A failure to act causing purely economic loss

Example: A, a lawyer, is asked by B, a businessperson, to check the provisions in a written contract of lease and let him know before the end of the day if there are any unusual clauses . A does not check the lease carefully and fails to advise B about a very unusual clause in the lease that makes B liable to pay for fireproofing the leased building. Hearing nothing from A, B signs the contract and becomes liable for these expenses as a result.

Comment: In this case, the lawyer has failed (or omitted) to act, and this omission has caused economic loss to his client. As with omissions causing physical harm, the law recognises the possibility of liability in these circumstances, in particular when the defendant had a positive duty to act because of special circumstances. These include situations where a plaintiff relied or depended on a defendant to take positive action to avoid potential harm. The necessary reliance normally exists in a patient and doctor relationship. It has also been held to exist in the relationship between a student and school authority; a prisoner and prison authority; a solicitor and client; and users of municipal facilities, and the relevant city council. In the present case, A is therefore likely to be liable for B's loss.