References: , [1838] EngR 915, (1838) 5 Bing NC 58, (1838) 132 ER 1026
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The court considered the extent of a duty of care which might be owed by an agent.
Bosanquet J. said: ‘The jury were warranted in concluding, that if the Defendants were to effect an insurance upon the terms in question, they undertook to give notice in case of failure: that undertaking arises out of the nature of the case, and the relation in which the parties stood to each other: and according to the principle laid down in Smith v. Lascelles if a merchant is led, from previous transactions, to expect that his correspondent will effect an insurance, he has a right to rely on his discharging that duty, unless he receives a letter to the contrary.
Whether that expectation arises from previous dealings, or from an undertaking to insure in the particular instance, can make no difference; and Buller J. says, ‘Where the merchant abroad has no effects in the hands of his correspondent, yet, if the course of dealing between them be such that the one has been used to send orders for insurance, and the other to comply with them, the former has a right to expect that his orders for insurance will be obeyed, unless the latter give him notice to discontinue that course of dealing.”