LAW2001 Lecture Notes - Lecture 6: Punitive Damages, Precontract, Reasonable Person
Document Summary
Fraudulent misrepresentation means the owner knows that the statement is false, but made the statement to induce another to enter the contract. Innocent misrepresentation means the owner believes the statement to be true and has a good reason for that belief. To rescind a contract based on misrepresentation or fraud, a party must show three things: (1) there was a false statement of fact; Puffery (exaggerated (cid:1688)sales talk(cid:1689)) is not a statement of fact. Opinion is generally not fraudulent. (2) the statement was fraudulent or material; and (3) the injured person justifiably relied on the statement. If the maker"s statement is fraudulent, the injured party generally has a choice of rescinding the contract and/or suing for damages. Nondisclosure of a fact is misrepresentation only when disclosure is necessary: To correct a mistaken understanding about a writing (such as a deed), or. Required by law (as in some real estate or car sales).
