Misrepresentation + Business Torts

Question 1

Intentional Misrepresentation

Answer 1

Rule - false misleading statement regarding a material fact intended to induce the P to justifiably rely, or concealing a material fact when D has an affirmative duty arising from:

1. a fiduciary relationship
2. the other party is likely to be misled by statements the D made earlier
3. D is aware the other party is mistaken about the basic facts of the transaction and custom suggests the disclosure should be made

Scienter - D must know the representation is false or acted with reckless disregard for its falsehood

Intent - D must intent to induce the P to act in reliace on the misrepresentation

Causation - P’s active reliance on the misreprestation cause P to act or refrain from acting

Justifiable Reliance - the reliance must be reasonable

Damages - P must prove actual, economic, pecuniar loss

Question 2

Negligent Misrepresentation

Answer 2

Rule - P must prove:

1. D provided false info to a plaintif as a result of D’s negligence in preparing the info

Note - D usually accounting firm

2. P may suffer pecuniary damages caused by relying on D’s information; and either
   3a. P and D have a contractual relationship
   3b. P is a known party by D to benefit from the info supplied; and
3. the information was relied upon in a transaction where teh supplier of information intended to influence

Defenses - any of the negligence defense

Damages - consequential damages

Question 3

Intentional Interference with Business Relations

Answer 3

Rule - P must prove:

1. D know of a contractual relationship between P and 3P
2. D intentionally interfered with the K resulting in a breach
3. the breach caused damages to the P

Nature of K - cannot be voidable; must be valid

Interference Besides Inducing Breach - if D’s conduct exceeds fair competition and free expression, then recoverable (e.g., persuading bank not to lend money)

Justification - interference is justified if motivated by considerations ofhealth, public safety, public moral

Misappropriation of Trade Secrets - if P owns a valid trade secret and has taken reasoanble precautions to protect it and D has tekn the secret by improper means, then recoverable

Question 4

Injurious Falsehoods

Answer 4

1. Trade Libel

Rule - statements that injure P’s business or product

Damages - special damages

Ex: publishing article congradulating friend/competitor for retiring, closing business, and moving and is false

2. Slander of Title

Rule - D, with malice, submits a publication of a false statement that is derogatory to the P’s ownerhsip title that diminishes value in the eyes of 3P and causes special damages

Question 5

Wrongful Use of the Legal System

Answer 5

1. Malicious Prosecution - D intentionally and maliciously pursues a legal action for an improper purpose without probable cause andthe action is dismissed in favor of P.

Prosecutor - have absolute immunity from tort (i.e., civil lawsuit)

2. Abuse of Process - D set in motion a legal procedure in proper for but abused it to achieve some alterior motive which caused damages.