This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
A different result may follow where the parties do not stand on an equal footing. Statements as to value, or expressions of praise and commendation, may then amount to statements of fact.1 If one who offers stock for sale knows that a large part of such stock has been issued for patents which are practically worthless, his representation as to the
Pritchard v. Dailey, 168 N. Car. 330, 84 S. E. 392.
10 Mertins v. Hubbell Publishing Co., 190 Ala. 311, 67 So. 275.
11 Worrell v. Kinnear Mfg. Co., 103 Va. 719, 49 S. E. 988.
12 United States. Southern Development Co. v. Silva, 125 U. S. 247, 31 L. ed. 678.
Florida. Williams v. McFadden, 23 Fla. 143, 11 Am. St. Rep. 345, 1 So. 618.
Illinois. Dowden v. Wilson, 108 111. 257; Burwash v. Ballou, 230 111. 34, 82 N. E. 355.
Iowa. Eastern Granite Co. v. Heim, 89 la. 698, 57 N. W. 437.
Kentucky. Crawford v: Livingston, 153 Ky. 58, 154 S. W. 407.
Massachusetts. Parker v. Moulton, 114 Mass. 99, 19 Am. Rep. 312; Deming v. Darling, 148 Mass. 504, 2 L. R. A. 743, 20 N. E. 107.
Minnesota. Columbia Electric Co. v. Dixon, 46 Minn. 463, 49 N. W. 244.
New York. Ellis v. Andrews, 56 N. Y. 83, 15 Am. Rep. 379.
North Carolina. Vaughan v. Exum, 161 N. Car. 492, 77 S. E. 679.
Pennsylvania. Rockafellow v. Baker, 41 Pa. St. 319, 80 Am. Dec. 624.
Wisconsin. Mosher v. Post, 89 Wis. 602, 62 N. W. 616.
1 Murray v. Tolman, 162 111. 417, 44 N. E. 748; Mosier v. Osborn, 284 111. 141, 119 N. E. 924; Stotts v. Fairfield, 163 la. 726, 145 N. W. 61; Wokoun v. Jameson - la. - , 167 N. W. 676; Wagner v. Allen - la. - , 169 N. W. 143; Watland v. Quaintance (la.), 171 N. W. 692; Como Orchard Land Co. v. Markham, 54 Mont. 438, 171 Ac. 274; Crompton v. Beedle, 83 Vt. 287, 30 L. R. A. (N.S.) 748, 75 Atl. 331.
"Authorities may be found which, by making a liberal allowance for the optimism of a seller, refuse to hold him legally responsible for "puffing his own wares' or engaging in so-called dealer's talk, even though his statements do not square with the truth, and this upon the theory that no sensible person ought to be influenced by such considerations; but even this rule, thus broadly stated, is not generally looked upon with favor at the present time: Pres-cott v. Brown, 30 Okla. 428, 120 Ac. 991. Of course, statements may be so extravagant that even the most credulous person ought not to believe them, and the law can not undertake to reward mere folly. From the very nature of the subject there can not be any definite rule by which to determine whether representations do or do nob constitute fraud. The utmost that can value of such stock may amount to fraud.2 Expressions which would amount to mere vague words of praise if the adversary party had an opportunity to inspect the subject-matter, may amount to statements of fact if such opportunity does not exist.3 A substantial overstatement of the value of a stock of goods, together with failure to disclose the fact that the business had been unprofitable, may amount to fraud.4 A statement as to value may be fraud if based on the special knowledge of the party who makes such statement.5 A false statement as to the value of land made to a vendee who lacked business experience and had no means of knowing the falsity of such statement may amount to fraud.6
Representation as to value may be coupled with other repre-sentations or with non-disclosure so as to deceive the adversary party; and in such case it may amount to fraud.7 A statement as to the solvency of the borrowers, whose notes a bank holds, and of the value of such notes, may amount to fraud in a contract for the sale of the stock of such bank.8 A statement as to value may amount to fraud if the party who makes such statement has, by some trick or artifice, prevented the adversary party from making an examination.9 If a vendee represents to the vendor that a certain tract of land is of very small value and that it can be used only for pasture, when in fact the vendee knows that valuable deposits of granite underlie such land, such representation is fraud for which such deed may be set aside.10 be done is to judge the representations involved in the particular case, by the results which ought reasonably to be anticipated from a reliance upon them, by one whose situation is such that he may rightfully accept them as true": Como Orchard Land Co. v. Mark-ham, 54 Mont. 438, 171 Ac. 274.
2 Stotts v. Fairfield, 163 la. 726, 145 N. W. 61. 3 Mosier v. Osborn, 284 HI. 141, 119 N. E. 924; Wakefield v. Coleman, 159 la. 241, 140 N. W. 386; Sutton v. Greiner, 177 la. 532, 159 N. W. 268; Howard v. Duncan, 94 Neb. 685, 144 N. W. 169; Williams v. State, 77 0. S. 468, 83 N. E. 802.
4 Face v. Hall, 177 Mich. 495, 143 N. W. 622.
5 Dilenbeck v. Davis (la.), 172 N. W. 184; McKibbin v. Day, 71 Neb. 280, 98 N. W. 845.
6 Robert v. Finberg, 85 Conn. 557, 84 Atl. 366; Wokoun v. Jameson, - la. - , 167 N. W. 676. A statement as to the value of land which is offered as mortgage security, is regarded as fraud for which performance may be refused. Watland v. Quaintance (la.), 171 N. W. 692.
7 Crompton v. Beedle, 83 Vt. 287, 30 L. R. A. (N.S.) 748, 75 Atl. 331.
8 Dilenbeck v. Davis (la.), 172 N. W. 184.
9 Garr v. Alden, 139 Mich. 440, 102 N. W. 950.
10 Crompton v. Beedle, 83 Vt. 287, 30 L. R. A. (N.S.) 748, 75 Atl. 331.
Sec. 307. Price, A statement as to the price paid for either the property in question or for similar property,1 as where price marks on goods are falsely stated to be the cost price,2 or where the price is falsely said to be the regular wholesale price,3 or where a vendor gave his vendee a receipt showing that a greater amount was paid for realty than was paid, to enable vendee to sell such realty at a higher price to a third person,4 or as to the price offered therefor,5
1 Colorado. Zang v. Adams, 23 Colo. 408, 58 Am. St. Rep. 249, 48 Ac. 509; Mayo v. Wahlgreen, 9 Colo. App. 506, 50 Ac. 40.