The tort of deceit is a type of legal injury that occurs when a person intentionally and knowingly deceives another person into an action that damages them. Specifically, deceit requires that the tortfeasor
* makes a factual representation,
* knowing that it is false, or reckless or indifferent about its veracity,
* intending that another person relies on it,
* who then acts in reliance on it, to that person's own detriment.
Deceit dates in its modern development from ''Pasley v. Freeman''. Here the defendant said that a third party was creditworthy to the claimant, knowing he was broke. The claimant loaned the third party money and lost it. He sued the defendant successfully.
Relationship with negligence
The leading case in English law is ''
Derry v. Peek'', which was decided before the development of the law on negligent misstatement. In ''
Hedley Byrne & Co Ltd v. Heller & Partners Ltd'' it was decided that people who make statements which they ought to have known were untrue because they were negligent, can in some circumstances, to restricted groups of claimants be liable to make compensation for any loss flowing, despite the decision in ''Derry v Peek''. This falls under the so-called "voluntary assumption of responsibility" test.
In ''Bradford Equitable B S. v Borders'', it was held that in addition the maker of the statement must have intended for the claimant to have relied upon the statement.
Negligence and deceit differ with respect to
remoteness of damages. In deceit the defendant is liable for all losses flowing directly from the tort, whether they were foreseeable or not. In ''Doyle v. Olby (Ironmongers) Ltd'',
Lord Denning MR
Alfred Thompson "Tom" Denning, Baron Denning (23 January 1899 – 5 March 1999) was an English lawyer and judge. He was called to the bar of England and Wales in 1923 and became a King's Counsel in 1938. Denning became a judge in 1944 when ...
remarked, "it does not lie in the mouth of the fraudulent person to say that
uch damages directly flowing from the fraudulent inducementcould not reasonably have been foreseen". So where there is a sudden downturn in the property market, a person guilty of deceitful misrepresentation is liable for all the claimant's losses, even if they have been increased by such an unanticipated event. This is subject to a
duty to mitigate Mitigation in law is the principle that a party who has suffered loss (from a tort or breach of contract) has to take reasonable action to minimize the amount of the loss suffered. As stated by the Canadian Federal Court of Appeal in ''Redpath Indu ...
the potential losses.
Contributory negligence
In some common law jurisdictions, contributory negligence is a defense to a tort claim based on negligence. If it is available, the defense completely bars plaintiffs from any recovery if they contribute to their own injury through their own negl ...
is no defence in an action for deceit.
[''Alliance and Leicester BS v. Edgestop Ltd'' 9931 WLR 1462] However proving deceit is far more difficult than proving negligence, because of the requirement for intention.
See also
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Tort law
A tort is a civil wrong that causes a claimant to suffer loss or harm, resulting in legal liability for the person who commits the tortious act. Tort law can be contrasted with criminal law, which deals with criminal wrongs that are punishab ...
*
Misrepresentation
In common law jurisdictions, a misrepresentation is a false or misleading '' R v Kylsant'' 931/ref> statement of fact made during negotiations by one party to another, the statement then inducing that other party to enter into a contract. The ...
*
Misleading or deceptive conduct
Misleading or deceptive conduct (often referred to as just misleading conduct) is a doctrine of Australian law.
Section 18 of the ''Australian Consumer Law'',''Competition and Consumer Act'' 2010 (CthSchedule 2, The Australian Consumer Law whic ...
Further reading
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References
{{law
Tort law