Rodas v. Manitaras

In Rodas v. Manitaras (159 A.D.2d 341 [1st Dept 1990]), the First Department referred to the "exclusive knowledge" exception, but held: "where, as here, a party has been put on notice of the existence of material facts which have not been documented and he nevertheless proceeds with a transaction without securing the available documentation or inserting appropriate language in the agreement for his protection, he may truly be said to have willingly assumed the business risk that the facts may not be as represented. Succinctly put, a party will not be heard to complain that he has been defrauded when it is his own evident lack of due care which is responsible for his predicament." In Rodas (at 342), plaintiffs requested examination of business records and were refused access. The First Department held this put them on notice "that the income of the business was a material fact in which they had received no documentation." There was no actual notice, however, that the information given to them was false.