Also known as: misrepresentations of fact · misrep of fact
Written by attorneys — see sources below.
A false assertion regarding an existing condition or event.
Alexander prepared a press release for his firm claiming it regularly represents state agencies in complex procurement disputes. In reality the firm had completed only one limited subcontract on a routine bid protest. The procurement officer reviewing the firm's proposal read the release and noted the claimed experience in her evaluation.
Dispatcher Martin told driver Lewis that a bus warning light was merely a bad sensor and the vehicle was safe. Martin had already read a mechanic's note warning that the brake lines might fail. Lewis drove the bus down a steep mountain road and crashed, injuring passenger Carla.
Blue Line Gallery told collector Nina that a painting was an original by a famous artist with verified provenance and recent higher appraisals. The gallery possessed a report questioning authenticity and no appraisal documents. Nina paid a premium price and later discovered the work was a low-value copy.
Landlord Charanian told tenant McClain that her retail unit measured 5,500 square feet. The actual size was 186 square feet smaller. McClain signed the lease and paid a higher share of common expenses based on the overstated figure.
Seller Krobatsch told buyer Weintraub that a house had no latent defects. Weintraub knew the seller had an incentive to conceal problems yet still relied on the statement and purchased the property. After closing Weintraub discovered serious undisclosed defects.
A Virginia pharmacy advertised that its prescription prices were the lowest in the state. The claim was untrue because several competitors charged less. Consumers relied on the advertisement when choosing where to fill prescriptions.
Virginia law made it unprofessional conduct for a licensed pharmacist to publish, advertise, or promote any price for prescription drugs under Va. Code Ann. § 54-524.35(3). The Virginia State Board of Pharmacy regulated the profession to protect public health, safety, and welfare. It licensed pharmacists only after they showed good moral character, graduated from an approved school, completed up to twelve months of experience, and passed a Board examination. Licensed pharmacists remained subject to penalties or license revocation for negligence, fraud, or unprofessional conduct. Prescription drug prices varied sharply even within the same locality. In Richmond the cost of forty Achromycin tablets ranged from $2.59 to $6.00. In the Newport News-Hampton area the price of tetracycline ranged from $1.20 to $9.00. About ninety-five percent of prescriptions were filled with dosage forms prepared by manufacturers. Some pharmacies refused to quote prices over the telephone. An individual Virginia resident who suffered from diseases requiring daily prescription drugs, together with two nonprofit organizations whose members included many users of such drugs, brought suit against the Board and its members. The plaintiffs claimed the ban prevented them from learning where their limited resources could be spent most effectively. A prior challenge to the same statute brought by a drug retailer and one of its pharmacists had been rejected on due-process and equal-protection grounds. The three-judge District Court for the Eastern District of Virginia declared the quoted portion of the statute void and enjoined its enforcement. The Supreme Court noted probable jurisdiction of the Board's appeal.
View caseLiability arises when a person fraudulently makes a misrepresentation of fact to induce reliance and the recipient justifiably relies, causing pecuniary loss. The maker must know the statement is false or lack any basis for it.
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Yes. The recipient of a fraudulent misrepresentation of fact remains justified in relying on its truth even if an investigation would have revealed the falsity.
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Yes. A communication is false or misleading if it contains a material misrepresentation of fact about the lawyer or the lawyer's services, and the rule applies even when the statement is made through marketing materials.
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Yes. A misrepresentation of fact or law may constitute negligent conduct when the speaker knows or should know the statement is false and the statement induces action creating an unreasonable risk of harm.
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…all that has been said — we prefer the rule of the Restatement that “The recipient in a business transaction of a fraudulent misrepresentation of fact is justified in relying on its truth, although he might have ascertained the falsity of the representation had he made an investigation.” Restatement: Torts, § 540. We recognize, of…