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Fraudulent Inducement of Contracts and a Party's Duty of Due Diligence

In a recent case, a restaurant (a business entity that owned/operated a restaurant) leased a building from the landowner. Sometime afterwards, the restaurant claimed it had been fraudulently induced into signing the lease (the decision refers to a "contract and lease") and sued the landowner for rescission (to undo) of the lease based on the fraudulent inducement.

A claim of fraudulent inducement means the offending party lied (made misrepresentations of fact) to you to get you to sign a contract; you did not find out the other party lied until after you signed the contract; you have been damaged by the fraudulent inducement; and now you want out of the contract. (The decision doesn't get into what the supposed misrepresentations were.)

However, part of a court's analysis is "buyer beware", you better have done your homework, your due diligence*, before signing the contract. In this case, the appeals court said the restaurant could have found out the landowner was making misrepresentations because the necessary information wasn't solely in the landowner's possession:
Here, the plaintiffs failed to establish that the alleged misrepresented facts were matters peculiarly within the defendants' knowledge, which they could not have discovered by the exercise of "ordinary intelligence". 
The restaurant also sought rescission of the contract on a theory of "mistake of fact." But for the same reasons, the court said no, you restaurant failed to show that you did your homework, which would have cleared up any supposed mistake of fact:
In addition, inasmuch as the plaintiffs seek to rescind the contract and lease on the ground of a unilateral mistake of fact, they failed to establish the exercise of ordinary care in relation thereto, and, thus, failed to establish their prima facie entitlement to judgment as a matter of law rescinding the contract and lease on that ground.
The restaurant may be able to prove all of its claims at a trial, but the lower court, and the appeals court, said it failed to prove its claims on summary judgment (a mini-trial, on paper). You can win on fraudulent inducement claims, but you have to show you did your homework before signing the contract.

*Using "due diligence" here in its broad/common meaning; "due diligence" and "ordinary intelligence" can mean different things

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