4. Pure Economic Loss Flashcards
What is consequential economic loss?
Financial loss resulting from physical injury or property damage.
Are there special rules for owing a duty of care for consequential economic loss?
No special rules.
If a duty of care is owed for physical injury or property damage, is there also a duty for consequential economic loss?
Yes.
What is pure economic loss?
Financial loss not stemming from damage to property.
Give examples of pure economic loss.
Cost to replace defective product, loss of profits.
Is a defendant liable for a claimant’s financial loss if it does not stem from damage to their property?
No, unless exceptions apply.
What are the exceptions to a defendant being liable for a claimant’s financial loss?
Negligent misstatement, public nuisance.
What is the approach of courts regarding liability for negligent misstatement in social or informal settings?
Reluctant to impose liability.
What are the tests for establishing liability for negligent misstatement?
Reasonable reliance + assumption of responsibility; OR special relationship.
What is the remedy for negligent misstatement?
Damages for reasonably foreseeable financial loss suffered by the claimant.
Can disclaimers nullify liability for negligent misstatement?
Yes, if reasonable under UCTA / CRA.
What are the three tests for establishing liability for negligent misstatement?
Reliance, knowledge, purpose.
When is reliance likely unreasonable in a negligent misstatement case?
If the claimant has special knowledge.
When is reliance unreasonable in a negligent misstatement case?
If it is outside the purpose of the statement.
What determines if a defendant has assumed responsibility in a negligent misstatement case?
Whether they are a professional providing a special skill or service.
