20.5.1 Duty to Communicate Information to Foreseeable Users.

• Jurisdiction: Arizona

20.5.1 Duty to Communicate Information to Foreseeable Users. The first element of a negligent misrepresentation claim is the existence of a duty. A person may be liable for negligent misrepresentation if he fails to exercise reasonable care and competence in obtaining or communicating information and thereby, in the course of his business or employment, provides false information for the guidance of others in their business transactions, causing the recipients of the information to incur damages because they justifiably relied on the information.¹⁸ The provider of information has a duty to exercise care only when he has knowledge of the intended use of the information and intends to supply it for that purpose.¹⁹

A negligent misrepresentation case does not lie if there is no duty on the part of the person making the misrepresentation to provide correct information.²⁰ In Van Buren v. Pima Community College District Board, the court held that Van Buren, a professor on a one-year contract, did not have a negligent misrepresentation claim against Pima Community College for failing to notify him that his position was specially funded because Pima Community College did not have any duty to disclose the fact that the position was specially funded.²¹

To be liable for negligent misrepresentation, a party must supply false information.²² A party that has no fiduciary relationship to the recipient and does not make any affirmative misrepresentations regarding the subject has no duty to investigate and correct false statements made by other parties.²³ No negligent misrepresentation claim exists when the facts are equally within the observation of both, or where the nature and extent of the transaction that will be regulated by the information are not known.²⁴

A duty may be created when the maker of the statement knows the recipient intends to supply the information for the benefit of a limited group or class of persons and the plaintiff is a member of that limited group or class.²⁵ In Sage v. Blagg Appraisal Co., Ltd., the court imposed a duty on the appraiser where the home buyer had the right to cancel the purchase contract if the appraisal showed the value of the home was worth less than the contract price.²⁶ The duty is to exercise reasonable care not to misstate existing, ascertainable facts.²⁷ There is no liability for statements of opinion.²⁸ Nor is there liability for representations about future matters not reasonably understandable as being representations...