Glanzer v. . Shepard
23 A.L.R. 1425, 233 N.Y. 236, 135 N.E. 275 (1922)
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Rule of Law:
A professional who provides a service at the request of one party, knowing that a specific third party is the intended beneficiary and will rely on that service to their detriment, owes a duty of care to that third party despite the absence of privity of contract.
Facts:
- Glanzer Bros. purchased 905 bags of beans from Bech, Van Siclen & Co.
- The contract stipulated that payment would be based on weight sheets certified by public weighers.
- Bech, Van Siclen & Co. hired the defendants, a firm of public weighers, to weigh the beans and provide a certificate.
- The defendants were informed that the beans had been sold to Glanzer Bros. and that the certificate was for their use in making payment.
- The defendants issued a weight certificate, sending one copy to the seller and a duplicate to Glanzer Bros.
- Relying on the certificate, Glanzer Bros. paid Bech, Van Siclen & Co. for the certified weight.
- Glanzer Bros. later discovered the actual weight was 11,854 pounds less than what the defendants had certified, resulting in a significant overpayment.
Procedural Posture:
- Glanzer Bros. sued the defendant weighers in the City Court of New York for the amount of their overpayment.
- The trial judge directed a verdict in favor of the plaintiffs, Glanzer Bros.
- The defendants appealed to the Appellate Term, an intermediate appellate court, which reversed the trial court's judgment.
- The plaintiffs then appealed to the Appellate Division, a higher intermediate appellate court, which reversed the Appellate Term and reinstated the trial court's verdict.
- The defendants are the appellants in the present action before the New York Court of Appeals, the state's highest court.
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Issue:
Does a public weigher, hired and paid by a seller, owe a duty of care to a buyer who the weigher knows will rely on their weight certificate for payment, despite the absence of a direct contractual relationship?
Opinions:
Majority - Cardozo, J.
Yes. A duty of care is imposed by law upon the weighers for the benefit of the buyers. The buyers' use of the weight certificate was not an indirect or collateral consequence of the weighers' actions; it was the 'end and aim of the transaction.' The weighers knew the beans were sold and that payment would be made on the faith of their certificate. By sending a copy directly to the buyers, they created a relationship sufficient to impose a duty of care, independent of contract. This duty arises not from contract or privity, but from the relationship between the parties and the foreseeable reliance of the third party, whose conduct the weighers' service was intended to govern.
Analysis:
This case is a landmark decision in tort law, significantly eroding the traditional requirement of privity of contract for negligence claims involving economic loss. It establishes that a duty of care can extend to a known, intended third-party beneficiary whose reliance is the direct and foreseeable purpose of a professional service. This principle, often called the 'end and aim' test, created an exception to the privity rule for negligent misrepresentation. The decision paved the way for future developments in professional liability, influencing how courts analyze the duties of accountants, auditors, and other professionals to non-clients who rely on their work.
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