and therefore, the loss was recoverable. Also the metal would have been sold at a profit and the loss of profit on that particular damaged metal was also recoverable as consequential economic loss.
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Weller & Co v Foot and Mouth Disease Research Institute [1965]
Loss arising from property belonging to another
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Murphy v Brentwood District Council [1990] HL
The House of Lords confirmed that the cost of repairing inherently defective products or property was rightly classified as pure econmic loss.
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Cattle v Stockton Waterworks [1875]
If Claimant has no proprietary interest in property damaged then there is no claim in Tort.
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Defects in goods
Contract Law
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Damage to property (or person) caused by a defect
Tort Law
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Exception 1
Negligent misstatements
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Hedley Byrne & Co Ltd v Heller & Partners [1964] CA
1) Special relationship 2) Voluntary 3) Assumption of responsibility 4) Reasonable 5) Reliance
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Esso Petroleum Co Ltd v Mardon [1976] QB
Held: Esso was liable for the damages. This was a negligent misrepresentation because Esso was in a special relationship with Mardon and they were in a position to have special knowledge.
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Chaudhry v Prabhakar [1988]
Held: The claimant could recover for the damages. This was because there was a special relationship even though it was not a professional consultation but the claimant had sought advice in a social setting.
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Factors relevant to show a more likely special relationship
1) Business capacity 2) Maker knows “gravity” of inquiry 3) Maker has special skill or knowledge
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Factors relevant to show a less likely special relationship
1) “Off the cuff” remarks 2) Social capacity 3) Informal setting 4) Maker not aware of any special importance
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Element 2: Voluntary
Assumption must be voluntary i.e. no duress
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Assumption of responsibility
1) Accepted Names into Syndicate 2) Special expertise 3) Explicit reliance
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Exclusion clauses
Hedley Byrne v Heller AND Consumer Rights Act 2015 s65(1)
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Consumer Rights Act 2015 s65(1)
'A trader cannot by a term of a consumer contract or by a consumer notice exclude or restrict liability for death or personal injury resulting from negligence'.
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Smith v Eric S Bush (1990)
This case made it clear that any attempt to rely on a disclaimer of responsibility will now be subject to this statute.
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Reasonable Reliance guidance
James McNaughten Paper Group Ltd v Hicks Anderson & Co (1991): -Purpose for which made -Purpose for which communicated
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Continue reasonable reliance guidance
- Relationship between adviser, advisee and any third party -Size of class to which advisee belongs -State of knowledge of adviser
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Exception 2
Quasi-contract
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Other cards in this set

Card 2

Front

Held: The damaged metal was physical damage and therefore, the loss was recoverable. Also the metal would have been sold at a profit and the loss of profit on that particular damaged metal was also recoverable as consequential economic loss.

Back

Spartan Steel & Alloys Ltd v Martin & Co [1973] QB

Card 3

Front

Loss arising from property belonging to another

Back

Preview of the back of card 3

Card 4

Front

The House of Lords confirmed that the cost of repairing inherently defective products or property was rightly classified as pure econmic loss.

Back

Preview of the back of card 4

Card 5

Front

If Claimant has no proprietary interest in property damaged then there is no claim in Tort.

Back

Preview of the back of card 5
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