Leonard was an entrepreneur who owned a restaurant business called,Blue Moon Diner Ltd.The business was located in an old house owned by Leonard.Lauren,the accountant,was preparing financial statements for the purpose of selling Blue Moon Diner Ltd.She assumed that the house was an asset of Blue Moon Diner Ltd.and did not review the land title or check with Leonard.Alicia purchased the business for $500 000,believing that the house was an asset worth $450 000 and the business was worth $50 000.Can she sue Lauren?

Question

Quizplus · Accepted Answer

Lauren had a duty of care to Alicia as she was preparing financial statements for the purpose of selling the business, and Alicia relied on these statements while making the purchase. Lauren also breached the standard of care for an accountant by assuming that the house was an asset of the business without verifying its ownership. Therefore, Alicia can sue Lauren for damages.

Leonard Was an Entrepreneur Who Owned a Restaurant Business Called,Blue