Deceit in the law of tort is said to have been committed when a person knowingly or recklessly—without caring whether a statement is true or false—makes a false representation of fact to another person, with the intent that the person should act upon it, and the person suffers damage as a result of acting on the falsehood.
According to Street on Torts, deceit is defined as:
“A false representation made by the defendant knowingly, or without belief in its truth, or recklessly, careless whether it be true or false, with the intention that the plaintiff should act in reliance upon the representation, which causes damage to the plaintiff in consequence of his reliance upon it.”
This tort is fundamentally concerned with fraudulent misrepresentation, as distinct from negligent or innocent misstatement.
Deceit vs. Negligent Misstatement.
it is a trite principle of law, established in Hedley Byrne & Co Ltd v. Heller & Partners Ltd (1964) AC 465, that a person who makes a careless misstatement to another may be liable in negligence if the other suffers loss as a result of relying on that statement. However, in deceit, the misstatement must be knowingly or recklessly false, and intended to induce the claimant to act.
Origin of the Tort: Pasley v. Freeman (1789) 3 TR 51
The tort of deceit traces its roots to the landmark case of Pasley v. Freeman, where the defendant falsely represented to the plaintiff that a man (X) was creditworthy. Relying on this, the plaintiff sold goods to X on credit and suffered loss. The court held the defendant liable in deceit.
Lord Kenyon aptly described the principle thus:
“Fraud without damage, or damage without fraud, gives no cause of action; but where these two do concur, there an action lies… If indeed no injury is occasioned by the lie, it is not actionable; but if it be attended with a damage, it then becomes the subject of an action… In this case, two grounds of the action occur; here are both the damnum et injuria (damage and legal wrong).”
This statement captures the essence of the tort: fraud plus loss.
Essence of Fraud in Deceit
It becomes obvious that fraud is the most essential element of deceit. of deceit. Absence of fraudulent intent is fatal to any claim founded on deceit. This principle also finds expression in contract law under the head of fraudulent misrepresentation.
Illustrative Deceit Case: James v. Mid Motors Ltd (1978) L.R.N 187 SC
Here, the plaintiff entered a hire purchase transaction for a motor vehicle. The defendant’s manager insisted that the plaintiff must insure the vehicle comprehensively with a specific insurance company. The plaintiff paid the premium and was issued a cover note by the manager—bearing the name of an imaginary insurance company. vicariously liable for the manager’s fraudulent misrepresentation.
Elements of the Tort of Deceit
For a claim in deceit to succeed, five essential elements must be proved:
1. There must be a false representation;
- The defendant must have known it was false; or made it without belief in its truth, or acted recklessly
There must be intent, that the plaintiff (or someone in their class) should act upon the representation;
4 The plaintiff must have acted upon it;
5. The plaintiff must have suffered damage as a result.
This position was affirmed by the Nigerian court in Alhaji Abdalla Maradi v. Alhaji Sanda (1958) WRNLR 172, where the above five elements were reiterated as conditions precedent to success in deceit.
1. Ways in Which Representation of Fact May Be Made
A) By Words (Written or Oral) or Conduct: The representation may be made through spoken words, written statements, or conduct that implies a particular fact.
B) By Promises (When Dishonestly Made)
Where a defendant makes a promise without any intention or power of fulfilling it at the time, he may be liable in deceit.
Example: Edgington v. Fitzmaurice (1885) 29 Ch D 459
Mr. Edgington invested in company debentures based on a prospectus that falsely stated the money would be used to expand the business. In reality, the company intended to use the funds to pay off debts. The court held that a false statement of intention (if dishonest) amounts to deceit.
Modern Application in Nigeria: Monier Construction Co. Ltd v. Emmanuel Lumenze (2008)
The respondents submitted a design proposal for a water intake project. The appellant used the design without signing a contract, then offered a minimal consultancy fee. The court held the appellant liable for deceit, noting the misrepresentation of intent and the unauthorized use of the design. ₦3.5 million was awarded in damages.
On Silence: When Can Silence Amount to Deceit?
General Rule: Silence does not normally amount to deceit. However, exceptions exist:
i) Half-Truths or Incomplete Disclosures: As stated by Lord Cairns in Peek v. Gurney (1873):
“There must… be some active misstatement of facts, as that the withholding of that which is not stated makes that which is stated absolutely false.”
ii) Distorted Representations
E.g., in Dimmock v. Hallet (1866), describing a property as “fully let” without disclosing that tenants had given notice to quit amounted to misleading omission.
iii) Change of Circumstances
Where a statement was true at the time, but later becomes false, and the defendant is aware, he has a duty to update the representation.
Incledon v. Watson – school’s student numbers dropped during negotiations. Not disclosing this made the original representation misleading.
With v. O’Flanagan (1936) – a doctor stated his practice earned £2,000 annually. Illness caused revenue to drop drastically before the sale, but he did not disclose this. The court ruled that failure to update was actionable misrepresentation.
Ship v. Croskill (1870) – the seller failed to disclose damage that occurred after an initially accurate ship survey. Held liable for misrepresentation.
iv) Statutory Duty to Disclose
Certain statutes mandate disclosure, and breach may result in liability.
For example: Section 39 of the Companies Decree 1968 imposes disclosure duties on directors in company prospectuses. Failure constitutes a statutory tort akin to deceit.
v) Active Concealment
Deliberate concealment (e.g., hiding defects in property) also amounts to fraudulent misrepresentation.
