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CS Professional · Drafting, Pleadings and Appearances · Art of Opinion Writing

A firm gives an opinion to Shreya Pharma Ltd. stating that a proposed buyback complies with the law. The opinion was prepared carelessly, ignoring a clear statutory limit, and the company, relying on it, suffers a penalty. The opinion carried a clause saying it was meant only for the board. Which statement best describes the professional's exposure?

The firm may be liable to Shreya Pharma for negligence, since a professional owes the engaging client reasonable skill and care. Ignoring a clear statutory limit is careless, and a clause restricting the opinion to the board does not remove the duty owed to that very client.

  1. ANo liability, because an opinion is only a view and never actionable
  2. BPossible liability to the company for negligence, as the duty of reasonable care applies to the party who relies on the opinion, and the use clause does not excuse carelessness towards the boardCorrect
  3. CLiability only to third parties, never to the company that engaged the firm
  4. DLiability only if the professional was paid more than a fixed fee

Explanation

A professional owes the client a duty of reasonable skill and care. Ignoring a clear statutory limit is negligence, and the board is the intended addressee, so the restriction of use does not shield the firm against the client. Disciplinary action may also follow.

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