Question

Diversified Graphics, Ltd., hired Ernst & Whinney to assist it in obtaining a computer system to fit its data processing needs. DG had a long-standing relationship with E&W and developed great trust and reliance on E&W’s services. Because DG lacked computer expertise, it decided to entrust E&W with the selection and implementation of an in-house computer data processing system. E&W promised to locate a “turnkey” system, which would be fully operational without the need for extensive employee training. Instead, DG received a system that was difficult to operate and failed to meet its needs. Is E&W liable to DG?

Answer 1

Yes E&W is liable to DG for not meeting the requirements of the system, and making it difficult for DG to operate and train it's employees to learn the complex system . E&W failed to keep its promises and hence liable for negligence damages and fiduciary damages. As it failed to comply the duty to locate turnkey on promised grounds and neglected what is required by the DG therefore, it has to compensate the damages and expenses incurred by DG for the new system.