1. May a seller avoid liability for fraud and negligent misrepresentation involving its material misrepresentations of fact that induce a buyer to assent to a contract by having a disclaimer-of-reliance clause in a contract?

2. Knowing that the purchase and sales agreements contained contractual devices designed to negate the element of fraudulent reliance, and thus preclude fraudulent inducement lawsuits, were the developers and brokers accordingly given a license to lie?

David Sarif and seven other purchasers (Purchasers) each bought a unit at the 26-story Twelve Atlantic Station (Twelve) condominiums in 2005 and 2006. They sued the developers and the brokers for fraud in the inducement and negligent misrepresentation. They alleged that at the time of their purchases, the developers were advertising “spectacular city views” of Atlanta while they had already undertaken to develop the 46-story Atlantic Station tower directly across the street, and that their brokers were advising the Purchasers that any future development to the south of Twelve would be low- to mid-rise office buildings. Purchasers allege that they paid substantial premiums for their views of the city from the south side of the building, which is now blocked by the 46-story building. Each Purchaser signed an agreement containing a provision stating that “[t]he views from and natural light available to the Unit may change over time due to, among other circumstances, additional development and the removal or addition of landscaping”; a disclaimer at the top of the first page as required by the Georgia Condominium Act stating that “ORAL REPRESENTATIONS CANNOT BE RELIED UPON AS CORRECTLY STATING THE REPRESENTATIONS OF SELLER”; an express disclaimer in which Purchasers affirmed that they did not rely upon any representations or statements of the brokers; and a comprehensive merger clause. The Court of Appeals reversed the trial court’s judgment for the defendants, and the Georgia Supreme Court granted certiorari.

JUDICIAL OPINION

HUNSTEIN, C. J.… It is well-settled law in Georgia that a party who has “the capacity and opportunity to read a written contract cannot afterwards set up fraud in the procurement of his signature to the instrument” based on oral representations that differ from the terms of the contract. Craft v. Drake, 260 S.E. 2d 475 (1979). Statements that directly contradict the terms of the agreement or offer future promises simply cannot form the basis of a fraud claim for the purpose of cancelling or rescinding a contract. Id. In fact, the only type of fraud that can relieve a party of his obligation to read a written contract and be bound by its terms is a fraud that prevents the party from reading the contract.

In Craft, the plaintiff alleged that a bank officer fraudulently induced him to execute certain notes by misrepresenting that plaintiffs home would not be used as collateral for the note. However, the express terms of the note specifically stated that the holder would have a security interest in any property held by the plaintiff at the time of execution or subsequently acquired. The Court held that because the oral misrepresentation was directly contradicted by the language of the agreement and because the statements were promissory in nature as to future acts, the plaintiff was bound by the terms of the note he signed. See Craft, 260 S. E.2d 475.

The crux of Purchasers’ argument here is that they are not bound by the terms of their agreements because Brokers promised “spectacular city views” from the south side of Twelve at the same time that Developers were moving forward with plans to erect a 46-story condominium across the…………………………………..