They seem to hold that any material statement made by a
man as of his own knowledge, or in such a way as fairly to be
understood as made of his own knowledge, is fraudulent if untrue,
irrespective of the reasons he may have had for believing it and
for believing that he knew it. /1/ It is clear, therefore, that a
representation may be morally innocent, and yet fraudulent in
theory of law. Indeed, the Massachusetts rule seems to stop
little short of the principle laid down by the English courts of
equity, which has been criticised in an earlier Lecture, /2/
since most positive affirmations of facts would at least warrant
a jury in finding that they were reasonably understood to be made
as of the party's own knowledge, and might therefore warrant a
rescission if they turned out to be untrue. The moral phraseology
has ceased to be apposite, and an external standard of
responsibility has been reached. But the starting-point is
nevertheless fraud, and except on the ground of fraud, as defined
by law, I do not think that misrepresentations before the
contract affect its validity, although they lead directly to its
making. But neither the contract nor the implied condition calls
for the existence of the facts as to which the false
representations were made.
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