Also known as: manipulative · deceptive · manipulative or deceptive device · manipulative or deceptive devices · 10b-5 fraud · securities fraud
Written by attorneys — see sources below.
Conduct that misleads others by creating a false impression of safety or by omitting material facts. A landlord who purports to repair leased property yet leaves it more dangerous or gives it a deceptive appearance of safety, and an advertiser who omits that quoted prices apply only to limited cases, both exemplify the element.
Megan Moore leased a commercial building from Metro Bank. After tenants reported a sagging floor beam, the bank nailed new boards over the rotted supports without reinforcing them. The fresh surface looked solid, so a visiting client stepped onto the area and fell through when the hidden decay gave way.
Mohan Malhotra placed a newspaper ad offering routine will preparation for a flat fee. The ad omitted that the quoted price applied only to the simplest estates and that additional charges would apply in most cases. A client who relied on the ad later discovered the true cost after signing an engagement letter.
The first example shows conduct that creates a deceptive appearance of safety through superficial repairs. The second shows conduct that misleads by omitting material pricing information from an advertisement. Both forms satisfy the element when they induce detrimental reliance.