CHAPTER 14 - LIABILITY FOR
ECONOMIC LOSS AND
PSYCHIATRIC INJURY EXAM
QUESTIONS AND THEIR REVIEWED
ANSWERS
what is pure economic loss?
loss made financially by a business while it is unable to
operate
- requires a special relationship between the parties as
there is no contract in place
Spartan Steel v Martin
there is no liability for pure economic loss caused by
negligent acts
what is a negligent misstatement?
an inaccurate statement made honestly but carelessly
Hedley Byrne v Heller
a claim could be made if:
1. the statement was made negligently, and
2. there is a special relationship between the parties
Caparo v Dickman
defined a special relationship as:
1. there must be a possession of a special skill or
expertise on the part of the person giving the advice
2. a reliance by C on the advice given
3. the advice must be communicated directly to C
ECONOMIC LOSS AND
PSYCHIATRIC INJURY EXAM
QUESTIONS AND THEIR REVIEWED
ANSWERS
what is pure economic loss?
loss made financially by a business while it is unable to
operate
- requires a special relationship between the parties as
there is no contract in place
Spartan Steel v Martin
there is no liability for pure economic loss caused by
negligent acts
what is a negligent misstatement?
an inaccurate statement made honestly but carelessly
Hedley Byrne v Heller
a claim could be made if:
1. the statement was made negligently, and
2. there is a special relationship between the parties
Caparo v Dickman
defined a special relationship as:
1. there must be a possession of a special skill or
expertise on the part of the person giving the advice
2. a reliance by C on the advice given
3. the advice must be communicated directly to C
