How To Prove A Texas Negligent Misrepresentation Claim
In Texas, a claim of Negligent Misrepresentation is defined as:
A party that is trying to induce another party to a contract has a duty to ensure that reasonable care is taken as regards the accuracy of any representations of fact that may lead to the latter party to enter the contract. If such reasonable care to ensure the truth of a statement is not taken, then the wronged party may be the victim of negligent misrepresentation. Negligent misrepresentation can also occur in some cases when a party makes a careless statement of fact or does not have sufficient reason for believing in that statement’s truth.
It simply means:
A statement made without regard to the truth.
There are 4 elements of the claim:
- Element 1. A representation was made by the defendant in the course of his or her business, or in a transaction in which he or she has pecuniary interest. A representation was made by the defendant during their business activities or in a deal where they stood to gain financially.
Facts that might support this element look like:
* The defendant, a licensed real estate agent, advertised the property as having a new roof installed within the last year.
* During a business meeting, the defendant assured the plaintiff that the financial projections for the investment were accurate and reliable.
* The defendant provided a written report to the plaintiff, claiming that the product had been tested and met all safety standards.
* In a sales presentation, the defendant stated that the software would increase productivity by at least 30%, based on previous client results.
* The defendant, as a car dealership owner, represented that the vehicle had never been in an accident during the sales process. - Element 2. The representation was false information for the guidance of others. In a negligent misrepresentation claim, this element means that someone provided incorrect information that they should have known was false, leading others to make decisions based on that misleading information.
Facts that might support this element look like:
* The defendant provided a financial report that inaccurately stated the company’s revenue, leading investors to believe the business was more profitable than it actually was.
* The defendant claimed that the product was FDA-approved, despite knowing it had not undergone the necessary testing or certification.
* The defendant assured potential clients that the service would be delivered within a week, while being aware that the timeline was unrealistic and unachievable.
* The defendant represented that the property was free of liens, failing to disclose existing legal claims against it that could affect ownership.
* The defendant advertised the software as fully compatible with existing systems, despite having knowledge of significant compatibility issues that would hinder its functionality. - Element 3. The defendant did not exercise reasonable care or competence in obtaining or communicating the information. The defendant failed to take proper care or show skill when gathering or sharing information, which means they didn’t act responsibly, leading to misleading or false statements that caused harm to someone else.
Facts that might support this element look like:
* The defendant failed to verify the accuracy of the information provided, relying solely on unverified sources.
* The defendant did not conduct any due diligence before communicating the information to the plaintiff.
* The defendant had access to reliable data but chose to ignore it in favor of outdated or misleading information.
* The defendant was aware of the potential consequences of providing inaccurate information but proceeded without caution.
* The defendant neglected to disclose critical information that would have clarified the context of the data shared. - Element 4. The plaintiff suffered pecuniary loss by justifiably relying on the representation. The plaintiff lost money because they trusted a false statement made by someone else, believing it to be true, and that trust led them to make a financial decision that resulted in their loss.
Facts that might support this element look like:
* The plaintiff invested $50,000 in a business venture based on the defendant’s assurance of high returns.
* The plaintiff incurred $10,000 in expenses after the defendant falsely claimed the product was FDA approved.
* The plaintiff declined a lucrative job offer, believing the defendant’s promise of a stable income from a new venture.
* The plaintiff lost a significant client after relying on the defendant’s misrepresentation about the company’s financial stability.
* The plaintiff purchased a property at an inflated price due to the defendant’s misleading statements about its market value.
(See Federal Land Bank Ass’n of Tyler v. Sloane, 825 SW 2d 439 – Tex: Supreme Court 1991.)
If you’re in court without a lawyer and plan to assert a Claim of Negligent Misrepresentation, having a Personal Practice of Law at Courtroom5 is essential. You’ll need to make informed decisions about what to file at each phase of your case and prepare legal documents supported by thorough legal research and a strong analysis of the facts. Equip yourself with the tools and knowledge to effectively navigate your legal journey.
Prove Your TX Negligent Misrepresentation Claim
U.S. Civil Cases Only