- 12 Marks
Question
b) Zealow & Associates is a consultancy firm of Accountants. Kingsley Gyeabour, a prospective businessman, has decided to establish a fuel filling station. He sought the professional advice of the consultancy firm, which advised that based on their assessment, the turnover for a day’s sale would be 1200 gallons of ordinary petrol and 1000 gallons of diesel. Relying on the firm’s statement, Gyeabour established the filling station. He later realized that the actual turnover was 100 gallons of petrol and 200 gallons of diesel. Gyeabour intends to sue and seeks your advice.
Required:
Advise Gyeabour. (12 marks)
Answer
- There is a duty of care not to cause economic loss by negligent misstatement/misrepresentation, but the duty exists only where the person who makes the statement foresees that it may be relied on.
- There must be a special relationship between the person providing the advice and the person receiving it, which is the means of establishing to whom duty is owed.
- The provider of the advice must know the purpose for which it is to be used and that the recipient will rely on the statement and act upon it without making other inquiries.
- In this scenario, there is a special relationship between the firm and Gyeabour.
- The firm owed a duty to Gyeabour.
- Gyeabour may sue to recover damages.
(6 points @ 2 marks each = 12 marks)
(Total: 12 marks)
- Topic: Contract Law, Tort
- Series: NOV 2017
- Uploader: Dotse