In a common law action against auditors,lack of privity is a viable defense if the plaintiff
A)Is the client's creditor who sues auditors for ordinary negligence.
B)Can prove gross negligence by auditors that amounts to a reckless disregard for the truth.
C)Is the auditors' client.
D)Bases the action upon fraud.

Question

Quizplus · Accepted Answer

Lack of privity is a viable defense if the plaintiff is not the auditors' client. In this case, if the plaintiff is the client's creditor who sues auditors for ordinary negligence, the defense of lack of privity can be used by the auditors. However, if the plaintiff can prove gross negligence that amounts to a reckless disregard for the truth or bases the action upon fraud, lack of privity may not be a viable defense.

In a Common Law Action Against Auditors,lack of Privity Is