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First Principles of Business Law |
| The tort of Negligence |
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4. The existence of a duty of care: recognised duty situations |
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4.3.12. Establishing 'reasonable reliance' on a negligent misstatement |
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Read the facts below and then answer the question. A takes a taxi to the airport. He tells B, the taxi-driver, his name and that he is a financial adviser. The taxi-driver asks A what he thinks about investing in X Co. A says he thinks it is a very good company to invest in. A gives this advice honestly but reports just published show clearly that the company is in financial difficulties. Relying on what A told him, the taxi-driver invests heavily in X Co. Soon afterwards the company goes into liquidation and the taxi-driver suffers a large financial loss. A argues that even though he is a financial expert, he gave advice to B very informally and in such circumstances it was not reasonable for B to have relied on that advice. A says that he therefore owed B no duty of care. Is A correct? |
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