Which factor is relevant when determining whether reliance is justified in negligent misrepresentation?

• A. The speaker’s place of business
• B. The relationship between the parties and the plaintiff’s justification for relying on the representation
• C. Whether the plaintiff is wealthy
• D. The type of goods involved in the transaction

Answer: (B)

Justifiable reliance hinges on whether the plaintiff reasonably trusted and acted on the misrepresentation in light of the relationship between the parties and the circumstances. When there’s a relationship of trust or expertise—the defendant is in a position to know more, or has presented themselves as having special knowledge—the plaintiff’s reliance is more likely to be justified. The plaintiff’s justification for relying on the statement also matters: if the statement concerns a matter within the defendant’s knowledge or professional capacity and the plaintiff reasonably expects accuracy, reliance fits the standard.

The other factors listed aren’t decisive for justifiable reliance. The speaker’s place of business, the plaintiff’s wealth, or the type of goods involved do not by themselves determine whether reliance was justified.