future occurrences -- this is not a misrep unless the speaker did not intend to fulfill the promise at the time he made it (Skyfox).and (6) the victim's reliancewas reasonable(e.g., if didn't read K and K contained the truth, then reliance might not be reasonable).-Misrep as to a term of K makes K void b/c no assent.-Misrep as to a fact makes K voidable.--Misrep/fraud can be used as an affirmative defense to a BOK COA or the victim can bring a suit for rescission or reformation of the K. --The K can also be ratified by the victim. Fraud in the inducement: K is voidable if a party entered into the K because of and relying on a misrepresentation, if the reliance is justifiable. This is a restatement of the rule above and the above rule includes “fraud in the inducement” as one form of actionable misrep.Fraudis when the speaker intends to influence the victim to agree to the K and the speaker knows or believes that his assertion is not true, does not have the confidence he speaks or implies for the assertion, or knows that he does not have the basis that he states or implies for the assertion.Innocent misrepresentation: is when the speaker does not know that the statement is false or
Contracts II – Black Letter Law – Daicoff p. 5does not intend to defraud, this is also actionable misrep if it’s re: a material fact.Negligent misrepresentation: a nonfraudulent misrepresentation that induces one to enter into a K also makes the K voidable by the victim if (2) the reliance is reasonable and (3) the misrep is material. -innocent and negligent misrep is also included in the above general rule for misrep.Materialis when it would be likely to induce a reasonable person to manifest his assent, or the speaker knows that it would be likely to induce the hearer to do so. It’s a fact that a reasonable person would consider important in choosing to enter into a K. Or, if she knew it, she wouldn’t have entered into the K. (Ex: termite damage and past termite infestation; defective roof in 3-yr-old home).Fraud in the factum: K is void if the party entered into K not realizing it was a K (star signing autograph when it was really a K)--Third Party Rule (same as UI, above): misrep by a 3rdparty(not a party to the K) makes the K NOT voidable by the victim if the other, innocent party to the K (1) acted in good faith; (2) didnot know or have reason to knowof the UI; and (3) either gave valueor relied materially on thetransaction/K.Duty to Read:There is a duty to read what you sign (recall Acedo) – Morstad p. 468.Classical doctrine holds that there is a conclusive presumption, except if there is fraud, that you read and understood any K you signed. Exception for unsuspecting recipients of form K’s, receipts, and stubs (p. 466).Misrep is not actionable if the written K contradicts an oral promise during K negotiations (particularly when it contains a merger or integration clause) (Skyfox).
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- Fall '06
- The Land, black letter, Daicoff p.