Case Study Of Negligent Misstatement

2534 Words 11 Pages
“Negligence is the omission to do something, which a reasonable man, guided upon those considerations, which ordinarily regulate the conduct of human affairs, would do, or do something, which a prudent and reasonable man would not do”, Blyth v Birmingham Waterworks Co(1856). The tort of negligent misstatement is ‘inaccurate statement made honestly but carelessly usually in the form of advice given by a party with special skill/knowledge to a party that doesn’t possess this skill or knowledge" (Willesee Bill, Law management 252, Curtin Handbook 2010).
Peter has a claim against Bumble & Co for negligently prepared financial statements which have caused him a financial loss. However, according to English law, when presenting a case of negligent
…show more content…
For example, damage and harm were foreseeable in Home Office v Dorset Yacht Co Ltd but it was not in Bourhill v Young(1943). In Peter’s case, Peter was an existing shareholder in the company and by providing negligently prepared statements; it is reasonably foreseeable that problems can take place in terms of investment and other aspects of the business. The second aspect that courts consider is proximity. Unlike Caparo V Dickman (1990), we can conclude that a special relationship does exist between Peter and Bumble & Co, as Peter was an existing shareholder in the company. Lastly, the courts must see if it is just and reasonable to establish a duty of care. In this case, we can argue that it is indeed just and reasonable as a special relationship does exist and if the statements were not negligently prepared, damages could be avoided. Therefore, in conclusion of the three-stage test it can establish that a duty is …show more content…
Furthermore, when undertaking advertisement ventures, it is true that not all statements in this area amount to representation. English law accepts the fact that in order to sell certain goods and services the seller can make certain statements without being bound to what is said, Dimmock v Hallet (1866). However, in some circumstances, businesses must insure that their advertisement is worded correctly and portrays the message they are trying to send to the wider audience as they can be held accountable for misrepresentation, Carlisle v Carbolic Smoke

Related Documents

Related Topics