2. The Defendant Must Have Known the Representation Was False
It must be shown that the defendant:Knew the representation was false,Did not believe it was true, orWas reckless as to its truth or falsity.
Derry v. Peek (1889) 14 App Cas 337
A tram company falsely stated in a prospectus that it had permission to use steam-powered trams. This turned out to be untrue—they had only applied for such permission. The court ruled in favour of the defendant because the false statement was made in honest belief. The House of Lords emphasized that for fraud to exist, dishonesty or recklessness must be proved—not mere error.
Statutory Position: Section 216, Tort Law of Enugu State Cap. 150, 2004
This statute modifies the position in Derry v. Peek . It states:
“Where a person has entered into a contract after a misrepresentation has been made to him by another party thereto and as a result he has suffered damage, then if the person making the representation would be liable in damages had the representation been made fraudulently, that person shall be liable notwithstanding that the representation was not made fraudulently, unless he proves that he had reasonable grounds to believe up to the time the contract was made that the facts represented were true.”
This provision introduces liability for negligent misrepresentation, unless the defendant proves reasonable belief in the truth of the statement.
3. Intention That the Representation Be Acted Upon.
To succeed in an action for deceit, the plaintiff must show that the defendant intended for him (or a class to which he belongs) to rely or act upon the false representation. The courts will infer such intention where the representation is either calculated to induce reliance or where its natural and probable consequence is to induce the plaintiff to act upon it.
It is not necessary for the representation to be directly communicated to the plaintiff. Liability may still arise where the representation was passed to the plaintiff indirectly or through a third party.
▪ Langridge v. Levy (1837) 2 M&W 519
In this case, the defendant sold a defective gun to the plaintiff’s father, who had clearly stated it was for his sons’ use. The defendant warranted it to be safe. The gun exploded and injured the son (the plaintiff). The court held the defendant liable in deceit, even though the representation was not made directly to the son.
▪ Philmore v. Hood (1838) 132 ER 1042 — Also affirmed thWhere
Where a representation is made to a class of persons, a plaintiff can sue if he proves he belongs to that class.
▪ Commercial Banking Co. Ltd v. Brown (1972) CLR 337
The defendant bank issued a false credit report about a wool buyer to another bank. The plaintiff, a wool grower, acted on the report and suffered loss. The court held the bank liable, as the representation was intended to influence wool growers — a class to which the plaintiff belonged.
However, if the representation is made to a limited group, a person outside that group cannot maintain an action.
▪ Peek v. Gurney (1873) L.R. 6 HL 377
The company issued a prospectus to potential original shareholders. A later buyer of shares (not an original allottee) relied on the prospectus and sued for deceit. The court held he could not claim because the statement was not intended for people who bought shares secondhand.
Key Point: Once intention to induce is established, it is no defence that the defendant did not intend damage to result from the representation.
4. Reliance on the Representation
The plaintiff must prove that the false statement caused him to act, and that such action resulted in a detriment. However, it need not be the sole reason — it is enough if it was actively present in his mind when acting.
▪ Smith v. Chadwick (1882)
A company prospectus claimed that Mr. Chadwick, described as a man of “great commercial experience,” was a director. Mr. Smith invested and suffered loss when the company failed. He sued, alleging deceit.
The court held against Smith. While the statement may have been exaggerated, he failed to prove that he relied on it when investing.
Legal Principle: A statement may be false, but to constitute deceit, the claimant must have relied on it to his detriment, and the defendant must have acted fraudulently or recklessly.
▪ Edgington v. Fitzmaurice (1885)
The company stated in a prospectus that funds raised would expand the business, but they actually intended to use the funds to pay debts. Mr. Edgington invested, partly relying on this false representation. The court ruled in his favour, holding that a false statement of future intention — made dishonestly — amounts to fraud.
Even though Edgington had other reasons for investing, the deceit was one of the operative factors, which is sufficient.
▪ Attwood v. Small (1838)
The buyer (Attwood) relied not on the seller’s false statement, but on his own agents’ verification of the business figures. The court held that since the buyer relied on independent advice, he could not succeed in a claim for deceit.
🔹 Key Point: If the plaintiff relied on his own judgment or independent inquiry, he cannot claim deceit. But the defendant cannot argue that the plaintiff should have discovered the truth by being more careful.
▪ Sule v. Aromire (1951) 20 NLR
A seller misrepresented a judgment to a buyer to support ownership of land that was actually unrelated to the land being sold. The court held that the buyer was misled by fraudulent misrepresentation and was entitled to damages, even though the buyer might have discovered the truth with further inquiry.
▪ Central Railway Co. of Venezuela v. Kisch (1867)
An investor sued because the prospectus issued by the company contained misleading statements. The court ruled that since he relied on the prospectus, the company was liable, even though he might have discovered the falsity.
Another Key Point: Contributory negligence is not a defence to deceit. The deceiver cannot say, “You should have been more careful.”
5. The Plaintiff Must Have Suffered Damage
Deceit is not actionable per se. The plaintiff must prove that he suffered actual damage due to reliance on the misrepresentation.While the damage is usually financial, the law also permits recovery for personal injury and loss of property arising directly from the deceit.
🔹 Measure of Damages in Deceit:
The plaintiff is entitled to be restored to the position he would have been in had the false representation not been made. He may recover:
The difference between the price paid and the actual value of the property or investment;
Consequential expenses, such as costs incurred in attempting to run a failed business;
All damages flowing directly from the deceit, whether foreseeable or not.
In essence, damages in deceit are broader than in contract. The aim is to fully compensate for all losses caused by the fraud.
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