united-states contract-law california fraud
Is there any theory that would let someone recoup their money from buying overpriced jewelry?
<p><a href="http://www.tmz.com/2018/04/03/drew-brees-8-million-diamond-ring-lawsuit/" rel="nofollow noreferrer">This question is inspired by this article.</a></p>

<ol>
<li>Alice purchases jewelry from dealer, Bob, for $15 million.</li>
<li>Alice hires Carol to appraise jewelry.</li>
<li>Carol advises Alice jewelry is worth $5 million.</li>
<li>Alice sues Bob for $10 million.</li>
</ol>

<p>Is there <em>any</em> legal theory under which Alice could win her suit against Bob? If so, what are the minimum facts Alice must prove?</p>

Clarifying assumptions

<ol>
<li>This is not a fraud case. Bob did not defraud Alice in the sense that he promised to deliver X and, instead, delivered Y.</li>
<li>As a dealer, Bob knew the jewelry would appraise for $5 million when he sold it to Alice.</li>
<li>Bob told Alice the purchase was a "great investment" that would "only go up in value."</li>
<li>All legally required disclosures and disclaimers (if any) were made.</li>
<li>The suit occurs after any statutory buyer's remorse period expires (if any).</li>
<li>The sale took place in San Diego, California.</li>
</ol>

<h2>Consideration</h2>

<p>Consideration under a contract must be "sufficient" but it does not need to be "adequate".</p>

<p>Insufficient consideration falls under the following headings:</p>

<ul>
<li>performance of a duty imposed by law</li>
<li>performance of a duty already imposed by contract</li>
<li>acceptance by the creditor of part payment by a third party</li>
<li>Composition with creditors</li>
<li>Moral obligation</li>
<li>Illusory or uncertain promises</li>
</ul>

<p>Adequacy refers to whether the transaction represents a poor deal or not for either party - the law will enforce contracts that give effect to poor deals.</p>

<p>On the face of it jewelry on the one side and money on the other are both sufficient consideration to support a contract - the law does not care if they are adequate.</p>

<p>Basically, if you pay too much for something - tough titties.</p>

<h2>Representations</h2>

<p>A representation is a non-contractual statement of fact made by a party before or at the time of making a contract, addressed to the other party and in fact induces the party to enter the contract.</p>

<p>If the buyer can <em>prove</em> that the vendor made the statements that the jewelry was a "great investment" that would "only go up in value" then these would be misrepresentations - bearing in mind that this would need to be proved on a transaction by transaction basis since each is a separate contract.</p>

<p>There are legal remedies for misrepresentation in several areas of the law:</p>

<ul>
<li>Some representations become terms of the contract - the innocent party must <em>either</em> sue for damages <em>or</em> recind for actionable misrepresentation.</li>
<li>If the misrepresentation led to a contract being entered into by mistake (which is a legal term of art and not applicable here), the contract may be void.</li>
<li>A misrepresentation may become a collateral contract.</li>
<li>If it is an "actionable" misrepresentation then the contract may be voidable</li>
<li>a negligent misrepresentation may give rise to the tort of negligence.</li>
<li>a fraudulent misrepresentation may give rise to the tort of deceit.</li>
<li>Consumer law may also provide remedies (I don't know enough about Californian law here to comment). </li>
</ul>

<p>An "actionable" misrepresentation must have actually induced you to enter the contract, that is, you must have relied on that representation rather than your own judgement.</p>
