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Introduction to Business Law and Project Group.

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What was the legal issue in this case which the High Court had to determine? Explain the extra element which the court identified as being needed in negligent misstatement/pure economic loss cases which makes them different from ordinary negligence cases? How did Esanda “plead” (i.e., frame) its claim that the auditor owed a duty of care to it?...

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Question Preview:

What was the legal issue in this case which the High Court had to determine? Explain the extra element which the court identified as being needed in negligent misstatement/pure economic loss cases which makes them different from ordinary negligence cases? How did Esanda “plead” (i.e., frame) its claim that the auditor owed a duty of care to it?

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The legal issue involved in the case which the High Court had to determine was related to the negligent advice and the negligent misstatement leading to physical damage along with pure economic loss. The negligent advice or negligent misstatement has been debated in the courts of Australia n number of times and many appellants have raised the concern of pure economic loss arising out of the same. In the current research paper, we have taken the case of Finance Corporation Limited Appellant (Esanda) v Hungerfords Respondent (Peat Marwick). The case law speaks about the above mentioned negligent advice with reference to different case laws that has come to the notice of the court and draws a conclusion on the effect of such negligence and whether such negligence has proximity with the pure economic loss Cook, D. (1938).

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