To ensure that you properly secure supply chains and clientele, you may have to rely on multiple business contracts. These agreements can provide consistency in your business operations and lock in favorable deals that give your business stability. But not all contracts end up being favorable. In fact, if you’re not careful, you can be duped into a contract when the other party misleads you or outright lies about key facts relevant to the contractual arrangement. When this happens, you may be warranted in taking legal action to get out of the agreement.
What you need to know about fraudulent misrepresentation
Fraudulent misrepresentation occurs when a party intentionally or recklessly makes misrepresentations relevant to a contractual agreement with the intent of coaxing you into agreeing to it. To successfully prove that you’ve been subjected to fraudulent misrepresentation, you have to show the following:
- A representation of fact or opinion was made.
- That representation was false or otherwise inaccurate.
- The party making the representation knew that it was false or inaccurate, or they made the statement with reckless disregard for the truth.
- The party’s intent in making the statement was to get you to agree to the contract.
- You relied on the misrepresentation when deciding whether to enter the contract.
- You were harmed because of your reliance on the misrepresentation and entering into the contract.
Know how to effectively argue your fraudulent misrepresentation case
Pursuing a fraudulent misrepresentation case may be the only way to protect your business and regain any funds that were lost as a result of your reliance on the fraudulent misrepresentation in question. So, if you’ve been harmed by lies or misconstrued facts in the contract context, then now is the time to start gathering evidence and developing your legal arguments.