Economic Torts

Question 0

Misrepresentations include

Answer 0

1. false affirmative assertion
2. Active concealment
3. Omission of fact
   D must intend that P will act or fail to act in reliance on his misrepresentation. Intent may not be necessary if misrepresentation is ongoing.

Question 1

Intentional Misrepresentation (Fraud)

Answer 1

assertion of a false past or present fact 
with scienter, 
which is material and 
justifiably relied upon
causes damages

Misrepresentation of opinion is not actionable subject to exceptions.

Question 2

Scienter

Answer 2

misrepresentation made knowing it or be false or

recklessly possessing insufficient information as to its truth or falsity.

Question 3

Material Representation or Omission

Answer 3

If it would influence a reasonable person in determining his course of action in the particular transaction at issue. A fact may be material if D knows that P actually regards it as important even if a reasonable person would not.

Question 4

Reliance on Misrepresentation

Answer 4

P must rely on D’s misrepresentation and that reliance must be justified. A reasonable person would have relied on it. Factors include the nature of the misrepresentation, the parties, the relationship of the parties.

• reliance is generally justified unless it is patently false.
• P has no duty to investigate even where not burdensome to do so
• If P has investigated he may not rely on representations inconsistent with what he actually or might have reasonably discovered.

Question 5

Reliance on Opinion is not justified except:

Answer 5

1. Where D owes P a fiduciary duty
2. Where D has the confidence of P but less that a fiduciary obligation
3. Where D possesses a much greater expertise in the subject of the transaction reliance is more likely justified.
4. D has an interest that he fails to disclose, it is justifiable to rely on D’s expression of opinion on the subject of that interest.

Question 6

Causation in Intentional Misrepresentation

Answer 6

misrepresentation played a substantial part in inducing action

Question 7

Damages available in Intentional Misrepresentation

Answer 7

Compensatory Damages resulting from actual pecuniary loss suffered and punitive damages if P shows that D acted with common law malace

Question 8

Negligent Misrepresentation

Answer 8

Traditionally NOT Actionable. Many jurisdictions allow recovery where there is arguably no intentional misrepresentation by resorting to legal fictions that permit courts to find intent because of D’s honestly held belief in the truth of his assertion is unreasonable.

Question 9

Elements of CoA for Negligent Misrepresentation (where applicable)

Answer 9

1. Mental state is the same as negligence analysis. Thus representations, made in good faith, are not actionable if they are inaccurate because D failed to exercise due care.
2. D is liable to the person to whom the misrepresentation is made and to any other specific person D knew would rely on the misrepresentation.

Question 10

Interference with Contractual Relations

Answer 10

D must be shown to have caused the interference with a contract that is in force and effect; legal; and not opposed to public policy.

Merely reaping the benefits of a broken contract after the contracting party has withdrawn is not sufficient.

Question 11

Injurious Falsehood (trade libel)

Answer 11

False statement
knowing it to be false or reckless disregard of truth
publication
causes economic injury to P

intend to cause others not to do business with P
Recovery - pecuniary losses that have been realized or liquidated.

Question 12

Defenses to Injurious Falsehoods

Answer 12

Consent
Privilege - same absolute and qualified privileges applicable to defamation are available. Such privileges will be lost if P establishes that D acted with common law malice.