A Lawsuit Has Been Filed Against Your Client

question 106

True/False

A lawsuit has been filed against your client. If, in the opinion of legal counsel, the likelihood your client will lose the lawsuit is remote, no financial statement accrual or disclosure of the potential loss would generally be required.

---

Definitions:

Negligent

Failing to exercise the care that a reasonably prudent person would exhibit under similar circumstances.

Foreseen Users

Individuals who are reasonably anticipated to use a product or service, considered by manufacturers and service providers in liability assessments.

Near Privity

A legal doctrine that expands the scope of who can sue for breach of contract to include parties with a close enough relationship to the transaction, though not directly involved.

Negligent

The failure to take reasonable care to avoid causing injury or loss to another person, resulting in legal liability for the resulting damages.