Under the Ultramares rule,to which of the following parties will an accountant be liable for ordinary negligence?

$\begin{array} { l c c }
&\text { Parties in privity} & \text {Foreseen parties } \
\text { A } & \text { Yes } & \text { Yes } \ \text { B. } & \text { Yes } & \text { No } \ \text { C. } & \text { No } & \text { Yes } \ \text { D. } & \text { No } & \text { No } \end{array}$

Question

Under the Ultramares rule,to which of the following parties will an accountant be liable for ordinary negligence?

$\begin{array} { l c c } 
&\text { Parties in privity} & \text {Foreseen parties } \
\text { A } & \text { Yes } & \text { Yes } \ \text { B. } & \text { Yes } & \text { No } \ \text { C. } & \text { No } & \text { Yes } \ \text { D. } & \text { No } & \text { No } \end{array}$

Quizplus · Accepted Answer

Under the Ultramares rule, an accountant is only liable for ordinary negligence to parties with whom the accountant has privity of contract. The rule specifically excludes liability to third-party beneficiaires and other foreseeable users of the accountant's work, unless the accountant expressly intends to benefit those users. Therefore, an accountant is liable for ordinary negligence to parties in privity of contract (Option A) but not to foreseeable parties (Option C). Option B is the correct choice as it correctly identifies that an accountant is liable for ordinary negligence only to parties in privity of contract (i.e., those who have a direct contractual relationship with the accountant) and not to other foreseeable parties who may rely on the accountant's work. Option D is incorrect as the Ultramares rule specifically carves out exceptions to the general rule of accountant liability for ordinary negligence.

Under the Ultramares Rule,to Which of the Following Parties Will