Suppose Mary is a CPA and John hires her to create a financial audit for the purpose of securing a loan from BigBank, and Mary prepared the report with this purpose in mind. Suppose further that John defaults on his loan contract with BigBank. If BigBank decides to sue Mary, BigBank can argue that Mary owed it a duty of care.
Answer the following statement true (T) or false (F)
True
Yes, BigBank can argue near privity. To establish a condition of near-privity, the plaintiff (BigBank) must show that (1) the accountant (Mary) knew that the reports would be shown to a third party, (2) the accountant knew the identity of the third party and that she (or it?) would rely on the report, and (3) the accountant's conduct revealed that he or she had knowledge of the third party's reliance. The existence of near-privity means the plaintiff did, in fact and in law, owe a duty of due care toward the third party.
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