83,223
edits
Ultramares v Touche: Difference between revisions
Jump to navigation
Jump to search
no edit summary
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary |
||
| Line 7: | Line 7: | ||
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 J]], holding that | [[Cardozo J]], holding that a claim in {{tag|negligence}} failed because the auditors owed the plaintiff no duty of care, there being no sufficiently proximate relationship between them: | ||
:“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.” | :“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.” | ||