Special Relationship in Negligent Misstatement - Essay Example

? Negligent Mis ment Is Based On a “Special Relationship” Being Proven By Location Introduction Professionals have the responsibility of ensuring that they offer advice to their clients based on facts. Any negligent advice or any misstatement of material fact exposes them to liability. In law, negligent misstatement refers to a situation in which a professional represents a fact in a careless manner resulting to another party being disadvantaged because of that misstatement. In order to claim damages because of negligent misstatement by a professional, there must be a special relationship between the parties involved. Special Relationship in negligent misstatement Special relationship in law is regarded as a situation in which a party relies on a professional’s skills and experience of a professional to undertake certain actions or omissions. It is worth noting that professionals are people with impeccable knowledge and skills on myriad of issues depending on their area of expertise. Charlesworth (2008) says that due to their unique skills and experience, majority of people usually depends on their input before they act. Whenever one seeks the services of another in a professional capacity, the professional has a duty of care and as such should offer his advice or act with caution. In court proceedings where the subject matter is negligent misstatement, the court considers several factors in order to determine if there is any form of material misstatement. In fact, the courts consider three critical elements whenever they are dealing with the issue of special relationship in the context of negligent misrepresentation. One such factor is that the plaintiff relied on the skills and judgment of the defendant to make certain acts or omission. The other element is that the defendant ought to be aware or was aware of the fact that the Plaintiff was relying on him to make certain acts or omission. Finally, the circumstances must reasonably allude to the fact that the defendant should have been relied upon. In Dick Bentley Productions Ltd V Harold Smith (Motors) Ltd (1965) WLR 62, a dealer in motors made a false statement on the mileage capacity of a Bentley Model (Keenan & Smith, 2007). The court of appeal in rescinding the earlier ruling held that the dealer statement qualified as a term. The court of appeal established that the case qualified for negligent misrepresentation by the defendant and that there existed special relationship between Dick Bentley Productions and Harold Smith. The case, therefore, satisfied all the requirements of material misrepresentation, which include the fact that the plaintiff, Harold Smith Ltd, relied on the skills and judgment of the defendant, Dick Bentley Productions, to make certain the decision of purchasing the Bentley. The other element is that the defendant, Dick Bentley Productions, was aware of the fact that the Plaintiff, Harold Smith Ltd, was relying on him to make certain acts or omission. Finally, the circumstances reasonably alluded to the fact that the defendant was aware that the defendant was relying upon his advice. The defendant was a dealer in Bentley and as such; he was in a better position to tell the correct mileage of Bentley because he was a dealer in Bentley. For the special relationship to hold in court proceedings involving negligent misstatement there is need to prove that, the defendant was a professional who had the knowledge, experience, and judgment on the subject matter. In Oscar Chess Ltd v Williams (1957) 1 WLR, the defendant had falsely stated the age of the car to the dealer in a part exchange transaction. The court held that although there was a statement, the defendant was not in a position to tell the true age of the car to the plaintiff since the former was not a professional in the field. The statement of the defendant was therefore held to be representational. In his judgment, the judge alluded to the fact that the plaintiff could have at least bothered to verify the details that were supplied to him by the defendant. The concept term is very relevant when discussing the issue of special relationship. The term is used to refer to a situation in which one party holds special skills and knowledge about a subject matter and as such, any statement made by such individuals qualifies as a term. It is important to note that in negligent misstatement not all actions or omissions of the professionals are actionable. For a negligent misstatement to be action there has to be among others, false statement of facts, statements of belief or opinion, statement of intention and statement of law. In the case “Esso Petroleum Ltd V Mardon (1976) QB 801,” the courts held that the Petroleum Company was liable for the damages incurred by the Mardon, a tenant (Saunders & Wright, 2008). The tenant had relied upon the wrong financial forecast by the Petroleum Company to enter into a lease agreement with the company. In this case, the defendant was liable for fraud made in the context of statement of opinion. A professional should always make statements that are not superficially founded but based on strong evidence, which he can deduce through his skills, experience, and judgment. Proximity test is yet another critical aspect of negligent misrepresentation. The test proves that there exists special relationship, whether directly or indirectly. If the defendant makes the negligent misstatement to a third a party, and the plaintiff relies on that information to act, then the defendant is still liable for the damages that the plaintiff has incurred. In the case, Harold Wildgust and Carrickowen Ltd, v Bank of Ireland and Norwich Union Life Insurance Sicity (2006) 2 ILTM 28, the plaintiff has relied on the information that the defendant had given to a third party (Keenan & Smith, 2007). The courts held that the false information that defendant had given to the third party resulted to the plaintiff acting on it hence that created a special relationship between the two parties. As such, the defendant was liable for the damages that Carrickowen Ltd and Harold Wildgust had incurred. Several critical elements of law are taken into consideration when dealing with the issues of test of proximity with regard to negligent misstatement. The issues include among others, the person giving the information ought to be aware that persons will rely on information. The other element of proximity test is the fact that the person making statements acts or fails to act in a given manner at the foot of the advice. It is worth noting that the proximity liability takes into account persons who are reasonably expected to rely on the information given by the advisor although the advisor has no direct contact with such persons. Therefore, the circumstance gives rise to special relationships. References Charlesworth, J., 2008. The law of negligence. London: Sweet and Maxwell. Keenan, J. D., & Smith, K., 2007. Smith & Keenan's English Law: Text and Cases. London, U. K. Pearson Longman. Saunders, T. W., & Wright, E. B., 2008. The law of negligence. London: Butterworth. Read More