reliable paper writing on NEGLIGENCE (3) – Liability for False Statements law paper
Negligent misstatement question
A) Badsum, an accountant, is asked by Claire to value shares in Donut Delight PLC to determine whether they are likely to prove a good investment. Badsum and Claire are old friends and Badsum sends Claire an email stating that he will value the shares for ‘ old times’ sake’ but that any statement he makes as to the investment value of the shares is to be treated as a statement of opinion and that no reliance must be placed thereon.
Badsum’s report states that the shares are certain to be an excellent investment. Claire is a reporter and arranges for the report to be published in the Daily Herald. Claire also informs her friend Alexander, whilst they are out for a meal one evening, that she has been given a guarantee by an expert that the shares in Donut Delight PLC are bound to prove a good investment. Claire, Alexander and Sammy , a reader of the Daily Herald all purchase shares in Donut Delight PLC and lose a substantial amount of money when the shares in the company decrease in value and the company eventually goes into liquidation.
Advise Badsum of his potential liability for negligent in negligence.
B)
What is negligent misstatement?
1 Explain the type of situation to which this claim relates.
2 Explain the differences between “negligent misstatement” and “deceit”.
The duty of care for negligent misstatement
1 Is the duty of care for negligent misstatement different from that for negligence generally? If so, explain how it is different.
2 Which was the first case to hold that a duty of care can be owed for a negligent misstatement? Explain what that case said is required for a duty of care to be owed.
3 To what extent, if at all, did the case of JEB Fasteners v Marks Bloom change to duty of care owed for a negligent statement?
4 Explain the significance of the case of Caparo v Dickman.
5 Mention two more cases on negligent misstatement and explain how it was applied in these cases.
6 Explain how the law on negligent misstatement has impacted professionals such as accountants and solicitors.
For the above question:
7 Using what you have discussed above, write a paragraph to summarise what you could discuss in this question.
Seminar reading
1 Legal Aspects of Business custom book, chapter 13, pages 305-310.
2 Any other reading items will be posted on Blackboard.
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