Negligent misstatement Definition

GLOSSARY

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What does Negligent misstatement mean?

A negligent misstatement is a misstatement that is made honestly, but carelessly by party A to party B, where A owes B a duty of care. An action can be brought in tort for negligent misstatement.

It differs from a negligent misrepresentation in that an action for any form of misrepresentation will be between contracting parties, whereas no contractual relationship is required for negligent misstatement.

View the related checklists about Negligent misstatement

Misrepresentation—tough questions for assessing a misrepresentation claim—checklist

Misrepresentation—tough questions for assessing a misrepresentation claim—checklist This Checklist considers the questions to discuss with a prospective claimant bringing a claim for misrepresentation. For guidance on what a claim for misrepresentation is and the key elements required to establish such a claim, see Practice Notes: • Misrepresentation—what it is and similar claims • Misrepresentation—what statements will establish a claim? • Misrepresentation—what is inducement? • Misrepresentation—falsity (fraudulent, innocent or negligent misrepresentation) Assessing the merits of a claim for misrepresentation involves a detailed analysis of the facts, investigating the pre-contract negotiations and discussions that may have taken place many years before. There is a risk that the claimant’s view now of what was said then, and how important it was, may be coloured by their experience of what has happened since. The following is a list of the sort of questions that will need to be asked of the claimant (the representee) at an early stage to help form a view of the strength (or weakness) of any claim: • what was...

Misrepresentation—possible defences for the representor—checklist

Misrepresentation—possible defences for the representor—checklist This Checklist considers possible defences for a defendant facing a claim for misrepresentation. For guidance on what a claim for misrepresentation is and the key elements required to establish such a claim, see Practice Notes: • Misrepresentation—what it is and similar claims • Misrepresentation—what statements will establish a claim? • Misrepresentation—what is inducement? • Misrepresentation—falsity (fraudulent, innocent or negligent misrepresentation) The following is a list of non-exhaustive defences which a representor may seek to avail themselves of when defending a misrepresentation claim: • are there any provisions in the contract that exclude rights and remedies for misrepresentation? See Practice Note: Misrepresentations—excluding and limiting liability for them • has the claim been brought within the statutory or any contractual time limit? See Practice Note: Limitation—the principal limitation periods • is the claimant the person to whom the alleged

Negligent misstatement—defences and remedies

There are a number of ways in which liability for negligent misstatement may be avoided and/or limited. For details on founding a claim of negligent misstatement, see Practice Note: Negligent misstatement—founding a claim.For guidance generally on clauses seeking to limit or exclude liability, see Practice Notes:•Misrepresentations—excluding and limiting liability for them•Contractual estoppel•Contractual estoppel—key & illustrative casesDisclaimers of liability for negligent misstatementLiability for negligent misstatement can be disclaimed if the statement is accompanied by a form of words which makes the intention to disclaim clear.In Hedley Byrne v Heller the defendants stated that their advice was given 'without responsibility' and this was held to be effective to negate liability for negligence which would otherwise have arisen.It is important that the words chosen are express and unambiguous: the court will not be prepared to identify a disclaimer as a matter of inference (Box v Midland Bank [1981] 1 Lloyd’s Rep 434, not reported by ��˾��ҹ��®).Third partiesThe mere fact that the situation is one involving a third party will not necessarily make it...

Negligent misstatement—founding a claim

Similar but different to a claim for actionable misrepresentation are claims for negligent misstatement. This Practice Note sets out when and how such claims may by brought, by whom and the key essential ingredients of such claims. For details on remedies for negligent misstatement, see Practice Note: Negligent misstatement—defences and remedies.For guidance on bringing a claim for misrepresentation and the distinction between misrepresentation and negligent misstatement claims, see Practice Note: Misrepresentation—what it is and similar claims and related content.What is a claim for negligent misstatement?What is a negligent misstatement?The most obvious type of case is a careless response to a request for a specific piece of information.It also includes careless advice and evaluation in situations requiring special skill, and professional activities such as the auditing of a company.As well as the making of positive statements, liability may be imposed for an omission to make a statement when a duty to make one existed.Who can claim?The usual claimant is the person who asked for the information or advice and to whom...

