Danann Realty Corp. v. Harris

157 N.E.2d 597, 5 N.Y.2d 317 (1959)



If the facts represented are not matters peculiarly within a party's knowledge, and the other party has the means available to him of knowing, by the exercise of ordinary intelligence, the truth or the real quality of the subject of the representation, he must make use of those means, or he will not be heard to complain that he was induced to enter into the transaction by misrepresentations.


Plaintiff real estate company sued defendants, alleging that it was induced to enter into a contract of sale of a lease of a building held by defendants because of oral representations, falsely made by the defendants, as to the operating expenses of the building and as to the profits to be derived from the investment. Plaintiff, affirming the contract, sought damages for fraud and defendant filed a motion to dismiss. The lower court ruled in favor of defendant. On appeal, the court reversed the lower court's order and reinstated the trial court's ruling dismissing plaintiff's complaint.



Can defendant be held liable for fraud due to its oral representations to plaintiff?




The complaint did not state facts sufficient to constitute an action for fraud. Plaintiff made a representation in the contract that it was not relying on specific representations not embodied in the contract. Plaintiff could not now assert that it was relying on such oral representations. To condone this fraud would place the purchaser in a favored position. This is particularly so, where, as here, the purchaser confirms the contract, but seeks damages. If the plaintiff has made a bad bargain, he cannot avoid it in this manner.

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