Question

While sitting beside a swimming pool, your neighbor Bob, a roof installer, tells you that you should buy stock in HotNet because it is about to skyrocket in value. You invest all of your money in the stock, which then drops to zero. You:

a) Sue Bob for misrepresentation
b) Sue Bob for negligent misrepresentation
c) Sue Bob for fraudulent misrepresentation
d) Cannot sue Bob for misrepresentation

Answer 1

Answer: d) Cannot sue Bob for misrepresentation

Explanation: A misrepresentation is a false statement made from one person to another that a certain fact is true or accurate when it is indeed false. The fact that the value of the stock I bought on Bob's opinion does not give me the right to sue him for misrepresentation (intentional). The reason is this, Bob's expression of his opinion concerning the HotNet stock does not usually constitute a misrepresentation even when it turns out that his opinion is incorrect. It wasn't intended, however, he could be sued for negligent misrepresentation.