Economic Losses in Negligence

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Principles of Economic Loss - 1
1. Economic Loss is generally not recoverable where it would undermine contractual intentions - Freedom of contract is there to allow parties to balance quality vs price - More economically efficient to allow P's contractually choose where loss falls
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Principles of Economic Loss - 2
2. Defective Property loss is not recoverable in Tort - Muirhead v Industrial Tank Specialists [1986]
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Exceptions to Defective Property Loss not being recoverable in tort
1. Can recover for an injury caused by defect if it is unreasonable to expect C to have fixed it himself - Targett v Torfaen BC [1992] & 2. Can recover where the defect could cause a harm to a third party - Murphey v Brentwood LBC [1991]
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Principles of Economic Loss - 3
3. No recover if C has no propriety interest in damaged property - Cattle v Stockton WaterWorks [1875] "flooded tunnel" case
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Types of Economic Loss - Spartan Steel v Martin [1973]
Consequential Economic Losses & Pure Economic Losses
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Consequential Economic Losses
Actionable - Losses that stem from physical damage to property itself
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Pure Economic Losses
Not Actionable - Losses which do not arise from physical harm & Limiting factor so that defendants do not face "crushing liability" per Lord Denning at 36 & Also if it is a loss which couldve been covered by insurance you are less likely to get comp
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Negligent Misstatement & Hedley Byrne Principles - Two Stage Test (Hedley Byrne v Heller [1964]
1. "SR that leads to a voluntary assumption of responsibility" & 2. There was Reasonable Reliance by the claimant (ALSO D must've known or reasonably be expected to know that C was relying on him)
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1. "SR that leads to a voluntary assumption of responsibility"
SR generally means business connection - unless a friend acting as an agent - Chaudry v Prabhakar 1988 & D does not have to be in business of giving advice but see reasonable reliance - Esso v Mardon [1976]
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Cannot sue for harm caused to someone else
WBA FC v El-Safty [2005] and dislcaimers are subject to the S 11 Unfair Contract Terms Act 1977 reasonableness test
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2. There was Reasonable Reliance by the claimant
Must actually take place - a second opinion shows it hasn't - Barclays Bank v Customs and Exercise [2006] & Reliance must be reasonable:
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Will Drafting Cases
A solicitor drafting a will owes a DoC to it's intended beneficiaries - White v Jones [1995] & But there is no liability if the mistake can still be rectified - Hemmens v Wilson Browne [1993]
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Other cards in this set

Card 2

Front

Principles of Economic Loss - 2

Back

2. Defective Property loss is not recoverable in Tort - Muirhead v Industrial Tank Specialists [1986]

Card 3

Front

Exceptions to Defective Property Loss not being recoverable in tort

Back

Preview of the front of card 3

Card 4

Front

Principles of Economic Loss - 3

Back

Preview of the front of card 4

Card 5

Front

Types of Economic Loss - Spartan Steel v Martin [1973]

Back

Preview of the front of card 5
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