hedley byrne
Hedley Byrne v. Heller [House of Lords]
[1964] AC 465 Summary:
Hedley (the appellants) were advertising agents who had provided a substantial amount of advertising on credit for Easipower. If Easipower did not pay for the advertising then Hedley would be responsible for such amounts. Hedley became concerned that Easipower would not be in a financial position to pay the debt and sought assurances from Easipower’s bank that Easipower was in a position to pay for the additional advertising which Hedley may give them on credit. The respondents, who were Easipower’s bankers, gave a favourable report of Easipowers financial position, but stipulated that the report was given "without responsibility." On the strength of the report given by the respondents, Hedley placed additional orders on behalf of Easipower which eventually resulted in a loss of £17,000. Hedley then brought an action against the respondents for damages under the tort of negligence:
Held: A negligent, although honest, misrepresentation, may give rise to an action for damages for financial loss even if there was no contract between the advisor and the advisee and no fiduciary relationship. The law will imply a duty of care when the advisee seeks information from an advisor who has special skill and where the advisee trusts the advisor to exercise due care, and that the advisor knew or ought to have known that reliance was being placed upon his skill and judgment. However, in this case there was an express disclaimer of responsibility and there was therefore be no liability. This case established the doctrine of negligent misrepresentation, but in this case the disclaimer effectively barred the claim.
Full Judgement:
APPEAL from the Court of Appeal (Ormerod, Pearson and Harman L.JJ.).
This was an appeal (by leave of the Court of Appeal) by the appellants, Hedley Byrne & Co. Ltd., who were the plaintiffs in the action, from an order of the Court of Appeal dated October 18, 1961,
[1964] AC 465 Summary:
Hedley (the appellants) were advertising agents who had provided a substantial amount of advertising on credit for Easipower. If Easipower did not pay for the advertising then Hedley would be responsible for such amounts. Hedley became concerned that Easipower would not be in a financial position to pay the debt and sought assurances from Easipower’s bank that Easipower was in a position to pay for the additional advertising which Hedley may give them on credit. The respondents, who were Easipower’s bankers, gave a favourable report of Easipowers financial position, but stipulated that the report was given "without responsibility." On the strength of the report given by the respondents, Hedley placed additional orders on behalf of Easipower which eventually resulted in a loss of £17,000. Hedley then brought an action against the respondents for damages under the tort of negligence:
Held: A negligent, although honest, misrepresentation, may give rise to an action for damages for financial loss even if there was no contract between the advisor and the advisee and no fiduciary relationship. The law will imply a duty of care when the advisee seeks information from an advisor who has special skill and where the advisee trusts the advisor to exercise due care, and that the advisor knew or ought to have known that reliance was being placed upon his skill and judgment. However, in this case there was an express disclaimer of responsibility and there was therefore be no liability. This case established the doctrine of negligent misrepresentation, but in this case the disclaimer effectively barred the claim.
Full Judgement:
APPEAL from the Court of Appeal (Ormerod, Pearson and Harman L.JJ.).
This was an appeal (by leave of the Court of Appeal) by the appellants, Hedley Byrne & Co. Ltd., who were the plaintiffs in the action, from an order of the Court of Appeal dated October 18, 1961,