Hedley Byrne v Heller Quiz and Flashcards: Negligent Misstatement Cases

Study Notes

Hedley Byrne v Heller (1963)

Facts of the Case:

Hedley Byrne, a firm of advertising agents, asked Heller & Partners, a merchant bank, for a reference about a company called Easipower Ltd.
Heller & Partners provided a positive reference, stating that Easipower Ltd was a respectable company.
Relying on this reference, Hedley Byrne entered into a contract with Easipower Ltd, which ultimately turned out to be a bad debt.
Hedley Byrne sued Heller & Partners for negligent misstatement.

Key Issues:

Whether a duty of care was owed by Heller & Partners to Hedley Byrne in providing the reference.
Whether Heller & Partners had assumed responsibility for the accuracy of the reference.

Judgment:

The House of Lords held that Heller & Partners did owe a duty of care to Hedley Byrne.
The court established a new duty of care for negligent misstatements, where a person provides information or advice to another, knowing that the other will rely on it.
The court also held that Heller & Partners had assumed responsibility for the accuracy of the reference.
However, the court ultimately found in favor of Heller & Partners, as they had included a disclaimer of liability in their reference.

Significance:

The case established a new duty of care for negligent misstatements, which has had a significant impact on the law of tort and contract.
It has been applied in various situations, including professional advice, financial statements, and product descriptions.
The case highlights the importance of careful drafting of disclaimers and limitation of liability clauses.

Description

Learn about the landmark case of Hedley Byrne v Heller, which established a new duty of care for negligent misstatements. Understand the facts, key issues, and significance of this case in the law of tort and contract. Test your knowledge of this important judicial decision.