Page 48 Flashcards
Can a fraudulent promise with no intent to keep it be enough for misrepresentation?
Yes, although a broken promise made in good faith is not
Can silence be enough for misrepresentation?
Yes, if there is a duty to disclose
There is always a duty to speak whenever what three things demand it, unless you want to be guilty of misrepresentation?
Justice, equality, and fair dealing
What is caveat emptor?
You don’t have to tell all that you know, because the free market allows diligent people not to be deprived of the fruits of their superior skill or knowledge
If you don’t have authority to make a promise, but you do make an unauthorized promise to someone, can that be misrepresentation?
Yes
What does the defendant have to know about a misrepresentation?
He must either be consciously aware of his lack of knowledge about the truth or must act recklessly with insufficient information about it
In order for misrepresentation to apply, who has to actually rely on the misrep?
The intended recipient or someone the defendant expected to rely on the information
If a misrepresentation is ongoing, like a mislabeled product, who can recover?
Any plaintiff, regardless of defendant’s intent
What is the modern trend for intent for misrepresentation?
If a defendant could reasonably foresee someone would rely on his misrepresentation, that can also count
What is required for causation for misrepresentation?
The misrepresentation must be the actual cause and a substantial factor in misleading the victim
If a victim wasn’t deceived, has there been a misrepresentation?
No
What is defendant liable for in misrepresentation?
Only foreseeable damages caused by his deceit
Is it possible for a plaintiff to show that he relied indirectly on the defendant’s misrepresentation?
Yes, like if someone told another person
What is the most tested area of misrepresentation?
Justifiable reliance by the plaintiff
If the plaintiff doesn’t rely on a misrepresentation, can the defendant be guilty?
No
What is necessary for the victim’s reliance for misrepresentation?
It must be justifiable and foreseeable as measured by a reasonable person
If you make a misrepresentation to a third person and it is foreseeable that person will communicate it to the plaintiff, are you liable for misrepresentation?
Yes, if the plaintiff actually relies
If you rely on a material misrepresentation of fact, do you have a duty to check the truth?
No, no matter how easy it would be to do that
You’re not allowed to rely on a misrepresentation of opinion unless what four things exist?
- D has superior knowledge
- there is a fiduciary relationship
- there is a special relationship
- D has an undisclosed interest
If a defendant has superior knowledge that you don’t have, are you allowed to justifiably rely on their misrepresentation?
Yes
Who are some people that you could justifiably rely on their misrepresentations based on their superior knowledge?
Jeweler or art dealer
Are you justified in relying on someone puffing or bragging?
No
On an exam, if a sales person is talking up goods, what should you discuss?
Specificity of the statement and the context (“top notch widget”) (sales setting)
What is considered a special relationship that would allow you to rely on someone’s opinion?
Defendant has secured your confidence through being specially related, like family members or church members
If the defendant has a financial interest in a deal, but he doesn’t disclose that, are you allowed to rely on his advice?
Yes
What are damages for misrepresentation?
Consequential and punitive (if there is malice) so long as there’s proof of actual damages
What is the majority and minority position for damages for misrepresentation?
- majority: you can get pecuniary damages based on the benefit of the bargain had the misrepresentation been true
- minority: you can get out-of-pocket losses to restore you to the position before the tort
If you pay $10,000 for land that you were promised had timber on it and was supposed to be worth $15,000, but the land doesn’t have timber so it is only worth $3000, what are the damages you can get according to the majority position for misrepresentation?
$15,000, which is the benefit of the bargain, subtract $3000, which is your actual value, so your total recovery is $12,000
If you pay $10,000 for land that is supposed to have timber on it, and is worth $15,000, but it doesn’t end up having timber on it and is only worth $3000, according to the minority position for misrepresentation, what are your damages?
You get the $10,000 you paid minus the $3000 it was worth for a total recovery of $7000
What is negligent misrepresentation?
Carelessly making a presentation with no reasonable basis to believe it is true
Usually negligent misrepresentation is not actionable, but many courts allow recovery when what?
There was no intentional misrepresentation because the defendant honestly believed the assertion was true, but was unreasonable in that belief
When do you most often see negligent misrepresentation?
With tax advisers, lawyers, accountants, etc. or people that are in the business of giving economic info to others to make important economic decisions
What are the two positions on negligent misrepresentation?
- majority: liability only occurs when there is a special relationship that justifies defendant’s liability for failing to exercise due care
- minority: some states allow recovery
What would the following situation fall under?
D is in the business of supplying information and he fails to exercise due care to figure out the truth of a representation.
Negligent misrepresentation
What two things could bar or reduce a claim for negligent misrepresentation?
Contributory or comparative negligence
What are the elements of negligent misrepresentation?
- misrepresentation by D
- negligence to a particular group
- actual reliance
- justifiable reliance
- proximate cause
- damages
If a representation is volunteered under nonbusiness conditions, when is the only time that liability attaches for negligent misrepresentation?
If the statement was dishonestly made
If a defendant gives information with the intent that the plaintiff rely on it for business or knows reliance is likely, what is his duty under negligent misrepresentation?
He has a duty to exercise reasonable care to discover the truth
If a D intentionally misrepresents something, who is he liable to?
Anyone that relies on it or would reasonably and foreseeably rely on it
Do you have to use words in order to be guilty of misrepresentation?
No, it can be physically disguising a defect
