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Kuan-Ying SuLAW514 Commercial LawS327723ASSIGNMENT 2 - PROBLEM-BASED QUESTIONA IntroductionWhen the defendant is causing financial harm carelessly to the plaintiff, this is knownas pure economic loss. There are three situations that the plaintiff will be able to regain compensation due to the defendant’s carelessness:1.A person or property of a third party is suffering from financial harm due to the defendant’s carelessness.2.The plaintiff is suffering from financial harm due to the defendant provide a defective service or product.3.The defendant provides negligent advice cause the plaintiff to suffer from financial harm.1B Issue AIssue:The first issue to be considered is whether Hetty liable in a negligent misstatement toJan?RuleCareless advice leads to economic loss is called negligent misstatement. When the defendant gives advice to the plaintiff, he or she will owe a duty of care to the plaintiff if below three elements met:Business-related advice or serious natureThe defendant should be aware that the plaintiff intends to depend on the proposal.Under reasonable circumstances, the plaintiff relies on the defendant’s advice.21James Nickolas, Business Law (John Wiley, 4thed, 2017) 2442James Nickolas, Business Law (John Wiley, 4thed, 2017) 245
Kuan-Ying SuLAW514 Commercial LawS327723ApplicationHetty, an accountant, provided an audit report which the accounts disclosed an accurate and fair view of Impish Ltd’s book’s financial position, while they did not. Hetty knew that under this circumstance, Jan would rely on the view to decide whether she will invest the company or not. Hetty provided an audit report which disclosed the company’s financial position.(business-related)Hetty knew that Jan might rely on this report to decide the investment.In this situation, Jan relied on Hetty’s audit report was reasonable.The issue could be identified as negligence misstatement because it met the above conditions.The case of Hedley Byrne & Co Ltdv Heller and Partners Ltd AC 465 demonstrated that Hedley Byrne & Co Ltd (HB) was hired by Easipower Ltd. to carry out advertising orders. HB’s banker wrote a letter to contacted Easipower Ltd’s banker, Heller and Partners Ltd(H&P), to inquire about its credit status. The bank responded that Easipower Ltd was a respectably constitute company, while it did not.