Misrepresentation Flashcards
Misrepresentation
a misrepresentation is when someone says something that isn’t true or doesn’t match the facts
must be:
1. fraud or material
2. Recipent must be induced by reliance
3. & reliance is justified
Misrepresentation is fraud:
(1) if the person making it wants the other person to agree based on what they said, but they know or believe it’s not true, or they aren’t sure if it’s true, or they don’t have a good reason to say it.
(2) Misrepresentation that is material & a reasonable person would agree
(3) Hiding the fact would make the previous statement untrue
When a question is asked it creates the duty
(4) Not revealing the fact is unfair or will cause a misunderstanding
- if someone does something on purpose to keep another person from finding out a fact, it’s like they’re saying that the fact doesn’t exist at all
(5) Trusting relationship and has right to know fact and person does not disclose the fact
Misrepresentation must be an inducing cause
- A misrepresentation induces a party’s assent if it plays a big role in getting that person to agree or say yes to something.
- The contract can be cancelled
Contract with a Misunderstanding
- Court can change contract to show what you actually agreed upon
IF:
1. you had good reason to trust the lie
2. changing contract won’t unfairly hurt the others
Fraud v. Material
Fraud = know knowledge is false
- Does not have to be deliberate lie can be made innocently
If it is fraud the party does not have to show it is material
However, if the misrepresentation is not fraudulent, then it must be material.
Material = if it would be likely to induce a reasonable person to assent or if the maker knows that for some special reason, it is likely to induce a particular person to give her assent
Reliance on assertions of opinion
- An opinion is when someone shares what they believe or think, without being completely sure about a fact.
- Statement of opinion can be fact is there is a fiduciary relationship (legal/ ethical relationship) between parties
Misreprentation that cancels contracts
- Other party lied and you trusted
- fasle info
- if someone who isn’t part of deal gives false info and you have reason to trust them
when is relienace on opinion justified?
Reliance justified when:
1. Confidential relationship
2. Superior knowledge
3. Party’s do not deal at arm’s length
4. Person whom the representation is made does not have = opportunity to tolearn whether the represented is true
equitable remedy
Undoing agreement
