Negligent Misstatement

What constitutes a negligent misstatement? A negligent misstatement is a claim which is brought by one party against another at common law in tort. This claim arises if the party against whom the claim is brought made a statement which was considered to be negligent (Defendant) and the party bringing the claim (Claimant) relied on

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What constitutes a negligent misstatement?

A negligent misstatement is a claim which is brought by one party against another at common law in tort. This claim arises if the party against whom the claim is brought made a statement which was considered to be negligent (Defendant) and the party bringing the claim (Claimant) relied on this statement to its detriment and suffered a loss as a result of this statement.

In order for a claim for negligent misstatement to succeed the Claimant must be able to show to the court that on a balance of probabilities the Defendant owed them a duty of care. This duty of care is not to cause such harm which was suffered by their negligent misstatement, further that they breached the duty of care owed and that the Claimant has indeed suffered loss.

If the Claimant cannot satisfy the aforementioned then they will not have a claim for Negligent Misstatement.

If the Claimant can show that there was a contract in place between the parties then he may be able to sue under the contract (for negligent misrepresentation) as well as under tort. It is often easier to prove breach of contract in these situations.

Difference between a negligent misrepresentation and misstatement

It is much easier to prove a claim for negligent misrepresentation rather than negligent misstatement as for the former the Claimant will only need to show that the statement was not true / false and the defendant has to prove this is not the case or that he reasonably believed it was true. Whereas with a claim for negligent misstatement the Claimant will have to show that a duty of care actually existed (which can be difficult if there is no contract in place).

Damages claim?

In respect of being awarded damages by the court for a claim under negligent misstatement, when calculating damages a court will only award these  in respect of losses that were actually reasonably foreseeable whereas the court will consider wider losses for negligent misrepresentation.

It is also possible that if a contract was entered into and a claim brought for negligent misrepresentation that a curt would agree to order that the contract be rescinded. So that the parties were put back in the position they would have been had the contract not been entered into.

In certain circumstances you will not be able to bring a claim if the person who made the statement excluded any liability for it by agreeing to an express provision in a contract which excludes or limits liability, gives notice that the statement is only made on the basis that the other party agrees to exempt the party making the statement from any liability or a disclaimer is issued. You would need to check with your solicitor to see whether these are valid exclusions or not.

It is also important to consider prior to bringing a claim any other terms that might be included in the contract such as a mediation clause preventing bringing a claim prior to attempting mediation and also to ensure that you comply with any applicable time limits and jurisdictions for bringing a claim.

drosen-3-sbVisit the litigation part of our site for additional help with any business disputes.

commercial law • David Rosen • Disputes

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