Fraudulent Misrepresentation Discussion Paper
Instructions
- Kahn of Portland Oregon, sent a letter to Lischner of Los Angeles inquiring whether Lischner’s property in Humboldt County was for sale. Lischner replied that he was interested in selling and asked Kahn about the fair market value. Kahn wrote that it was difficult to make an offer without a legal description of the property and asked for it and the annual taxes. These were provided by Lischner. Subsequently, Kahn wrote, “I hesitate to place a value on someone else’s property, but I can tell you that I have been offered a similar track of property for $2,000. Since your property is closer to mine, I would prefer to buy yours, and offer a four-year term contract at a total price of $2,500.” The two parties ultimately agreed on a cash price of $2,500. Shortly after contracting with Kahn, Lischner went to Humboldt county and readily learned, upon the most superficial inquiry that the property was worth more than $2,500. He sold the property to Dacoima Lumber Sales, Inc. for $7,500. Thereupon, Kahn sued Lischner for $5,000. Lischner responded that he had been induced to contract by a fraudulent misrepresentation as to the value of the property by Kahn and therefore could rescind their contract of sale. What are the elements that must be present for fraudulent misrepresentation? Did Kahn commit fraud? Why, or why not.
- Cameron is an accountant in the accounting department of Data Analytics Company. Cameron’s son’s college tuition is due within a week, or he cannot continue taking classes. To meet the due date, Cameron transfers funds from Data Analytics to a fictitious bank account, planning to repay the firm within one month. The transfer is discovered before the firm is repaid, and Cameron is arrested. What crime, or crimes, if any, has Cameron committed?
- extra credit:Eat My Lunch, Inc., contracts to deliver and serve Hangry Meals Catering Service’s products to its clients for $5,000 per event, payable in advance. Hangry Meals Catering pays the money, but Eat My Lunch fails to perform. Can Hangry Meals Catering rescind the contract? Can Hangry Meals Catering also ob-tain restitution? What does it mean to “rescind” a contract? How is a contract rescinded? What is restitution? How is restitution accomplished? Explain.