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EQUITABLE ACTION SEEKING RESCISSION BASED UPON FRAUD NEED NOT ALLEGE PECUNIARY LOSS.

The First Department, in a full-fledged opinion by Justice Tom, determined a triable issue of fact had been raised about whether defendant made misrepresentations in a contract for a condominium such that the contract could be rescinded. Defendant agreed the condominium was to be used for residential purposes, but sought to operate a day care center on the premises. The court noted that pecuniary damages need not be alleged in an equitable action to rescind a contract based upon fraud:

 

Fraud sufficient to support the rescission requires only a misrepresentation that induces a party to enter into a contract resulting in some detriment, and “unlike a cause of action in damages on the same ground, proof of scienter and pecuniary loss is not needed” … . Thus, the fourth cause of action alleging that misrepresentations in defendant’s purchase application induced plaintiff to forgo exercise of its right of first refusal has a sound basis in the record, and Supreme Court properly concluded that a triable issue is presented. Board of Mgrs. of the Soundings Condominium v Foerster, 2016 NY Slip Op 01273, 1st Dept 2-23-16

 

CONTRACT LAW (RESCISSION FOR MISREPRESENTATIONS NEED NOT BE SUPPORTED BY AN ALLEGATION OF PECUNIARY LOSS)/RESCISSION (ACTION FOR RESCISSION BASED UPON MISREPRESENTATIONS NEED NOT ALLEGE PECUNIARY LOSS)/FRAUD (ACTION FOR RESCISSION OF A CONTRACT BASED UPON MISREPRESENTATIONS NEED NOT ALLEGE PECUNIARY LOSS)/DAMAGES (ACTION FOR RESCISSION OF A CONTRACT BASED UPON MISREPRESENTATIONS NEED NOT ALLEGE PECUNIARY LOSS)

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