Negligent misrepresentation

• negligent misrepresentation

  -> where representor has been careless and in breach of duty as to whether statement is true or not

  -> false statement made by a person who had no reasonable ground to believe it was true
• Common law definition and remedies

  • loss is financial and arises where there is a special relationship and the party misrepresenting had a duty of care to the other party

  Hedley Byrne v Heller and Partners - set out criteria for special relationship

  1. possess skill or expertise 2. voluntarily assumes responsibility for his statement 3. knows the purpose the statement will be used for 4. relies on statement where it is reasonable to do so

  Esso petroleum v Marden

  • remedies -> based on foreseeable losses and hedley byrne principle applied

  -> contributory negligence can reduce damages
• s2 (1) misrepresentation act

  • needs to be misrepresentation which results in a contract and for the innocent party to suffer loss
  • burden of proof then moves to the person making the statement to show there were reasonable grounds to believe it was true

  howard marine v odgen and sons

  • remedies - damages under s2 (1) are not subject to reasonably foreseeable test and are based on how fraudulent misrepresentation damages are calculated

  royscot trust v rodgerson