Also known as: laws of deceit · deceit · tort of deceit
Written by attorneys · grounded in primary & secondary sources — see below
A common-law tort imposing liability for pecuniary loss on one who fraudulently misrepresents a fact, opinion, intention, or law to induce another to act or refrain from acting in reliance on the misrepresentation. The recipient must show justifiable reliance and resulting damage. Damages include the difference between the value received and the price paid plus any additional loss caused by the reliance.
Lily Lopez, a partner at a firm, filed an affidavit in court stating that her client had relied on multiple independent analysts. She knew every statement traced to a single anonymous blog. The court granted the motion to dismiss based on the affidavit. Lopez faces tort liability for the fraudulent misrepresentation that caused pecuniary loss.
Lamar Lewis bought specialized lab equipment from Lotus Pharmaceuticals after the seller stated the machines were new and fully calibrated. The seller knew they were refurbished and untested. Lewis paid full price and later discovered the falsity when the equipment failed during critical tests. He recovers the difference between the value received and the purchase price plus consequential losses.
Select any source to read its text and confirm it supports the definition.
Leah Lamb signed a marital settlement agreement after her husband assured her their joint accounts held only modest balances. He had hidden substantial brokerage holdings. After the divorce Leah discovered the concealment and moved to set aside the agreement. The court invalidated the settlement because it resulted from deceit.
Lucas Lee purchased a used vehicle from Legacy Motors after the dealer misrepresented that the engine had been fully rebuilt with new parts. The car had only received cosmetic work. After the engine failed Lee recovered the difference between the car's actual value and the price paid plus repair costs caused by reliance on the false statement.
Luis Lopez bought a new car after the salesman stated it was free of any manufacturing defects. The manufacturer and dealer knew the steering mechanism was prone to failure. The car crashed when the defect manifested. Lopez sued both for damages caused by the fraudulent misrepresentation.
Lance Lee, a financial columnist, learned the timing of upcoming columns and tipped his broker to trade ahead of publication. The scheme generated substantial profits before discovery. Lee and the broker were prosecuted for misappropriating confidential information through deceit. The conviction rested on the fraudulent use of nonpublic facts.
The plaintiff must show a fraudulent misrepresentation of fact, opinion, intention, or law made to induce reliance, justifiable reliance on the misrepresentation, and pecuniary loss caused by that reliance.
The recipient may recover the difference between the value of what was received and the price paid, plus any additional pecuniary loss that is a legal consequence of the reliance.
Yes. A lawyer engages in professional misconduct by filing an affidavit that misrepresents known facts, because the rule prohibits conduct involving deceit or misrepresentation.
Yes. A spouse may invalidate an agreement reached through fraud, deceit, or misrepresentation, or when the agreement is unfair and full financial disclosure was lacking.
…to § 10(b) and Rule 10b-5 has been based on doctrines with which we, as judges, are familiar: common-law doctrines of fraud and deceit. See, e. g., Santa Fe Industries, Inc. v. Green, 430 U. S. 462, 471-477 (1977). Even when we have extended civil liability under Rule 10b-5 to a broader reach than the common law had…