Economic Loss And Negligent Misstatement

Question 1

What are the two types of economic loss?

Answer 1

Pure Economic loss and Consequential economic loss

Question 2

What is pure economic loss?

Answer 2

Loss which is not consequent of any physical injury or property damage.

Question 3

What is consequential economic loss?

Answer 3

Loss which is a direct consequence of physical damage or property damage.

Question 4

What is Negligent misstatement?

Answer 4

Where C relies on a statement made by D and the statement is made negligently

Question 5

What is the definition for negligent misstatement?

Answer 5

Hedley Byrne v Heller- There are 4 conditions which must be proved.

Question 6

What is stage one of negligent misstatement?

Answer 6

D must possess a particular skill related to the advice given.

Question 7

What is the side rule for stage one?

Answer 7

Social situations- Chaudhry v Probhaker. Not liable unless they are an expert in that field.

Question 8

What is stage 2 of negligent misstatement?

Answer 8

D must know that it is highly likely that the C will rely on their advice.
Mutual life v Evatt

Question 9

What is stage 3 of negligent misstatement?

Answer 9

C must have relied on advice and suffered a financial loss as a result.

Question 10

What is stage 4 of negligent misstatement?

Answer 10

It must be reasonable for the C to have relied on that advice.
White v Jones- is there a relationship of proximity, and a position of responsibility?

Question 11

What is the side rule for stage 4 of negligent misstatement?

Answer 11

Hedley Byrne v Heller- If the D could have stayed silent but instead volunteered to give advice they now owe a duty of care to C