Torts 17
Torts 17 : Business Torts: United States courts and scholars "paid lip-service" to Derry; however, scholars such as William Prosser argued that it was misinterpreted by English courts. The case of Ultramares Corporation v. Touche (1932) limited the liability of an auditor to known identified beneficiaries of the audit and this rule was widely applied in the United States until the 1960s. The Restatement (Second) of Torts expanded liability to "foreseeable" users rather than specifically identified "foreseen" users of the information, dramatically expanding liability and affecting professionals such as accountants, architects, attorneys, and surveyors. As of 1989, most U. S. jurisdictions follow either the Ultramares approach or the Restatement approach. The tort of deceit for inducement into a contract is a tort in English law, but in practice has been replaced by actions under Misrepresentation Act 1967. In the United States, similar torts existed but have become superseded to some degree by contract law and the pure economic loss rule. Historically (and to some degree today), fraudulent (but not negligent) misrepresentation involving damages for economic loss may be awarded under the "benefit-of-the-bargain" rule (damages identical to expectation damages in contracts) which awards the plaintiff the difference between the value represented and the actual value. Beginning with Stiles v. White (1846) in Massachusetts, this rule spread across the country as a majority rule with the "out-of-pocket damages" rule as a minority rule. Although the damages under the "benefit-of-the-bargain" are described as compensatory, the plaintiff is left better off than before the transaction. The economic loss rule which emerged in the 20th century would eliminate these losses if applied strictly, which has led to preclusion of the tort or an exception to allow the tort if not related to a contract
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