Is this the seller pushing something or the buyer purchasing something unsolicited Cts more inclined to require disclosure if seller approaches buyer facts” element is the restatement attempts to lead the “Basic common law by charting new territory Applied in instances of extreme unfairness tantamount to a swindle POLICY: may show an interest in ensuring that both parties understand the purpose of the transaction (weak argument for efficiency) has not explicitly adopted §551 Compare false statement vs. silence case If false statement, don’t have to worry about whether duty was present Don’t have to worry about whether it is a basic fact to the case Scienter- Intent to Deceive Scienter is hallmark of fraud Fraud requires a showing that the false representation was made either Knowingly; Without belief in its truth; or Recklessly with regard to its truth or falsity is liable if there is an intention to mislead (deceive) regardless of whether there is ∆ an intention to do harm Scienter and motive are different Scienter is the intent to deceive or reckless action constituting deception Motive is concerned with an intent to harm Motive is relevant with regard to punitive damages Not relevant with regard to liability inquiry Knowledge of falsity is not essential It is enough if believes the representation to be ∆ Testing one’s belief in of a statement Whether a reasonable man in the same situation as with knowledge and ∆ ∆’s means to knowledge might well believe what the claims to have believed ∆ and consider that representation as substantially true Unreasonableness of a belief may signal that the probably didn’t ∆’s ∆ not possess such a belief Still subjective test Not Fraud Making a false statement that the actor believes is true No scienter exists Negligently making a false statement Must be at reckless Reliance: Intent that rely on statement of material fact π Reliance generally Usually must show subjective reliance and objective reliance Subjective reliance Actual in-fact reliance by the on the misrepresentation π Objective reliance Whether reasonable person would have so relied
Is this the seller pushing something or the buyer purchasing something unsolicited Cts more inclined to require disclosure if seller approaches buyer “Basic facts” element is the restatement attempts to lead the common law by charting new territory Applied in instances of extreme unfairness tantamount to a swindle POLICY: may show an interest in ensuring that both parties understand the purpose of the transaction (weak argument for efficiency) has not explicitly adopted §551 Compare false statement vs. silence case If false statement, don’t have to worry about whether duty was present Don’t have to worry about whether it is a basic fact to the case Scienter- Intent to Deceive Scienter is hallmark of fraud Fraud requires a showing that the false representation was made either Knowingly; Without belief in its truth; or Recklessly with regard to its truth or falsity ∆ is liable if there is an intention to mislead (deceive) regardless of whether there is an intention to do harm Scienter and motive are different Scienter is the intent to deceive or reckless action constituting deception Motive is concerned with an intent to harm Motive is relevant with regard to punitive damages Not relevant with regard to liability inquiry Knowledge of falsity is not essential It is enough if ∆ believes the representation to be Testing one’s belief in of a statement Whether a reasonable man in the same situation as ∆ with ∆’s knowledge and means to knowledge might well believe what the ∆ claims to have believed and consider that representation as substantially true Unreasonableness of a ∆’s belief may signal that the ∆ probably didn’t not possess such a belief Still subjective test Not Fraud Making a false statement that the actor believes is true No scienter exists Negligently making a false statement Must be at reckless Reliance: Intent that π rely on statement of material fact Reliance generally Usually must show subjective reliance and objective reliance Subjective reliance Actual in-fact reliance by the π on the misrepresentation Objective reliance Whether reasonable person would have so relied