Unit 2.4 Paper 1
Negligence for the RES Exam
Last reviewed 12 October 2026
Unit 2.4 asks a narrow question with wide consequences: when is a salesperson personally liable for getting something wrong? Negligence is a tort, so it operates independently of any contract, and a salesperson who carelessly states a remaining lease, a floor area or an approved use can be liable to someone he never contracted with. The unit is short but it carries calculation questions, so the measure of damages matters as much as the doctrine.
The three elements of a negligence claim
A claim in negligence requires a duty of care owed by the defendant to the claimant, a breach of that duty, and damage caused by the breach that is not too remote. All three must be present. Negligence is fault-based, not strict: a salesperson is not liable merely because a buyer suffered a loss, only where he failed to take reasonable care. Nor is fraud an element — honest but careless conduct is exactly what the tort catches.
Because it is a tort, the duty does not depend on a contract. A salesperson acting for the seller owes the seller contractual and fiduciary duties but may separately owe a buyer a duty of care in tort, and a contract with the client does not prevent a separate tort claim by that client. No fee need have been paid.
On causation, where the very risk the duty guards against comes about — theft from a house the salesperson left unlocked — the thieves’ intervening act does not necessarily break the chain of causation. The normal remedy is damages, which the court may reduce where the claimant’s own carelessness contributed to the loss.
The Spandeck test for duty of care
Singapore does not use the English Caparo test. In Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency [2007] SGCA 37 the Court of Appeal laid down a single test for all negligence claims, including claims for pure economic loss, to be applied incrementally by analogy with decided cases.
The test has a threshold and two stages. The threshold is factual foreseeability: was it reasonably foreseeable that carelessness by the defendant would harm the claimant? This is satisfied in almost every case, and foreseeability alone is never enough. Stage 1 is legal proximity, which may be physical, circumstantial or causal, the key factors being the defendant’s voluntary assumption of responsibility and the claimant’s reliance, known to the defendant. Stage 2 asks whether policy considerations negate the prima facie duty — for example where a contractual framework has already allocated the risks. That defeated Spandeck itself: the contractual structure, including an arbitration clause, excluded proximity, and policy would have negated a duty anyway.
For a salesperson, proximity usually turns on how the information was given. Answering a buyer’s specific written question about remaining lease or approved use, saying “I have checked”, and knowing the buyer will act on the answer all point to an assumption of responsibility and foreseeable reliance. An off-hand remark at a social event, with no professional engagement and no known reliance, generally does not. Note what Spandeck does not require: no contract, no payment, and no intention to cause harm.
Negligent misstatement and the standard of the competent salesperson
Where the loss flows from relying on careless words rather than a careless act, the claim is a negligent misstatement claim of the kind recognised in Hedley Byrne. In Singapore it is still decided by the Spandeck test, with proximity typically resting on a voluntary assumption of responsibility and known reliance, and liability can arise without any contract and without any fee.
The standard of care is objective: a professional is judged by the standard of the reasonably competent member of that calling, here a reasonably competent salesperson. That cuts both ways. A newly registered salesperson is held to the same standard as an experienced one, so inexperience is no excuse — she should have checked the approved use, or advised the buyer to verify it. But the standard is not that of a lawyer, valuer, town planner or tax specialist, and a salesperson who recommends specialist advice on a question outside her field is doing what a competent salesperson should do, not breaching a duty.
What falls below the standard is failing to verify readily checkable facts a client or buyer will rely on: the remaining lease, the approved use, the strata or floor area, the plot ratio. Copying a figure from another stack’s listing instead of reading the title handed to you is the paradigm case; claiming to have checked the title without doing a search is another. A salesperson is not expected to measure like a surveyor, but she is expected to use the documents she has.
Negligence or misrepresentation? Picking the right claim
Candidates lose marks by reaching for the Misrepresentation Act 1967 whenever something untrue has been said. The Act operates between the parties to a contract, giving the misled party remedies against the other contracting party, including rescission and damages. A salesperson acting for the seller is usually not a party to the sale contract, so the buyer’s claim against him lies in tort. Rescission is a remedy against the contracting party and cannot unwind the purchase as against the salesperson.
The Act is also irrelevant where the carelessness was an act rather than a statement. Leaving a vacant unit unlocked, so that it is burgled, is a careless act: the claim is in negligence and, where the owner is the client, also for breach of the agent’s duty to act with reasonable care and skill.
The two can run in parallel. A seller who makes a false statement of fact inducing the buyer to contract faces a claim under Misrepresentation Act section 2(1), on which the burden lies on him to show a genuine and reasonable belief, while the salesperson who supplied the figure may face a separate claim in tort from the same buyer.
Damages: the tortious measure, and contributory negligence
Damages in tort are compensatory: they aim to put the claimant, so far as money can, in the position he would have been in had the tort not been committed — not the position he would have been in had the statement been true. That is the contractual, expectation measure, and it is a standard wrong answer. Where a buyer paid $1,560,000 for a unit actually worth $1,410,000, the loss is $150,000; it is not the gap between the price and some higher hoped-for figure, and it is not the whole price, because he still owns the unit. Where a seller was induced to sell too cheaply, the loss is the market value less the price obtained. Punitive damages are not the purpose.
