Richey v. Patrick

In Richey v. Patrick, 904 P.2d 798, 801 (Wyo. 1995), a case involving claims by purchasers of real property against lay sellers, the Court discussed the tort of negligent misrepresentation as found in the Restatement and stated that in order for there to have been a negligent misrepresentation, the plaintiff must show that: "one who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information" In Richey, the Court found that the sellers had not "supplied false information," as required by the claim, because the sellers had not supplied any information to the purchasers. The Court said, "a nondisclosure of information cannot support a claim of misrepresentation; since nothing has been represented, an essential element of the claim is missing." Id. at 802. The Court went on to hold that the crux of the purchasers' complaint was that the sellers should have informed them of a material fact, they owed a duty to do so, and it was this nondisclosure that caused the plaintiff's damage. In Richey, the Court then clarified that the appropriate claim was one for negligent nondisclosure as found within Restatement (Second) Torts 551. However, the Court declined to apply the Restatement section to the plaintiffs' claim because the Court reasoned that the "as is" clause contained within the purchase contract signed by the sellers and purchasers placed the risk of discovery of adverse material facts upon purchasers of real estate. Thus, the Court recognized the relationship between the parties was essentially contractual and held that when a contract places the burden on the purchaser to discover defects, they are barred from seeking relief for negligent nondisclosure.