Misrepresentation Flashcards
What are the 5 elements for intentional misrepresentation?
(1) a misrepresentation of a material present or past fact; (2) scienter; (3) intent to induce reliance; (4) causation of a justifiable and actual reliance; and (5) damages.
What is a misrepresentation?
Misrepresentation is a falsity portrayed by the defendant through words, acts, ambiguous statements, half-truths, and silence (if there is a duty to speak).
When is a fact material?
A fact is material if a reasonable person would attach importance to it in making a decision or the defendant knows or has reason to know the plaintiff would attach the same importance, regardless of whether a reasonable person would.
When are predictions and expressions of opinion a misrepresentation?
Generally, they’re not. unless the person making the statement has a particular expertise and knows or has reason to know that the listener intends to rely on the statement.
When is a misrepresentation made by conduct?
The conduct of a party – particularly a party’s concealment of some material fact from the other party – will support a claim of misrepresentation.
When is a misrepresentation of law or special fact actionable?
Generally, it’s not, unless the speaker is a member of a profession that is commonly known to require greater knowledge of the law than possessed by the average citizen
When is misrepresentation by silence actionable?
Generally, not unless the other party asks about a fact. However, the common law recognizes exceptions where a duty to speak exists. In addition, some statutes create duties to speak not otherwise present under common law.
What are the 6 exceptions that will make misrepresentation by silence actionable?
- Fiduciary relationship
- Half truth
- Subsequently acquired information making earlier statements false
- Actor learns that another intends to act on false statements that were not inteded to induce reliance
- The fact is basic to the transaction or not reasonably discoverable
- Actively concealed by defendant
What is the scienter requirement for mispresenation?
Scienter requires that the defendant madethe misrepresentation with actual knowledge of its falsity or reckless disregard for its truth or falsity. If scienter is not present, the defendant may still be liable for negligence misrepresentation.
What is a reckless disregard for the truth of a matter?
A person who lacks the factual basis or confidence implied by his or her statemenets with reckless disregard for the truth.
What intent is required for intentional misrepresentation?
Just that the defnendant induced reliance by the plaintiff or expected the reliance. A lie, without more, is not enough.
What is required for causation of a justifiable and actual reliance for intentional misrepresentation?
Whether actual reliance occurred is subjective. Whether the reliance was justifiable is an objective test of whether a reasonable person in the plaintiff’s position would not have consummated the deal if the truth were known. The question is whether the slightest investigation would have dislcosed the falsity.
How does an affirmative statement prove a justifiable reliance for intentinonal misrepresentation?
An affirmative statement may be accepted as justifiable at face value, unless:
1. its falsity is patent to the senses
2. There are danger signals requiring investigation
What type of damages are required for intentional misrepresentation? What isn’t allowed?
The plaintiff must prove actual pecuniary loss; emotional ditress damages will not be granted.
How are damages measured for intentional misrepresentation? (2 rules)
- benefit of the bargain rule (value promised, less value received)
- out of pocket rule (value parted with, less value received)