Contributory negligence is then applied. Under the Contributory Negligence and Personal Injuries Act 1953, where the claimant’s own failure to take reasonable care contributed to the loss, the court reduces the damages to the extent it thinks just and equitable having regard to his share in the responsibility. It is a partial defence, never a complete bar, and it is not limited to personal injury.
The arithmetic is easy to invert. A claimant 25 per cent to blame recovers 75 per cent, so a $240,000 loss becomes $180,000 — and $60,000 is the reduction, not the award. Compute the loss first, then apply the percentage. Typical conduct attracting a reduction includes ignoring a written recommendation to commission a survey, or not reading a report that was provided. A defendant does not become liable merely because his own advice to verify was ignored.
Disclaimers and exclusion clauses under UCTA
A disclaimer on a listing sheet or a notice at a show flat matters in two different ways, and the exam tests both. First, it is relevant to whether the defendant assumed responsibility at all, which is a Stage 1 proximity question; a clear and prominent disclaimer may show that he did not, but a generic line in small print, contradicted by a specific promise to check the title, is unlikely to protect him.
Second, the Unfair Contract Terms Act 1977 controls the clause itself. Section 2(1) is absolute: a person cannot, by any contract term or notice, exclude or restrict liability for death or personal injury resulting from negligence. Whether the visitor signed anything makes no difference, and reasonableness is irrelevant. Section 2(2) deals with other loss or damage, which can be excluded only so far as the term or notice satisfies the reasonableness requirement in section 11(1) — whether it was fair and reasonable to include, judged by the circumstances known to the parties when the contract was made.
The First Schedule exception is a favourite distractor: sections 2 to 4 do not apply to any contract so far as it relates to the creation or transfer of an interest in land. That takes the land-transfer terms of a sale and purchase agreement or a lease outside UCTA’s main controls, but it does not cover an agency’s notice to visitors about personal injury. Where the clause excludes liability for misrepresentation rather than negligence, section 3 of the Misrepresentation Act subjects it to the same reasonableness test. And a duty of care can be owed to any visitor, not only to a buyer who signs an option.
Terms to know
- Duty of care
- The legal obligation to take reasonable care not to cause foreseeable harm to another, determined in Singapore by the Spandeck test.
- Factual foreseeability
- The threshold question in Spandeck: whether it was reasonably foreseeable that the defendant’s carelessness would harm the claimant.
- Legal proximity
- Stage 1 of Spandeck: a sufficiently close relationship between the parties, often shown by a voluntary assumption of responsibility and known reliance.
- Pure economic loss
- Financial loss unaccompanied by physical damage to person or property; recoverable in Singapore where the Spandeck test is satisfied.
- Negligent misstatement
- A careless statement relied on by the claimant to his financial detriment, actionable without any contract between the parties.
- Contributory negligence
- The claimant’s own failure to take reasonable care for his own interests, which reduces but does not defeat his damages.
- Reasonableness requirement
- The test in UCTA section 11(1) that an exclusion term must be fair and reasonable to include, judged by the circumstances known to the parties when the contract was made.
Frequently asked questions
Can a salesperson be liable to a buyer he was not acting for?
Yes. Negligence is a tort and does not depend on a contract. Under the Spandeck test the buyer must show factual foreseeability, then legal proximity — typically that the salesperson voluntarily assumed responsibility for the information and knew the buyer would rely on it — and that no policy consideration negates the duty. No fee needs to have been paid.
What standard of care does a salesperson have to meet?
The objective standard of a reasonably competent salesperson. That includes verifying readily checkable matters a client or buyer will rely on, such as the remaining lease, the approved use and the floor area. It does not require the knowledge of a lawyer, valuer or town planner, and a newly registered salesperson is held to the same standard as an experienced one.
How are damages calculated in a negligent misstatement claim?
On the tortious measure: the claimant is put, so far as money can do it, in the position he would have been in had the statement never been made. For an overpaying buyer that is the price paid less the property’s true value. The contractual measure, which asks what the claimant would have had if the statement were true, is the wrong basis.
Does contributory negligence defeat a claim?
No. Under the Contributory Negligence and Personal Injuries Act 1953 the court reduces the damages to the extent it thinks just and equitable having regard to the claimant’s share in the responsibility. A claimant 25 per cent to blame recovers 75 per cent of the loss. It applies to economic loss as well as personal injury.
Does a disclaimer on a listing protect the salesperson?
Not automatically. A clear disclaimer may show that no responsibility was assumed, which goes to proximity. But under section 2(2) of the Unfair Contract Terms Act 1977 a term or notice excluding liability for negligence causing loss other than death or personal injury is effective only so far as it is reasonable, and under section 2(1) liability for death or personal injury cannot be excluded at all, signed or not.
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