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Ultramares v Touche: Difference between revisions
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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 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: | [[Cardozo J]], holding that a claim in {{tag|negligence}} failed because the auditors owed the plaintiff no [[duty of care]], there being no sufficiently [[proximity|proximate]] relationship between them: | ||
:“If liability for {{t|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 {{t|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.” | ||