ProfessorMelissa A. Hale
CaseCast™ – "What you need to know"
Brief Fact Summary. The owner of Defendant’s franchise, J.P. Davenport, sold Plaintiff Audrey Vokes, dancing lessons for a total cash outlay of $31,090.45.
Synopsis of Rule of Law. While a misrepresentation is not generally actionable unless it is a misrepresentation of fact rather than opinion, where the party making the misrepresentation has superior knowledge, the misrepresentation may be regarded as a statement of fact even though it would be considered an opinion if the parties were dealing on equal terms.
However, even though a party to a transaction owes no duty to disclose facts within his knowledge, or to answer inquiries respecting such facts, if he undertakes to do so he must disclose the whole truth.View Full Point of Law
Issue. Can the contract for the dance lessons be rescinded as procured by fraud or misrepresentation?
Held. Yes. A contract can be rescinded where a party induces the contract by misrepresenting a material fact. A contract cannot be rescinded where the misrepresentation is one of opinion, prediction or expectation. However, where the parties do not stand on equal bargaining ground, an opinion may be regarded as a statement of fact. Here, the salespersons of Defendant knew Plaintiff to possess no dancing ability, yet she was told repeatedly that she was responding well to the training and improving even though she was not improving at all. Thus, the contract may be properly rescinded under these circumstances.
Discussion. “Sales puffery” is generally a permitted practice so long as the salesperson is expressing opinion, not fact. However, where the salesperson has “superior knowledge,” his opinion may properly be regarded as a statement of fact.