Fraud By Misrepresentation
Fraud involves a situation where an individual or business entity intentionally deceives another party to gain an advantage or profit. Processes that involve contractual or commercial transactions are prone to risks related to fraud. Fortunately, there are legal remedies that a business or an individual can take advantage of for any losses incurred because of fraud. Both victims of fraud or parties that are accused of fraud can talk to a lawyer to advise them on the appropriate remedies for their specific situation.
Business Fraud And Misrepresentations Cases
Most business fraud and misrepresentation disputes involve allegations that a party lied or did not disclose the complete truth. As far as fraud is concerned, you only have a case if the defendant deliberately and intentionally deceived you using facts that the defendant knew were false. For that reason, fraud is considered a violation of a written, codified law. Another type of case a lawyer can help you with is breach of fiduciary duty. A fiduciary is any person or entity that manages property or money on behalf of another person or organization.
A fiduciary can be an accountant, a shareholder, and employee and so on. A breach of fiduciary duty is when the fiduciary acts in the interests of themselves rather that the best interests of the client. For example, if the fiduciary uses corporate property or assets for personal gain, then it is considered a breach of fiduciary duty. All the claimant needs to prove in a breach of fiduciary case is that the defendant was in a fiduciary position and that the defendant breached that duty for the defendant’s own personal gain.
Another type of business fraud case is misrepresentation. Misrepresentation involves a person making a false statement that the person does not believe to be true, in order to persuade another party to enter into a business transaction. This is considered as a violation of contractual law because one party in the contract presented false information when the contract was created.
What Is Fraudulent Misrepresentation?
Criteria For Something To Be Considered Fraudulent Or Misrepresented
Remember a party can only be liable for damages if it is proven that the party made a representation of a false material fact. For something to be considered fraudulent or misrepresented in a contract it must meet the following criteria:
- Somebody must make a statement that is false or misrepresents the facts
- The false statement or misrepresentation must be linked directly to the transaction or contract
- The person that made the false statement must have known that the statement was false
- The defendant must have made the false statement for the purpose of inducing the injured party into action or inaction
- The injured party must have relied on the misrepresentation to enter into a contract or to do a transaction
- The claimant must have suffered damages as a result of the misrepresentation
Failing to disclose or mention information regarding a transaction can also be considered as fraud and misrepresentation.
Forms Of Business Fraud
Some of the different forms business fraud can occur include the following:
- Fraudulent advertising and marketing
- Consumer fraud
- Theft of trade secrets
- Trademark and patent infringement
- Embezzlement
- Bribery and kickbacks
