Business Law 11th Edition by Kenneth Clarkson,Roger LeRoy Miller,Gaylord Jentz,Frank Cross

Exercise 11

Vokes v. Arthur Murray, Inc.
District Court of Appeal of Florida, Second District, 1968. 212 So.2d 906.
• Company Profile Arthur Murray, founder of Arthur Murray, Inc. ( www.arthurmurray.com ), began teaching people how to dance in 1919. At the time, social dancing was becoming increasingly popular among young people, in part because so many adults were shocked by the new "jazz dancing." Across America, young people wanted to learn the new steps-the turkey trot, the fox-trot, the kangaroo dip, the chicken scratch, the bunny hug, the grizzly bear, and others. By the 1930s, Murray's instructors were giving lessons on cruise ships, in tourist hotels, and to the employees of New York stores during the employees' lunch breaks. In 1937, Murray founded the Arthur Murray Studios, a chain of franchised dance schools. During the 1950s, Murray sponsored a television show- The Arthur Murray Party -to attract students to the schools. Murray retired in 1964, estimating that he had taught more than 20 million people how to dance.
• Background and Facts Audrey E. Vokes, a widow without family, wished to become "an accomplished dancer" and to find "a new interest in life.'' In 1961, she was invited to attend a "dance party" at J.P. Davenport's "School of Dancing," an Arthur Murray, Inc., franchise. Vokes went to the school and received elaborate praise from her instructor for her grace, poise, and potential as "an excellent dancer." The instructor sold her eight half-hour dance lessons for $14.50 each, to be utilized within one calendar month. Subsequently, over a period of less than sixteen months, Vokes bought a total of fourteen dance courses, which amounted to 2,302 hours of dancing lessons at Davenport's school, for a total cash outlay of $31,090.45 (in 2008, this would amount to nearly $140,000). When it became clear to Vokes that she did not, in fact, have the potential to be an excellent dancer, she filed a suit against the school, alleging fraudulent misrepresentation. When the trial court dismissed her complaint, she appealed.
PIERCE, Judge.
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[The dance contracts] were procured by defendant Davenport and Arthur Murray, Inc., by false representations to her that she was improving in her dancing ability, that she had excellent potential, that she was responding to instructions in dancing grace, and that they were developing her into a beautiful dancer, whereas in truth and in fact she did not develop in her dancing ability, she had no "dance aptitude," and in fact had difficulty in "hearing the musical beat."
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It is true that generally a misrepresentation, to be actionable, must be one of fact rather than of opinion.* * * A statement of a party having * * * superior knowledge may be regarded as a statement of fact although it would be considered as opinion if the parties were dealing on equal terms.
It could be reasonably supposed here that defendants had superior knowledge as to whether plaintiff had "dance potential" and as to whether she was noticeably improving in the art of Terpsichore [dancing]. And it would be a reasonable inference from the undenied averments [assertions] of the complaint that the flowery eulogiums [praises] heaped upon her by defendants * * * proceeded as much or more from the urge to "ring the cash register" as from any honest or realistic appraisal of her dancing prowess or a factual representation of her progress.
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* * * [W]hat is plainly injurious to good faith ought to be considered as a fraud sufficient to impeach a contract, and * * * an improvident [unwise] agreement may be avoided because of surprise, or mistake, want of freedom, undue influence, the suggestion of falsehood, or the suppression of truth. [Emphasis added.]
• Decision and Remedy Vokes's complaint was reinstated, and the case was returned to the trial court to allow Vokes to prove her case.
• Impact of This Case on Today's Law This case has become a classic in contract law because it clearly illustrates an important principle. The general rule-that a misrepresentation must be one of fact rather than one of opinion to be actionable-does not apply in certain situations, such as when one party misrepresents something about which he or she possesses superior knowledge (Vokes's dancing ability, in this case).
• The Ethical Dimension If one of Vokes's fellow students, rather than her instructor, had praised her ability and encouraged her to buy more lessons, should the result in this case have been different Explain.