On April 9, 2018, Justice Kornreich of the New York County Commercial Division issued a decision in INTL FCStone Markets, LLC v. Corrib Oil Co. Ltd., 2018 NY Slip Op. 30646(U), dismissing a fraudulent inducement claim on summary judgment for lack of reasonable reliance, explaining:
Corrib also cannot maintain a cause of action for fraud or fraudulent inducement because it cannot show justifiable reliance. Corrib’ s fraud claims are based on alleged representations about the terms of the trades and FCStone’s supposed promise not to serve as a counterparty. However, the terms of the trades are set forth in the Confirmations, which clearly disclose that FCStone was the counterparty. This was not an aberration. FCStone appears to have been a counterparty to virtually all of the transactions, a fact clearly disclosed in the Confirmations. Corrib never objected. Where, as here, a simple review of contracts would have revealed the falsity of the alleged misrepresentation, a fraud claim cannot stand because a party claiming fraudulent inducement cannot be said to have justifiably relied on a representation when that very representation is negated by the terms of a contract. As discussed, the Schedule provides Corrib two days to review and challenge terms of a Confirmation. Having failed to do so, Corrib cannot now claim it was justified in not noticing that terms in the Confirmations conflicted with oral assurances allegedly provided by FCStone. And to the extent Corrib alleges that it was fraudulent for FCStone not to explicitly inform Corrib that it was the counterparty, such a claim for fraudulent omission cannot be maintained where, as here, the parties are not in a fiduciary relationship.
(Internal quotations and citations omitted).
Commercial litigation frequently involves fraud-based claims. Such claims have special pleading requirements or rules, including the rule that a sophsticated businessperson’s reliance on a false statement must be reasonable. Contact Schlam Stone & Dolan partner John Lundin at email@example.com if you or a client think you have been defrauded, or if someone has accused you or a client of defrauding them.
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