Misrepresentation/Fraud

Question 1

Fraud - Elements - FIRD

Answer 1

• False statement of fact
• Intention/Scienter
• Reliance
• Damages

Question 2

Fraud - Burden of Proof Standard

Answer 2

CLEAR AND CONVINCING that is pleaded with particularity

Question 3

Fraud - Elements - False Statement of Fact / what, not included, future promises

Answer 3

• Made by D with actual or constructive knowledge of falsity
  
  • It has to be material
• DOESNT INCLUDE: Gral assertions of good value or quality, opportunity, puffery, sales talk, non-expert opinion, etc
• FUTURE PROMISES: considered only if made with present intent to perform

Question 4

Fraud - Elements - Intention/Scienter

Answer 4

Intention to mislead D AND act upon statement

• It is CULPABLE INTENTION

Question 5

Fraud - Elements - Reliance/ what, test

Answer 5

• It has to be relaince “in fact”

+

• Test: Reasonable person under similar circumstances

Question 6

Fraud - Elements - Damages / req, amount for recovery

Answer 6

• Foreseable
• P entitled to “Benefit of the bargain” - put P in same position as if statement was true
  
  • or reescind transaction and recovermoney paid

Question 7

Negligent Mispresentation - Elements (3)

Answer 7

1. False statement
2. Negligently made without fraud intention
3. Resulting in dx and potential liability

Question 8

Negligent Mispresentation - D’s status and Particular P

Answer 8

• D: Usually required to be a professional or business related actor that can make such an statement
• P: must have suffered dx from justifiable reliance and D to be aware of it - ie.e. professional or fiducairy relation

Question 9

Negligent Mispresentation - Difference with Fraud

Answer 9

NO CULPABLE INTENTION on misrepresentation

• D might actually beleive the truth of statement
• BUT Negligent for failure to execute duty of reasonable care in gathering and presenting information

Question 10

Fraudulent Concealment - Elements

Answer 10

1. Affirmative suppression or hiding
2. With intent to deceive or defraud
3. Of material fact that one is legally bound to reveal

Question 11

Fraudulent Concealment - Duty to disclose Rules / gral duty, caveat emptor, active concealment

Answer 11

• No gral duty to reveal - if no fidcuairy duty than no disclosure usually not fraudulent
• More jdx require the seller to “let the buyer know” (despite of caveat emptor rule (buyer duty of care)
  
  • However, active concealment dislike by courts and establishing liaiblity on seller who conceals

Question 12

Fraudulent Concealment - Remedies + dx amount

Answer 12

• Usually by rescission
• Dx: Amount = Actual cost less value with defect