representations; material misrepresentations; fraud

how to analyze representation

1. FALSITY: is it true? 2. FRAUD OR INNOCENT: did the maker know it was false? 3. ACTUAL RELIANCE: did a party subjectively care enough to rely on the statement as being true when entering into the K? 4. REASONABLE RELIANCE: was it reasonable for the person to think the rep is true? 5. MATERIALITY: would a reasonable person care about the representation being true when entering into a K?

Danann Realty v. Harris (1959) (disclaimer)

a disclaimer specifically denying that a plaintiff is relying on any of the defendants' reps relating to the fraud means that the actual reliance element of a fraud claim is not present

fraud

a fraudulent misrepresentation is a misrep made to induce another to enter a contract, and that the maker knows or believes is false, an exaggeration, or an unsupported inference a party can rescind a K or sue for dmgs if the party entered into the K in rsbl reliance upon the truth of a material representation that was fraudulent

representation

a statement of fact by one party that the other actually relies on in deciding to enter a k (character, condition, quality, rights in, subject matter, title to)

disclaimers and oral fraud (preclusion)

general disclaimer will not bar a claim for oral fraud by rendering the false reps not part of the agreement (in accordance with PE rule)

disclaimers and misrep (sufficient)

general disclaimer/merger clause is sufficient to bar claim for oral material misrepresentation due to parol evidence rule

intent/knowing

maker made a statement they know/believes is false, an exaggeration, or unsupported inference to induce another to enter a K (F)

falsity

maker makes false statement (F + MM)

material misrepresentation

misrepresentation that would induce any reasonable person to enter the contract, or that the maker knows would induce the particular recipient to enter the contract, but the makes still does not know is false a party can rescind a K or sue for dmgs if the party entered into the K in rsbl reliance upon the truth of a material representation that was false

representation (contrast w/)

opinions, predictions, promises to perform, puffery

reasonable/justifiable reliance

reliance on the truth of the statement (F+M)

remedy

remedy is rescission: false statements make contract voidable

materiality

universal importance - how rsbl. is it to care about misrepresentation? (M)

actual reliance

whether the recipient personally cared (F+M)