Negligent Misrepresentation as Contract

24 Aug 2013 09:07pm Mark P. Gergen 

This Article challenges the prevailing view in the United States, and everywhere else in the common law world, which classifies the claim of negligent misrepresentation as a tort. I argue negligent misrepresentation is best understood as a contractual claim akin to promissory estoppel, with the gist of both claims being invited reliance. The prevailing view is an unfortunate byproduct of classical theories of contract and the idealization of contract as essentially private legislation. The classification of the claim as a tort is unfortunate because the rise of the modern tort of negligence, which has at its heart a principle of liability for harm carelessly caused, creates a risk that the tort of negligent misrepresentation will be subsumed into a general tort of negligence. Subsuming the claim into negligence will efface important features of the claim. Classifying the claim as contractual, however,  will  preserve these  features  while reinforcing largely positive trends in modern contract law.

To make this case, the Article traces debates on the best theories of contract, tort, and negligence law from the mid-nineteenth century to the present. A long and broad view of these debates highlights a phenomenon that theorists who focus on specific fields overlook. In each of these fields, the best theory accounting for the core of the field does a poor job accounting for its periphery. Modern variations on classical theories of contract, like promise-based theories, brilliantly account for the core of contract law. Similarly, the theory of negligence as liability for harm carelessly caused brilliantly accounts for the core of negligence law. However, both theories fail in explaining the periphery of their respective fields of law. Promise-based theories of contract are too parsimonious and constrictive. They tend to reduce contract to a perfect circle of private legislation. The negligence principle is too general and open-ended, and it unhelpfully effaces the rich morality of the common law. Treating negligent misrepresentation as a problem of contract pushes back against both of these tendencies. It makes the domain of contract less constrictive and confines the domain of negligence.

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