Ghana Legal Systems Flashcards
(2 cards)
Candler v Crane
Facts: In Candler v Crane, Christmas & Co (1951), an investor (Candler) relied on negligently prepared financial statements by the defendant accountants, leading to financial losses after investing in the company.
Majority Holding: The Court of Appeal ruled that accountants owed no duty of care to Candler because there was no contractual or fiduciary relationship, following Derry v Peek (1889).
Denning LJ’s Dissent: Argued that professionals should owe a duty to foreseeable third parties who rely on their advice, foreshadowing modern negligence principles.
Significance: The case initially limited liability for negligent misstatements but was later overturned by Hedley Byrne v Heller (1964), which adopted Denning’s reasoning.
Legacy: Candler highlights the evolution of negligence law, expanding professional accountability for economic losses caused by careless advice.
Hedley v Byrne
Facts: Hedley Byrne, an advertising agency, sought a credit reference from Heller & Partners (a bank) about Easipower Ltd before entering business; the bank provided a negligently favorable reference but included a disclaimer denying responsibility.
Loss & Reliance: Relying on the reference, Hedley Byrne suffered financial losses when Easipower collapsed, prompting a negligence claim against Heller for the inaccurate advice.
Key Legal Issue: Whether a duty of care existed for negligent misstatements causing pure economic loss absent a contract or fiduciary relationship.
Holding (Duty of Care): The House of Lords ruled a “special relationship” could create a duty if (a) the defendant assumed responsibility, (b) reliance was foreseeable/reasonable, and (c) the statement was made in a professional context.
Disclaimer Defense: Heller avoided liability because their clear disclaimer negated the assumption of responsibility, though the case established the general principle of liability for negligent misstatements.
