For the first fact, with telephoning Elite, the issue is whether Ezy Bank can sue and ask for an indemnity from Elite Accountants. Here, we can clearly recognized that there is no intention, agreement and consideration between Ezy Bank and Elite, thus no contract is made. So the relevant area of law is negligent misstatement. To conclude whether Elite Accountants was negligent to Ezy Bank, three elements of negligence should be considered:

* That Elite Accountants owed Ezy Bank a duty of care * That Elite Accountants breached a duty of care. * That it was Elite's carelessness that caused Ezy Bank's financial loss

1. Did Elite owe Ezy Bank a duty of care?

First of all, according to this case, Elite is a real accountants, that means Tracey who is a partner of Elite accountants is professional in maintaining and auditing business accounts. And here Tracey was responsible for auditing Sassy’s financial statement, which means she has the special way to get the accurate and credible information about Sassy. Thus it is enough to conclude that Elite has special skill or expertise in relation to analysis the financial statements and provide advice.

Furthermore, it is obviously that Elite would realize that the financial statements might be taken as a basis for Ezy Bank. As is presented in this case, Tom, the credit officer from Ezy Bank telephoned Tracey and wanted to ensure whether Sassy would be able to meet its loan repayment obligations, then Tracey advised Tom that 'our audit has been conducted with the usual reasonable care and diligence'. Thus it is reasonable for Tracey to realize that Ezy Bank might be relied upon the financial statements which is audited by Elite to decided whether they will make a loan to Sassy.

Given that Elite has essentially represented that it has special skills in relation to analysis the financial statements and