Discover our 114 Practice Notes on Negligent misstatement

Letter of claim—negligent misstatement by bank

Letter of claim—negligent misstatement by bank [ON THE HEADED NOTEPAPER OF CLAIMANT’S SOLICITORS] Our reference: [insert your file reference for this matter] FAO [RELEVANT NAME] [NAME OF PROPOSED DEFENDANT’S SOLICITORS, IF ANY] [ADDRESS LINE 1] [ADDRESS LINE 2] [POSTCODE] [DATE] Dear [insert name] RE [PROSPECTIVE CLAIMANT’S NAME] AND [PROSPECTIVE DEFENDANT’S NAME] [ [We write further to our letter dated [insert date of previous correspondence, if any]].] [As you know, we OR We] act on behalf of [insert client’s full name], whose address is [insert full address]. This is our client’s letter of claim sent in accordance with the Practice Direction Pre-Action Conduct and Protocols of the Civil Procedure Rules (the Practice Direction), a copy of which is enclosed for your ease of reference. We draw your attention to the final section of this letter, which sets out the deadline by which your response is required, and the consequences of failing to respond properly within that time. [Your client should notify their insurer of this claim immediately. We would...

Memorandum on directors’ responsibilities, obligations and potential liabilities in respect of a prospectus—Main Market

Memorandum on directors’ responsibilities, obligations and potential liabilities in respect of a prospectus—Main Market STOP PRESS: A significant restructuring of the UK listing regime came into effect on 29 July 2024 which included the removal of the premium and standard listing segments and the creation of a single listing category for equity shares in commercial companies. The commercial companies category is heavily disclosure-based and sits alongside other listing categories such as the shell companies, secondary listing and closed ended investment fund categories. A new UK Listing Rules sourcebook came into force to implement the changes and the previous Listing Rules sourcebook was revoked. For further information see Practice Note: Reform of the UK listing regime—fundamentals. This Precedent reflects the listing regime prior to 29 July 2024. 1 Introduction 1.1 This memorandum has been prepared for those persons who are to be named in the prospectus to be published by [insert name of company] (the Company) as directors or proposed directors of the Company (the Directors) in connection with the...

Dive into our 7 Precedents related to Negligent misstatement

Where, in selling B’s goods on behalf of B, B’s agent provides to A documents independently produced by C as to the status of the goods and A relies on those documents in purchasing B’s goods; if the goods are defective, does A have a cause of action against B, B’s agent or C? In contract and/or in tort? Does it make any difference if the sale documents contain a non-reliance clause?

Where, in selling B’s goods on behalf of B, B’s agent provides to A documents independently produced by C as to the status of the goods and A relies on those documents in purchasing B’s goods; if the goods are defective, does A have a cause of action against B, B’s agent or C? In contract and/or in tort? Does it make any difference if the sale documents contain a non-reliance clause? This Q&A assumes that A is a consumer and not a business. Who to sue? In this Q&A the brokerage acts as B’s agent. A principal (here B) is normally liable for all acts of an agent within the agent's authority, whether responsibility arises in contract or in tort. Authority means the agent's actual, apparent or usual authority. Usually therefore, a third party will be able to sue the principal, ie in this scenario A to sue B. However, there are exceptions to this rule. For example, where the agent acts outside authority and the principal...

Does innocent misrepresentation regarding the number of previous registered keepers of a vehicle give a consumer the right to reject the vehicle which is subject to a hire purchase agreement?

Does innocent misrepresentation regarding the number of previous registered keepers of a vehicle give a consumer the right to reject the vehicle which is subject to a hire purchase agreement? The Consumer Rights Act 2015 (CRA 2015) applies to contracts for the supply of goods to consumers, including hire-purchase agreements. CRA 2015 sets out various statutory rights, including that goods must be as described. If goods are not as described, the consumer may have the short-term right to reject (within the first 30 days) and also has access to the tiered remedies. CRA 2015 also provides remedies where the goods do not comply with the pre-contract information provided by the trader to the consumer under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, SI 2013/3134 (CCR 2013). The draft CTSI guidance Car traders & consumer law: guidance for dealerships (page 35) provides the following as an example: ‘You describe a car as having one careful owner but it has had four private owners, all consecutively...

See the 30 Q&As about Negligent misstatement

No causal link between old incorrect benefit statements and member’s decision to early retire (Miss D, CAS-58806-H1J6)

Pensions analysis: In the determination of Miss D, CAS-58806-H1J6, the Deputy Pensions Ombudsman (DPO) has rejected a complaint about the provision of incorrect information about a member’s retirement age which was provided many years before retirement. The DPO found that, while the statements were negligent and Miss D had acted in good faith, she should have contacted the Scheme at that time to obtain up to date information and she had also failed to mitigate her loss. Martin Scott of gunnercooke LLP looks at the decision.

Financial Services weekly highlights—20 June 2024

This week's edition of Financial Services weekly highlights includes: SFDR: ESAs call for ‘simple and clear categories for financial products’; Basel III: Commission to delay market risk rules to ensure global level playing field; Commission launches consultation on AI in the financial sector; plus dates for your diary over the coming week.

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