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What must be proven in a misrepresentation action in Massachusetts?

Suppose that a businesswoman named Kim owned a makeup store. Because Kim’s order of cruelty-free makeup would not be delivered for another month, Kim’s customers began to gravitate toward businesswoman Selena’s makeup store to purchase the products from Selena’s store instead of Kim’s store. Selena’s store already carried the products that Kim’s customers wanted.

Upset that her customers were spending money at Selena’s store to make purchases, Kim began to give false information and untruths to Selena and Selena’s customers. First, Kim told Selena that the cruelty-free makeup sold at Selena’s store was actually defective and dangerous to customers. Second, Kim told Selena’s customers that Selena tampers with the products. Third, Kim went to Selena’s store and marked up the price of many of the products at a much higher price to deter customers from purchasing makeup from Selena’s store. Finally, Kim told Selena that Kim could find better makeup at a cheaper price for Selena. She told Selena that if Selena were willing to close her store for a few days, then Kim would be able to assist Selena with the removal of Selena’s “defective” makeup and the addition of the newer makeup that Kim could secure for Selena.

In reliance on Kim’s information and actions and worried that the “defective” makeup at Selena’s store would injure someone, Selena made decisions which ultimately caused Selena’s business to suffer economic damages.

To have a sound claim of misrepresentation, a plaintiff “must show a false statement of material fact made to induce the plaintiff to act, together with reliance on the false statement by the plaintiff to the plaintiff’s detriment.”[1] The speaker does not need to know that the statement is a false statement.[2]

There are generally two forms of misrepresentation: negligent misrepresentation and intentional misrepresentation.

Negligent misrepresentation requires the following elements: (1) misrepresentation by a defendant in a business or professional capacity; (2) breach of a duty toward the plaintiff; (3) causation; (4) justifiable reliance; and (5) damages.

The proof requirements for intentional misrepresentation include all of the factors contained in negligent misrepresentation, plus the knowledge that the statement is a false statement (scienter). In Massachusetts, however, the speaker does not need to know that the statement is a false statement, but only needs to have the ability to reasonably determine whether the statement is a false statement.[3]

Selena may have a solid case of intentional misrepresentation against Kim, as Kim provided many untruths to Selena. In reliance on her untruths, Selena made decisions which negatively impacted her business. This is a case for intentional misrepresentation specifically, because Kim knew that her statements were false. Additionally, Selena may have other forms of relief against Kim, such as interference with business relations, slander, consumer protection under a “rascality” standard in Section 11 of Chapter 93A, and more.

Personal injury, negligence, business, and tort law matters are nuanced and complex. If you would like to learn more about being made whole as a result of damage that you’ve incurred, or if you would like to learn more about damages in a personal injury case, call us for a free consultation at 617-657-HURT (4878) or fill out our contact form here.

[1] Zimmerman v. Kent, 31 Mass. App. Ct. 72, 77 (1991)

[2] Id.

[3] Id.

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