PEL Flashcards
(13 cards)
Chaudhry v Prabhakar
Woman asked non-mechanic friend if a car was road-worthy as the friend had claimed to be knowledgeable of cars. The friend confirmed and the woman bought the car. Car was faulty - Duty of care owed friend claimed to have expertise which led her to believe him.
MLC v Evatt
Man asked insurance company for investment advice - advice was faulty - there was no duty of care as the insurance company was not in the business of giving investment advice, no fee was charged (this doesn’t prevent a duty of care but it points against one)
Patchett v Swimming Pool Association
Trade association advertised businesses as installers of pools - customer used their services to hire a specific installer and suffered loss as the pool company left the work mid-way. Customer tried to get refund but they weren’t entitled to one as their specific installers weren’t full members of the trade association - just affiliate status. Customers sued the trade association for misstatement. No duty of care owed to customers.
Harris v Evans (direct advice)
Official inspector gave advice about what was needed to run bungee-jumping business according to health and safety guidelines to business owner. A report of this was relayed to the authorities. The operator relied on it and paid for modifications to business - while the authorities believed the report which resulted in the business closing. Business shut down so owner paid for modifications for nothing. No duty of care owed as the inspector was in a public safety role.
Hedley Byrne v Heller
Advertising company was asked to place number of ads on behalf of a firm on TV and in newspapers. Under contract between these two, the advertising company assumed the financial responsibility for these ads. As such, the advertising company asked its bank to ask the buyer firm’s bank to ensure they had the funds to pay them. Reassured, the advertising firm went and placed the ads - the buyer firm went bankrupt - advertising firm sued the buyer’s bank as they assured them the buyer firm was safe. Held: Buyer’s bank did not owe duty of care - only because its statement included a disclaimer to not take responsibility - had it not been for a disclaimer, a duty of care would have been owed.
Smith v Eric S Bush
Woman wanted to buy a house and needed a mortgage. She went to a building society for a mortgage. Building society legally had to survey the mortgage property before mortgage could be arranged for which woman paid a fee. Surveyor valued the house but missed the fact that there were faults with the house - thus incorrect valuation. On that basis, woman got a mortgage and bought the property - soon house had been damaged due to faults missed by surveyor. Woman sues surveyor. Held: Surveyor did owe a duty of care.
Caparo v Dickman
Caparo was a top 500 company. It held shares in a third party company known as Fidelity. An accountant firm did the accounts for Fidelity. One year, the accounts showed Fidelity had made a profit well below market expectations. As such, Caparo sought to buy Fidelity since it was doing okay but could do better. Once bought, they found that Fidelity was actually making a loss, not a profit at all. Fidelity was doing very bad. Caparo sues the accountant firm for misstatement about profit. Held: Accountant did not owe a duty of care to Caparo.
Harris v Evans (third party reliance)
The inspector’s report to the authorities resulted in them closing down the business. The business owner suffered at the hands of the local authorities as a result of the inspector. This sort of loss is equally as recoverable as negligent misstatement.
Held: Business owner was not owed duty of care by inspector
White v Jones
Old man had a fight with his daughters so made a new will to cut them out of inheritance. They later made amends so old man decided to add them back to will. He instructed his solicitor to draft a new will in July - appointment to review was in September. However, old man died three days before he reviewed the will. Daughters not included in wills. Daughters sue solicitor for negligence for delaying date till September. Held: Solicitor owed duty of care to two daughters
Richards v Hughes
Hughes wanted to set up a trust fund for children’s educational expenses. Hughes entered into contract with accountant to monitor the trust fund. The accountant did not monitor the trust fund and the fund lost money and became worthless. Two children sued accountant for negligent provision of services. Held: Duty of care owed
Spartan Steel v Martin
Imagine an essential facility i.e water pipes, electricity line etc, is owned by property owner X. Claimant uses these for their businesses but do not own them, has contract to use them with X. Defendant negligently damages these facilities. X can sue defendant as for property damage as property owner but what about claimant? Claimant are losing money as the facility is down. This is relational economic loss, aka exclusionary rule. English law does not allow the claimant to recover pure economic loss in this scenario as per Spartan Steel v Alloys.
Mnemonic
Many
Children
Handle
Potassium in
High
School
Science
How
Wonderfully
Rad is
Science
Case names
MCL v Evatt
Chaudhry v Prabhakar
Harris v Evans
Patchett v Swimming Pool Association
Hedley Byrne v Heller
Smith v Eric
Caparo v Dickman
Harris v Evans
White v Jones
Richard v Hughes
Spartan Steel v Martin
