According to the Florida Supreme Court, the factors to be considered in a Negligent Misrepresentation case are:
The statement made by the defendant must be material or important and not a small portion of a more in depth statement which is essentially true. According to Standard Jury Instructions-Civil Cases (No. 99-2), 777 So.2d 378, 381 (Fla. 2000), a material facts is one that is of such importance that the plaintiff would not have entered into a transaction but for the statement. Comparative negligence can apply to a case of negligent misrepresentation when look at whether the listener justifiably relied on the statement by the defendant.
Fraudulent misrepresentation is where the defendant knows that the statement is false and intends that the plaintiff rely on it to his/her detriment and to the benefit of the defendant. Fraudulent misrepresentation requires less of showing concerning comparative fault where the plaintiff could have through some diligence ascertained that the statement was false, as the law wishes to punish those who use fraud more than those who are merely negligent.
The pleading requirements for a lawsuit for both negligent misrepresentation and fraudulent misrepresentation require pleading with specificity.
An example of a negligent misrepresentation would be where a real estate agent unknowingly informs a potential buyer that a house does not have any defects, when in fact it does. Fraudulent misrepresentation would be where the real estate agent know of a defect but informed the potential buyer that there was no defect in an attempt to sell the house despite the defect. A similar cause of action to this would be of Fraud in the Inducement where there is:
Class Actions cannot be brought under separate contracts on the basis of fraud. Further, one in Pari Delictor, or who engaged in fraud themselves, may be barred from bringing an action. Fraud in the inducement, like the other causes of action above, must be plead with particularity in accordance with Fla.R.Civ.P. 1.120(b), and must list who made the statement, the substance of the false statement, when the statement was made and in what context.
Fraud in the Inducement is the use of deceit or trick to cause someone to do something to their detriment, such as using false statements to induce someone to sign a contract that is to their detriment.
A further related cause of action is Fraud in the factum, where a misrepresentation cause one to enter into a transaction without understanding the risks, duties or obligations incurred. To determine whether a transaction involves fraud in the factum a consideration of all the relevant factors to the transaction is necessary. An example of Fraud in the factum would be if one induced you to sign one type of contract when in fact it was a different type of contract. In this case the contract would be voidable due to the fraud (as opposed to void on its face). Fraud in the factum can be considered an equitable defense to the terms of the contract.
Another type of fraud would be Extrinsic fraud which usually occurs in family and domestic relations cases whereby one uses fraud to prevent one from obtaining information necessary to their ability to prove their case, such as lying on a Florida Family Law Financial Affidavit, or fabricating evidence. Extrinsic fraud also occurs in foreclosure cases where the lender through their fraud forces the homeowner to lose their property.
Intrinsic fraud, on the other hand, is where fraud was used to procure a transaction. The two types of intrinsic fraud are fraud in the inducement and fraud in the factum, as listed above.
A term often used in the context of fraud is Scienter, or knowledge of the wrongdoing. Thus one committing a fraud would have knowledge that what they are doing is fraudulent and have the intent to commit the fraud. For example, under Section 10(b) of the Securities and Exchange Act of 1934, a plaintiff must prove that the defendant acted with scienter, though the Private Securities Litigation Reform Act of 1995 added that the plaintiff must prove a “strong inference” of scienter.