Brown & Co. ,a CPA firm,issued an unqualified opinion on the financial statement of its client,King Corp.Based on the strength of King's financial statements,Safe Bank loaned King $500,000.Brown was unaware that Safe would receive a copy of the financial statements or that they would be used in obtaining a loan by King.King defaulted on the loan.If Safe commences an action for common law fraud against Brown,then to be successful,Safe must prove that in addition to other elements it:
A) was in privity of contract with Brown.
B) was not contributorily negligent.
C) was in privity of contract with King.
D) justifiably relied on the financial statements.
Correct Answer:
Verified
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