## Facts

- Simmons Manufacturing Company agreed to sell Vulcan Metals Co., Inc. a vacuum-cleaner business for $75,000, including tools, dies, equipment, inventory, and patents and related applications.
- The purchase was structured in part through three promissory notes totaling $40,000.
- During negotiations, Simmons’s officers and agents made two categories of statements:
  - General commendations about the cleaner’s quality, efficiency, and performance (including assertions about the level of vacuum the machine could produce).
  - Specific assertions about the product’s marketing history, including that it had never been put on the market, offered for sale, or shown to outsiders, and that no meaningful selling efforts had been made.
- Vulcan alleged it relied on these statements in buying the business and later discovered that Simmons had attempted to market the machine, that sales efforts had largely failed, and that the machine could not generate the vacuum needed for effective operation.
- Two actions proceeded and were consolidated:
  - Vulcan sued for deceit based on the sale.
  - Simmons sued on the promissory notes; Vulcan asserted fraud as a defense and counterclaim.
- The district court directed verdicts for Simmons in both actions, dismissing the deceit claim and entering judgment for Simmons on the notes.

## Issues

1. Whether generalized praise and performance claims about the vacuum cleaner were actionable misrepresentations or nonactionable “puffing.”
2. Whether statements that the product had not been marketed or offered for sale were actionable misrepresentations of material fact, requiring jury determination if supported by evidence of falsity and reliance.
3. Whether a retraction or correction of a false marketing-history statement, communicated before contract execution, defeats a fraud claim for lack of reliance.

## Decision

- The Second Circuit held that generalized commendations about quality and performance were nonactionable sales talk in the context of a business purchase where the buyer had a meaningful opportunity to investigate.
- The court held that representations about the product’s prior marketing and sales efforts were concrete factual assertions that could be material; if false and relied upon, they could support liability for deceit.
- The court ruled it was error to direct a verdict for Simmons on the fraud theory grounded in the marketing-history representations; that issue should have been submitted to the jury.
- The court stated that a retraction of the false “never sold/never marketed” statement, if communicated to Vulcan before execution of the contract, would be a complete defense on that ground.

## Legal Principles

- Generalized praise, commendations, and promotional assertions (“puffing” or “dealer’s talk”) are not actionable in deceit where reasonable parties in an arm’s-length commercial transaction would not treat them as factual assurances.
- The actionability of “opinion” statements depends on context, including the parties’ relative positions and the reasonableness of reliance, rather than a rigid opinion-versus-fact label.
- Specific and verifiable assertions about past events—such as whether a product has been marketed, offered for sale, or previously tested in the market—may be material facts; falsity and reliance ordinarily present jury questions.
- Fraud requires causal reliance; if the maker retracts or corrects the misrepresentation and the truth is communicated before the injured party becomes bound, reliance is negated.

## Conclusion

The Second Circuit distinguished nonactionable commercial puffing from actionable deceit based on false statements of concrete fact, holding that alleged misrepresentations about prior marketing could support fraud and should have gone to the jury, while generalized performance praise could not, and that a timely communicated retraction before contract execution defeats reliance.


Vulcan Metals Co. v. Simmons Mfg. Co., 248 F. 853 (2d Cir. 1918)