Go to navigation Go to content
Toll-Free: (888) 497-3410
Phone: 516.791.5700
Law Offices of Jonathan M. Cooper

The Biggest Hurdle to Winning a Fraudulent Concealment Claim in NY

Permit me to be blunt.

It is really hard to win a claim that the other side to a contract fraudulently concealed material information from you (breaching their fiduciary duty), and on that basis to seek rescission of the contract. There are a number of reasons for this, not the least of which is that commercial contracts almost always have a provision wherein the parties acknowledge that they had the opportunity to perform their full due diligence, and are going in to the deal with their eyes wide open.

Moreover, and further complicating matters from the perspective of the party seeking out of the contract, even if they relied to their detriment on the seller's representations, the buyer is far from assured of winning his claim because he still has to prove that his reliance was justified and reasonable.

To that end, New York's courts have stated as follows:

"A plaintiff is expected to exercise ordinary diligence and may not claim to have reasonably relied on a defendant's representations where he has "means available to him of knowing, by the exercise of ordinary intelligence, the truth or the real quality of the subject of the representation" (Curran, Cooney, Penney v Young & Koomans, 183 AD2d 742, 743 [1992] [internal quotation marks and citations omitted]; see Orlando v Kukielka, 40 AD3d 829, 831 [2007])."

While this can seem a bit harsh, it really is a logical rule; otherwise, consider the parade of horribles that would ensue, as no contract would have any true finality, because the purchaser would remain free to contest it after just a bit of buyer's remorse.