Torts problem question-Negligent misstatements Case Study

Torts problem question-Negligent misstatements - Case Study Example Whoever makes a claim due to somebody's negligence besides proving duty of care, breach and damages, must also show extra factors under 'duty' As pure economic loss caused by negligence is not a tort but liability under common law negligence. In Hedley Byrne & Co Ltd v Heller & Partners Ltd [1963]1 UKHL 4 (28 May 1963, it was held by the House of Lords that respondents were not liable as bankers for giving negligently favourable opinion about their client whom the appellants dealt with as a result. The reason was that the bankers had no fiduciary relationship with the appellants nor had any duty of care to them as there was no contract. Besides they had cautioned the appellants that their opinion was without owning any responsibility. Applying the same principle in the above case, it can be argued that though the bankers had been in the process of making a fiduciary relationship subject to the surveyor's opinion, such a relationship had not been established. There was also no negligence on the part of the bankers. Besides they also had relied on Surveyor's opinion and lost business as a result. In fact Helen and the Bank are in the same position. On the other hand whether Helen as well as Andrew can claim compensation from the Surveyor depends on the principles of duty of care, fiduciary relationship, and negligence. ... But proximity of relationship could be deemed to exist as two of them have suffered due to his negligent opinion. Therefore both Helen and Andrew can claim damages from him. In fact, valuer was held liable in Can v Wilson2, wherein the valuer was held responsible to the mortgagees for negligent undervaluation and was asked to pay loss incurred by the mortgagees due to mortgagor's default. In this case, the defendant who was the valuer sent his valuation report to the agent of plaintiff (mortgagee) in order to induce him to advance money against the mortgage of the property he valued. As the valuer had knowingly placed himself in that position, he had a duty of care in the preparation of a valuation document. In somewhat identical cases, Smith v. Eric S. Bush and Harris v. Wyre Forest District Council [1989]3, both the plaintiffs purchased houses relying on valuations of the surveyors who acted under the instructions of the defendant mortgagees and their fees were paid by the plaintiff purchasers. The valuations of the surveyors turned out to be defective resulting in serious financial loss to the plaintiffs. Even though the terms of agreement excluded liability for both the mortgagees and the surveyors for any loss due to inaccuracy in valuation, the House of Lords held that surveyors had a duty of care to the plaintiffs and the terms of exclusion of liability was struck down by virtue of section 2(2) and 11 (3) of the Unfair Contract Terms Act 1977. B In the case of B.Pen & Co, Charles lent money to James to buy the business of B.Pen & Co, relying on the Accountant's report which later turned out to be untrue to the detriment of both Charles and John. Although it was