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O was selling his inn, the Cromwell arms, and C was considering buying it. C wrote to O’s accountant, R, and requested information about the annual turnover of the inn. The accountant wrote to C informing him that the inn’s annual sales were in the region of $200,000 , adding that information was given without any responsibility on his part.
C purchased the inn and subsequently found that although several years previously turnover had once approached $200,000, generally it was about $150,000 a year.
Which 2 of the following statements are correct
a)The accountant owe duty of care to C
b) The accountant does not owe a duty of care to C
c) The accountant will be liable for the losses which C has suffered
d) The accountant will not be liable for the losses which C has sufferedSir please tel me the correct answer and also please tel me the reason of your choice.
The answer in kaplan is
a)The accountant owe duty of care to C
c) The accountant will be liable for the losses which C has sufferedPlease explain me the reason of this answer.
Why did you not tell me in the post that it was necessary to select TWO of the options?
In the situation that you have outlined, the accountant is under a professional duty to be careful in responding to direct questions particularly where the accountant is aware that the information supplied will be an integral element of a purchase decision
Even if the accountant was not directly responding directly to a question specifically directed at the accountant, (s)he knew (or ought reasonably to have known) that the information that was given would be relied upon
If a question had been asked whether it was likely that Usain Bolt would return to the athletics track and the accountant responded “Yes, it’s likely” there would be no duty of care in that situation because the opinion requested and given is not in the course of the accountants course of business
But in the question that you have asked, clearly it IS the case that it’s a situation where the response is apparently based on fact and, it turns out, the facts upon which it is based are different in reality from the accountant’s negligent statement
OK?
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