Friday, November 25, 2011

Agent Fraud or Negligent Misrepresentation

Missouri follows the Restatement (Second) of Agency, Sections 257 and 261, imposing liability on a principal for both agent fraud or negligent misrepresentation.

Sections 257 provides:

"A principal is subject to liability for loss caused to another by the other's reliance upon a tortious representation of a servant or other agent, if the representation is:
(a) authorized
(b) apparently authorized; or
(c) within the power of the agent to make for the principal."
"This precept applies not only where the agent has acted with the intent to mislead but where he failed to exercise reasonable care or competence in making the representation. Restatement (Second) of Torts § 257 comment b."

Mark Twain Plaza Bank v. Lowell H. Listrom & Co., 714 S.W.2d 859, 865 (Mo.App.1986).

Addition Missouri cases applying either or both section 257 or 261 include:

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