Misrepresentation

What are the available damages under misrepresentation

1) Majority: expectation/benefit of bargain 2) Minority: "out of pocket loses" (price paid - value of the good) 3) punitive damages: - none in negligent misrepresentation - yes in fraudulent misrepresentation

Elements for innocent misrepresentation?

1) defendant must make a false representation of material fact - normally form of words but can be actions 2) the misrepresentation is material to the transaction 3) Plaintiff justifiably rely on the misrepresentation - not justified if obviously false 4) plaintiff must suffer damages 5) loss of the plaintiff benefits the defendant

Under a claim for fraudulent misrepresentation, when is there liability for non-disclosure of defect?

1) fiduciary relationship: reliance of good faith and disclosure is justified, and the defendant has the duty to make a disclosure of all material facts 2) Active concealment: where a person actively conceals a material fact, he is under a duty to disclose the fact, failure to do so creates liability 3) Half truth: If a defendant makes a statement he knows or believes is misleading because of failure to state additional facts, it is fraudulent misrepresentation 4) Preventing the plaintiff from discovering the truth creates a fraudulent misrepresentation

What kinds of statements cannot be justified for reliance?

1) future predictions - Unless you make plaintiff believe it is a statement of fact 2) trade talk/puffery 3) opinion - UNLESS opinion is based on existing fact that is objective and verifiable 4) misrepresentations of law - people are presumed to know the law - HOWEVER, if a misrepresentation of law includes a misrepresentation of fact then there can be justifiable reliance 5) publisher will not be liable because no duty to investigate

Explain the causation element under fraudulent misrepresentation and its limitation

1) if plaintiff's reliance is a substantial factor in determining the Course of conduct that resulted in the loss 2) Even if the plaintiff investigates the misrepresentation for the truth, this is not enough to relieve him of liability - UNLESS he chooses to dismiss the misrepresentation and rely on his investigation 3) Pecuniary losses that could not reasonably be expected to result from the misrepresentations are generally not legal causations and are beyond the scope of maker's liability

What are the factors considered when determining if a misrepresentation is obviously false? (objective standard)

1) intelligence and experience of the plaintiff 2) relationship between the parties 3) whether it could be discovered during ordinary care

What are the elements for a fraudulent misrepresentation claim?

1) misrepresentation by the the defendant 2) scienter (refers to defendant's intent or knowledge of wrongdoing) 3) An intent to induce the Plaintiff's reliance on the misrepresentation (at the given time) 4) Causation (i.e. actual reliance by the plaintiff on the misrepresentation) 5) justifiable reliance by the plaintiff on the misrepresentation - misrepresentation is not justifiable unless the misrepresented matter is material - Must be no purposeful avoidance of the truth by plaintiff ----- but no duty to investigate 6) damages - expectation/benefit of the bargain

What are the elements to a negligent misrepresentation claim?

1) misrepresentation of fact or something similar by defendant (motivation irrelevant) 2) misrepresentation is made in the course of the defendants business, profession, or employment, or in the course of a transaction in which the defendant has an economic interest - anyone who has a pecuniary interest in a transaction is subject to liability for negligently supplying information intended for the guidance of others 3) The misrepresentation results from defendant negligence (failure to use reasonable care) in obtaining information and communicating it to the Plaintiff 4) justifiable reliance by plaintiff who d defendant owes a duty of care to 5) Resulting economic damage

What are the 3 forms of misrepresentation?

1) negligent misrepresentation 2) fraudulent/intentional misrepresentation 3) innocent misrepresentation

What about liability for fraudulent information that is delivered to another through documentation or a 3rd party?

1) the maker of a fraudulent misrepresentation incorporated in a document has reason to expect that it will reach and influence any person who the document reaches 2) liability when the maker makes a misrepresentation to a 3rd party and the maker inters/has special reason to know that It will be repeated/communicated to another

What is the general rule for misrepresentation?

A person who makes a misrepresentation is liable to the injured person or class of persons when the maker of the misrepresentation intends or had reason to expect that the injured persons will act in reliance upon the misrepresentation

What is an exception to the general rule for misrepresentation?

Absent a special or fiduciary relationship between the parties, there is no duty to outwardly disclose information Exception: However, in a case where the plaintiff is a homebuyer and the defendant is a home-seller, the defendant has to disclose material facts about there property

What is a material fact?

It is a fact that can change/alter the transaction between the parties if understood

What may be deemed negligence in a misrepresentation claim? when does liability arise?

Negligence may consist of failure to exercise reasonable care in: 1) ascertaining the information; or 2) the manner in which it is communicated 3) can be so grossly negligent that it amounts to fraud Defendant may be liable where there is a DUTY to give correct information or special relationship - P does not need to show defendant had knowledge of falsity

What is the general rule for fraudulent misrepresentation?

One who fraudulently makes a material misrepresentation of fact, intention, or law for the purpose of inducing another to act or refrain from acting is subject to liability for economic loss cause by the other's justifiable reliance on the misrepresentation

What is the general rule for negligent misrepresentation?

One who negligently provides false information to another is subject to liability for physical harm caused by action by the other in reasonable reliance upon information where such harm results to: 1) the other person; or 2) such third persons as the actor should expect to be put in peril by the action taken

What is a defense to negligent misrepresentation?

Recipient of a negligent misrepresentation is barred from recovery for pecuniary loss suffered from his negligent reliance on the misrepresentation

What intent or knowledge is required for a fraudulent misrepresentation (Scienter)

Representation that the defendant: 1) knows or believed that the matter is not as represented; or 2) knows that he does not have confidence in the accuracy of his representation he states or implies; or 3) knows that he does not have the basis for his representation that states or implies

General rule for innocent misrepresentation

a false representation made with the intent to induce plaintiff's reliance in a business transaction, and the plaintiff's justifiable reliance results in her financial detriment and to the defendant's gain