Commercial transactions essay
Therefore, she has no duty of care to Frank and Beeline, while Douglas Pity Ltd, as a professional company has a duty of care to them.Sub Issue 1.3 and 1.
4: although Black was employed by Brown & Co, it can be reasonably assumed that he wasn’t given actual authority to give advice to someone out of his accounting firm, nor was there any implied authority for Black to let him give advice on his employer’s behalf. By the way, it was reasonable to expect that Frank and Beeline would act on Black, a professional accountant’s advice to sign the purchase contract. Therefore Black has a duty of care o Frank and Beeline, but Brown & Co does not.
Issue 2 & Sub Issue 2. 1 and 2. 2: Frank and Beeline cannot sue Marie, but they can make an action against Douglas Pity Ltd. If they can prove that Marie has provided negligent misstatement about the motel business, such as phone call records, they can ask Douglas Pity Ltd to pay part of their losses. They also need to prove that Douglas Pity Ltd has breached their duty of care to them. Sub Issue 2. 3 and 2. 4: When everything was ready Frank said that they could not sign the contract unless Black gave them advice to sign it. Black, a professional accountant indicated them to do so.
Therefore, Brown & Co is not liable for Frank and Bellini’s damage, but Black is, because Black has breached his duty of care to Frank and Beeline. CONCLUSION Under the tort of negligence, both Douglas Pity Ltd and Black are liable for Frank and Bellini’s losses. Frank and Beeline can sue them and if they can prove that Douglas and Black had given negligent misstatement about profitability of the motel business. For instance, Frank and Beeline need to provide evidence that Black had given unachievable occupancy rate of the motel. However, Frank and Beeline cannot themselves and they were not entirely relying upon Blacks advice.
For example, Frank and Beeline didn’t enquire Black whether the occupancy rates given by him was practical or not. Overall, the chance of successfully getting remedies from Black is the largest, while there is also a reasonable chance to win the case against Douglas Pity Ltd. Frank and Beeline can expect to recover $ 15000 from Douglas Pity Ltd, $ 25000 from Black, but the remaining part of their loss, approximately $ 35000 are their own liabilities. By the way, it would be very difficult for Frank and Beeline to receive any remedy from Marie and Brown & Co even if they chose to sue them.