Misrepresentation

Question 1

Definition

Answer 1

TORT DESIGNED TO PROTECT THE ECONOMIC INTERESTS OF THOSE WHO ARE INDUCED TO ENTER INTO TRANSACTIONS AS A RESULT OF SOMEONE’S FALSEHOOD.

Question 2

Elements

Answer 2

1. False representation of a material fact
2. liability producing conduct
3. Defendant’s representation induces plaintiff to rely and to act or refrain from acting
4. Reliance is justifiable
5. Damages
6. Defenses

Question 3

False representation of a material fact

Answer 3

a. Representation is conduct calculated to convey a misleading impression and can consist of speech or writing.
(1) Ambiguous statements.
(2) Active concealment of the truth.
(3) Failure to disclose is generally not actionable unless there is a fiduciary relationship (duty to speak), one speaks and later learns contradictory information, if one speaks sufficient information must be disclosed so that the listener is not misled
b. Fact must be a present state of mind or intention:
(1) False predictions are not actionable unless there is a fiduciary relationship or the representation is made by a person with superior knowledge or special information
(2) Representations pertaining to the law are not actionable unless the representation relates to a fact

Question 4

Liability producing conduct

Answer 4

a. Intent – statement is made when it is known to be false or with reckless disregard of the truth. This type of misrepresentation is referred to as fraud or deceit.
b. Negligence (negligent misrepresentation) – this standard of fault is only actionable in a commercial setting where the defendant is under a duty to exercise due care to discover the truth
c. Strict liability – sale of land or chattels

Question 5

Defendant’s representation induces plaintiff to rely and to act or refrain from acting

Answer 5

The group of potential plaintiffs may be larger than the individual to whom the representation was made. The test is who would foreseeably act in response to the misrepresentation

Question 6

Reliance is justifiable

Answer 6

a reasonable person would have relied. It is not actionable to rely on an opinion. It is not actionable to rely on a known falsity. It is not actionable to rely where ordinary observation would have disclosed the truth

Question 7

Damages

Answer 7

must prove actual damages.

  a. Loss of bargain vs. Out of pocket rule .
b. Punitives are available if the fault standard is intent.

Question 8

Defenses

Answer 8

depend on the liability producing conduct