COML203 WK8-9 L16-17 Negligent Misstatement

Question 1

What is negligent misstatement?

Answer 1

Liability for negligence may arise from giving gratutitious advice.
Generally, there will be no duty of care in respect of advice given purely on social occasion.
However, if in making the statement, the defendant went beyond what was required of him or her as a friend, he or she may owe a duty of care to the plaintiff.

Question 2

Who does negligent mistatement usually concern?

Answer 2

Professional or public bodies who are in a postion to give or provide advice, such as
1. Accountants and auditors
2. Architects and engineers
3. Solicitors and barristers
4. Banks
5. Government agencies and public bodies

Question 3

What eight factors may be considered when determining whether there is a duty of care in negligent misstatement cases.

Answer 3

1. Assumption of responsibility, whether actuall or deemed
2. Reliance, including the fact of reliance and reasonablenedd of reliance
3. Foreseeability of reliance
4. Purpose for which the statement is made
5. Purpose for which the statement is relied on
6. Legal environment against which the statement is made
7. Contract matrix (relationship between the various parties)
8. Disclaimer

Question 4

What does assumption of responsibility mean? What would happen in cases where it is voluntary? When may it be assumed?

Answer 4

Concerns whether the defendant assumed responibility for his or her statement.
Assumption of responsibility may be actual or deemed.
In cases where the defendant’s assumption of responsibility is voluntary (that is, the defendant undertakes to exercise reasonable care) it is both reasonable and foreseeable that the plaintiff will rely on the undertaking.
In cases where there is no voluntary assumption of responsibility by the defendant, if the defendant foresees or out to foresee that the plaintiff will reasonably place reliance on what is said, the law will deem the defendant to have assumed responsibility and find proximity accordingly.

Question 5

What are the two factors considered when determining whether reliance is reasonable?

Answer 5

1. The purpose for which the statement was made and 2. the purpose for which the plaintiff relied on it is what is considered when determining whether it is reasonable for the plaintiff to place reliance on the statement made by the defendant.
   If a statement is made for a particular purpose, it will not usually be reasonable for the plaintiff to rely on it for another purpose.
   If the statement is made to and for the benefit of a particular person or class of persons and the plaintiff is not that person or fall within that class of persons, it would usually be unreasonable for the plaintiff to place reliance on the statement and make the defendant to assume responsibility for negligence.

Question 6

What is the purpose of a disclaimer?

Answer 6

Defendants can avoid liability for negligent statements if they clearly and unambiguously state with reasonable notice that the statement is made without responsibility.

Question 7

How is foreseeability of reliance determined?

Answer 7

Reliance is foreseeable if a reasonable person in the situation of the defendant can foresee that the plaintiff would place reliance on the statement made by the defendant.