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