Mr Walsh, who had 20 years’ experience in the property market at the time claimed his offer to purchase a two-storey north Dublin city centre commercial property was based on a “back of an envelope” calculation of the rent he would receive calculated on a value per square foot basis by reference to the measurements contained in the selling agent’s sales brochure. Mr Walsh’s offer was accepted and he completed the purchase of the property. However it subsequently transpired that the actual floor area of the property was overstated by approximately 20% in the sales brochure. Mr Walsh claimed damages for misrepresentation in tort against the auctioneering firm on the basis that it breached a duty of care to him to ensure that the sales brochure was accurate.
The Sales Brochure /The Disclaimer
The following paragraph, disclaiming liability, was included in small print at the bottom of the front page of the Sales Brochure:
“Whilst every care has been taken in preparation of these particulars, and they are believed to be correct, they are not warranted and intending purchasers/ lessees should satisfy themselves as to the correctness of the information given.”
The agent sought to rely on the waiver in the brochure and in addition argued that irrespective of the sales brochure it did not owe a duty of care to the purchaser as there was insufficient ‘proximity’ or closeness of relationship between the two parties.
The High Court Decision
In 2007 the High Court found the auctioneering firm owed Mr Walsh a duty of care to ensure that measurements in the sales brochure were correct and found that the terms of the disclaimer were inadequate to exonerate the firm from liability.
The selling agent appealed the decision to the Supreme Court.
The Supreme Court Decision
In finding that the auctioneering firm was not liable to Mr Walsh for economic loss caused by negligent misstatement three judges of the Supreme Court held that the selling agent did not owe a duty of care to Mr Walsh as Jones Lang LaSalle Limited did not assume responsibility for ensuring that the dimensions described in the sales brochure were correct.
The Supreme Court held that the High Court erred in law in holding that the disclaimer inferred that Jones Lang LaSalle assumed responsibility for details in the brochure and that the disclaimer was inadequate to exclude that liability.
Regarding the Sales Brochure and the disclaimer therein Ms Justice Laffoy of the Supreme Court stated:
“Where the person giving the information in so doing has expressly included a disclaimer in the brochure or advertisement, in my view, the core issue in determining whether a duty of care exists is whether the existence of the disclaimer by reference to its terms has the effect that there is no assumption of responsibility for the task for furnishing correct information on the part of the estate agent giving information to the recipient.”
“…. there was no assumption of responsibility on the part of JLL in relation to the task of furnishing the accurate internal measurements to Mr Walsh and that the consequence was that the law imposed no duty of care on JLL.”
The decision is a welcome clarification of the law in this area which up until now was uncertain. Prior to the Supreme Court judgment, it was not clear how far a selling agent’s duty of care to a purchaser reached in the sales campaign process or indeed how or to what extent a selling agent could disclaim that liability. Now it is clear that a selling agent will not be held liable for loss caused by incorrect particulars contained in a sales brochure where a waiver included. Even where no disclaimer is made available the decision is authority for enabling a selling agent to avoid liability for inaccuracies contained in a sales brochure (even contained on a website) on the basis that it would not be ‘fair and reasonable’ to hold that a duty of care is owed given that a sales brochure is generally made publicly available.
For further information and advice in relation to “Auctioneer’s Liability for Sales Brochure Clarified”, please contact Deirdre Farrell, partner, Amorys Solicitors email@example.com, telephone 01 213 5940 or your usual contact at Amorys.