Business-related fraud can be a destructive force that can devastate investors, businesses, and employees. When an unsuspecting victim is persuaded to enter into an agreement under false pretenses, it is called “fraud in the inducement.” If you believe you have been encouraged to sign a contract through the deceptive actions of another, it’s important to know: What is fraud in the inducement?
Florida Fraud in the Inducement
To prove a Florida fraud in the inducement claim, the defrauded party would have to be able to show that there was:
- a false statement of material fact;
- that the defendant knew or should have known was false;
- that was made to induce the plaintiff to enter into a contract; and
- that proximately caused injury to the plaintiff when relying on the misrepresentation.
If you believe that you have been the victim of fraud in the inducement, you should contact an experienced Florida business attorney to discuss your case. Your lawyer can help you evaluate the situation and determine if you can meet the necessary elements to bring a claim.
Fraud and Due Diligence
One question that may come up is whether the injured party conducted their due diligence. In other words, did the fraud victim investigate the other party? Did they learn a reasonable amount of information about them before signing a contract? Further, when examining the agreement’s terms, did they evaluate them carefully? These are potentially relevant questions. However, there is a limit to how much a fraud victim is expected to know about a deceptive party or entity. Further, generally, it is reasonable for a contracting party to rely on the other party’s representations.
Does Fraud in the Inducement Require that there be a Valid Contract?
A fraud in the inducement claim is different from a breach of contract dispute. In an inducement case, the fraudulent party said or did something that led the injured party to enter into the contract. Because the agreement was formed fraudulently, the contract is also fraudulent. Florida law does not recognize fraudulent contracts and treats these types of agreements as non-existent.
What Remedies are Available for Fraud in the Inducement?
If the injured party can prove their case, the fraudulent party may be required to pay a number of damages. These may include punitive damages and present and future loss of profits. The agreement would also be canceled.
Defenses to Fraud in the Inducement
A party who is alleged to have committed fraud in the inducement may claim that they are not culpable because:
- They were not aware that the statement was false,
- The statement at issue was not false,
- The injured party unreasonably relied upon the statement, or
- They did not intend to induce the other party to complete the transaction or enter into a contract.
Contact a Florida Business Attorney Today
If you are involved in a fraud in the inducement case, it’s crucial that you contact an experienced business attorney. You and your lawyer can discuss your case and determine your options.
Attorney Richard Sierra at the Florida Small Business Center assists clients like you with business and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.