Have you been in a situation where you have you lost your money as a result of your reliance on a promise? You may have relied on a verbal statement made by another person or misled into entering a contract? This is where the law of negligence comes into play.
The law of negligence concerns the failure of a person to take reasonable care over something. It is a broad area of law and there are countless examples where companies, organisations, individuals have been held to be negligent. Although many of the examples involve a certain degree of damage, what happens in a situation where the loss you suffer is purely monetary?
You may have suffered a considerable amount of money just because a party had been reckless in the information they provided to you. Such information can take the form of advice, market statistics or even online newsfeeds. One example that comes to mind is an investor’s reliance on the opinion of a financial institution regarding the financial viability of a product or a statement made by a person who possesses expert knowledge.
It is important that you obtain legal advice before relying and acting on such information. It becomes more important when a significant portion of your equity is at stake and you have clearly relied on the false information.
You must also consider whether you relied on a statement made by a person with the required skill and knowledge. That statement may be a general statement or made by a person who does not have the required skill and knowledge. At that stage, you may have no action against that person and carry the risk of being sued.
In the majority of cases, you must demonstrate that you have suffered an economic loss as a result of the false, statement or promise made by the person. It is essential that you obtain legal advice before commencing any sort of action because without loss, you cannot ask to be reimbursed for anything. For example, you may have relied on a false statement made by a builder in relation to the construction of a set of units. In this example, it must be demonstrated that the builder’s false statement was the cause of your monetary loss.
Even if you have suffered an economic loss as a result of false statement or promise, you will need to provide evidence of the loss and its connection to the false statement or promise. Usually clients that suffer a loss are those clients that do not consult a lawyer at the outset of the transaction.
Disclaimer: This article contains general information only and is not intended to be a substitute for obtaining legal advice.