Gala v. Hamilton
Citation and Court
715 A.2d 1108 (Pa. 1998), Supreme Court of Pennsylvania
Facts
Gala alleged that Hamilton, a professional, made negligent misrepresentations upon which Gala relied to his detriment, resulting in economic loss. The case addressed the scope of the duty a professional owes to third parties who foreseeably rely on the professional’s representations.
Issue
Whether a professional owes a duty of care in negligent misrepresentation to a third party who was not the client but who foreseeably relied on the professional’s representations.
Holding
The court addressed the scope of professional liability for negligent misrepresentation, applying the Restatement (Second) of Torts § 552 framework to determine the class of persons to whom a professional owes a duty.
Rule / Doctrine
Under Restatement § 552, a professional who supplies false information in the course of a business transaction is liable for negligent misrepresentation to those persons for whose benefit and guidance the information was supplied, or to those whom the professional intended to reach, but not to all foreseeable plaintiffs.
Significance
Gala v. Hamilton is used in the context of professional negligence and negligent misrepresentation to illustrate the limits of duty in purely economic loss cases and the Restatement § 552 approach, which provides a narrower duty rule than general foreseeability.