Williams v Natural Life Health Foods [1998] 1 WLR 830

• Plaintiff wanted to buy a franchise from X and X gave Plaintiff unrealistic financial projections from Defendant (the managing director) which encouraged Plaintiff to buy. It also stated the level of expertise required to run the shop based on Defendant’s own experience.

• HL denied Plaintiff’s claim against Defendant personally in tort.

Lord Steyn

• Henderson established that the Hedley principle of assumption of responsibility was no limited to statements but also to services.

• This extended version of Hedley was held to be the governing principle in cases of economic loss caused by negligent rendering of services and secondly that once a case fell within the principle it was not necessary to further consider whether it was “fair just and reasonable” to impose a duty.

• Thirdly there had to be reliance on the assumption of responsibility (otherwise the negligent service was not causative of loss).

• Fourthly the existence of a contract doesn’t preclude a claim in tort. What does the objective “assumption of responsibility” mean? He quotes Lord Goff (see above). Primary focus is on the dealings between plaintiff and defendant, their conduct etc.

  • Here, the dealings between Plaintiff and X are not evidence for an assumption of responsibility by Defendant.

• On reliance, Steyn says that the test is NOT reliance in fact, but whether Plaintiff “could reasonably rely on an assumption of personal responsibility by the individual who performed the services on behalf of the company”.

  • In this case there was no assumption of responsibility by Defendant AND Plaintiff did not believe Defendant had undertaken an assumption of responsibility towards them so that Plaintiff could not reasonably rely on such an assumption of responsibility. 

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