Facts
- A bean seller agreed to sell 905 bags of beans to Glanzer Bros., with the purchase price to be paid according to weight sheets certified by public weighers.
- The seller retained Core & Herbert, public weighers, to weigh the beans and provide weight certificates to the buyer for use in paying the seller.
- The weighers issued certificates stating the beans weighed 228,380 pounds and delivered a duplicate certificate directly to the buyer; the weighers noted the return was made by order of the seller “for” the buyer.
- The seller paid the weighers for the service.
- After a small portion of beans was withdrawn, the buyer accepted delivery and paid the seller in reliance on the certificates.
- The buyer later discovered the actual weight was 11,854 pounds less than the certified weight and sued the weighers to recover the resulting overpayment.
Issues
- Whether public weighers who certify weight at a seller’s request, knowing the certificate is prepared for and will be relied on by a specific buyer in paying the price, owe the buyer a duty of reasonable care in tort despite lack of privity.
Decision
- The New York Court of Appeals affirmed judgment for the buyer.
- The court held the weighers owed a duty of care to the buyer because the buyer’s reliance was the intended and known purpose of the weighing and certification.
- The buyer could recover in negligence for the economic loss caused by an inaccurate certificate, even though the seller, not the buyer, hired and paid the weighers.
Legal Principles
- Privity of contract is not required when a defendant undertakes, in the course of business, to supply certified information for the guidance of a specifically identified third party in a particular transaction.
- A duty of reasonable care arises where the third party’s reliance is the “end and aim” of the undertaking, not merely a collateral or accidental consequence.
- An information provider’s tort liability for negligent misrepresentation is bounded by the scope of the undertaking and the class of intended, known recipients, limiting exposure to indeterminate claims.
Conclusion
The court imposed tort liability on public weighers who negligently overstated weight because they knew their certificate would be used by a particular buyer as the basis for payment; the absence of a direct contract did not bar recovery for the buyer’s economic loss.