Marv, an accountant, provides financial advice to his client, Yuri. Marv makes a mistake in his calculations, leading to a financial loss for Yuri. Which one of the following statements is correct?

Question

Marv, an accountant, provides financial advice to his client, Yuri.  Marv makes a mistake in his calculations, leading to a financial loss for Yuri.  Which one of the following statements is correct?

BlackTom AI · Accepted Answer

The question describes a scenario where Marv, an accountant, provides financial advice to Yuri, and a mistake in Marv’s calculations leads to a financial loss for Yuri. The prompt indicates the correct option is that Marv may be liable for negligent misstatement.

To unpack this, consider the core elements of negligent misstatement in common law: (1) a duty of care owed by the professional to the client, (2) breach of that duty through carelessness or failure to exercise reasonable professional standards, (3) reliance on the misstatement by the client, (4) and resulting measurable damages caused by that reliance.

In this scenario, Marv is a professional adviser (an accountant) who provides financial advice to Yuri. Yuri likely relies on Marv’s calculations when making financial decisions. If Marv makes a calculational error that falls below the standard of care expected of a reasonably competent accountant, he would have breached his duty of care. Yuri’s reliance on Marv’s advice and the subsequent financial loss would satisfy the causation and damages elements, establishing potential liability for negligent misstatement.

Why the other possibilities are not available here (in a typical professional-context setting):
- It is unlikely to be a case of strict liability, because professional liability generally requires some degree of fault or negligence rather than automatic responsibility for all statements regardless of care.
- It is unlikely to be intentional misrepresentation unless there is a deliberate falsity with intent to deceive, which is not indicated by the scenario of a simple calculation error.
- It would not typically be a case of breach of contract unless there was a contractual promise or misrepresentation within a contract; the question describes a tort-based liability (negligent misstatement) rather than a contractual breach, unless Yuri’s suit also relies on contract terms.

In short, the description aligns with negligent misstatement because a professional duty, a breach through error, and reliance-induced damages together explain Yuri’s loss due to Marv’s miscalculations. The option asserting negligent misstatement captures the correct theory of liability given the facts presented.

BUSINESS 114 BUS114 Module 06: Pre-workshop quiz (Professionals and Advisors)

Marv, an accountant, provides financial advice to his client, Yuri. Marv makes a mistake in his calculations, leading to a financial loss for Yuri. Which one of the following statements is correct?

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