Comrade, reliance THIS!:
Of the four forms of deceit recognized in California, only one--negligent misrepresentation--does not require the maker of a misrepresentation to know that the representation is false. As defined by statute, negligent misrepresentation is "[t]he assertion, as a fact, of that which is not true, by one who has no reasonable ground for believing it to be true". California Civil Code, section 1710(2).
The approved jury instruction for negligent misrepresentation is more helpful than the statutory definition:
1. The defendant must have made a representation as to a past or existing material fact;
2. The representation must have been untrue;
3. Regardless of his actual belief the defendant must have made the representation without any reasonable ground for believing it to be true;
4. The representation must have been made with the intent to induce plaintiff to rely upon it;
5. The plaintiff [must have] been unaware of the falsity of the representation; must have acted in reliance upon the truth of the representation and must have been justified in relying upon the representation;
6. And, finally, as a result of the reliance upon the truth of the representation, the plaintiff must have sustained damage.
BAJI 12.45. An examination of this definition seems to suggest that it is virtually identical to the standard definition of fraud. A closer examination shows that it is somewhat different, and a case based on negligent misrepresentation must be examined carefully before it is filed.
In one sense, negligent misrepresentation is fraud without scienter, that is, without the defendant knowing that the representation was false. Instead of knowledge of the falsity, the plaintiff must only show that the defendant had no reasonable ground for believing it to be true. This state of mind is much easier to prove than actual knowledge of falsity or reckless disregard of the truth. |
