Wednesday, December 25, 2013

LaFazia v. Howe case brief

LaFazia v. Howe case brief summary
575 A.2d 182 (R.I. 1990)

CASE SYNOPSIS
Plaintiff sellers instituted an action against defendant buyers for breach of a promissory note. The Superior Court (Rhode Island) granted the sellers' motion for summary judgment. The buyers appealed.

CASE FACTS
The buyers had purchased a delicatessen from the sellers. Business was not as the buyers had anticipated and the business lost money. As a result, the sellers were unable to make their payments to the sellers on the promissory note. The buyers argued that summary judgment was inappropriate because the sellers' misrepresentations raised an issue of material fact concerning whether the misrepresentations were intended to induce the buyers to purchase a failing business and argued that the misrepresentations were a basis for rescinding the contract. The sellers pointed to merger and disclaimer clauses in the contract and claimed that they obviated the buyers' claim of misrepresentation.

DISCUSSION

  • The court agreed with the sellers that the clauses precluded the buyers from asserting that the sellers made material misrepresentations regarding the profitability of the business. 
  • The court reasoned that the evidence showed that the buyers did not attempt to rescind the contract but instead affirmed the contract and that the merger and disclaimer clauses prevented the buyers from successfully claiming reliance on prior representations.

CONCLUSION
The court affirmed the grant of summary judgment.

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