Pure Economic Loss/Negligent Misstatement Flashcards

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1
Q

Define pure economic loss

A

Financial damage suffered as the result of the negligent act of another party which is not accompanied by any physical damage to a person or property.
(Weller v Foot and Mouth Disease)

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2
Q

How was pure economic loss clarified

A

(Spartan Steel v Martin) - negligently damaged factory electric cable - loss of profits

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3
Q

Negligent misstatement

A

Economic loss can be recovered for a negligent misstatement under the rules laid down in
(Headly Byrne v Heller)
C must prove there was a special relationship.

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4
Q

(1/5) Special relationship

A

(Chaudry v Prabhakar)
It must be shown that D possesses a skill of expertise - can extend to a social setting if D holds himself to have a particular skill.

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5
Q

(2/5) Assumed responsibility

A

Must be shown that D assumed responsibility for giving the advice. Formal contract between parties - sometimes there are disclaimers in the contract to absolve the other party from liability.

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6
Q

(3/5) Known user

A

(Goodwill v British Pregnancy Council)
D knows the identity of that particular person who is relying on the statement

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7
Q

(4/5) Known purpose

A

(Caparo v Dickman)
The information must have been prepared for a known purpose - knows the purpose of the statement

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8
Q

(5/5) Reasonable reliance

A

(Smith v Eric Bush)
Must be shown that there was reliance on the advice and it was reasonable to do so.

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