Justifiable reliance is an essential element of a claim that a fraudulent misrepresentation induced a party to enter a transaction. A sophisticated party has an obligation to take steps to attempt to verify a representation not set forth in the contract before it can justifiably rely upon it.1 A motion to dismiss a sophisticated party’s fraud claim may be granted when the complaint is devoid of an indication that the claimant took reasonable steps to investigate the allegedly misrepresented fact.2
A sophisticated party cannot establish that it entered into an arm’s-length transaction in justifiable reliance on the representation if that party failed to attempt to verify the representation by making use of the means available to it.3 If a party has means available to it of knowing, by the exercise of ordinary intelligence, the truth or real quality of a representation made to it, it must make use of those means and if it does not it will not be heard to complain that it was defrauded.4
