Fraud & Misrepresentation Attorney

What Constitutes Fraud in California?

There are four basic kinds of fraud recognized by California law:

• Intentional Misrepresentation – This occurs when a party to a contract makes an intentionally or recklessly false statement of fact (not opinion) that is intended to defraud the victim. The victim must “reasonably” rely on the false statement and suffer damages as a result.
• Negligent Misrepresentation – This is similar to intentional misrepresentation, except that it applies in situations where the accused did not have a “reasonable basis” to believe its statements were true. In other words, a person may commit negligent misrepresentation if they honestly, but erroneously, make a false statement that induces the victim to act to his or her detriment.
• Concealment – Sometimes it is not what you say but what you do not say. Concealment describes situations where a party commits fraud by concealing or failing to disclose a “material fact” that ultimately causes harm to the victim. In order to prove fraud by concealment, the victim must show the defendant had a “duty to disclose” the fact in question under California law.
• False Promise – This refers to cases where the first party induces the second party to enter into a contract by making certain promises that the first party never had any intention of keeping.

In some cases, notably claims for intentional misrepresentation, a successful plaintiff can seek punitive damages against the wrongdoer, in addition to any compensatory damages arising from the breach of contract. And even in cases where the evidence is insufficient to prove fraud–not every broken promise is a false promise or misrepresentation–an injured party may still be able to recover damages under tort or common law.