ConsumerProtectionOutline - Spring 2001/2004: Consumer...

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Spring 2001/2004: Consumer Protection Outline I. Introduction A. F RAUD : Intent to conceal the facts/ deceive – Before the DTPA 1. Elements for fraud in Tx a. material misrepresentation b. D’s knowing it’s false c. or recklessly d. intending P to rely upon the misrepresentation e. and P does rely f. and there’s a proximate causation of damages (foreseeability) 2. Fraud is a less than ideal cause of action to try to prove. It’s hard to prove “intent to deceive” *other possibilities: negligent misrepresentation, warranty of merchantability 3. With fraud, you can get punitive damages, if you can prove malicious conduct in the fraud. *But you can’t get attorney’s fees . 4. Puffing : This is a defense that makes fraud claims difficult: when a salesperson is merely expressing opinion. Supreme Ct. has held that pure statements of opinion are not actionable. *Are exceptions: if speaker has special knowledge 5. Future events also make a claim for fraud difficult. To make a fraud case, you must show that when the salesperson made a promise, he intended not to perform the promise. a. Ex. you buy a car which breaks down. Week after week, the car dealer keeps saying he’s too busy to fix it, though when you bought it he promised to fix it. Must show that when the car dealer said he would fix it, he intended not to fix it. His not fixing it is circumstantial evidence of that intent. 6. Examples of fraudulent situations : all are hard to prove a. false statement of material fact b. opinion about a future event, but only if the speaker has superior knowledge of the subject matter c. saying an opinion he knows is false d. opinion based on a false statement of facts e. failure to disclose a material fact (concealment when P doesn’t have equal chance to discover it) 7. Threadholm case , 646 sw2d 947, Tx S. Ct. 1983: land developer held a meeting to solicit local buyers. P wants to build homes, but is afraid property value will be low b/c of local mobile home park. Developer says that the park will close, do not to worry about it. P, relying on this, builds the property and builds 18 homes. It ends up the park is owned by a third party and isn’t going to close. Hence, the property value of the new homes is low and sell poorly. a. Trial ct: Developer made a false representation which was relied upon by P. Developer didn’t know specifically, but he made the statement recklessly and with a showing of superior knowledge. b. C/A: P URE EXPRESSIONS OF OPINION AREN T ACTIONABLE AS FRAUD . There are exceptions to this, however: if D has knowledge of the falseness; if D has a special knowledge of the facts; if D gives a reckless expression of opinion. Here, the developer falsely gave the wrong info on the mobile homes, so he misrepresented the facts. P’s attys showed which statements were false. With expression of opinion, P must show special knowledge on the part of D to show fraud.
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ConsumerProtectionOutline - Spring 2001/2004: Consumer...

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