Inducement in fraudulent misrepresentation cases (BV Nederlandse Industrie Van Eiprodukten v Rembrandt Enterprises, Inc.)

Table of contents

• What are the practical implications of this case?
• What was the background?
• What did the court decide?
• Fraudulent misrepresentation
• Breach of warranty
• Transferred loss
• Case details

Article summary

Dispute Resolution analysis: This decision is of interest in several respects. It provides a warning about giving estimates as negotiating devices which are not based on an honestly held belief as to their accuracy. Importantly it also clarifies the test applicable to establish inducement for the purposes of a fraudulent misrepresentation claim: in fraudulent misrepresentation cases a weaker test is to be applied to the question of inducement than in cases of negligent misrepresentation, so that it is sufficient to show that but for the representation the representee might have acted differently, not that it would have acted differently. In cases of fraudulent misrepresentation very strong evidence is required to rebut the presumption that but for the representation the representee would have acted differently.