Misrepresentation – Part II

Abstract

A person who relies on a misrepresentation can recover for losses caused to him thereby only if the law regards his reliance as justifiable. This limitation on liability again reflects the customs and ethics of the market place, which have traditionally allowed some latitude for dishonesty in bargaining situations. Positive statements about past or existing facts apparently within the speaker's knowledge and material to the transaction are the sort which have most readily subjected the representer to liability for misrepresentation. To the extent that statements do not fit into the mold, there has been more or less a question whether custom or law requires them even to be honest, let alone carefully made or accurate. In bargaining, as in diplomacy and politics, there is an area in which a certain amount of rhetoric is used and expected, and nobody has a right to take it seriously. This and the next three sections deal with the kind of statements about which questions of this kind exist. It will be noted that through them all runs this common thread: the area of immunity on this ground is constantly shrinking.