Deceit CASES
In English law, deceit is an intentional tort involving deliberate or reckless misrepresentation causing another party financial loss due to reliance on the false statement.
Definition and Principles
The tort of deceit requires proof of intentional or reckless false statements, claimant reliance, and resultant financial harm. It addresses deliberate dishonesty rather than mere negligence.
Common Examples
- Fraudulent misrepresentation leading to financial loss in business transactions.
- False statements knowingly made to induce a contract.
- Financial fraud involving deliberate misinformation.
Legal Implications
- Damages awarded to restore claimants to the position prior to deceit.
- Potential for punitive or exemplary damages due to intentional wrongdoing.
Practical Importance
Understanding deceit is crucial for protecting against intentional fraud, ensuring commercial integrity, and securing appropriate remedies for deliberate misrepresentation.
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Smith New Court bought shares based on a fraudulent misrepresentation. After purchase, an unrelated, massive fraud was revealed, collapsing the share price. The House of Lords held the defendant liable for all direct losses, even unforeseeable ones, flowing from the transaction. Facts Smith New Court Securities Ltd (SNC) was induced to purchase a large block of shares in Ferranti International Signal plc for approximately £23.1 million. The purchase was made based on fraudulent misrepresentations from the defendant, Scrimgeour Vickers (SV), who, acting for an undisclosed principal, falsely claimed there were two other bidders for the shares. This induced SNC to
