Cases - Hedley Byrne & Co Ltd v Heller & Partners Ltd

Record details

Name

Hedley Byrne & Co Ltd v Heller

Date

[1964]

Citation

AC 465

Keywords

Contract administration

Summary

The appellant agents had placed advertising orders for a company on terms by which they, the appellants, were personally liable for the cost of the orders. In view of that risk, they asked their bankers to inquire into the company's financial stability and their bankers duly made inquiries of the respondents, who were the company's own bank. The respondents gave favourable references, but stipulated that they did so 'without responsibility'. In reliance on the references, the appellants placed orders that resulted in them incurring a substantial loss. They brought an action against the respondent bank for negligence in providing the references.

The House of Lords held that a negligent, though honest, misrepresentation (oral or in writing) may give rise to an action for damages for economic loss in tort, because the law will imply a duty of care. Where (a) a defendant assumes responsibility to a claimant by providing information or making a representation (which might be made as part of contract administration duties) to that claimant and (b) the claimant reasonably relies on that information or those services, it was fair, just and reasonable to impose liability in tort for the damage caused by negligent advice.