MGMT 3100 Lecture Notes - Lecture 3: Osmosis, Equitable Remedy, Life Insurance
23 Feb 2014
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Notions of misrepresentation, undue influence or duress, which allow for a contract to be unwound. Material misrepresentation example: buying a car, and the mileage on the car is turned back, however a difference in the value of a company is not material. Example: buying life insurance and not notifying the company of smoking history. Example: a pharmaceutical company that states a new drug will help these problems without knowing for sure. When a homeowner assures that there is no mold without conducting inspection. Example: the yacht, the owner (not an appraiser) did not know about osmosis of the boat. A misrepresentation must involve a question of fact as opposed to a statement of opinion for it to be actionable, or a statement of opinion rendered by an expert. Does a vendor have an obligation to disclose all information to the buyer. Yes if the vendor is aware that the information is material, then the buyer should be notified.
