 Of this amount, $ 400 billion dollars would come from Chinese institutions, while $ 360 billion dollars would come from banks in North America and Western Europe. The impact of the pandemic on the banking sector is already starting to become visible in reports for the second quarter of 2020: Wells Fargo reported a net loss of $ 2.38 billion. Bank of America posted a profit that was about half of what it made a year ago and warned that it was preparing reserves to deal with substantial credit losses. BBVA México reported a 28.9% decrease in profits derived from an increase in reserves of 7,632 million pesos as well as lower transactions in the use of credit cards. HSBC, one of the most global and diversified banks in the world, reported a 65% drop in its results.
According to the Follow-up Survey on the Effects of COVID-19 on the Well-being of Mexican Homes, carried out by the Research Institute for Development with Equity of the Iberoamericana University (IBERO), 17.7% of Mexicans have chosen not to pay their debts, especially credit card debt, given the economic situation caused by the coronavirus. The key to overcoming this crisis will be to have some good news regarding the medical treatment of the disease, so that people can resume activities with greater confidence and security. Without this factor, it will be very difficult for the level of economic activity to recover, no matter how low interest rates may be.
A big difference in relation to the 2008 crisis is that banks are now part of the solution and not part of the problem. In the case of Mexico, the crisis finds a strong, modern, and well-capitalized financial sector. However, the size of the economic downfall in Mexico and globally is unprecedented. It is a crisis that could go from health crisis to economic crisis, and then to financial crisis, faster than we imagine, and that could generate systemic risks in ways that are still difficult to predict.The Pennsylvania Supreme Court recently added the Keystone State to the growing list of states that have suggested the economic loss doctrine is a viable theory of law, but then proceeds to find that the negligent misrepresentation exception is a viable means to avoid the doctrine. The opinion was handed down on January 19, 2005, in the case of Bilt-Rite Contractors, Inc. v. The Architectural Studio, 866 A.2d 270 (Pa. 2005).
The Pennsylvania Supreme Court's opinion acknowledged that prior case law had held that a contractor cannot prevail against an architect for economic damages suffered as a result of negligence in drafting specification, absent privity of contract between the contractor and the architect. The court noted that tort law, unlike contract law, was not generally intended to compensate parties for losses suffered as a result of a breach of duties, which are assumed only by agreement. To recover in tort there must be a breach of duty of care imposed by law and a resulting injury.
The court found two viable exceptions to the economic loss rule recognized previously, and both were in negligent misrepresentation cases. One was where the defendant intentionally makes a false misrepresentation, which had no application under the facts of the case at issue, and two was where the defendant is in the business of supplying information for the guidance of others and makes a negligent misrepresentation. The court concluded the second theory allowed recovery.
This case was before the court as a matter of first impression. The court identified the issue before it as whether a building contractor may maintain a negligent misrepresentation claim against an architect for alleged misrepresentations in the architect's plan for a public construction contract where there is no privity of contract between the architect and the contractor, but the contractor reasonably relied on the misrepresentations in submitting its winning bid, and consequently suffered purely economic damages, as a result of that reliance.
East Penn School District entered into a contract with The Architectural Studio (TAS), pursuant to which TAS provided architectural services for the design and construction of a new school. The services included the preparation of plans, drawings, and specifications to be submitted to contractors for the purpose of bidding or preparing bids for the construction of the new school.
In February of 1997, the School District solicited bids from contractors for all aspects of the project, including TAS's plans, drawings, and specifications and the bid documents supplied to the contractors. Appellant Bilt-Rite Contractors, Inc., submitted its bid for general construction work on the project, and on May 6, 1997, the School District awarded the general construction contract to Bilt-Rite, who was the lowest responsible bidder.
On June 6, 1997, the School District and Bilt-Rite entered into a contract for the project in the base amount of $16,238,900. The contract specifically referred and incorporated by reference TAS's plans, drawings, and specifications.
