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Contract Law: Fraudulent Inducement

Sometimes companies (or individuals) enter into contracts with other parties for goods or services (or the purchase of businesses), and you come to find out the other party lied to you to "lure" you into entering the contract. One of the options for getting out of the contract (called "rescission") is to bring an action for "fraudulent inducement"--you were fraudulently induced into entering the contract.

To prevail on a fraudulent inducement claim you have to be able to show:  (1) the other party knowingly made a misrepresentation of material fact to you; (2) with the intent to deceive you and induce you to act on his misrepresentation; (3) you reasonably relied on his (mis)representation; and (4) as a result of your reliance, you suffered damage. 

The misrepresentation can be one of "commission" (the other party affirmatively misrepresented a material fact) or one of "omission" (the other party intentionally failed to tell you something important).

Because this claim involves the allegation of fraud, each element must be proved by "clear and convincing evidence"--which can be a tough standard to meet. 

If you believe you were mislead by someone into making a deal, signing a contract, etc., contact this office at (516) 252-9500 or at greg@gcurrylaw.com.


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