After three years without earning a profit, plaintiffs sue Division for fraud. Do these facts sustain an action for fraud in the inducement? Why or why not?
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Division West Chinchilla Ranch advertised on television that a five-figure income could be earned by raising chinchillas with an investment of only $3.75 per animal per year and only thirty minutes of maintenance per day. The minimum investment was $2,150 for one male and six female chinchillas. Division West represented to plaintiffs that chinchilla ranching would be easy and that no experience was required to make ranching profitable. Plaintiffs, who had no experience raising chinchillas, each invested $2,150 or more to purchase Division’s chinchillas and supplies. After three years without earning a profit, plaintiffs sue Division for fraud. Do these facts sustain an action for fraud in the inducement? Why or why not? |
Explanation
Evidence to support the arguments are as follows:
Statements that set the base of any contract should be true and fair in the eyes of law to make a contract valid. In this case, statements were biased and untrue, which constitutes a fraud. Individual D knew that the buyers had no experience, yet still allured them to purchase fur(chinchilla).
If in the given situation, the buyers who are buying chinchilla(fur) have full knowledge and experience, then the negotiation might have taken place with their full knowledge. For this reason, the case will not be of fraud.
Sample Response
The following may be the two scenarios:
Individual D may have performed the fraud
Individual D may not have performed a fraud
