Ultramares v Touche: Difference between revisions
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{{cn}}{{Casenote|Ultramares|Touche}} is a famous case in {{t|negligence}} which placed bounds on the extent of neighbourliness, and who can claim {{t|damages}} for breach of [[duty of care]]. | {{cn}}{{Casenote|Ultramares|Touche}} is a famous case in {{t|negligence}} which placed bounds on the extent of neighbourliness, and who can claim {{t|damages}} for breach of [[duty of care]]. | ||
The auditors Touche Niven gave Fred Stern & Co., a rubber importer, an unqualified audit certificate, negligently not noticing that it had falsified its accounts | The auditors Touche Niven gave Fred Stern & Co., a rubber importer, an unqualified audit certificate, negligently not noticing that it had falsified its accounts. Touche knew that the audited accounts would be used to raise money. Relying on the accounts, Ultramares lent money to Fred Stern & Co. | ||
You’ll not guess what happened next. | You’ll not guess what happened next. | ||
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Stern declared [[bankruptcy]] the following year. Ultramares sued Touche for the debt, declaring that a careful audit would have shown Stern to be insolvent. The audit was found to be [[negligent]], but not [[fraudulent]]. The case then went to the New York Court of Appeals, the great Judge Benjamin Cardozo presiding. | Stern declared [[bankruptcy]] the following year. Ultramares sued Touche for the debt, declaring that a careful audit would have shown Stern to be insolvent. The audit was found to be [[negligent]], but not [[fraudulent]]. The case then went to the New York Court of Appeals, the great Judge Benjamin Cardozo presiding. | ||
{{cardozo indeterminacy}} | |||