(7) Torts: Commercial Torts Flashcards
Types of Misrepresentation
- Intentional Misrepresentation
- Negligent Misrepresentation
Rule:
Intentional Misrepresentation
P must prove (1) Misrepresentation of a material fact; (2) Scienter; (3) Intent to induce P’s reliance; (4) Causation; (5) Justifiable reliance (by P on the misrepresentation); AND (6) Damages.
Define “Misrepresentation of a Material Fact” & When is there a duty to disclose?
Intentional Misrepresentation
Misrepresentation through misleading or through concealment. There is a duty to disclose a material fact when (a) in a fiduciary relationship; (b) it will likely mislead; or (c) mistaken belief about basic fact that D is aware of and should disclose.
Defined Scienter
Intentional Misrepresentation
D must have known the representation to be false or must have acted with reckless disregard as to its truthfulness.
Deep dive into “Justifiable Reliance”
Inentional Misrepresentation
D must have intended to induce P to act or refrain from acting
P must have actually relied on the misrepresentation. Opinions and facts that are obviously false cannot be justifiably relied on.
Damages
Intentional Misrepresentation
Must prove actual damages to recover for economic loss. No nominal damages will be rewarded but consequential damages may be.
Negligent Misrepresentation
P must prove: (1) The D provides false information; (2) as a result of the D’s negligence; (3) during the course of his business or profession; (4) causing P to justifiably rely upon the information; AND (5) The P either is in a contractual relationship with the D or is a 3rd party known by the D as one for whose benefit the information is supplied.
Defenses to Negligent Misrepresentation
In negligent misrepresentation, negligence defenses can be raised. Comparative and Contributory negligence.
Damages P can Recover for under Negligent Misrepresentation
The P can recover reliance (out of pocket) damages, as well as consequential damages if negligent misrepresentation is proven with sufficient certainty.
Intentional Interference with Business Relations
P must prove (1) a valid contract existed between P and 3rd party; (2) the D knew of the contractual relationship; (3) the D intentionally interfered with the contract, causing a breach or ending relationship; AND (4) The breach caused economic damages to P.
(1) Contract must be valid and not terminable at will however some states will allow at will contracts to apply.
(3) The D’s actions must substantially exceed fair competition and free expression such as persuading a bank not to lend money to the competition.
Defenses to Intentional Interference with Business Relations
Fair Competition: If the D’s interreference was not motivated by an improper purpose courts will not find them liable.
Trade Libel
A person is liable for statements injurious to a P’s business or products and proof of special damages is required. P must prove: (1) Publication; (2) Of a false and derogatory statement; (3) With malice; (4) Relating to the P’s title to his business property, the quality of his business, or the quality of its products; AND (5) Causing special damages as a result of interference or damage to business relationships.
Defenses to Trade Libel
Truth and Fair Competition