TAS's plans provided for the installation of an aluminum curtain wall system, sloping glazing system, and metal support systems, all of which TAS expressly represented could be installed and constructed through the use of normal and reasonable construction means and methods, using standard construction design tables.
Once construction commenced, however, Bilt-Rite discovered that the work, including the aluminum curtain wall, sloped glazing, and metal support systems could not be constructed using normal and reasonable construction methods. Bilt-Rite was required instead to employ special construction means, methods, and design tables resulting in substantially increased construction costs.
On November 19, 1999, Bilt-Rite sued TAS on the theory of negligent misrepresentation, under § 552 of the Restatement of Torts, claiming that TAS's specifications were false and/or misleading, seeking damages for its increased construction costs. TAS took the position that even if everything that Bilt-Rite claimed in the lawsuit were factually true, Bilt-Rite could not recover from TAS due to the economic loss doctrine. TAS argued that the economic loss doctrine holds that a tort plaintiff cannot recover for purely economic losses. TAS contended it owed no duty to Bilt-Rite, since the parties had no contractual relationship.
Bilt-Rite argued it could recover since its claim came with the Negligent Misrepresentation exception. Bilt-Rite made this argument even though Pennsylvania had not specifically decided that the doctrine was applicable to claims by disgruntled contractors against design professionals.
One who, in the course of his business, profession, or employment or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transaction is subject to liability for the pecuniary loss caused by them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.
Through reliance upon it in a transaction he intends the information to influence or knows that the recipient so intends, or in a substantially similar transaction.
The liability of one who is under a public duty to give information extends to loss suffered by any of the class of person for whose benefit the duty is created and any of the transactions in which it is intended to protect them.
Prior Pennsylvania case law had held that a contractor could not prevail, and, as a result, the trial court had ruled on TAS's motion and held that though Pennsylvania courts have cited § 552 of the Restatement with approval, no court had held that it permitted a cause of action against a design professional. The trial court found that Bilt-Rite's action did not fall into either of the exceptions outlined and, therefore, Bilt-Rite had failed to set forth a viable cause of action against TAS under § 552.
After the trial court's ruling was affirmed at the Court of Appeals, the Pennsylvania State Supreme Court granted further review because the question of the viability of a negligent representation tort action in the architect/contractor/no privity scenario is one of first impression.
The Supreme Court of Pennsylvania considered Bilt-Rite's argument that the school district had hired TAS to prepare plans, drawings, and specifications with the intention of conveying those documents to contractors for purposes of bidding. In fact, Bilt-Rite argued that the sole purpose of the design documents was for the use by the contractors in the bidding process, and the court apparently accepted that argument. Bilt-Rite argued that TAS knew that contractors would rely on the designs and specifications in submitting bids and yet failed to exercise reasonable care in preparing those documents. Since Bilt-Rite's reliance on the designs was both justifiable and foreseeable, Bilt-Rite argued that its Complaint fell squarely within § 552.
Bilt-Rite also referred the court to the comments in the Restatement under § 552, which Bilt-Rite felt "exactly" described the case at hand. The comment explains that the law does not require that the maker of the alleged negligent misrepresentation need have any particular person in mind as the intended, or even the probable, recipient of the information. In other words, the Restatement does not require that the person who becomes the eventual plaintiff need not be identified to, or known to, the eventual defendant. If the maker of the representation intends the information should reach and influence either a particular person or group of persons known to him, or a group or class or persons distinct from the much larger class who might reasonably be expected sooner or later to have access to the information, and if that person or group of persons will foreseeably take some action in reliance on the information, then the requirements of the Restatement are met. If the maker of the representation knows that his recipient intends to transmit the information to similar person, persons, or group that meets the requirements of the section.
TAS responded to Bilt-Rite's arguments by reliance on the more traditional view of tort law. TAS responded that the economic loss doctrine precludes causes of action based on negligence or negligent misrepresentation where the plaintiff claims only economic loss and the parties are not in