Vulcan Metals Co. v. Simmons Manufacturing Co.

Brief Fact Summary.

The defendant sold the plaintiff the patent and equipment to manufacture vacuum cleaners, but the defendant exaggerated the vacuum’s abilities and its past sale performance.

Synopsis of Rule of Law.

Statements of opinion can be actionable on grounds of misrepresentation if they are material and indicate a reflection of facts that the reasonable person would accept as true.

Facts.

The defendant sold a patent and equipment for the manufacture and sale of a vacuum cleaner to the plaintiff. This case deals with two classes of misrepresentations. First, the plaintiff claims that the defendant misrepresented the efficacy of vacuum cleaners it was selling. Second, the plaintiff claims that the defendant had not sold or made any attempt to sell the vacuum cleaner. There is some evidence that points to the fact that the machines proved to be ineffective and of little to no value. There is also evidence that agents of the defendants had attempted to manufacture the machines in the past and had been unsuccessful mostly due to insufficient water pressure.

Issue.

Is the defendant liable for the alleged misrepresentation stemming from the exaggeration?

Held.

Yes. The judgement is reversed, and a new trial is ordered.

Discussion.

On the first claim of misrepresentation, the court looks to what extent of exaggeration, or “puffing,” is allowed before crossing the line into misrepresentation. The distinction usually lies between opinion and fact, but, as the court points out, an opinion can very well also be reflective of fact. If parties are situated so that one knows more about the product than the other and is generally reliable, that party’s opinion might weigh closer to fact. That being said, in this case, the plaintiff had the opportunity to examine and test the product for itself, so the parties are relatively equal. But this rule does not apply to the allegation that the vacuums had never been put on sale, which clearly materially impacted the plaintiff’s decision to enter into a contract. The retraction of a false statement about the past sale of the vacuum would needed to have been made before the formation of the contract.