Monday, July 13, 2015

Fraudulent inducement and contracts.

Practice point:  In order to state a claim for fraudulent inducement, there must be a knowing misrepresentation of material present fact, which is intended to deceive another party and induce that party to act on it, resulting in injury.  In a contract case, the pleadings must allege misrepresentations of present fact, not merely misrepresentations of future intent to perform under the contract, in order to present a viable claim that is not duplicative of a breach of contract claim. In addition, the misrepresentations of present fact must be collateral to the contract and must have induced the allegedly defrauded party to enter into the contract.

Student note:  As a general rule, to recover damages for tort in a contract matter, it is necessary that the plaintiff plead and prove a breach of duty distinct from, or in addition to, the breach of contract.

Case:  Wyle Inc. v. ITT Corp., NY Slip Op 05877 (1st Dept. 2015)

Here is the decision.

Tomorrow's issue:  Design defects and products liability.