Topic 3: Pure Economic Loss

Question 1

What are the 3 elements to establish a DoC for PEL?

Answer 1

1) Relationship of trust and confidence 2) D voluntarily assumed responsibility for the risk to C 3) In negligent misstatement cases, C reasonably relied on D’s advice

Question 2

What does the case of Hedley Byrne decide?

Answer 2

Allows DoC to still apply through TPs (e.g. mortgagees) (Smith), allows DoC to extend to provision of services (Henderson), and extends to Wills (White)

Question 3

What are the limits of the doctrine of PEL?

Answer 3

1) Only professionals can take responsibility for PEL, not some random person (Burgees) 2) D must assume responsibility to C personally (BNL)

Question 4

What is meant by the “Assumption must be voluntary”?

Answer 4

AoR must not be coerced or forced upon, it also does not have to be of COMPLETE free choice