An Employee Prepared an Appraisal of a Property for His

Multiple Choice

An employee prepared an appraisal of a property for his real-estate development company. The employee had been told that the appraisal would be used by the company to attract a potential investor, Mr. Jones, for the company's client, Mr. Lee. Because the appraiser carelessly forgot to check the recent changes in the zoning by-laws, the appraisal was not accurate. Mr. Jones was misled about the value of the land and suffered a financial loss of $200,000. On these facts, which of the following is true?

A) Mr. Jones could not take any action because he had no contract with the company or the appraiser.
B) A person cannot be sued for words that cause loss, only for actions that cause physical injury.
C) If Jones sues the appraiser, he cannot also sue the employer company.
D) The cause of action most likely to be taken by the investor is defamation.
E) To win in an action against the appraiser, Jones must prove that the appraiser owed him a duty of care, fell below the standard of care owed, and thereby caused him a foreseeable loss because of his reliance on the information.