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Supreme Court of Texas hears dispute over whether continued lease talks can support a fraud claim
Summary
The court heard arguments in Maya Walnut v. Lee about whether statements that lease negotiations will continue can be treated as actionable misrepresentations and whether the 'red flag' doctrine bars a fraud claim where a tenant might have discovered contrary facts.
The Supreme Court of Texas heard argument in Maya Walnut v. Lee, a commercial dispute over whether continued lease negotiations can give rise to a fraud claim and how the court’s "red flag" doctrine governs justifiable reliance.
Mister McCarthy, counsel for petitioner Maya Walnut, told the Court that Walnut Creek’s communications — including a nondisclosure agreement and repeated assurances that final terms would be discussed later — induced his client to continue negotiating rather than secure alternate premises. "[T]he jury saw specific representations," McCarthy argued, asserting the landlord’s conduct amounted to a scheme that deprived Maya of her business opportunity.
Miss Johnson, counsel for the respondents, urged the Court to reject a new fraud theory based on continued negotiations. She said the petition asks the Court to infer an implied fraud "by continued negotiations"…
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