Tort Law

Tort Law

Issue

The main issue to be discussed in the paper is to discuss the cases mentioned below and provide the advices to the characters presented in each case. The cases are basically on the tort law. This case study is related to the act of due diligence and discusses the cases of an audit firm which has failed to perform its activities in an effective and efficient manner.

Given below are the main issues to be discussed in the paper. The case is about a firm of accountants named Humphries and Co. The website of the firm consisted of an item praising the growth prospects of one of the companies it audited named Busted Ltd. Greg after seeing this on the website have made a huge investment on Busted Ltd. which then liquidated. After some time it has been revealed that the company was insolvent since a long time but the company officials did not take notice of it.

Charles has also asked the firm to advice his wife June about the tax and the firm gave the negligence advice for which June has to pay a large tax for several years.

Another situation is the situation of Jack who has asked Mick to sell the shares of Blodget Co as according to the audit conducted by him the company is not financially strong. But after selling off the shares the value of the shares increased showing that negligently Jack did not understand the proper meaning of audit report.

Peter, a small businessman wants to buy the fish and chip shop by obtaining loan from bank. As per the bank's advice the audit firm has audited the business to check the stability for security. In order to cover the fee of the administrative expenses, Peter has made the payment. After a satisfaction, the bank has granted loan to Peter and sent a copy to Peter with a header “For information only”. After some times the business of Peter has failed, due to the hidden debts which have been overlooked in audit. Thus, Peter has lost all his savings and also a reduction of 50% in the value of property.

The case is about providing the advice to Greg, Charles, June, Jack and Peter about the liability of the firm.

Rule

All the cases presented in this paper mainly rely on the tort law. Therefore, Greg, Charles, June, Jack and Peter can take the actions against the firm on the basis of Tort Law. The cases are mainly an act of negligence conducted by Humphries and Co. The law of United States considers this act as a crime. The tort law or negligence law is any act that causes the danger and damages for another party. The most significant components of the tort law are the damages and the negligence of the other people. According to the law, negligence is any act which causes the failure and damage for another person for exercising the due diligence. It is actually an act in ...