Restatement (Second) of Torts · Section § 552
Section 552 addresses the liability of professionals for negligent misrepresentation, outlining the legal standards for when such assertions can lead to damages.
Source: Restatement Restatement (Second) of Torts § § 552
One who, in the course of a business, profession or other transaction in which they have a pecuniary interest, supplies false information to another is liable for economic loss caused by reliance upon the information if they fail to exercise reasonable care or competence in obtaining or communicating the information.
Professionals who provide inaccurate information in the course of their work can be held liable if someone relies on that information and suffers economic harm. This section underscores the importance of reasonable care in providing information.
This section applies to professionals and others who provide information where they have a financial interest.
Liability is based on the failure to exercise reasonable care in providing accurate information.
Illustration 1
An accountant provides incorrect financial advice to a client who then suffers monetary losses due to reliance on that advice.
Illustration 2
A contractor submits false estimates that lead a homeowner to incur unnecessary costs.
The court applied § 552 to establish that a party providing misleading financial statements could be liable for damages resulting from reliance by investors.
This case illustrated the application of § 552 concerning professional negligence in the context of real estate appraisal.
Section 552 is crucial in promoting accountability among professionals who provide advice or information that others rely upon. It encourages practitioners to maintain diligence and accuracy, thereby protecting those who may suffer from economic loss due to inaccuracies.