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Is there any real difference between Negligent Misrepresentation and Constructive Fraud?

Glendale, AZ |

Maybe I'm misinterpreting, but the elements between the two sound about the same since lack of intent to deceive is the core principle. Is there any major difference between these two causes of action?

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Attorney answers 1


Yes, in general : a false representation,(2) with knowledge or belief that the representation was false or without a sufficient basis for making the representation,(3) to induce the someone to act or refrain from acting on the representation,(4) the victim justifiably relied on the represetation


Fraud By Omission

Fraud By Omission , the suppression or omission of a material fact which a party is bound in good faith to disclose is equivalent to a false representation, since it constitutes an indirect representation that such fact does not exist. The intention of the promisor not to perform an enforceable or unenforceable agreement cannot be established solely by proof of its nonperformance. The intention may be shown by any other evidence that sufficiently indicates its existence, as, for example, the certainty that he would not be in funds to carry out his promise. The essence of any misrepresentation claim is a false or misleading statement that harmed you.


False Representations in Nevada

Estimates and opinions are not false representations. Commendatory sales talk (puffing) isn’t either. An estimate is an opinion and an estimate of value is an opinion as to value upon which reasonable and honorable men may hold differing views. A a charge of fraud normally may not be based upon representations of value.But where a statement is not made as a fact, but only as an opinion, the rule is misrepresentation has not occured. ‘If a person fraudulently misrepresents facts, or states facts to exist which he knows not to exist, his fraud would vitiate a contract, provided the misstatements were in respect to a material point.



Where a statement is not made as a fact, but only as an opinion, the rule is quite different. Thus a false representation as to a mere matter of opinion it does not avoid a contract. Ordinarily, a naked statement of opinion is not a representation on which a buyer is legally entitled to rely, unless, perhaps, in some special cases where peculiar confidence or trust is created . The ground of this rule is, probably, the impracticability of attempting to discover by means of the rules of law the real opinion of a person making a representation, and also because a mere expression of opinion does not alter facts, though it may bias judgment. Mere expressions of opinion are not, therefore, considered so tangible a fraud as to form a ground of avoidance of a contract, even though they are falsely stated.


Essence of a contract in Nevada

Where a representation is made, going to the essence of a contract, the party making it should be careful to state it as an opinion, and not as a fact of which he has knowledge, or he may be liable. But whenever a belief is asserted, as in a fact, which is material or essential, and which the person asserting knows to be false, and the statement is made with an intention to mislead, it is fraudulent and affords a recovory. A person may be liable for misrepresentation even when the defendant does not make an express misrepresentation, but instead makes a representation which is misleading because it partially suppresses or conceals information. , If someone in contract or bargining for one has knowledge of material facts which are not accessible to the other side, under such circumstances, there is a duty of disclosure. Breach of this duty may result in damages

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Very helpful information, thank you!



During a preliminary showing of an apartment, the landlord's management company represented to a prospective tenant that the apartment was newly renovated, free of material defects, and otherwise completely habitable all as a means of luring the tenant to sign a lease agreement. The tenant then signs the lease agreement, but within 2 weeks after moving in, the tenant discovers hidden water damage and mold growing within the apartment of which makes the tenant sick. The tenant then immediately vacates after only those 2 weeks due to illness from the mold. If the landlord knew of the hidden conditions and induced the tenant anyway to move in, would this be fraudulent? In the alternative, if the landlord didn't know of the conditions and assumed everything was as originally represented, would this then likely be negligent misrepresentation?

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