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A plaintiff is not precluded from asserting a claim for fraudulent misrepresentation in the formation of a contract by either a merger or a disclaimer clause.
Loren Snyder contracted to purchase a wheat farm. The contract, drafted by Snyder’s broker, recited Snyder did not rely on and of Loverchecks’ representations as to any condition which purchaser deemed material to the sale. Snyder had bought property before and had farmed the property. Snyder alleged the farm had a major rye problem, not a minor one as he had been told. The district court granted summary judgment in favor of all defendants on all of Snyder’s claims. The district court awarded costs to all defendants, and awarded attorney's fees to the Loverchecks.
Does a claim for fraudulent misrepresentation survive a non-reliance clause?
The court affirmed district court's summary judgment on all claims, holding that: a claim for fraudulent misrepresentation survived a non-reliance clause, but Snyder failed to meet the heightened pleading requirements for fraud; a claim for negligent misrepresentation could not be maintained in an action for breach of contract; and that Snyder’s broker had a duty to explain the proposed contract language to Snyder, but Snyder was a sophisticated buyer and broker had not violated his duty under the facts of the case.