Duty of Care: Economic Loss

Question 1

How is pure economic loss defined?

Answer 1

negatively

Question 2

How isn’t pure economic loss defined?

Answer 2

• Physical damage

- intellectual property rights or reputation

Question 3

What is pure economic loss?

Answer 3

• Money wasted and a lost opportunity to profit after D’s negligent act

Question 4

Negligent statements?

Answer 4

Negligent statements are likely to bring about economic loss and inflict economic loss

Question 5

Negligent Misstatments?

Answer 5

Contrast between negligence and deceit

Question 6

Derry v Peek?

Answer 6

C must prove fraud

Mere negligente not sufficient

Question 7

What happened in Hedley Byrne v Heller Partners

Answer 7

• Careless favour about a company called eASIPWER
• C relied on this reference and Easipower went into liquidation
• Loses 17k and sues for negligent statement
• Believed that there was a special relationship between them which sufficed, those in a powerful situation, or a situation you might believe to be special, advisory role

Question 8

What happened in Mutual Life and Citizens assurance co ltd v Evatt?

Answer 8

Liability for misstatement, there are certain professional relationships

Question 9

What are the four conditions said to be post medley byrne parameters?

Answer 9

• Must be aware of the transactions which C has in contemplation
• information communicated to him
• anticipation the he will properly and reasonably rely on the information of the transaction
• purpose for which the information must be connected with interests that it is reasonable to require

Question 10

What post Hedley and Byrne case is needed for the parameters of liability?

Answer 10

• Smith v Bush (S for Surveyor)

Question 11

What happened in Smith v Bush (1990)

Answer 11

Surveyer for a mortgage company, defendant gave a favourable report to C, report included express disclaimer denying any liability, C paid the surveyor fee, D was well aware that C would rely on the report and would suffer loss if report was neglient; Held

Question 12

What other test can be seen for economic loss?

Answer 12

Assumption of responsibility test; covers negligent performance of services (acts) as well as negligent statements and advice
C must show that there was dependency on D not being negligent as well as reliance.