Have you ever been in a situation where, out of the goodness of your heart, you have offered advice or a service to a friend or family member? Have you ever considered that under the law of agency you could be legally liable for any shortcomings in what you provide?
Well neither did Mr Prabhakar. The case of Chaudhry v Prabhakar & Anor ( 3 All ER 718) tells the story.
Chaudhry and Prabhakar were close friends. Shortly after Chaudhry obtained her drivers licence she asked her erstwhile friend Prabhakar to help her purchase her first motor vehicle. Her only stipulation, other than price, was that the vehicle should not have been involved in an accident. Chaudhry knew nothing of vehicles and Prabhakar, although not an expert (he worked in a grocer’s shop), knew significantly more than her and had previously purchased cars.
Prabhakar was not paid for his services. His motivation to act was borne solely out of his friendship with Chaudhry. Prabhakar acted for Chaudhry as a gratuitous agent, or in other words, one that did not get paid.
Prabhakar found a Volkswagen Golf motor vehicle that was for sale. Prabhakar felt the car looked very attractive, had a lot of make-up, and would be a nice vehicle for a lady to drive. . However Prabhakar also became aware that the bonnet had been crumpled and either straightened or replaced. Prabhakar recommended the car to Chaudhry and assured her – even though he had never met him before – that the person selling the car was a friend and was trustworthy. As a result of his assurances, Chaudhry decided to buy the car. About two months after the sale it was discovered that the car had been involved in an accident and that a very poor attempt had been made to repair the vehicle, but that it remained severely damaged and unroadworthy. Actually, the vendor had purchased the car as scrap and carried out rudimentary repairs to it before offering it for sale.
Chaudhry then sued Prabhakar. The court held that Prabhakar was Chaudhry’s gratuitous agent and that in carrying out her instructions he failed to use the relevant level of care and expertise. He was ordered to pay Chaudhry the sum of £5,526.58.
In deciding the case on appeal one of the three member court was dubious as to whether Prabhakar owed Chaudhry a duty of care. Lord Justice May stated:
I do not find the conclusion that one must impose on a family friend looking out for a first car for a girl of 26 a duty of care in and about his quest, enforceable with all the formalities of the law of tort, entirely attractive.
Lord Justice May concluded that to find Prabhakar owed an enforceable duty of care to Chaudhry would in effect “make social regulations and responsibilities between friends unnecessarily hazardous.” Although the views of Lord Justice May seems like sound common sense he was only one of three and the case to this day remains good law.
The law requires that even a gratuitous agent must carry out the business he or she has undertaken to perform and is responsible to their principal for any loss resulting from any failure to use proper care, skill, or diligence in carrying out the undertaking.
Next time you kindly offer to do something for a family member or friend be aware of two things: 1, that your actions will be determined by what may be reasonably expected in all the circumstances and 2, that you may be liable for any loss resulting from your failure to correctly carry out the undertaking.