Fraud in the Inducement??? Interesting Take - REO Property Preservation Forum
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post #1 of 1 (permalink) Old 11-01-2013, 02:59 PM Thread Starter
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Fraud in the Inducement??? Interesting Take

Even if it is mine in opinion only...

naturally after publishing you find more stuff....

A recent decision of the federal Court of Appeals for the Eighth Circuit, Outdoor Central Inc. v. Inc. upheld a trial judge's determination of fraud in the inducement. The case arose from a presentation that explained the "advantages" of a merger and the features of a technology system. The system was described as "scalable" and containing features that did not exist.
The acquiring party conducted an independent investigation, but failed to uncover the false statements prior to the purchase. When it sued to rescind the transaction, the seller responded that scalable was just "a marketing term devoid of technical meaning." Besides, the purchaser had conducted its own investigation before agreeing to the transaction.
The trial judge determined that in the context of the presentation "scalable" was a technical term. The seller fired individuals who knew of the system's defects and those persons were unavailable to be interviewed by the purchaser. Consequently, the defects were particularly within the seller's knowledge and there was no way to fully test the system before purchase. Specific factual statements that the seller made concerning the system were determined to be false; thus the Eighth Circuit upheld the trial judge's decision granting damages and related remedies.

This is a very tricky crime to prove...however, what's your there enough crap industry wide that can be compiled????
Enjoy the weekend all!!!!

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