Tort of Deceit Flashcards
What is the tort of deceit?
The tort of deceit pertains to a type of legal injury that arises when one party misleads the other into an action that results in damages. This means that the deceitful actions of a defendant creates corresponding damages on the plaintiff. Also, in the tort of deceit, defendant is liable for all losses flowing directly from that tort, whether they
were foreseeable or not.
Tort of Deceit Cont’d
A deceit occurs when there is a misrepresentation that is made with the express intention of defrauding the other party, subsequently causing loss to the other party,
Doyle v Olby Ironmongers Ltd
“It does not lie in the mouth of the fraudulent person to say that he could not have reasonably forseen.”
Parsley v Freeman
In this case, the defendant stated that a third party was creditworthy to the claimant, whilst knowing that the person was bankrupt and broke. The claimant thereafter loaned the penniless 3rd party, money and lost it. He sued the defendant successfully.
Hedley Byrne & Co Ltd v Heller & Partners Ltd.
In this case, Headley Byrne, was a firm of advertising agents and a customer Easy Power Ltd had put in a large order. Hedley Byrne needed to clarify their financial position and creditworthiness and
so asked Easypower’s bank for clarifications. Relying on the bank’s report made in a letter that was headed without responsibility on the part of this bank. “Easy power is considered good for its ordinary business engagements”
Hedley Byrne & Co Ltd v Heller & Partners Ltd Cont’d
The letter was freely delivered to Hedley, however, Easy power soon went into liquidation and Hedley Byrne lost 17,000 pounds equivalent to 400,000 pounds as at 2019. On account of those contracts Hedley Byrne sued Heller & Partners for negligence, claiming that the information was given negligently and was also misleading
Hedley Bryne Case Cont’d
The court found, that the relationship between the parties was sufficiently proximate as to create a duty of care. That it was reasonable for them to have known that the information that they had given would likely have been relied upon for entering into a contract of some sort. That would give rise to a special relationship in which the defendant would have to take sufficient care in giving advice to avoid negligence liability
ELEMENTS OF THE TORT OF DECEIT
(a) False Representation
(b) The maker knew that the statement was false
(c) He intended that the statement should be relied upon
(d) The statement was relied upon
(e) Damages suffered as a result
False Representation of Fact or Law
