1: Misrepresentation Flashcards
(9 cards)
R159: Misrepresentation (general)
A misrepresentation is an assertion that is not in accord with the facts
R164: When A Misrepresentation Makes a Contract Voidable
If a party’s manifestation of assent is induced by a fraudulent OR material misrepresentation by the other party upon which the recipient is justified in relying
R162: When a Misrepresentation is Fraudulent or Material
(1) Fraudulent if the maker intends his assertion to induce a party to manifest his assent AND the maker (a) knows/believes assertion is not in accord with the facts, (b) does not have confidence that he states/implies in the truth of the assertion, or (c) knows he does not have the basis that he states/implies for the assertion; (2) Material if it is likely to induce a reasonable person to manifest his assent OR if maker knows it would be likely to induce
R168: Reliance on Assertions of Opinion
(1) An assertion is of opinion if it expresses only a belief, WITHOUT certainty, as to existence of a fact or expresses only a judgment as to quality, value, authenticity, etc.; (2) If reasonable, recipient of an assertion of opinion as to facts not disclosed/not otherwise known may interpret it as an assertion (a) that facts known to person are not incompatible with his opinion or (b) that he knows facts sufficient to justify him in forming it
169: When Reliance on an Assertion of Opinion Is Not Justified
If assertion is of opinion only, recipient is NOT justified in relying on it unless recipient (a) stands in relation of trust/confidence to person that reliance is reasonable, (b) reasonably believes that person has special skill, judgment, or objectivity with respect to matter, or (c) is particularly susceptible to misrepresentation for some other special reason
160: When Action is Equivalent to an Assertion (Concealment)
Action intended/known to be likely to prevent another form learning a fact is equivalent to an assertion that the fact does not exist
161: When Non-Disclosure is Equivalent to an Assertion
Non-disclosure of a fact known to him is equivalent to an assertion that fact does not exist in following: (a) knows disclosure is necessary to prevent previous assertion from being a misrepresentation/fraudulent or material, (b) knows that disclosure would correct a mistake of other party as to basic assumption on which party is making K and if non-disclosure amounts to failure to act in good faith and fair dealing, (c) knows disclosure of fact would correct mistake of other party as to contents or effect of a writing, or (d) other person is entitled to know fact b/c of relation of trust and confidence
Vokes v. Murray: Dance Classes
Generally a K can only be rescinded following misrepresentation of fact, BUT there are exceptions: (1) exists relationship of trust, (2) trick employed by representor, (3) parties do not in general deal at “arm’s length”, or (4) representee does not have equal opportunity to become apprised of truth or falsity of fact represented; may be held liable for false implications even if party owes no duty to disclose facts within their knowledge
Hill v. Jones: Termites
Seller has affirmative duty to disclose where disclosure would correct mistake of other party as to basic assumption on which party is making K and if nondisclosure amounts to failure to act in good faith/fair dealing; possibility of termite infestation may be such a fact in the sale of a house, materiality is up to a jury; seller had duty to disclose of possible infestation
