We granted certiorari in this case to consider the proper measure of damages in a negligent misrepresentation case. Because the Court of Appeals improperly utilized a fraud standard of damages for this negligence cause of action, we reverse. Mindis Acquisition Corporation was formed to purchase Mindis Corporation. After the purchase was complete, MAC discovered that the inventory value of Mindis was less than what appeared on Mindis’s financial statements. MAC then sued Mindis’s accountants, BDO Seidman, LLP, for negligent misrepresentation, contending that BDO was negligent in its audit of Mindis’s financial statements. The trial court instructed the jury that damages were to be determined by the standard used in fraud and deceit cases, a benefit-of-the-bargain standard.1 The jury found in favor of MAC and awarded $44 million. The Court of Appeals rejected BDO’s contention that the jury was charged on an improper fraud standard of damages and affirmed the jury’s verdict.2
1. In Roberts & Co. v. Rhodes-Haverty Partnership ,3 this Court first recognized a claim for negligent misrepresentation and adopted the liability standard set forth in section 552 of the Restatement Second of Torts. This Court again considered negligent misrepresentation in Hardaway Co. v. Parsons, Brinckerhoff, Quade & Douglas, Inc. ,4 and agreed with the Court of Appeals that the proper statute of limitations for a negligent misrepresentation case must be determined by applying principles of negligence law. Consistent with our prior cases treating this cause of action as one sounding in negligence, we now conclude that the damages standard for a negligent misrepresentation claim is the traditional negligence standard, which is also set forth in the Restatement Second § 552. Under Restatement Second of Torts § 552B, the amount of damages awarded for negligent misrepresentation is measured by an “out-of-pocket” standard: The damages recoverable for a negligent misrepresentation are those necessary to compensate the plaintiff for the pecuniary loss to him of which the misrepresentation is a legal cause, including a The difference between the value of what he has received in the transaction and its purchase price or other value given for it; and b Pecuniary loss suffered otherwise as a consequence of the plaintiff’s reliance upon the representation. The out-of-pocket measure of damages is consistent with Georgia’s general measure of damages in negligence cases, which seeks to place the injured party in the same place it would have been had there been no injury or breach of duty.5 It is also consistent with our prior decision in Roberts & Co. , in which we recognized that the important distinction between cases of intentional misrepresentation and cases of negligent misrepresentation is the culpability of the defendant.6 As noted in the commentary to section 552B, an out-of-pocket measure of damages is commensurate with the culpability of the tortfeasor, who acted negligently, rather than intentionally or maliciously.7 Furthermore, utilizing the out-of-pocket standard for negligent misrepresentation and the benefit-of-the-bargain standard for fraudulent misrepresentation is a middle position that is consistent with our statement in Badische Corp. v. Caylor 8 that our adoption of section 552 represents a “middle ground” standard.9 Finally, a majority of jurisdictions favor the Restatement position.10
