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Statement of Fact vs. Statement of Opinion.Statement of Opinions are not actionable. Opinions from Experts can be actionable, and injured party can seek rescission or reformation.oMisrepresentation of Law Does not entitle a party to relief.oMisrepresentation by Silence Ordinarily neither party has duty to disclose facts. Seller will be liable if she knows of material defect that cannot be reasonably discovered by buyer
If you say nothing about a material thing that could be easily found out by buyer, you could be held to fraudulent misrepresentationIntent to Deceive Party knows that a ‘fact’ is not true, or makes a reckless statement without regard for the truth, or implies that statement is based on personal knowledge or investigation.oInnocent Misrepresentation: person makes statement he believes to be true but actually misrepresents facts. Innocent party can rescind contract, but usually cannot seek damages.Justifiable Reliance on MisrepresentationoDeceived party must have justifiably relied on representation.oReliance is not justified if the innocent party knows the true facts or relies on extravagant statementsInjury to Innocent PartyoNo proof of injury is required when the action is to rescind contract.oProof of injury is universally required to recover damagesUndue Influence2 parties to a contract; 1 is more leveraged than the other leverage is based on dependent relationship andother party’s lack of bargaining powerContract lacks voluntary consent and is voidable.Based on Confidential or Fiduciary Relationship, or Relationship of Dependence.Undue Influence or Persuasion is presumedif weak party talked into doing something not beneficial to him or herself.IRAC Example (Undue Influence)oIssue: Can Juan argue the defense for lack of voluntary consent with Samuel due to undue influence?oRule: In this case, the facts tell us that Juan is totally dependent on Samuel because he lives with him. This means that he has no free will, no fiduciary power. In addition, the deal that Samuel forced Juan into, Samuel greatly benefits from because he is making Juan sell 35% below market value.DuressIf you threaten a party, you want to enter in contract with and it is an illegal act DURESSParty who enters into a contract under fear or threat makes the contract voidable.Threatened act must be wrongful or illegal and render person incapable of exercising free will.oThreat of civil suit is not unlawful, may be unethical.oThreat of criminal prosecution may constitute duress.Economic Duress: generally not sufficient to constitute duress, unless same party who created the need alsorequires the money.Adhesion Contract Take it or Leave it Contract
IRAC Example (Fraudulent misrepresentation as voluntary lack of consent)oIssue:Can Tanner claim fraudulent misrepresentation as a voluntary lack of consent?