Economic Torts

Question 1

Types of Economic Torts

Answer 1

• Intentional Misrepresentation (Fraud)
• Negligent Misrepresentation
• Interference with K Relations
• Interference with Prospective Advantage
• Injurious Falsehood

Question 2

Intentional Misrepresentation (Fraud)

Answer 2

When D makes an intentional material misrepresentation of past or present fact, made with scienter, which the P justifiably relies to his economic detriment.

Question 3

Fraud: What is a Misrepresentation?

Answer 3

A assertion of a false past or present fact. Can include affirmative assertions, active concealment, or a failure to disclose (under some circumstances)

Question 4

Fraud: When a Defendant Might Be Liable for Failure to Disclose

Answer 4

• When the D is a fiduciary to the P
• Where the D makes an assertion believing it to be true, subsequently discovers its falsity or change of circumstances, and fails to correct the earlier assertion
• Where the D makes an incomplete or ambiguous assertion (that renders is misleading)
• Where the D makes a false assertion not intending that anyone rely upon it, discovers that the P intends to act in reliance upon the false assertion, and fails to disclose that the assertion was false
• Where the P reasonably expects disclosure

Question 5

Fraud: Scienter

Answer 5

When a D makes a misrepresentation knowing it to be false or recklessly possessing insufficient information as to its truth or falsity

Question 6

Fraud: Justifiable Reliance

Answer 6

The D must intend that the P or a class of persons of which the plaintiff is a member will act or fail to act in reliance on his misrepresentation except when the Ds misrepresentation is ongoing (e.g. a mislabeled product).

Question 7

Fraud: Causation

Answer 7

The element of causation is met if a Ds misrepresentation played a substantial part in inducing the P.

Question 8

Negligent Misrepresentation

Answer 8

The traditional rule is that this is not actionable. Many modern courts impose liability for negligent misrepresentation only in certain situations where a special relationship exists between D and P and the nature of the Ds activity justifies holding the D liable for a failure to exercise due care.

Question 9

Interference with K Relations

Answer 9

When D knew that there is a K between P and a third party + D acted with the purpose of having the K breached or making it harder to perform.

Question 10

Application of Interference with K Relations

Answer 10

Virtually applies to any Ks that:

• are in force and effect
• are legal
• and not opposed to public policy
• however, there is an exception for a K to marry

Question 11

Interference with Prospective Economic Advantage

Answer 11

When D knew of prospective economic advantage and acted to interfere with it for improper motives. But D can act to protect their own competitive interests (proper motive).

Question 12

Injurious Falsehood (Trade Libel)

Answer 12

• When a D makes a false statement to third person + with actual malice + that causes an economic injury to the plaintiff with the intent to cause others not to do business with the P.
• The statement does not have to be defamatory or personally relate to the P. P has the burden of proving falsity.

Question 13

Injurious Falsehood: Limitations on Recovery

Answer 13

Recovery is only for those pecuniary losses that the P proves have been realized or liquidated.

Question 14

Injurious Falsehood Defenses

Answer 14

Include consent and privilege (same principles of privilege that apply to defamation apply to injurious falsehood).