Puffery as a Defense to Negligent Misrepresentation

Texas has long recognized a cause of action for the tort of negligent misrepresentation. In order to sustain a claim for negligent misrepresentation, the plaintiff must show the defendant:

(1) made representations to the plaintiff in the course of defendant's business or transaction in which the defendant had an interest;

(2) provided false information for the guidance of others;

(3) failed to exercise reasonable care or competence in obtaining or communicating information;

(4) the plaintiff justifiably relied on defendant's representation; and

(5) the defendant's negligent misrepresentation proximately caused the plaintiff's injury.[1]

However, Texas courts have held if the representations are mere puffery, they are not actionable.[2] Typically, courts consider puffery to be an expression of seller’s opinion; not a representation of fact.[3]

“Whether a statement is an assertion of material fact or merely one of opinion—or mere puffery—depends on the circumstances in which a statement is made.”[4] To determine if a statement is puffery, courts will consider: (1) the specificity of the statement; and (2) the levels of knowledge of the buyer and seller.[5] For instance, statements comparing one product to another are considered unspecific and are not actionable misrepresentations.

In Autohaus, Inc. v. Aguilar, the court considered two statements to determine if negligent misrepresentations had been made.[6] A sales representative at a used car dealership made two statements to a potential buyer: “the Mercedes automobile is the best engineered car in the world” and “the car probably would not have mechanical problems”.[7] After taking possession of the car, the buyer experienced numerous problems including a) unstable steering, b) malfunctioning doors and air conditioning, c) a broken radio, and d) the car experienced signification transmission difficulties.[8] Ultimately, the salesman’s statements were not actionable misrepresentations because the first statement merely compared one product to another and the second statement contained the word “probably” which was too indefinite to be actionable.[9]

In Shaw Equipment Co. v. Hoople Jordan Construction Co., the court considered the levels of knowledge between the parties and how that knowledge is effected when the parties previously worked with each other.[10] The buyer agreed to rent equipment from the seller with an option to purchase the equipment after the rental period.[11] The option agreement expressly provided the machine would be purchased “in the condition it is at the time of exercising the option, without warranty.”[12] The purchaser testified that at the time the lease was executed, the salesman represented the equipment would perform the job to the purchaser’s satisfaction, and it “was the answer to everybody’s dreams” in the industry.[13] Almost immediately, the equipment failed to perform satisfactorily.[14] Regardless of this failure, the purchaser exercised the option to purchase the machine.[15] The court held that the salesman’s representations were puffing and did not constitute misrepresentation because a purchaser who has previous dealings with buyer should have reason to know the representations are false.[16] The purchaser had full knowledge of that the alleged misrepresentations were false when he purchased the equipment because he used the equipment with difficulty for over a year before deciding to purchase it.[17]

When faced with a claim for negligent misrepresentation, puffery is often one of the first lines of defense. A statement constitutes puffery if it is not specific or the parties have similar knowledge of the facts such that one party would not rely on the statement. If the court determines the statement is mere puffery, after looking at the totality of the circumstances, the representation will not be actionable.

[1] Willis v. Marshall, 401 S.W.3d 689, 698 (Tex. App.—El Paso 2013, no pet.); see also Restatement (Second) of Torts § 552.

[2] Dowling v. NADW Mktg., Inc., 631 S.W.2d 726, 729 (Tex. 1982) (citing Gulf Oil Corp. v. FTC, 150 F.2d 106, 109 (5th Cir. 1945))

[3] See id. at 729

[4] GJP, Inc. v. Ghosh, 251 S.W.3d 854, 889 (Tex. App.—Austin 2008, no pet.) (citing Transport Ins. Co. v. Faircloth, 898 S.W.2d 269, 276 (Tex. 1995)).

[5] CAS, Ltd v. TM Aviation Partners, LP, No. 05-15-00779-CV, 2016 WL 4151455, at *4 (Tex. App. Aug. 4, 2016) (citing Autohaus, Inc. v. Aguilar, 794 S.W.2d 459, 464 (Tex. App.—Dallas 1990), writ denied per curiam, 800 S.W.2d 853 (Tex. 1991)).

[6] Autohaus, 794 S.W.2d at 464.

[7] Id.

[8] Id.

[9] Id.

[10] See Shaw Equip. Co., 428 S.W.2d 839.

[11] Id. at 837.

[12] Id.

[13] Id.

[14] Id.

[15] Id. at 838.

[16] Id. at 838-39.

[17] Id. at 839.