Page 48

Question 1

Can a fraudulent promise with no intent to keep it be enough for misrepresentation?

Answer 1

Yes, although a broken promise made in good faith is not

Question 2

Can silence be enough for misrepresentation?

Answer 2

Yes, if there is a duty to disclose

Question 3

There is always a duty to speak whenever what three things demand it, unless you want to be guilty of misrepresentation?

Answer 3

Justice, equality, and fair dealing

Question 4

What is caveat emptor?

Answer 4

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

Question 5

If you don’t have authority to make a promise, but you do make an unauthorized promise to someone, can that be misrepresentation?

Answer 5

Yes

Question 6

What does the defendant have to know about a misrepresentation?

Answer 6

He must either be consciously aware of his lack of knowledge about the truth or must act recklessly with insufficient information about it

Question 7

In order for misrepresentation to apply, who has to actually rely on the misrep?

Answer 7

The intended recipient or someone the defendant expected to rely on the information

Question 8

If a misrepresentation is ongoing, like a mislabeled product, who can recover?

Answer 8

Any plaintiff, regardless of defendant’s intent

Question 9

What is the modern trend for intent for misrepresentation?

Answer 9

If a defendant could reasonably foresee someone would rely on his misrepresentation, that can also count

Question 10

What is required for causation for misrepresentation?

Answer 10

The misrepresentation must be the actual cause and a substantial factor in misleading the victim

Question 11

If a victim wasn’t deceived, has there been a misrepresentation?

Answer 11

No

Question 12

What is defendant liable for in misrepresentation?

Answer 12

Only foreseeable damages caused by his deceit

Question 13

Is it possible for a plaintiff to show that he relied indirectly on the defendant’s misrepresentation?

Answer 13

Yes, like if someone told another person

Question 14

What is the most tested area of misrepresentation?

Answer 14

Justifiable reliance by the plaintiff

Question 15

If the plaintiff doesn’t rely on a misrepresentation, can the defendant be guilty?

Answer 15

No

Question 16

What is necessary for the victim’s reliance for misrepresentation?

Answer 16

It must be justifiable and foreseeable as measured by a reasonable person

Question 17

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?

Answer 17

Yes, if the plaintiff actually relies

Question 18

If you rely on a material misrepresentation of fact, do you have a duty to check the truth?

Answer 18

No, no matter how easy it would be to do that

Question 19

You’re not allowed to rely on a misrepresentation of opinion unless what four things exist?

Answer 19

• D has superior knowledge
• there is a fiduciary relationship
• there is a special relationship
• D has an undisclosed interest

Question 20

If a defendant has superior knowledge that you don’t have, are you allowed to justifiably rely on their misrepresentation?

Answer 20

Yes

Question 21

Who are some people that you could justifiably rely on their misrepresentations based on their superior knowledge?

Answer 21

Jeweler or art dealer

Question 22

Are you justified in relying on someone puffing or bragging?

Answer 22

No

Question 23

On an exam, if a sales person is talking up goods, what should you discuss?

Answer 23

Specificity of the statement and the context (“top notch widget”) (sales setting)

Question 24

What is considered a special relationship that would allow you to rely on someone’s opinion?

Answer 24

Defendant has secured your confidence through being specially related, like family members or church members

Question 25

If the defendant has a financial interest in a deal, but he doesn’t disclose that, are you allowed to rely on his advice?

Answer 25

Yes

Question 26

What are damages for misrepresentation?

Answer 26

Consequential and punitive (if there is malice) so long as there’s proof of actual damages

Question 27

What is the majority and minority position for damages for misrepresentation?

Answer 27

• 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

Question 28

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?

Answer 28

$15,000, which is the benefit of the bargain, subtract $3000, which is your actual value, so your total recovery is $12,000

Question 29

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?

Answer 29

You get the $10,000 you paid minus the $3000 it was worth for a total recovery of $7000

Question 30

What is negligent misrepresentation?

Answer 30

Carelessly making a presentation with no reasonable basis to believe it is true

Question 31

Usually negligent misrepresentation is not actionable, but many courts allow recovery when what?

Answer 31

There was no intentional misrepresentation because the defendant honestly believed the assertion was true, but was unreasonable in that belief

Question 32

When do you most often see negligent misrepresentation?

Answer 32

With tax advisers, lawyers, accountants, etc. or people that are in the business of giving economic info to others to make important economic decisions

Question 33

What are the two positions on negligent misrepresentation?

Answer 33

• 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

Question 34

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.

Answer 34

Negligent misrepresentation

Question 35

What two things could bar or reduce a claim for negligent misrepresentation?

Answer 35

Contributory or comparative negligence

Question 36

What are the elements of negligent misrepresentation?

Answer 36

• misrepresentation by D
• negligence to a particular group
• actual reliance
• justifiable reliance
• proximate cause
• damages

Question 37

If a representation is volunteered under nonbusiness conditions, when is the only time that liability attaches for negligent misrepresentation?

Answer 37

If the statement was dishonestly made

Question 38

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?

Answer 38

He has a duty to exercise reasonable care to discover the truth

Question 39

If a D intentionally misrepresents something, who is he liable to?

Answer 39

Anyone that relies on it or would reasonably and foreseeably rely on it

Question 40

Do you have to use words in order to be guilty of misrepresentation?

Answer 40

No, it can be physically disguising a defect