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Negligent misstatement

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA LW Exams › Negligent misstatement

  • This topic has 1 reply, 2 voices, and was last updated 2 years ago by MikeLittle.
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  • June 28, 2023 at 2:11 pm #687492
    carlline
    Participant
    • Topics: 20
    • Replies: 20
    • ☆

    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 #687505
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23352
    • ☆☆☆☆☆

    Hi 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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