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BILY RULE
In August 1992, the California Supreme Court decided Bily v Arthur Young, in which it held that, for damages resulting from an incaccurate audit prepared for a client, an auditor may be liable, for general negligence, only to express third party beneficiaries; for negligent misrepresentation, only to persons the accountant intended to influence; and for fraudulent misrepresentation, to any foreseeable plaintiff. Since then the Court of Appeal has applied the Bily rule to members of other occupations in the business of furnishing information.
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BILY v ARTHUR YOUNG (Auditor) 3 C4 370, T/AT 11/92
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