Claims for pure economic loss are limited (Sparton Steel v
Martin) negligent misstatement is one of those allowed.
Negligent Misstatement
Definition = when a person (D) makes When PEL happens as a result of a Negligent
Pure Economic Misstatement liability can be imposed if a
a statement to another (C). This is
Loss as a result special relationship is established(Hedley
usually giving advice.
Byrne and Co. Ltd v Heller and Partners Ltd)
1. D must have some special
skill relating to statement
(Chaudry v Prabhakar).
Steps:
2. D must know it’s highly likely C will rely on
statement and voluntarily accepted this risk ()
3. C relies on it, incurring financial
loss (JEB Fasteners v Bloom)
4. Reasonable for C to
rely on it (Smith v Bush)
Extra step:
- What is the known purpose that
the statement is being relied on for
Martin) negligent misstatement is one of those allowed.
Negligent Misstatement
Definition = when a person (D) makes When PEL happens as a result of a Negligent
Pure Economic Misstatement liability can be imposed if a
a statement to another (C). This is
Loss as a result special relationship is established(Hedley
usually giving advice.
Byrne and Co. Ltd v Heller and Partners Ltd)
1. D must have some special
skill relating to statement
(Chaudry v Prabhakar).
Steps:
2. D must know it’s highly likely C will rely on
statement and voluntarily accepted this risk ()
3. C relies on it, incurring financial
loss (JEB Fasteners v Bloom)
4. Reasonable for C to
rely on it (Smith v Bush)
Extra step:
- What is the known purpose that
the statement is being relied on for
