California, United States of America
The following excerpt is from Bily v. Arthur Young & Co., 11 Cal.Rptr.2d 51, 3 Cal.4th 370 (Cal. 1992):
By allowing recovery for negligent misrepresentation (as opposed to mere negligence), we emphasize the indispensability of justifiable reliance on the statements contained in the report. As the jury instructions in this case illustrate, a general negligence charge directs attention to defendant's level of care and compliance with professional standards established by expert testimony, as opposed to plaintiff's reliance on a materially false statement made by defendant. 21 The reliance element in such an instruction is only implicit--it must be argued and considered by the jury as part of its evaluation of the causal relationship between defendant's conduct and plaintiff's injury. In contrast, an instruction based on the elements of negligent misrepresentation necessarily and properly focuses the jury's attention on the truth or falsity of the audit report's representations and plaintiff's actual and justifiable reliance on them. Because the audit report, not the audit itself, is the foundation of the third person's claim, negligent misrepresentation more precisely captures the gravamen of the cause of action and more clearly conveys the elements essential to a recovery. (Garcia v. Superior Court, supra, 50 Cal.3d at pp. 737, 741-744, 268 Cal.Rptr. 779, 789 P.2d 960.) 22
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