Quick Summary
51-year-old Vokes (plaintiff) claimed Arthur Murray (Defendant), the franchisor of Arthur Murray Dance Schools, used flattery to make her believe she was a good dancer capable of making dance her career. She claimed Arthur Murray convinced her to buy dancing lessons. The defendant claimed his remarks to Vokes were not misrepresentations but rather trade-approved “puffing.” Vokes appealed the trial court’s ruling that his complaint lacked a cause of action.
A party’s opinion may be actionable as fraudulent misrepresentation if they have superior knowledge.
The court concluded that a contract could be broken if one party agrees to it because of fraudulent misrepresentation and undue influence, like a statement of opinion where one party knows more about the truth of the statement than the other. A contract can also be invalidated if the parties signed it based on a false statement of fact or opinion.
Rule of Law
In situations where one party has more expertise than the other, the statements of opinion made could be actionable for fraudulent misrepresentation and undue influence.
Facts of the Case
Vokes (Plaintiff), a 50-year-old widow, decided to become an accomplished professional dancer at age 51. Vokes alleged that Arthur Murray (Defendant), the franchisor of the (Arthur Murray Dance Schools) employees used flattery, cajolery, and awards to lead her to believe that she was a good dancer capable of taking dance as a career. She also alleged that Arthur Murray persuaded her to invest $31,000 dollars in dancing tuition.
Vokes filed a lawsuit to cancel the remaining 2,300 hours of courses included in the contract she had made with Murray. She claimed in her complaint that she had no talent for dancing, had never taken dance lessons before and that Arthur Murray’s staff had misled her about her abilities and skill to take advantage of her.
The defendant claimed that his remarks to Vokes were not misrepresentations of reality but rather just views or “puffing” authorized by the trade. The trial court rejected the appellant’s complaint for failing to identify a cause of action, and Vokes filed an appeal.
Issue
Can a contract be invalidated if the parties signed it based on a false statement of fact or opinion where one party knows more about its truthfulness than the other?
Holding and Conclusion
Yes.
A contract can be broken if one of the parties agrees to it because of fraudulent misrepresentation and undue influence, like a statement of opinion where one party knows more about the truth of the statement than the other.
Reasoning and Analysis
The court reasoned that a tradesman’s use of puffing to sell their services does not constitute fraudulent behavior and hence cannot be prosecuted. His puffing became fraudulent when he pushed her to spend money on skills that did not exist. Still, it was clear to the plaintiff that her abilities did not justify the defendant’s costs. Arthur Muray charmed the plaintiff to spend such fees.
Neither her growth nor her expertise in dancing warranted the extensive, costly additional sessions he insisted she attend after hearing his comments. Accordingly, it may be argued that the defendant wasn’t interested in helping the plaintiff improve her dance skills but rather only generating a profit.
The court pointed out that the plaintiff was not given a fair chance to learn whether the defendant’s claims were true or false. The court agreed with the plaintiff that she had a right to a trial since her complaint alleged that defendant had used undue influence or misrepresented material terms of the contracts to get her to sign them.
Relevant FAQs of this case
What is the difference between fraudulent & negligent misrepresentation?
Fraudulent misrepresentation occurs when someone deliberately lies to you in order to gain some sort of benefit—like money or other property. Negligent misrepresentation is more tricky. It involves misrepresenting the truth accidentally or carelessly but not with the intent to defraud you.
The line between the two isn’t always clear, but it helps to think of a fraudulent act as one done with the knowledge that it was false.
For example, if someone tells a potential buyer that an antique vase was made by a famous artist who died in 1985 (when in fact the artist died in 1975), he or she would be knowingly providing false information and could be considered liable for fraudulent misrepresentation. In contrast, if someone mistakenly said that the same vase was made by another well-known artist who died in 1985 (when in fact, the correct date was 1975), that person would not be acting with intent and could be considered liable for negligent misrepresentation.
In either case, both parties agree on something untrue.
Does flattery fall under the undue influence?
Undue influence is “the intentional compelling another person to act in some manner counter to his will or judgment, by methods of flattery, deception, or intimidation.” A party alleging undue influence has the burden of proof in a court of law. Circumstantial evidence, issues about the victim’s mental competence to make informed judgments, and expert testimony may all be used to support a claim of undue influence.
References
Was this case brief helpful?