Max decides to invest in the stock of Millenium Television after he reads John\'

Question

Max decides to invest in the stock of Millenium Television after he reads John's audit, which includes a statement, known by John to be false, as to the value of numerous worthless securities held as corporate assets. If Max sues John in a state using the broadest test for determining an accountant's liability for negligence to third parties, he will be entitled to:

have John complete a new audit.

damages if he is a reasonably foreseeable plaintiff.

nothing, since he is an incidental beneficiary of the audit contract.

rescission of his purchase contract.

have John complete a new audit.

damages if he is a reasonably foreseeable plaintiff.

nothing, since he is an incidental beneficiary of the audit contract.

rescission of his purchase contract.

Explanation / Answer

In the above case Max decided to invest in Millenium television but doesnt invest hence he is a incidental beneficiary of audit contract hence he is a third party , so he does not poses any legal rights to claim for the false statement.Hence the answer is C) nothing , since he is an incidental beneficiary.

however if he had invested the answer would have been B) damages asa he would have legal rights in that case

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