DUTY

STANDARD OF CARE

(1) Here, the accounting firm falls within these principles.

(2) That said, liability is limited to those to whom D made the representation.

BREACH

CAUSE-IN-FACT

PROXIMATE CAUSE

DAMAGES 

RULE

(1) D is liable

(2) ONLY IF D knowingly

(3) supplies the information for the benefit of the third party AND

(4) the information is relied upon by that third party.

POLICY SIGNIFICANCE

(1) California rejected the foreseeability approach, which is the majority rule.

(2) Cal. felt that general rule didn't sufficiently distinguish between (a) negligence and (b) negligent misrepresentation

(3) Some have criticized the California approach as vague and arbitrary

RELEVANT FEATURE FOR ANALOGY

(1) actual and justifiable reliance

(2) on D's representations