Rick Prepared Financial Statements for MegaCorp Knowing That It Was

question 10

Multiple Choice

Rick prepared financial statements for MegaCorp knowing that it was going to use his statements to apply for a loan with Big Bank.When Big Bank turned MegaCorp down,it applied to Fourth Bank for a loan.MegaCorp presented the statements prepared by Rick to Fourth Bank,which gave the company a loan.It was discovered that Rick was negligent in preparing the statements,and Fourth Bank sued Rick.Under which of the following tests is Rick liable?

• A)Ultramares doctrine
• B)Foreseeable doctrine
• C)Restatement doctrine
• D)Both the foreseeable doctrine and the Restatement doctrine

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Definitions:

Security Registration Legislation

Laws and regulations that govern the process and requirements for registering securities, aimed at protecting investors and ensuring transparency in financial markets.

Automobile

A wheeled motor vehicle used for transportation, typically powered by an internal combustion engine or electric motor.

Title

The ownership of the goods.

Construction Lien

A legal claim against a property by a contractor or subcontractor who has not been paid for work performed or materials supplied in improving that property.