Johnny’s friend Arnold wishes to purchase a restaurant. One Friday evening he finds an Indian…

Johnny’s friend Arnold wishes to purchase a restaurant. One
Friday evening he finds an Indian restaurant called Puluub for sale, which is
located on Kerouac Avenue around the corner from Johnny’s restaurant The Lame
Duck. The restaurant is full of customers. The following Monday Arnold speaks
to Johnny about his plans. Arnold explains that he is very keen to buy the
business but that he has never owned a restaurant or even worked in the
industry before, and he would appreciate Johnny’s advice and guidance. Johnny
assures Arnold that Puluub appears to be a very successful restaurant and that
he is ‘almost guaranteed’ to make a profit in the first 12 months. Arnold
immediately decides to purchase the restaurant with his brother Cameron. One
year later they are on the verge of bankruptcy; the restaurant was not as
popular or as profitable as they expected, and turnover has declined even
further since they took over the business. Has Johnny committed the tort of
negligent misstatement? In your answer focus on whether or not Johnny owed a
duty of care to (1) Arnold and (2) Cameron.

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