Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA LW Exams › Negligent misstatement
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- June 28, 2023 at 2:11 pm #687492
Hi sir, I have a doubt regarding the following question.
In Hedley Byrne v Heller & Partners, the House of Lords held that a banker would owe a duty of care on a reference for a client given voluntarily without consideration to a third party. What was the basis of this decision?
A) That in such a case a duty is owed to persons generally.
B) That a duty is owed to those persons who could reasonably be foreseen as relying on the statement.
C)That a duty is owed to a person the defendant knew or ought to have known would rely on the statement.
D)That a duty is only owed to t hose with whom the defendant was in a fiduciary or contractual relationship.The answer given in the book is C. My doubt is why is the answer not B?
Thank you!
June 29, 2023 at 7:59 am #687505Hi Caroline
That’s a tricky one to be sure! I believe that the critical difference between options b and c is the use of the phrase “knew or ought to have known” ….
…. but it’s a very marginal distinction
Sorry not to be more definitive.
OK?
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