Misrepresentations / Interference With Business Relations

Question 1

Intentional Misrepresentation / Fraud

Answer 1

1. False representation of material fact - Affirmative misrepresentation
2. Scienter (knowledge or reckless disregard of truth)
3. Intent to induce reliance P to act or refrain in reliance on misrepresentation.
4. Justifiable reliance (not justifiable if statement obviously false or lay opinion)
5. Damages (actual economic loss/consequential damages, no nominal damages)

Question 2

Negligent Misrepresentation

Answer 2

1. D (accounting firm or other supplier of commercial information)
2. Provides false information to P as a result of D’s negligence in preparing the information
3. P justifiably relies on the information and incurs pecuniary damages as a result
   • P must be in contractual relationship with D or D knows P is a member of a limited group for whose benefit the information is supplied
   • Information must be relied on in a transaction that D intends to influence or knows recipient intends to
4. Defenses (standard negligence defenses)

Question 3

Intentional Interference With Business Relations-Interference with prospective economic advantage (no contract)

Answer 3

• Still interference, but More egregious conduct required for liability: “independently tortious”; violates federal or state law; improper conduct per balancing analysis
• Business competitor will not be liable for encouraging switching business

Question 4

Intentional Interference With Business Relations - Intentional Interference with Contract

Answer 4

• P must prove D knew of contractual relationship between P and 3rd party
• Intentionally interfered with contract, resulting in a breach and
• Breach caused damages to P
• Defenses - Justified if motivated by health, safety, or morals; contract is terminable at will; and D is business competitor

Question 5

GA “Abuse of Litigation” Statute:

Answer 5

1. Replaces common-law abuse of process claims
2. Requires that underlying litigation be both malicious and without substantial justification
3. Requires 30 day notice (then 30 days to withdraw - withdraws P cannot recover damages)
4. Underlying litigation must be terminated in PL’s favor