Lecture 3.docx - ACTG 2P40 Lecture 3 Jan 22nd 2018 Chapter...

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ACTG 2P40Lecture 3Jan 22nd, 2018Chapter 5: Professional LiabilityLiability of Professionals1.Contractual Liability2.Fiduciary Liability3.Tort LiabilityContractual LiabilityContract for servicesoIf contract breached, the breaching party is liableoi.e. contract to provide legal serviceFiduciary DutyA duty imposed on a person who stands in a special relationship of trust and loyalty to anotherThree characteristics fiduciary relationship:oFiduciary has undertaken to act in best interests of anotheroBeneficiary is vulnerable – no legal knowledgeoA legal or practical interest of beneficiary could be harmed by the actions of the fiduciaryDuty to act in good faith in the best interest of the beneficiaryTort LiabilityOccurs when professional deliberately or carelessly causes damage to a clientAction can incur contract, fiduciary and tort liabilityTort liability can extend the range of plaintiffs beyond those contracted withoi.e. auditor’s report given to investors; credit reports used by other lendersPlaintiff will sue for all causes of action, in the alternative, to maximize damage, but can’t double (or triple) recover for the same lossMisrepresentation: MIDTERMMisrepresentation is an untrue statement – can be intentional or carelessDeceit – a Tort when damage is caused by a false statement made with the intention of misleading anotherElements of Deceit (Fraudulent Misrepresentation)oA false representation made by the defendant;oKnowingly or recklessly false;oWhich causes the plaintiff to actoThe plaintiff’s actions result in damages1
ACTG 2P40Lecture 3Jan 22nd, 2018Deceit/Fraudulent Misrepresentation – knowingly or willfully disregarding the falseness of the informationNegligent Misrepresentation – careless in the communication of the informationSimilar elements to negligence (duty of care, standard of care, damages, causation)

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