Hedley Byrne & Co Ltd Appellants; v Heller & Partners Ltd [1964] A.C. 465

Facts: The appellants were a firm of advertising agents. The respondents were merchant bankers. Towards the end of 1957 the appellants on behalf of a customer, Easipower Ltd placed some small orders for advertising. They placed on behalf of Easipower on credit terms substantial orders for advertising time on television programmes and for advertising space in certain newspapers on terms that they themselves became personally liable to the television and newspaper companies. The appellants, becoming doubtful of the financial position of Easipower, wanted a bankers’ report concerning the company which then had an account with the respondents. The respondents replied in a letter headed: CONFIDENTIAL ‘For your private use and without responsibility on the part of this bank or its officials.’ The letter continued: ‘Dear Sir, In reply to your inquiring letter of 7th instant we beg to advise: Re E... Ltd. ‘Respectably constituted company, considered good for its ordinary business engagements. Your figures are larger than we are accustomed to see.’ The appellants relied on these statements and as a result they lost money when Easipower went into liquidation. In this action they sought to recover this loss from the respondents as damages on the ground that their replies were given negligently and in breach of the respondents’ duty to exercise care in giving them.