In negligent misrepresentation, when may a party without privity recover, and what factors influence the court’s decision?

• A. Only if there is privity; the factors do not affect the decision.
• B. Liability to a non-party requires a formal contract; the factors include the speaker’s financial status.
• C. Liability may be imposed where there is a special relationship and justifiable reliance; factors include the speaker’s expertise and awareness of intended use.
• D. Reliance is never justified in non-privity relationships.

Answer: (C)

In negligent misrepresentation, you assess whether a duty to speak accurately can exist even without privity. If there is a special relationship between the parties and the plaintiff justifiably relies on the statement, liability may attach to a non-party. Courts weigh factors such as the speaker’s expertise or skill in the subject matter and whether the speaker knew the information would be used by the plaintiff or the intended audience. When someone with particular knowledge makes a representation for which the plaintiff reasonably relies, the defendant can be liable for negligent misrepresentation despite lack of privity. That’s why the best answer emphasizes a special relationship and justifiable reliance, with the factors including the speaker’s expertise and awareness of intended use.