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    Hedley Byrne Law Case

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    Peter M
    1) Hedley Byrne, an advertising agency, placed a large order with Easipower Ltd and asked Easipower's bank, Heller & Partners Ltd, to provide a reference on Easipower's financial position. 2) Heller & Partners provided a reference letter stating that Easipower was "considered good for its ordinary business engagements" but included a disclaimer of responsibility. 3) Hedley Byrne relied on the reference in contracting with Easipower but later lost money when Easipower went into liquidation. Hedley Byrne sued Heller & Partners for negligence. 4) The court found that Heller & Partners owed a

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    Hedley Byrne Law Case

    Uploaded by

    Peter M
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    1) Hedley Byrne, an advertising agency, placed a large order with Easipower Ltd and asked Easipower's bank, Heller & Partners Ltd, to provide a reference on Easipower's financial position. 2) Heller & Partners provided a reference letter stating that Easipower was "considered good for its ordinary business engagements" but included a disclaimer of responsibility. 3) Hedley Byrne relied on the reference in contracting with Easipower but later lost money when Easipower went into liquidation. Hedley Byrne sued Heller & Partners for negligence. 4) The court found that Heller & Partners owed a

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    1) Hedley Byrne, an advertising agency, placed a large order with Easipower Ltd and asked Easipower's bank, Heller & Partners Ltd, to provide a reference on Easipower's financial position. 2) Heller & Partners provided a reference letter stating that Easipower was "considered good for its ordinary business engagements" but included a disclaimer of responsibility. 3) Hedley Byrne relied on the reference in contracting with Easipower but later lost money when Easipower went into liquidation. Hedley Byrne sued Heller & Partners for negligence. 4) The court found that Heller & Partners owed a

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    26 views2 pages

    Hedley Byrne Law Case

    Uploaded by

    Peter M
    1) Hedley Byrne, an advertising agency, placed a large order with Easipower Ltd and asked Easipower's bank, Heller & Partners Ltd, to provide a reference on Easipower's financial position. 2) Heller & Partners provided a reference letter stating that Easipower was "considered good for its ordinary business engagements" but included a disclaimer of responsibility. 3) Hedley Byrne relied on the reference in contracting with Easipower but later lost money when Easipower went into liquidation. Hedley Byrne sued Heller & Partners for negligence. 4) The court found that Heller & Partners owed a

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    © All Rights Reserved
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    of 2

    Hedley Byrne were a firm of advertising agents. A customer, Easipower Ltd, put in a large order.

    Hedley
    Byrne wanted to check their financial position, and creditworthiness, and subsequently asked their
    bank, National Provincial Bank, to get a report from Easipower’s bank, Heller & Partners Ltd., who
    replied in a letter that was headed,

    "without responsibility on the part of this bank"

    It said that Easipower was,

    "considered good for its ordinary business engagements".

    The letter was sent for free. Easipower went into liquidation, and Hedley Byrne lost £17,000 on
    contracts. Hedley Byrne sued Heller & Partners for negligence, claiming that the information was given
    negligently and was misleading. Heller & Partners argued there was no duty of care owed regarding the
    statements, and, in any case, liability was excluded.

    Judgment

    The court found that the relationship between the parties was "sufficiently proximate" as to create a
    duty of care. It was reasonable for them to have known that the information that they had given would
    likely have been relied upon for entering into a contract of some sort. That would give rise, the court
    said, to a "special relationship", in which the defendant would have to take sufficient care in giving
    advice to avoid negligence liability. However, on the facts, the disclaimer was found to be sufficient to
    discharge any duty created by Heller's actions. There were no orders for damages, because,[3]

    “ A man cannot be said voluntarily to be undertaking a responsibility if at the very moment when he is
    said to be accepting it he declares that in fact he is not. ”

    Lord Morris of Borth-y-Gest wrote,[4]

    “ I consider that it follows and that it should now be regarded as settled that if someone possessing
    special skill undertakes, quite irrespective of contract, to apply that skill for the assistance of another
    person who relies upon such skill, a duty of care will arise. The fact that the service is to be given by
    means of or by the instrumentality of words can make no difference. Furthermore, if in a sphere in
    which a person is so placed that others could reasonably rely upon his judgment or his skill or upon his
    ability to make careful inquiry, a person takes it upon himself to give information or advice to, or allows
    his information or advice to be passed on to, another person who, as he knows or should know, will
    place reliance upon it, then a duty of care will arise.

    ...in my judgment, the bank in the present case, by the wo

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