Invalid Assent (ch 4) Flashcards
(38 cards)
Question
Ansewer
sales talk; not generally considered statements of fact
puffing
false statement made without intent to deceive, upon which a party justifiably relies to his detriment (e.g., carelessness, mistake)
misrepresentation
Two questions that come into play when determining misrepresentation
- Whether statement was one of fact2. Whether injured party was justified in relying on speaker
one party is obligated to act in the best interest of the other party
fiduciary interest
3 types of misrepresentation
- innocent (actually believe it, with good reason)2. negligent (fail to exercise reasonable care in ascertaining facts)3. fraudulent (intent to deceive)
3 remedies for innocent or negligent misrepresentation
- uphold contract2. rescind on contract and void3. keep contract and collect damages
You may not sue for (1) under contract law. Fraudulent misrepresentation must be sued for through the avenue of (2).
- punitive damages2. Tort law
Fraudulent misrepresentation is difficult to sue for because you must prove a (1).
- state of mind
3 avenues through which you can prove state of mind for fraud
- seller knew/believed assertion was untrue2. seller lacked confidence in the truth of his statement but presented it as fact3. seller implied there was a basis for the truth of his statement (e.g., he looked it up)
For collecting damages, it must be proven that the buyer (1) on the untruthful statement
- relied
Where there is not (1), there is a generaly rule that there is no duty to disclose info to another party.
statutory authority
5 exceptions to presumed lack of duty to disclose info
- half-truths (“I’ve never see a rattlesnake”–has seen many other snakes)2. positive concealment (filling in cracks)3. failure to correct a past statement (e.g., if something new happens to the property)4. fiduciary relationship (obligated to look out for best interests of the person)5. failure to correct a known mistake (e.g., a buyer’s mistake–“red diamond”)
A mere expression of opinion that does not relate to an (1) cannot be the basis of a claim of (2) or (3) unless the person stating the opinion has (4) or (5) knowledge.
- existing fact2. fraud3. misrepresentation4. exclusive5. superior
Where an opinion is a (1) in a purchase, this can be misrepresentation.
- decisive factor (e.g., “fashionable” couch)
Fraud in the (1) and fraud in the (2) have similar fact patterns.
- execution2. inducement
relates to parties’ motivation for entering into the contract (e.g., buy a car thinking 50k miles–actually has 150k)
fraud in the inducement
relates to deception in what document is actually being presented for approval
fraud in the execution
(1), or nondisclosure, is difficult to prove as there is not always a (2).
- silence as fraud2. duty to disclose
knowledge of falsity; a “guilty mind”
scienter
Mistake, if (1), can be rescinded by the offeror. The mistake must be (2), which is hard to prove. Relief can be granted if the mistake relates to the (3)–not to (4) or (5). A mistake in (6) is also not voidable.
- mutual2. material3. substance4. quality 5. value6. judgment (believing something is going to gain value)
silence as fraud
Having a duty to disclose but knowingly concealing the truth.
scienter
Having a guilty mind, knowledge of the falsity.
Innocent misrepresentation (remidies)
You may have a remedy when the misrepresentation was material “imporant to you and infuenced your decision to enter into contract.” You have the option to void the contract or sue for damages. EX - No intention of misrepresentation