Misrepresentation

Question 1

Define Misrepresentation?

Answer 1

1. Knowing
2. False Material Statement
3. Made with the Purpose & Effect
4. Of Inducing Justifiable Reliance
5. To the Hearer’s Detriment

Question 2

Define Silent Fraud?

Answer 2

1. Knowing Refusal

2. To Disclose under Circumstances where disclosure is reasonably Expected.

Question 3

Define Negligent Mispresentation?

Answer 3

1. Careless
2. False Statement
3. Of Fact

Question 4

Define the “False” Element of Misrepresentation?

Answer 4

To be actionable, the Misrepresentation must be verifiably false, not merely conjecture, sales person puffing, or opinion.

Question 5

What is Bare-Nondisclosure?

Answer 5

Bare Non-Disclosure, without a duty to disclose arising out of the relationship or circumstances, is not actionable.

Question 6

What is Active Concealment?

Answer 6

Active Concealment of a Condition about which a buyer would want to know can constitute a misrepresentation.

Question 7

Who has to have knowledge of falsity?

Answer 7

The seller must know of the statement’s falsity for it to be actionable. Honest statements of prediction or intent are not actionable when the predicted event does not occur. (example: “we are going to win this case for sure.”)

Question 8

What limitations on recovery are there for Negligent Misrepresentation Claims?

Answer 8

Where recognized, negligent misrepresentation claims may be limited to recovery of out-of-pocket losses rather than benefit of the bargain damages.

Question 9

Define Justifiable Reliance?

Answer 9

The fraud claimant must show that the claimant’s reliance on the misrepresentation was justifiable.

Question 10

Are Misrepresentations of Law Actionable?

Answer 10

Generally, not actionable unless falsely implying underlying facts.

Question 11

Are Misrepresentations by Professionals Actionable?

Answer 11

Professionals who misrepresent facts are liable to 3rd parties ONLY WHEN they know of their reliance and take some overt action in support of it. (They take advantage of them)

Question 12

What burden of proof do Misrepresentation Claimants have?

Answer 12

Claimants must prove fraud by clear and convincing evidence, not merely a preponderance.

Question 13

How to they measure fraud damages?

Answer 13

A majority of jurisdictions measure fraud damages by the lost benefit of the bargain, although some limit damages to out-of pocket losses.