View source for Tort of deceit

{{Short description|Legal injury}}
{{Use dmy dates|date=June 2021}}
{{tort law}}
The '''tort of deceit''' is a type of legal injury that occurs when a person intentionally and knowingly deceives another person into an action that damages them. Specifically, deceit requires that the tortfeasor 
* makes a factual representation,
* knowing that it is false, or reckless or indifferent about its veracity,
* intending that another person relies on it,
* who then acts in reliance on it, to that person's own detriment.

Deceit dates in its modern development from ''Pasley v. Freeman''.<ref>''Pasley v. Freeman'', (1789) 3 [[Term Reports|TR]] 51</ref> Here the defendant said that a third party was creditworthy to the claimant, knowing he was broke. The claimant loaned the third party money and lost it. He sued the defendant successfully.

==Relationship with negligence==
The leading case in English law is ''[[Derry v. Peek]]'',<ref>{{cite BAILII|litigants=Derry v Peek|link=Derry v. Peek|court=UKHL|year=1889|num=1|parallelcite=(1889) LR 14 App Cas 337|date=1 July 1889}}</ref> which was decided before the development of the law on negligent misstatement. In ''[[Hedley Byrne & Co Ltd v. Heller & Partners Ltd]]'' it was decided that people who make statements which they ought to have known were untrue because they were negligent, can in some circumstances, to restricted groups of claimants be liable to make compensation for any loss flowing, despite the decision in ''Derry v Peek''. This falls under the so-called "voluntary assumption of responsibility" test.

In ''Bradford Equitable B S. v Borders'',<ref>''Bradford Equitable B S. v Borders'', [1941] 2 [[All England Law Reports|All ER]] 205, HL</ref><ref>{{cite journal |author = Horace Russell|year= 1939|title= The Borders Case|journal= The Journal of Land & Public Utility Economics|volume= 15|issue= 2|pages= 225{{endash}}227|doi= 10.2307/3158131|jstor= 3158131}}</ref> it was held that in addition the maker of the statement must have intended for the claimant to have relied upon the statement.

Negligence and deceit differ with respect to [[Remoteness (law)|remoteness]] of damages. In deceit the defendant is liable for all losses flowing directly from the tort, whether they were foreseeable or not.<ref>{{cite BAILII|litigants=Smith New Court Securities Ltd v. Scrimgeour Vickers (Asset Management) Ltd|link=Smith New Court Securities Ltd v Scrimgeour Vickers (Asset Management) Ltd|court=UKHL|year=1996|num=3|parallelcite=[1997] AC 254|date=21 November 1996}}; [http://www.legalmax.info/members2/conbook/clef_aqu.htm ''Clef Aquitaine SARL v. Laporte Materials (Barrow) Ltd''] {{Webarchive|url=https://web.archive.org/web/20140221142029/http://www.legalmax.info/members2/conbook/clef_aqu.htm |date=21 February 2014 }} [2000] 2 All ER 493</ref> In ''Doyle v. Olby (Ironmongers) Ltd'', [[Lord Denning MR]] remarked, "it does not lie in the mouth of the fraudulent person to say that [such damages directly flowing from the fraudulent inducement] could not reasonably have been foreseen".<ref>{{cite BAILII|litigants=Doyle v Olby (Ironmongers) Ltd|link=Doyle v Olby (Ironmongers) Ltd|court=EWCA|division=Civ|year=1969|num=2|pinpoint=p. 167|parallelcite=[1969] 2 QB 158|date=31 January 1969}}</ref> So where there is a sudden downturn in the property market, a person guilty of deceitful misrepresentation is liable for all the claimant's losses, even if they have been increased by such an unanticipated event.<ref>''Slough Estates Ltd v. Welwyn-Hatfield District Council'' [1996] 2 PLR 50</ref> This is subject to a [[duty to mitigate]] the potential losses.<ref>''Downs v. Chappell'' [1997] 1 [[Weekly Law Reports|WLR]] 426, where a conned car buyer only recovered losses up to the time he should have sold the car on</ref>

[[Contributory negligence]] is no defence in an action for deceit.<ref>''Alliance and Leicester BS v. Edgestop Ltd'' [1993] 1 WLR 1462</ref> However proving deceit is far more difficult than proving negligence, because of the requirement for intention.

==See also==
*[[Tort law]]
*[[Misrepresentation]]
*[[Misleading or deceptive conduct]]

==Further reading==
* {{cite book |last= Eggers|first= Peter Macdonald|year= 2009|title= Deceit: The Lie of the Law|url= https://books.google.com/books?id=mZDCAAAAQBAJ&pg=PP1|location= London|publisher= Informa Law|isbn= 978-1-31791274-3}}

==References==
{{reflist|2}}

{{law}}

[[Category:Tort law]]