MCS 3040 Chapter Notes - Chapter 22: Fiduciary, Disclose, Professional Liability Insurance

• School: University of Guelph
• Department: Marketing and Consumer Studies
• Course: MCS 3040
• Professor: Joseph Radocchia

Document Summary

Contractual terms are negotiated, and both professional and client must comply with the terms of the contract. Professional service contract: client must address key terms of contract prior to engaging a professional"s service. Retainer: advance payment requested to fund services to be provided and thereby minimize the professional"s exposure to risk. Basic elements of negligence action: professional owes the claimant a duty of care, professional has breached the standard of care, professional"s conduct has cause the claimant"s loss, the claimant"s loss is not too remote from the professional"s actions. Five requirements for proof: must be duty of care between professional and recipient, representation must be untrue, inaccurate, or misleading, professional was negligent, recipient relied on the misrepresentation, recipient reliance on misrepresentation must have caused damaged to recipient. The courts have recognized third-party claims for economic loss resulting from negligent misrepresentations. Remains a contentious and controversial issue, particularly in the context of an audit.