In business, as in life, people are not always as reputable and they appear. Unfortunately, there are less than scrupulous business actors who will resort to fraudulent misrepresentation to gain what you have.
The elements of proving a fraudulent misrepresentation claim are that:
- the defendant made a material false representation;
- the defendant intended to commit fraud against the plaintiffs;
- the plaintiff reasonably relied upon the defendant's fraudulent misrepresentation; and
- the plaintiff suffered damage as a result of their reliance.
Additionally, New York's Deceptive Practices Act (which is not to be confused with the Uniform Deceptive Trade Practices Act that does not apply in New York) includes NY General Business Law section 349, which prohibits deceptive business practices in the conduct of any business, trade, or commerce. This law is broadly construed and applies to a wide range economic activities and empowers consumers and gives them an even playing field in their disputes with businesses that are generally in a superior position.
According to the Court of Appeals of New York, the highest court in the state, NY GBL 349 has three elements: 1) the act or practice was consumer-oriented; 2) the act or practice was misleading in a material respect; and 3) the plaintiff was injured as a result of the deceptive act or practice. This is a much lower bar to meet when compared to common-law fraudulent misrepresentation because a plaintiff does not need to prove that the defendant intended to mislead the plaintiff.
New York's Deceptive Practices Act also specifically prohibits false advertising and odometer tampering (which is classified as a misdemeanor). This statute allows for criminal prosecution by the attorney general, as well as civil litigation by the party injured by the deceptive practices. If the plaintiff prevails on a deceptive trade practices claim, s/he may be awarded actual damages up to $1,000 (in cases of willful or purposeful deception), as well as the costs and fees associated with the litigation.
*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.
Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.