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Can my business sue someone for fraud?

On Behalf of | Jul 12, 2024 | Business Lawsuits & Disputes |

As a business owner, you pride yourself on acting with integrity. In an ideal world, your customers, clients, vendors, contractors and employees would act in the same way. Unfortunately, you cannot control how others conduct themselves, and people may act fraudulently. 

In a nutshell, fraud involves deception that results in some sort of gain, often a financial gain. Nonetheless, fraud is a bit more complex and there are several different types of potential legal claims. Outlined below are some important points to consider. 

Fraud in the inducement 

Fraud in the inducement occurs in the early stages of contract negotiations. It involves one party making material statements that are false, in order to induce the other party to sign the contract. 

For fraud to have occurred, the fraudulent party must have known that the material statement was untrue and would be relied upon by the other party. A mere opinion is not enough. For example, if one party says that they should be able to deliver the goods by a certain date, this is different from stating that they definitely will deliver the goods by a certain date, and knowing that this is not possible. This type of fraud is also commonly referred to as fraudulent misrepresentation

Negligent misrepresentation 

Negligent misrepresentation is different because it involves carelessness rather than intentional deception. An example would be if a company said that they could deliver goods by a certain date, but did not first check whether or not this was possible. One important point regarding negligent misrepresentation is that the statement relied on cannot be unreasonable. A statement that all parties should have reasonably known was untrue would most likely not count as negligent misrepresentation. 

Fraud can be complex, and intent is a very important aspect of the law in this area. We help businesses who believe they have been defrauded. Contact us today for a consultation. 



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