-Joe Loser enters into an investment scheme with some local bigwigs. To get Joe’s money, these people lie to Joe about several present facts that are critical to the investment scheme. Later, Joe sues to rescind the investment contract on the basis of fraud. While Joe is on the stand, the attorney for the other parties asks him: “Mr. Loser, why did you enter this deal in the first place?” Joe says: “For one reason and one reason only: I admired these men tremendously and figured that any deal good enough for them was a deal I wanted in on too. The details did not matter; if they were in it, I wanted to be in it too.” Joe has blown his fraud case why

Fraud must be proved by showing that the defendant's actions involved five separate elements: (1) a false statement of a material fact,(2) knowledge on the part of the defendant that the statement is untrue, (3) intent on the part of the defendant to deceive the alleged victim, (4) justifiable reliance by the alleged victim on the statement, and (5) injury to the alleged victim as a result.

To be fraudulent, a false statement must relate to a material fact. Here we are told that Joe was lied to about critical facts so elements 1, 2 and 3 are met. However, it should also substantially affect a person's decision to enter into a contract or pursue a certain course of action. A false statement of fact that does not bear on the disputed transaction will not be considered fraudulent. Here Joe has just testified that he did not rely on the false statements so his fraud case fails.

 

-Jill Homeowner contracts with Ralph Roofer for Ralph to reshingle Jill’s roof. Midway through the job, Ralph says that he can’t finish unless Jill promises to pay him an additional $500. There is no real basis for this demand; Ralph just wants more money. Even though she could have gotten one of six other roofers to finish the job at a reasonable price, Jill refuses to pay the additional $500, and Ralph sues her. Jill defends on the basis of duress. Will this defense work?

A contract can be voided for duress if Jill can prove that she had no other reasonable and available choice but to agree to the contract. There are four elements Jill would have to show for the defense to work. There has to be an improper threat, a lack of alternative, the threat actually induces the making of the contract and the other party must cause or take advantage of the duress. Here we are told that Jill had alternatives and also she did not pay the money so the defense of duress will fail.

 

-Suppose that X is buying a crane from Y.X needs a crane that will handle loads of up to 10,000 pounds. Y’s salesman tells X that the crane “will handle a 10,000 pound load.” Relying on this statement, X buys the crane. Later, he discovers that the crane will only handle a 5,000-pound load. X wants to rescind on the basis of either fraud or misrepresentation. Y, however, alleges that the salesman did not make a statement of past or existing fact. Is Y correct?
The elements of a misrepresentation are
(1) unambiguous, false statement of existing fact. It cannot be mere puffery.
(2) which is addressed to the party misled, and
(3) which induces the contract.

Here we are told that the salesman, a party with special knowledge on which X had the right to rely, made the specific statement that the crane would handle 10K pounds. X had stated that was his requirement and he relied on the representation by the salesman. Then we are told the crane will only handle 5K pounds. Here the statement by the salesman was an unambiguous statement about an existing fact, ie the amount of weight the crane would handle.

 

 

-Give two reasons why distinction between fraud and misrepresentation is relevant.

One of the main differences is that a fraud is always done intentionally while a misinterpretation could simply be negligence.

In addition fraud has a malicious intent to deceive. A negligent misinterpretation may not have a malicious intent if it happens through a misstatement or omission of a material fact.

I saw the bonus, thanks. If you are on a subscription though you should just accept one of the other answers.