ProfessorMelissa A. Hale
CaseCast™ – "What you need to know"
Brief Fact Summary. Plaintiff entered into Defendant’s school of dancing, in pursuit of her dream of becoming an “accomplished dancer.” While Plaintiff’s dancing abilities did not increase, her expenses in pursuit of the dream did, when Defendant encouraged her to enter into several different contracts, and pay out cash in excess of $30,000 for lessons and dance-related trips. When Plaintiff realized she had no dancing ability, she sought rescission of the contracts and return of her money, based on fraud.
Synopsis of Rule of Law. In order to bring a cause of action to rescind based on fraud, the facts must justify the allegations.
It should be noted that a statement of a party having exclusive or superior knowledge may be regarded as a statement of fact although it would be considered as opinion if the parties were dealing on equal terms.View Full Point of Law
Issue. The issue presented in this case is whether trade puffing can be considered a misrepresentation of a material fact, which could be actionable in fraud.
The court considers the notions of fraud and misrepresentation and makes the finding that, for a misrepresentation to be actionable, it must be a question of fact. In this case, although the instructors opined as to Plaintiff’s dancing ability, they did not tell her the whole truth. The large expenditures that Plaintiff made, in pursuit of her “progress”, were not justified by the fact that she was not improving. Thus, the court found that there was a factual question, to be determined, regarding the Defendants’ misrepresentation, and reversed, allowing Plaintiff a new trial.
Discussion. Generally, when a tradesman engages in puffing to promote its services, it is not considered actionable as fraud. In this case, however, it was apparent to Defendant that the expenses Plaintiff was undergoing were not justified by her abilities, and his puffing became fraudulent when he caused her to make expenditures in reliance of non-existent abilities.