McElrath v. Electric Inv. Co.

114 Minn. 358, 131 N.W. 380, 1911 Minn. LEXIS 1105

 

RULE:

Promises or assurances as to future events cannot be made the basis of an action of fraud.

FACTS:

Defendant was the owner of a summer hotel property in Antlers Park. On April 15, 1209 the parties entered into a contract by the terms of which defendant leased the property to plaintiff for a term of years. The terms and conditions of the lease were fully set forth in the written contract, which was duly executed by both parties, and required of plaintiffs the payment of specified amounts semiannually, and that the hotel be conducted along certain specified lines. The action is being brought for damages brought about by the fraudulent representations made by defendant to induce the plaintiffs to enter into the contract.

ISSUE:

Can making false representations over subject matter that is uncertain and relates to future conditions be a cause of action?

ANSWER:

No.

CONCLUSION:

The Court affirmed the lower court’s decision. If in making the representations defendant "intended to create in plaintiffs the belief” that something was going to happen, and "the representations might be understood and were understood by plaintiffs as asserting that fact," then a charge of fraud may be based thereon, though the represented event was to occur in the future. Here, the defendant made a promise to make an important summer resort, but that is not a promise that he has control over because it is surrounded with known uncertainty beyond defendant’s control. It is therefore not open to the charge of actionable fraud.

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