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Almost always comes up in contractual transactions, often where trickery is involved in inducing the buyer, etc.
- 1. The D must make a misrepresentation of fact.
- Affirmative Misrepresentation. Silence does not satisfy the tort of fraud (though it may be fraudulent for other civil law purposes). This is the origin of caveat emptor.
- 2. Misrepresentation must be made deliberately or recklessly.
- --D must know he’s lying or have made no effort to ascertain the truth.
- --A mere error by D will not trigger fraud liability.
4. There must be reliance by P.
- 3. The misrepresentation must be intended to induce reliance [material].
- (puffing up car; not your actual expectation this will affect buyer)
- 5. Must be economic damage.
- Must end up overpaying b/c of the fraud.
- Compressed Fraud Elements
- Someone tricked you deliberately, you fell for it, and you got screwed.
Prima Facie Tort
New York Only.
- Intentional infliction of pecuniary harm without justification. Sort of a catch-all.
- “Elements:” 1. Must be an intent to do harm; 2. Must be harm.
- --Record company/radio station example.
- --Predatory pricing—selling low to drive out competitors.
Inducing a Breach of Contract
1. Must be a contract in existence between P and third-party (T).
- 2. D must have knowledge of the K.
- 3. D must engage in persuasion designed to encourage T to breach the K.
- Most bar questions, the inducement will be a better deal, better collateral, etc.; as opposed to coercion, etc.
- 4. T must then breach the contract.
- Privilege—special/advisory relationship b/t D and a contracting party (parents, professional advisors, clergy).
- P’s Claims:
- --Against T for the actual breach.
- --Against D for inducing the breach.
Theft of Trade Secrets
1. P must possess a valid trade secret.
2. D must take the trade secret by improper means.
- Valid trade secret=
- 1. Information that provides a business advantage to the possessor (mfg process);
- 2. Must be secret; and
- 3. Owner must take reasonable steps to keep the information secret.
There are two alternative “improper means”:
Improper b/c of breach of trust/implied confidentiality of relationship.
Improper if illegal or legal but violates ordinary standards of commercial morality.
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