April 23, 2013 Articles

At Liberty to Lie? The Viability of Fraud Claims after Disclaiming Reliance

Courts have taken different approaches regarding the enforceability of waiver of reliance provisions.

By Andrew M. Zeitlin and Alison P. Baker

Writing for the New York Court of Appeals, Judge Edward R. Finch once wrote, “[a] rogue cannot protect himself from liability for his fraud by inserting a printed clause in his contract.” Ernst Iron Works v. Duralith Corp., 270 N.Y. 165, 169 (1936). Today, many courts are disagreeing with Judge Finch’s premise, holding that fraud claims are precluded where the complaining party contractually disclaims reliance on his or her opponent’s statements. In sum, with a properly drawn contract, a party may be at liberty to lie.

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