DISCLAIMER CLAUSES IN VALUATION REPORTS: A REDUNDANT FEATURE?

Abstract

The practice of supplying one valuation figure could lead an appraiser open to litigation for negligence'. - John D. Benjamin, Paul Chmielewski, G. Stacy Sirmans (The Appraisal Journal, April 95, Vol. LXIII No. 2) Joyce and Norris have noted that there has been a notable increase in litigation against appraisers for professional negligence, primarily arising from valuation for mortgage purposes in the Australian property market. This indicates that the work of appraisers are subjected to intense scrutiny as a result of growing awareness in the valuation profession and thus the need to offer a 'duty of care' to the client as they are responsible for the advice given. The position in Singapore is similar to a certain extent because information in the real estate industry is easily accessible so it is easier to uncover one's negligent act. Disclaimer clauses or limiting conditions have always been a part of valuation reports with the aim of protecting the appraiser's interest and to inform and protect the client, as well as other users of the reports. In view of their intended purpose, this dissertation attempts to study the significance and effectiveness of disclaimer clauses in claims of professional negligence primarily by referring to precedent cases. The conclusion of this study indicates that disclaimer clauses do not always serve their intended purpose as their effectiveness are limited by both the Misrepresentation Act 1967 and the Unfair Contract Terms Act 1977.