P vVPtyLtd-Negligent Misstatement (direct)

V Pty Ltd owned a small business which it wished to sell. P was in the market to buy such a business. During negotiations V informed P that the local council was proposing to build a new car park which was expected to attract a substantial number of new shoppers to the area.

In fact, the council had no such plans. A car park had never even been discussed by the council. P decided to buy the business. The main reason for P's decision was the healthy state of the business's accounts (which were accurate). However, P was also persuaded by the potential for increased trade suggested by the car park proposal.

P made no inquiries with the local council. A simple phone call would have established that there were no plans to build a car park. P has been operating the business for six months and has just discovered the truth about the car park. P wants to keep the business but feels that a premium was paid based on the information about the car park.

1.Does V owe a duty of care to P?