Geoffrey D. Ittleman Attorneys At Law

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How to prove fraudulent misrepresentation in your case

On Behalf of | Apr 19, 2022 | Business Litigation

Your business contracts set the stage for your success. That’s why it’s imperative that they’re properly negotiated, and you hold the other parties to these agreements to their obligations. That sounds easy enough, right?

Well, matters can quickly be complicated when a contract is breached, but if you’ve suffered losses through a contractual arrangement then you may want to ask if the agreement was even valid in the first place. This is because in far too many instances, businesses are duped into a contract through fraudulent misrepresentation.

What is fraudulent misrepresentation?

Remember, the purpose of a contract is to ensure that everyone agrees to its terms and there’s no confusion. But if you’ve been misled or lied to in order to secure your agreement to a contract, then you haven’t really consented to the realities of the contract.

But to gain a better sense of what fraudulent misrepresentation entails, let’s look at the elements that would have to be shown to a court in order to prove that fraudulent misrepresentation has occurred:

  • An actual representation was made: This element is usually easy to prove. After all, you just have to show that a statement of fact was given to you in relation to the contract. This might be something as simple as a stated price for goods, or it could be statements pertaining to a completion date of a project.
  • The representation wasn’t true: You’ll need evidence to back up your claim here. Sometimes those who have been accused of fraudulent misrepresentation argue that the fact in question was true at the time of contract formation, but that it changed shortly thereafter. Thus, they argue, they didn’t make a false representation.
  • The party making the representation knew that it was false: This is probably the hardest aspect of a fraudulent misrepresentation case to prove. You’ll have to look at the party’s conduct outside of the contractual arrangement for evidence of intent, and you may even need to gain access to the other party’s internal communications. Remember, too, that you may be able to prove fraudulent misrepresentation even if the other party didn’t intentionally lie but instead made the representation of fact in a way that was reckless and without regard for its truthfulness.
  • The other party intended for you to rely on the false representation: To succeed on a fraudulent misrepresentation claim, you’ll have to show that the other party made the representation to induce you to enter into the contract. Again, you’ll need some external evidence to support your claim in this regard.
  • You suffered detrimental reliance: You’ll also have to demonstrate that you did, in fact, rely on the representation that was made and that you were harmed by that reliance. Maybe you missed out on another favorable contract that you could have secured, or maybe you suffered lost profits by entering into the contract. Make sure that you have extensive evidence that speaks to why you entered into the contract and how doing so hurt your business.

Aggressively advocate for your position

There can be a lot at stake in a fraudulent misrepresentation case. That’s why it’s wise to educate yourself on this area of the law and work closely with a skilled legal professional who can help you craft the persuasive legal arguments that you need on your side. Hopefully then you can find accountability for the wrongdoing to which you’ve been subjected, secure compensation for your losses, and position yourself to strongly move forward with your business operations.