Also known as: intentional misrepresentations · fraudulent misrepresentation
Written by attorneys · grounded in primary & secondary sources — see below
An actionable tort or contract defense arising from a false representation of material fact made with scienter and intent to induce reliance by the recipient who justifiably relies on the statement resulting in pecuniary loss.
Igor Ito purchased manufacturing equipment from a seller who stated that all units met current industry specifications. Igor signed the contract without conducting any inspection of the equipment. When the equipment proved defective Igor sued for intentional misrepresentation and recovered because his failure to investigate did not defeat justifiable reliance on the false statement.
Ike Ingram told a buyer that all inventory records showed full compliance with quality standards. Ike had reviewed internal reports showing multiple defects yet made the statement anyway. The buyer later discovered the defects and avoided the contract because the falsity was not obvious at the time of purchase.
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Ira Irving purchased components from a supplier who falsely claimed the parts were sourced from approved vendors. Ira knew the supplier had an incentive to close the deal quickly yet still relied on the statement. Ira recovered damages because reliance remained justified even though the supplier held an adverse interest in the transaction.
Irene Ingalls bought software from a developer who opined that the program would integrate seamlessly with existing systems. The developer possessed internal test data showing incompatibility but presented the opinion as fact. Irene justifiably relied on the opinion and recovered because the developer purported to have special knowledge she lacked.
Ibrahim Iqbal consulted an independent appraiser before purchasing real property. The appraiser stated that the land value exceeded the asking price by twenty percent. Ibrahim relied on the opinion and completed the purchase only to learn the value was overstated. Ibrahim recovered because the appraiser was reasonably believed to be disinterested and the opinion was material to the transaction.
Iain Irons purchased shares after a broker falsely stated that the company had secured major contracts. Iain failed to review publicly available filings that would have revealed the falsehood. Iain still recovered damages for intentional misrepresentation because contributory negligence does not bar recovery when reliance is otherwise justifiable.
The elements are a false representation of material fact, scienter consisting of knowledge of falsity or reckless disregard, intent to induce reliance, actual and justifiable reliance by the recipient, and resulting damages.
No duty to investigate exists. A recipient remains justified in relying on a fraudulent misrepresentation even if an investigation would have revealed the falsity.
Reliance on an opinion is justified when the maker purports to have special knowledge the recipient lacks, stands in a fiduciary relation, or the recipient reasonably believes the maker is disinterested and the opinion is material.
Contributory negligence does not bar recovery. A plaintiff who justifiably relies on a fraudulent misrepresentation may still recover even if negligent in doing so.
Intentional misrepresentation requires scienter consisting of knowledge of falsity or reckless disregard while negligent misrepresentation requires only a breach of duty to exercise reasonable care in making the statement in a business or professional context.
…claim nor, in this case, under promissory estoppel. We affirm the court of appeals' dismissal of plaintiff's claim based on fraudulent misrepresentation, and reverse the court of appeals' allowance of the breach of contract claim. Claiming a reporter's promise to keep his name out of a news story was broken, plaintiff Dan Cohen sued…