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Pacific Associates v Baxter

[1989] 2 All ER 159

Case summary last updated at 19/01/2020 15:28 by the Oxbridge Notes in-house law team.

Judgement for the case Pacific Associates v Baxter

P won a contract and D was employed by same group to supervise P’s work and report to the employer when P would need extra money should it come up against a problem that required it. When P needed extra money due to an insoluble problem, D wrongly refused to certify making P lose large sums as a result (economic loss only). There was a disclaimer of liability by D. CA refused P’s claim since D had no duty of care to P since this was not required by the contract. D had not voluntarily accepted having any responsibility to the plaintiffs in the way that they performed their contractual obligations. However it would still have been possible foe D to be liable to P not to cause economic harm had the 3-steps of Caparo been satisfied, but given the disclaimer clause this was not the case. 
Purchas LJ: a disclaimer can remove liability in Hedley Byrne type cases. Hedley Byrne type cases require not only the usual proximity but also a “special relationship” (basically a higher degree of proximity)

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