11 Hous. Bus. & Tax L.J. 1 (2011)

handle is hein.journals/houbtalj11 and id is 1 raw text is: MEASURING BUSINESS DAMAGES IN
FRAUDULENT INDUCEMENT CASES
By George P. Roach*
I.     SUM  M ARY  ............................................................................ 2
II.    INTRODUCTION      ...................................................................  3
III.   SUMMARY CHARACTERISTICS OF FRAUDULENT
INDUCEMENT ......................................... 7
A. Damage Preliminaries ............................................. 10
B. Fraudulent Inducement Widens the Plaintiff's
R each  .........................................................................  12
IV. THE EVOLUTION OF DAMAGES LAW FOR FRAUDULENT
INDUCEM    ENT  ..................................................................... 14
A. The Standard of Practice Since 1980 ........................ 17
B. Expectancy Damages .................................................. 19
C.  Perry  Equipm    ent ....................................................... 22
D. Reliance Waivers and Class Actions ......................... 26
V.     VALUE AS A DAMAGES METRIC ....................................... 27
A. Measuring Value ....................................................... 28
B.   Valuation   D ate  .........................................................  32
VI.    LOST PROFITS As A DAMAGES METRIC ........................... 34
A .  M itigation  ..................................................................  39
B. Are Lost Profits Always Special Damages? ............... 41
C. Gross Not Net Profits ............................................... 42
D. Ex Post v. Ex Ante Evidence ...................................... 43
VII. BOB V. OOP APPROACHES To DIRECT DAMAGES ................ 44
A. Asset Transactions ................................................... 44
B.   Service  Contracts ......................................................   48
C. Expectancy Claims In Business Acquisitions ............... 52
D .  D isconnected   Values ...................................................... 55
VIII. SPECIAL DAMAGES ........................................................... 58
IX.    RELIANCE DAMAGES ....................................................... 63
X.     EQUITABLE REMEDIES ...................................................... 67
XI.    AVOIDING OR MINIMIZING THE MINEFIELD .......................... 71
X II.  C ON CLU SIONS   ...................................................................... 72
*   George Roach practices damages law and provides consulting on litigation damages
and valuation in Dallas, Texas. He is a Senior Adviser to the litigation consulting firm of
Freeman & Mills, Inc. in Los Angeles. His background includes an M.B.A., J.D. and an
A.B. in economics. See www.litigation-consultant.com for further information.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing nearly 2,700 academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline with pricing starting as low as $29.95

Access to this content requires a subscription. Please visit the following page to request a quote or trial:

Already a HeinOnline Subscriber?