Odger's English Common Law

FRAUDULENT MISREPRESENTATION. 555
(v.) that such, representations induced the plaintiff to take
certain action ; and
(vi.) that the plaintiff has thereby suffered damage.
The representations must be made either by the defendant
himself or by some agent whom he has duly authorised in that
behalf ;
and they must be made either to the plaintiff himself,
or to some third person with the intention and desire that he
should repeat thorn to the plaintiff. The action, which the
plaintiff is induced to take in reliance upon such representa-
tions, may be of any kind which causes him damage ; but it
very often is the entering into a contract. If the plaintiff be
induced to enter into a contract by a misrepresentation which
is innocently and not fraudulently made, he is entitled to have
the contract rescinded if he applies for such relief in time, 1
but he is not entitled to recover any damages. Damages are
the penalty of deceit.
That the defendant acted fraudulently will give no
ground of action to a plaintiff, unless the damage which he
has suffered is the direct consequence of the defendant's
fraudulent act ; it must, as a rule, be either a natural and
necessary consequence of his words or a result which he him-
self contemplated at the time when he made the representation.
Whenever A. fraudulently makes a representation which is
false, and which he knows to be false, to B., meaning that
B. shall act upon it, and B., believing it to be true, does act
upon it and thereby sustains damage, A. will be liable to an
action for damages at suit of B. 2
If A. gives B. a good character for honesty and B.. by means of that
character obtains a situation in C.'s warehouse and subsequently embezzles
C.'s money, A. will not be responsible for this loss, unless he knew that
what he wrote was false and wrote it with the object of obtaining that
situation for B.
A defendant who has fraudulently made an untrue statement
is, as a rule, only liable to pay damages to those persons
to whom he made the statement, or to whom he intended it
i Redgrave v. Hurd (1881), 20 Ch. D. 1 ; and see post, p. 722.
2 Swift v. Jewsbury (1874), L. R. 9 Q. B. 301 ; Smith v. Chadwick (1884), 9
App. Cas. 187 ; Edgington v. Fiizmauride (1885), 29 Ch. D. 459, 482.