Template:Cardozo indeterminacy: Difference between revisions
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The great American jurist [[Benjamin N. Cardozo]] held<ref>[[Ultramares v Touche - Case Note|Ultramares v Touche]]</ref> that a [[creditor]]’s claim in | The great American jurist [[Benjamin N. Cardozo]] held<ref>[[Ultramares v Touche - Case Note|Ultramares v Touche]]</ref> that a [[creditor]]’s claim in [[negligence]] against a [[debtor]]’s incontestably [[negligent]] [[Audited financial statements|auditor]]s failed because the auditors did not owe the company’s [[creditors]] a [[duty of care]], there being no sufficiently [[proximity|proximate]] relationship between them. Articulating a now somewhat outdated [[shareholder capitalism]], Cardozo J held the auditors to owe only the [[shareholder]]s a [[duty of care]]. | ||
Said Cardozo J, in an immortal passage that gave rise to the metajuridical concept of “[[Cardozo indeterminacy]]”: | Said Cardozo J, in an immortal passage that gave rise to the metajuridical concept of “[[Cardozo indeterminacy]]”: | ||
{{quote|“If liability for [[negligence]] exists, a thoughtless slip or blunder, the failure to detect a theft or forgery beneath the cover of deceptive entries, may expose accountants to a ''liability in an indeterminate amount for an indeterminate time to an indeterminate class''. The hazards of a business conducted on these terms are so extreme as to enkindle doubt whether a flaw may not exist in the implication of a duty that exposes to these consequences.”}} | {{quote|“If liability for [[negligence]] exists, a thoughtless slip or blunder, the failure to detect a theft or forgery beneath the cover of deceptive entries, may expose accountants to a ''liability in an indeterminate amount for an indeterminate time to an indeterminate class''. The hazards of a business conducted on these terms are so extreme as to enkindle doubt whether a flaw may not exist in the implication of a duty that exposes to these consequences.”}} | ||
Latest revision as of 13:30, 14 August 2024
The great American jurist Benjamin N. Cardozo held[1] that a creditor’s claim in negligence against a debtor’s incontestably negligent auditors failed because the auditors did not owe the company’s creditors a duty of care, there being no sufficiently proximate relationship between them. Articulating a now somewhat outdated shareholder capitalism, Cardozo J held the auditors to owe only the shareholders a duty of care.
Said Cardozo J, in an immortal passage that gave rise to the metajuridical concept of “Cardozo indeterminacy”:
“If liability for negligence exists, a thoughtless slip or blunder, the failure to detect a theft or forgery beneath the cover of deceptive entries, may expose accountants to a liability in an indeterminate amount for an indeterminate time to an indeterminate class. The hazards of a business conducted on these terms are so extreme as to enkindle doubt whether a flaw may not exist in the implication of a duty that exposes to these consequences.”