First Principles of Business Law

12. Negligence

12 (b) 1.5. Establishing a duty of care: A duty of care to prevent purely economic loss

A is a contractor. He enters into a contract with B to lay an irrigation system in B's garden. The plans of B's garden clearly show that there is a municipal powerline buried underground all along one side of B's garden. Although these plans are available to A, he does not bother to examine them before starting to dig a ditch in which to lay irrigation pipes. Not realising the powerline is there, A cuts through it. This causes a loss of power to B's neighbours. One of these, C, is a self-employed engineer who uses computers to do his work. For the two days it takes to repair the powerline, C is unable to do the work that he would have done, and as a result he loses two days of the income he would otherwise have generated.

(a) Since C has not suffered any physical damage or harm, either to himself, or his equipment, or his data, he will not be able to sue A in negligence for damages.

(b) Because C has not suffered any physical damage or harm, either to himself or his equipment or his data, he will be able to sue A in Negligence for damages if he can establish special circumstances.