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Nor is this all。 The law pursuing its course of specification； as explained in the last Lecture； decides what is the tendency of representations in certain cases；as； for instance； that a horse is sound at the time of making a ＇135＇ sale； or； in general； of any statement of fact which it is known the other party intends to rely on。 Beyond these scientific rules lies the vague realm of the jury。
The other moral element in deceit is knowledge that the statement was false。 With this I am not strictly concerned； because all that is necessary is accomplished when the elements of risk are reduced to action and knowledge。 But it will aid in the general object of showing that the tendency of the law everywhere is to transcend moral and reach external standards； if this knowledge of falsehood can be transmuted into a formula not necessarily importing guilt； although； of course； generally accompanied by it in fact。 The moment we look critically at it； we find the moral side shade away。
The question is； what known circumstances are enough throw the risk of a statement upon him who makes it； if it induces another man to act； and it turns out untrue。 Now； it is evident that a man may take the risk of his statement by express agreement； or by an implied one which the law reads into his bargain。 He may in legal language warrant the truth of it； and if it is not true； the law treats it as a fraud； just as much when he makes it fully believing it； as when he knows that it is untrue； and means to deceive。 If； in selling a horse； the seller warranted him to be only five years old； and in fact he was thirteen； the seller could be sued for a deceit at common law； although he thought the horse was only five。 /1/ The common…law liability for the truth of statements is； therefore； more extensive than the sphere of actual moral fraud。 But； again； it is enough in general if a representation ＇136＇ is made recklessly； without knowing whether it is true or false。 Now what does 〃recklessly〃 mean。 It does not mean actual personal indifference to the truth of the statement。 It means only that the data for the statement were so far insufficient that a prudent man could not have made it without leading to the inference that he was indifferent。 That is to say； repeating an analysis which has been gone through with before； it means that the law； applying a general objective standard； determines that； if a man makes his statement on those data； he is liable； whatever was the state of his mind； and although he individually may have been perfectly free from wickedness in making it。
Hence similar reasoning to that which has been applied already to intent may be applied to knowledge of falsity。 Actual knowledge may often be easier to prove than that the evidence was insufficient to warrant the statement； and when proved it contains the lesser element。 But as soon as the lesser element is shown to be enough； it is shown that the law is ready to apply an external or objective standard here also。
Courts of equity have laid down the doctrine in terms which are so wholly irrespective of the actual moral condition of the defendant as to go to an opposite extreme。 It is said that 〃when a representation in a matter of business is made by one man to another calculated to induce him to adapt his conduct to it； it is perfectly immaterial whether the representation is made knowing it to be untrue； or whether it is made believing it to be true； if； in fact； it was untrue。〃 /1/
Perhaps the actual decisions could be reconciled on a ＇137＇ narrower principle； but the rule just stated goes the length of saying that in business matters a man makes every statement （of a kind likely to be acted on） at his peril。 This seems hardly justifiable in policy。 The moral starting point of liability in general should never be forgotten； and the law cannot without disregarding it hold a man answerable for statements based on facts which would have convinced a wise and prudent man of their truth。 The public advantage and necessity of freedom in imparting information； which privileges even the slander of a third person； ought a fortiori； it seems to me； to privilege statements made at the request of the party who complains of them。
The common law； at any rate； preserves the reference to morality by making fraud the ground on which it goes。 It does not hold that a man always speaks at his peril。 But starting from the moral ground； it works out an external standard of what would be fraudulent in the average prudent member of the community； and requires every member at his peril to avoid that。 As in other cases； it is gradually accumulating precedents which decide that certain statements under certain circumstances are at the peril of the party who makes them。
The elements of deceit which throw the risk of his conduct upon a party are these。 First； making a statement of facts purporting to be serious。 Second； the known presence of another within hearing。 Third； known facts sufficient to warrant the expectation or suggest the probability that the other party will act on the statement。 （What facts are sufficient has been specifically determined by the courts in some instances； in others； no doubt； the question would go to the jury on the principles heretofore explained。） Fourth； the ＇138＇ falsehood of the statement。 This must be known； or else the known evidence concerning the matter of the statement must be such as would not warrant belief according to the ordinary course of human experience。 （On this point also the court may be found to lay down specific rules in some cases。 /1/）
I next take up the law of slander。 It has often been said that malice is one of the elements of liability； and the doctrine is commonly stated in this way： that malice must exist； but that it is presumed by law from the mere speaking of the words； that again you may rebut this presumption of malice by showing that the words were spoken under circumstances which made the communication privileged； as； for instance； by a lawyer in the necessary course of his argument； or by a person answering in good faith to inquiries as to the character of a former servant；… and then； it is said； the plaintiff may meet this defence in some cases by showing that the words were spoken with actual malice。
All this sounds as if at least actual intent to cause the damage complained of； if not malevolence； were at the bottom of this class of wrongs。 Yet it is not so。 For although the use of the phrase 〃malice〃 points as usual to an original moral standard； the rule that it is presumed upon proof of speaking certain words is equivalent to saying that the overt conduct of speaking those words may be actionable whether the consequence of damage to the plaintiff was intended or not。 And this fails in with the general theory； because the manifest tendency of slanderous words is to harm the person of whom they are spoken。 Again； the real substance of the defence is not that the damage ＇139＇ was not intended； that would be no defence at all； but that； whether it was intended or not；that is； even if the defendant foresaw it and foresaw it with pleasure；the manifest facts and circumstances under which he said it were such that the law